Public-private Partnerships for Government Financing, Controlling Risk, and Value-for--money: The UK Experience
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Authors
Miguel, Joseph G. San
Summers, Donald E.
Subjects
Public-Private Partnerships (PPPs)
Public Private Partnership, PPP, Energy Savings Performance Contracts (ESPCs) for mobile assets, Privatization, Outsourcing, B-52H re-engining program, Alternative Forms of Financing Defense Requirements, Fee for Service Contracts
Public Private Partnership, PPP, Energy Savings Performance Contracts (ESPCs) for mobile assets, Privatization, Outsourcing, B-52H re-engining program, Alternative Forms of Financing Defense Requirements, Fee for Service Contracts
Advisors
Date of Issue
2006-09-01
Date
01-Sep-06
Publisher
Language
Abstract
One of the key requirements to a successful Public-private Partnership (PPP) is the transfer of risk from the government to the private sector. This research examines the PPP experience in the United Kingdom (UK) Ministry of Defense to determine if they would be applicable to the US Department of Defense (DoD). PPP agreements have provided the UK increased capabilities. Also, this research provides an in-depth analysis of Private Financed Initiatives (PFI) that Serco Inc. has undertaken. Finally, this research evaluates the increases in value-for-money resulting from the PPP transfer of risk to the private sector. The research concludes that PPPs should be continued and expanded to provide increased real-time capability to the DoD while supporting private industry. Since the government has the lowest cost of borrowing, PPPs agreements may not appear to be cost effective as a means of procurement. However, the benefits from transferring risk to the private sector can more than offset the higher financing cost. PPPs reallocate risk and up-front capital requirements allowing the government to spread program cost over time. Without initial capital outlays, the government can acquire higher priority goods and services with its limited resources. In addition, PPPs provide the government with an increased infrastructure and technological capability than would otherwise not be available.
Type
Report
Description
Sponsored Report (for Acquisition Research Program)
Series/Report No
Department
Financial Management
NPS Faculty
Identifiers
NPS Report Number
NPS-FM-06-036
Sponsors
Naval Postgraduate School Acquisition Research Program
Funder
Format
Citation
Distribution Statement
Approved for public release; distribution is unlimited.