Operational KPIs are developed during the procurement phase. This means generally, KPIs are designed at a time where the least amount of information is known about the service delivery specifics of PPPs, by lawyers and project teams that have limited operational experience (PF10 and PF12). It is therefore important to have flexibility (PF08) between the partners to review KPIs to ensure the services being delivered actually match that which was intended as part of the business case (PF05) and to take necessary steps to address consequential misalignment between expectation and practice. Moreover, and if KPIs are not well constructed, for example, it may be difficult for the public partner to hold operators to account for under-performance (PT06):
"If the KPIs are [ineffective], then you're going to have trouble holding your facility manager accountable, without doubt...If you get that wrong, if you don't have people that are of the calibre that you need, you pay for it big time in PPPs".
Modifying KPIs usually means they are adjusted to their 'right' level (PF12). However, the extent to which the modification contributes towards the achievement of VfM may depend upon a range of factors including the timing of negotiations, how much leverage the public partner has over its private partner and the level of employee ability to broker the best deal for the state. As PF02 explains:
"When you're modifying an existing contract [or specification], you're doing it non-competitively. As government, you're going to have to test and look really closely at what's changing and what the value was that you were getting...It [also] depends on the balance of power in a particular negotiation. If the contractor is bleeding, and if they need you to do something to avoid some kind of default, then you might have the negotiating advantages as the public sector, whereas if you're under specified performance, then the negotiating leverage is on the other foot. It just depends on where the balance of power lies".