Failure to enforce private partner obligations under terms of contract may undermine the attainment of planned VfM outcomes. This may result, for example, if an operator successfully claims informal precedent (PF08, PF13 and RK06) over something the public partner has failed to manage as part of its oversight responsibility. In practice however, such a scenario is more likely to occur if the private partner alters informal processes without agreement, and where the changes are not detected by the public partner (PF13); or where, for instance, the private partner proposes a modification to a contract and that modification is accepted by the public partner without giving due consideration to the wider ramifications of that particular change. PF13 elaborates:
"You've got to always look at why you would do something different than what's in the contract...Issuing something that could inadvertently be used as a precedent - or that may change the project risk profile - is always something you've got to be alert to over a 25 year deal. Agreeing to something that seems relatively minor can be used to say 'you signed-off on that basis so we've assumed that all of these other things flow from it' and then you say 'how the hell did that happen?'"
In separate discussions, interview participants PF12, PF08, PT11, PF14, PT12, PF02, PF05 and RK10 all point to a variety of ways that performance / progress can be measured against the attainment of stated PPP outcomes during operations. These include:
- Reviewing progress against the public interest template. Although these types of assessments are normally undertaken during conceptualisation and business case development, PT11 argues that such analysis could extend to the operational phase for determining whether the rights of users and consumers are still being protected as intended;
- Reviewing progress against business case objectives / justifications for contract amendments. Despite being potentially effective ways to assess performance (PF12, PT11, PF02 and PF05), PT11 and PT12 assert that government is not always proficient at conducting these types of appraisals. PPPs are, however, subject to the Gateway Review Process in Victoria (including Gate Six: Benefits Realisation - see Department of Treasury and Finance 2009a) as well as other Australian states;
- Reviewing progress against operational objectives. There may be, for instance, certain objectives that have not been set in business cases or contracts that government wants to track (PF12, PT11 and PF02) such as user satisfaction levels (PF08 and RK10) e.g. monitoring and measuring the quality of users' experiences; and
- Ex-post evaluations. In the UK, PPPs should undergo ex-post evaluations, for example, to assess the quality of the contract management function after hand-back. However, this rarely happens in practice (PF14). This means that valuable lessons learned that could be applied to other PPPs are being lost and that avoidable, costly mistakes are probably being repeated in other PPPs.