The Private Finance Initiative: An Innovative Procurement Tool for Today's Public Administrators

  • Seth Gabriel
  • Jordan Head
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

Abstract

The 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.

Author Biographies

Seth Gabriel
Seth Gabriel will graduate in May 2006 from The George Washington University with a master’s degree in public administration and a concentration in government-business relations. He received a B.A. in political science in 2001 from Washington College of Chestertown, Maryland. Mr. Gabriel is currently a research assistant at The George Washington Center for the Study of Globalization, where his research focuses on public accountability.
Jordan Head
Jordan Head will graduate in May 2006 from The George Washington University with a master's degree in public policy and a concentration in urban and social policy. She holds a B.A. in economics from Southwestern University in Georgetown, Texas. Ms. Head is currently a research assistant at The George Washington Center for the Study of Globalization and is also an intern at the World Wildlife Fund.
Published
2006-05-01
Section
Articles