Avoiding Performance Failure Payment Deductions in PFI/PPP Projects: Model of Critical Success Factors

Lukumon O. Oyedele

75 citations0/0 files storedJournal of Performance of Constructed Facilities

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Public-Private Partnership Projects Construction Project Management and Performance Facilities and Workplace Management

Abstract

The overall aim of this paper is to identify critical success factors that would help Private Finance Initiative/facility management (PFI/FM) contractors to avoid performance failure payment deductions in Public Private Partnership/PFI (PPP/PFI) projects (constructed facilities). Using focus groups discussions, 36 possible factors that could influence performance failure payment deductions were identified and put together in a questionnaire survey. Analysis included reliability analysis that enabled identification of 29 reliable factors from the initial 36 factors. Using linear multiple regression, the best seven predictors that could help PFI/FM contractors to avoid performance payment failure deduction were identified from the 29 reliable factors. With the aid of another set of data and Spearman's rank correlation analysis, the seven predictors referred to as critical success factors were validated to confirm their dependability and wider applicability. The seven critical success factors include: (1) good working relationship with client, end-users, subcontractors, and suppliers; (2) minimal use of subjective measures as key performance indicators (KPIs); (3) a functioning help desk in place to receive service requests and complaints;, (4) explicit and realistic performance standards, criteria, and weighting systems; (5) quality of service delivery that meets requirements of output specification; (6) use of the Just-in-Time approach compared with a prescheduled maintenance regime; and (7) PFI/FM contractor active participation in the design process. The research findings would help both PFI/FM contractors and private project consortiums to maximize their profits/returns on investment by improving their performance and avoiding payment deductions in PFI projects. Public sector clients and occupants/users of their facilities would also achieve full value for money by enjoying facilities that adequately meet their needs and requirements.

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References

1988SERVQUAL: A multiple-Item Scale for measuring consumer perceptions of service quality 1986Servqual : a multiple-item scale for measuring customer perceptions of service quality 2002The “real” success factors on projects 2000Doing Critical Management Research 2013Inequality: A New Zealand Crisis 2005Critical success factors for PPP/PFI projects in the UK construction industry 2007The Influence of Project Managers on Project Success Criteria and Project Success by Type of Project 2007Public-Private Partnerships: Principles of Policy and Finance

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