The Private Finance Initiative: An Innovative Procurement Tool for Today's Public Administrators
Journal IssueVolume 13, 2006
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.