KPIs are created during the procurement phase and agreed to in the PPP contract. However, they have to be considered from an operational, real life point of view. The Procuring Authority should be in agreement with the Project Company about what is required and work to ensure that KPIs are mutually understood. This needs to be addressed as early as possible once KPI measurement and assessment starts.
The Procuring Authority should regularly assess any KPIs that may be ineffective and, with the long-term success of the project in mind, decide if:
• certain KPIs (e.g. performance standards, rectification periods) or payment deductions should be amended for the benefit of the project
• a practical solution can be agreed with the Project Company as a way to manage difficult KPIs
As is detailed in Section 3.1 (Transitions), 'bedding-in' periods are also common at the outset of the operations phase to allow the parties to become familiar with their operations phase obligations.
EXAMPLE Early collaboration on review of KPIs The Procuring Authority and Project Company on the Port of Miami Tunnel project in the USA began collaborating with the operations contractor a year before operations were due to begin, to review KPIs and predict any challenges. The Procuring Authority assessed the issues raised by the contractor and concluded that one KPI relating to response times was not workable. All other KPIs were kept as described in the PPP contract. For more information, see the Port of Miami Tunnel Case Study. |