Negotiating Efficient PPP Contracts

This paper concerns Public Private Partnership (PPP) contracts in concern to the coming new 2014/24IEU public procurement directive. The new EU public procurement directive gives the public authority the opportunity to negotiate PPPs much more when they are implemented in national law. An opportunity the member states should consider using when procuring a PPP. This paper looks at the negotiation and contracting of a PPP in an economic theoretical and EU public procurement perspective and discusses how to establish an efficient PPP contract under a strong public law doctrine. Governments should consider tendering out PPP projects in the spirit of joint utility because joint utility can increase the concept of more value for money; the cornerstone of the PPP concept. This paper discusses the positive gains from negotiation and compares it with the upcoming possibilities in the EU public procurement law. Furthermore, the paper seeks to establish a connection between public law, private law and the efficient PPP contract by drawing upon economic theory and empirical contract data from UK, US and Danish partnering contracts from the construction industry and the aim of contracting joint utility. Joint utility can increase the concept of more value for money; the cornerstone of the PPP concept. The paper draws upon existing legal
content regarding collaboration and common goals and game theory to explain the benefits from implementing similar clauses in PPP contracts.