2.1.10 Output specifications form a vital part in encouraging innovation in PPP deals. Private sector innovation is especially critical for DBFO deals, where the private provider is expected to generate management efficiencies compared to public sector in-house provision. Hence, it is necessary for the public agency concerned to state clearly what needs to be achieved from the facilities and services while leaving room for the private sector to produce innovative, cost-effective solutions. In short, the output specifications detail what needs to be achieved, not how it is to be achieved.
Examples of Input Specifications vs. Output Specifications | |
Input Specifications | |
Maintaining School Playing Fields | |
Playing fields must be trimmed and cleaned thrice a week. | Playing fields must be capable of providing seven hours playability per week. |
Maintaining Drains, sewers and gutters | |
Drains, sewers and gutters must be cleared at least once every day. | All drains, sewers and gullies to be maintained free-flowing and free from odours. |
2.1.11 Producing effective output specifications involves the art of defining the end without being prescriptive on the means for meeting these outputs. The specifications should clearly and comprehensively state what is required and the standards to be achieved.
2.1.12 In a PPP project, the public agency concerned will make payments to the private sector based on whether the output specifications are met. Therefore, it is vital that both the public and private sectors have a clear understanding of how performance against these output specifications are measured and monitored. Performance measurement may be linked to an agreed set of standards or key performance indicators, which will generally relate to the quality, amount and frequency of service provision. There has to be agreement within the PPP contract on how such performance is to be measured and monitored since the payments to the private sector are based on these performance specifications being met.