Procurement & Contracts Coursework Assignment Example | Topics and Well Written Essays - 5750 words

Procurement & Contracts Coursework - Assignment Example 57). One of the key attributes of PPP is that it not only facilitates public-private partnerships during the construction phase, but it provides for post-construction services to be managed by a private agency. It has been argued that by taking this approach, the construction design is usually conducted contemplating subsequent services which ultimately lowers the cost of services. Moreover, the nature and duration of the PPP encourages a relationship of trust and facilitates the free flow of information (Hoppe & Schmitz, 2013). Likewise, Private Finance Initiative (PFI), project procurement, a form of PPP, is particularly important when the public budget is constrained by economic difficulties such as the current economic downturn. PFI is a method by which the public sector secures â€Å"value for money† and the private sector â€Å"service provider† assumes the risks associated with the project (Akintoye, Hardcastle, Beck, Chinyio, & Asenova, 2003, p. 461). Given that the global economic downturn has impacted the UK government’s ability to deliver and meet the demands for health services, a PFI-PPP procurement route is the more innovative and least costly option over traditional procurement routes. ... Traditional procurement routes will also be discussed. The Principles of Public-Private Partnership Procurement Definition PPP is defined by the OECD as: †¦an agreement between the government and one or more private partners (which may include the operators and the financers) according to which the private partners deliver the service in such a manner that the service delivery objectives of the government are aligned with the profit objectives of the private partners and where the effectiveness of the alignment depends on a sufficient transfer or risk to the private partners (OECD, 2008, p. 17). PPP therefore takes the involvement of the private sector to more proactive level and does not merely involve a limited contractual arrangement. PPP is best understood when compared to traditional procurement routes. PPP vs Traditional Procurement Routes Instinctively, the concept of PPP invokes ambivalence over the idea of the private sector becoming involved in the construction and man agement of public infrastructure. However, as Grimsey and Mervyn (2007) point out: †¦the old command and control structures of the public sector are breaking down and are being replaced by interrelationships between government and private sector entities (p. 171). Although traditional procurement routes use the private sector, PPPs can be distinguished in a significant way. Traditional procurement routes usually involve private entities constructing roads, hospitals, schools, public buildings and schools and so on. Private companies also manage and maintain the infrastructure. However, with PPPs, rather than use individual agreements, the agreements are combined in