The Private Finance Initiative: An Innovative Procurement Tool for Today's Public Administrators
Keywords: Private Finance Initiative, PFI, public-private partnership, PPP, key performance indicators, KPI, public services, Her Majesty's Prison Service, private financing, procurement tools, public sector, private sector, United Kingdom
AbstractThe Private Finance Initiative is an innovative public-private partnership first pioneered in the United Kingdom. The initiative's goal is to obtain higher quality public services at a lower cost to the public by engaging the private sector. The program relies on private financing and expertise, output-based contract specifications, performance-based payment mechanisms, and negotiated risk transfers to achieve this goal. This article discusses the initiative's successes and failures using Her Majesty's Prison Service as a case study. The article finds that, while the program has limitations, the evidence of its successes suggests that American administrators should consider it as a procurement tool for public services in the United States.