2.4.30 Benchmarking and/or market testing some elements of the service can also be conducted regularly to determine if the unitary charge is comparable to market price.
2.4.31 Although in theory it is sensible to compare costs to ensure that value for money continues, the practice of benchmarking and market testing are often more difficult. This difficulty may be due to (i) the inter-related nature of the services being purchased, which means that the services cannot be benchmarked or market tested separately, or (ii) the absence of a ready comparator.
2.4.32 Where possible, the PPP contract can allow for market testing or benchmarking of some operations services, e.g. sub-contracted services, at regular intervals. However, agencies should note that market testing and benchmarking are generally used for 'soft' services, e.g. catering, cleaning and grounds maintenance, which do not involve a significant capital investment in their delivery, or do not affect the value of any capital asset under the contract. Services that can affect the value of the capital asset, such as retrofitting the building and maintaining the building over the contract period, are usually not benchmarked or market tested because market testing such services can disrupt the synergy of the design, build, maintain and operational phases, and remove the incentive for the private sector to consider whole lifecycle costing in a PPP project.
2.4.33 The public agency should be aware that benchmarking or market testing can result in either an increase or a decrease in the unitary charge.