Asbestos Containing Material.
The budget within which a public authority has the ability to make payments under a PPP contract.
Application Programming Interface. A set of clearly defined methods of communication between software components, for instance two different software programs.
Application hosting is an outsourced, web-based solution that enables businesses to access software applications and related services through the Internet (“cloud”) and is usually provided by an ASP (Application Service Provider). As it is accessed through the cloud, the hosted application provides the same functionality as client-server based software, but offers benefits in terms of flexibility, speed of installation and deployment. All software updates and patches are applied and managed by the service provider, allowing the end user to benefit from the latest functionality.
Application Server Provider. A business that manages and distributes software-based services and solutions to customers via the Internet from a central data centre. See also Application Hosting, Cloud Computing and Software as a Service.
The decrease in value of a tangible asset over its useful life.
The sale or withdrawal of a fixed asset from use upon the completion of its useful life or due to lower productivity in its later life.
The tracking of multiple classes of assets such as office equipment, furniture or specialist technical equipment.
The ability of a PPP project to meet the standards for the areas of the facility to be used as intended (e.g. the classroom in a school). Deductions can be made from payments to a service provider if availability requirements are not met.
Base Case / Base Case Model
The default scenario for the financial performance of a PPP project and will form the basis on which sensitivity analysis start. It is also the underlying position on which changes to the project will be based.
Process of comparing the business processes and performance metrics (generally of facilities management services) of the undertaking within similar industries. Undertaken on a periodic basis in line with the underlying contract.
Building Information Modelling. Information derived from digital representations of the physical and functional components of a building, which is used to support strategic facilities decision-making for the entire building lifecycle. For more details on BIM, click here.
Building Management System. Software which controls and monitors a building or facility’s mechanical and electrical equipment such as ventilation, lighting, power systems, fire systems, and security systems.
The private sector constructs an asset and finances the capital cost during the construction period only.
Build, Own and Operate
Where the private sector builds, owns and operates a facility or service in perpetuity.
Bring Your Own Device. A growing trend where employees are invited to use their own smartphones or tablets for work.
Computer Aided Design. Automated drawing software which is used to create precision two-dimensional drawings or three-dimensional models.
Computer Aided Facilities Management. The use of CAFM software will enable the effective management of physical facilities, and assets (hard services), including equipment such as lighting, heating and air conditioning, in addition to building services (soft services) such as cleaning, grounds maintenance and security.
Service Works’ own CAFM system, QFM, provides ultimate control for facilities management through its flexible modular system, which are available individually or as part of a fully integrated package including: help desk & reactive maintenance, planned maintenance, health & safety, SLA agreements and contracts, mobile workforce management.
Through our CAFM software’s comprehensive reporting capabilities, you will gain essential insight into performance and generate long-term cost savings.
Capital expenditure – the build cost of the building contractor or supply chain contractor.
Confirmation of client change instruction that includes capital, lifecycle, FM costs and any change to the contract service obligations.
Cloud computing is a model for delivering applications and services over the Internet.
Computerised Maintenance Management System. Software which is used to enable the efficient scheduling of maintenance tasks and the effective management of assets and equipment.
Construction Operations Building Information Exchange. An information exchange specification developed to manage BIM data, particularly the information needed by FMs for the management of the facility.
The point at which agreement is reached on all the commercial terms of the project agreement.
Compensation on Termination Payment
A payment made by the public sector body upon termination of a PPP project agreement by the public sector body as a result of, for example; an event of default, force majeure termination event or voluntary termination. The payment amount will be determined by the contract (termination payment schedule) and the level of payment will depend on the reason for the termination.
The duration of a PPP contract from financial close.
Within a PPP project, is sometimes appropriate for the unavailability of one part of a facility to lead automatically to the unavailability of another that is reliant on it. For example, if a corridor in a school is unavailable, it will also result in classrooms located along the corridor being unavailable.
Customer Relationship Management. An approach to describe the management of a company’s relationships and interactions with their customer base and potential customers. Commonly used to refer to the system(s) used manage, schedule, track and store interactions with such clients and prospective clients.
DBFO (Design, Build, Finance and Operate) or DBFM (Design, Build, Finance and Maintain) or DBFMO (Design, Build, Finance, Maintain and Operate)
The acronym applies to Design, Build, Finance and Operate (or Maintain) contracts or Design, Build, Finance Maintain and Operate, where the private sector designs, builds, finances operates and or maintains and asset, operation and supporting services under a long-term agreement.
DCMF (Design, Construct, Maintain and Finance)
Design, Construct, Maintain and Finance – very similar to DBFM, this is generally the convention for PPP prison projects.
A debt provider invests most of the financing required in a PPP, and is thereby entitled to a contractually-defined stream of cash flow in the form of interest and repayment of the principal sum.
In a PPP project, this defines the critical areas of a building where the unavailability of a number of rooms (for example) will cause the unavailability of a whole zone or cluster.
The higher rate of interest applied to a borrower who fails to make a repayment when due.
Design & Build
The contract to design and build a facility or a piece of infrastructure that delivers the performance specification in the PPP contract.
The process of validation of contractual information provided in connection with a PPP, prior to entering into a binding agreements.
Environmental Management System. A software application which manages the impacts of an organisation’s activities upon the environment.
Enterprise Asset Management Software
Software designed to manage the entire lifecycle of an asset, to maximise its productivity and minimise its costs; from acquisition through to operation, management and disposal.
Ordinary share capital invested in a PPP project company by the sponsors and any third party investor, along with loan stock or loans made by shareholders. Equity has the last claim on a project’s income, and bears the highest risk.
Enterprise Resource Planning. Business management software which is used to manage and automate a broad range of back office functions, such as purchasing, inventory, sales, marketing, finance and human resources.
A task associated with planned or reactive maintenance activity.
Facilities Management (FM)
The provision of services ranging from catering and cleaning (soft FM); to minor repairs, decoration and major maintenance and replacement (e.g. of heating systems) (hard FM).
A private entity, normally a finance services company, funds a PPP project directly or uses other methods such as bond issues or long-term leases.
The point at which all contract documents become legally binding and the financing for a PPP project is available. It is at this point that the main contractual terms for the project are fixed.
A computer model which produces all of the data necessary for analysis, decision making, fund raising and ongoing monitoring of a PPP project based upon agreed inputs.
A framework contract is an agreement with suppliers, which establishes the terms governing PPP contracts which are awarded during a given period, in particular price and quantity. A framework is a general term given to agreements with suppliers which set out terms and conditions under which specific purchases (Call-Offs) can be made throughout the term of the agreement.
Full Business Case (FBC)
Produced for major infrastructure investments prior to contract award.
Geographic Information System. Technology which captures, manages and information about geographic locations.
General Packet Radio Service. Technology for radio transmission of small packets of data, especially between mobile phones and the Internet on 2G and 3G communication networks.
Global Positioning System. A satellite navigation system which is used to determine information about ground position and velocity.
Gross Service Units (GSU)
The number of service units attributed to an area of the building as a measure of its usage.
The maintenance and replacement of building components (e.g. roofs, heating equipment, windows, lamps, doors).
Health & Safety
Health & Safety. The goals of Health and Safety programs are to protect the safety, health and welfare of employees and building users in line with legal and regulatory compliance
A workspace sharing model which involves multiple workers using a shared work area during different time periods. Workspaces can typically be reserved for use by a mobile worker whenever they are required to be in an office.
An indemnity is an undertaking which is given by one contracting party to compensate the other contracting party for a loss which may arise as a result of an event occurring (or not occurring) as specified in a PPP contract. Unlike a breach of warranty claim, there is no onus on the party seeking to enforce the indemnity to show that a breach has arisen or that a loss has been suffered.
A provider of finance that is not a commercial bank but trades large volumes of financial securities and is subject to limited regulatory oversight. Examples include pension funds and insurance companies.
Internet of Things. The networking of physical devices, buildings and other items, allowing them to collect and exchange data using sensors and software.
Integrated Workplace Management System. Enterprise software solutions that span the lifecycle of facilities and asset management, from acquisition, operation and management through to disposal.
Key Stage Review (KSR)
A multi-faceted review of a PPP project carried out at key stages of its development and procurement to recommend improvements and increase confidence in out-turn predictions.
Key Performance Indicators. Performance-related metrics that are used to evaluate factors which are crucial to the success of an organisation.
The replacement of the components of a building so as to ensure asset performance meets required standards over the contract period.
The total of all recurring and non-recurring costs over the lifetime or a specified period of an asset or piece of equipment.
The provision of finance by a financial institution to a PPP project.
These are practices that have developed during the operational phase of a PPP contract which are not defined in the contract and therefore not adequately captured by the original performance management regime and payment mechanism.
A service whereby the software provider administers the hardware, operating systems and all systems software. Applications are accessed by the end user via the Internet. All software updates and patches are applied and managed by the service provider, allowing the end user to benefit from the latest functionality. See also Application Hosting.
Maintenance Management Software. This software streamlines the management of planned and reactive maintenance, assets and health and safety.
NPD (Non-Profit Distributing)
Non-profit distributing. The NPD model was originally used in Scotland as an alternative to the PFI model, but it has since been superseded.
O & M (Operation & Maintenance)
Operation and maintenance contract, whereby a private operator operates a publicly-owned asset under contract for a specified term.
Occupational Health & Safety. The goals of Occupational Health and Safety programs are to protect the safety, health and welfare of employees and building users in line with legal and regulatory compliance.
The requirements set out by the authority in terms of what they want to achieve through a PPP project are defined as ‘outputs’, leaving the private partner to decide on how best they will combine ‘inputs’ in order to deliver those requirements. The services detailed in the output specification should be capable of objective assessment so that the performance of the private partner can be accurately monitored.
P3 (Public-Private Partnership) is a procurement method involving collaboration between public government bodies and private companies, whereby private sector businesses finance, build and (in some cases) operate infrastructure and services and provide facilities management through long term concession agreements. These agreements transfer substantial risks to the private sector in return for payments over the concession life (usually at least 25 years). Payment is only made if services are delivered according to the requirements of the P3 agreement.
Platform as a Service. A web-based solution that allows development of applications and services over the internet, accessible via any web browser.
A payment mechanism is the principal means for allocating risk and incentivising the contractor to deliver services to the required standard within a PPP (public-private partnership) contract. If these standards are not met (typically relating to service, performance and availability), then the PPP contractor will incur financial deductions according to the contract’s service level parameters.
Personal Digital Assistant. A handheld device that combines computing, telephone/fax, internet and networking features. PDA devices are largely being rendered obsolete since the widespread usage of Smartphones.
Poor service in a PPP contract will incur performance points based on KPI weightings. The accumulation of points eventually leads to a unitary charge deduction.
PF2 is the UK Government’s new approach for using private finance to deliver of public infrastructure and services through long-term contractual arrangements between between public government bodies and private companies, following a review of the previous model, the Private Finance Initiative (PFI). For more information, see PFI.
PFI (Private Finance Initiative) is a UK-based procurement method involving collaboration between public government bodies and private companies, whereby private sector businesses finance, build and (in some cases) operate infrastructure or services and provide facilities management through long term concession agreements. These agreements transfer substantial risks to the private sector in return for payments over the concession life (usually at least 25 years). Payment is only made if services are delivered according to the requirements of the PFI agreement.
Planned Preventative Maintenance. Maintenance that is performed routinely in order to prevent equipment failure and optimise the life of assets.
PPP (Public-Private Partnership) is a procurement method involving collaboration between public government bodies and private companies, whereby private sector businesses finance, build and (in some cases) operate infrastructure or services and provide facilities management through long term concession agreements. These agreements transfer substantial risks to the private sector in return for payments over the concession life (usually at least 25 years). Payment is only made if services are delivered according to the requirements of the PPP agreement.
The main contractual document in respect of a PPP which requires signature by the authority and project company at financial close.
A Public-Private Partnership (also known as PPP or P3) is a contractual collaboration between public government bodies and private companies to finance, build, and (in some cases) operate or maintain on an ongoing basis an infrastructure or services project. PPPs have been in the development of a wide variety of buildings and infrastructure (including hospitals, schools, roads, rail and judiciary facilities) as well as services (such as water, healthcare and vaccination programmes).
Quick Response Code. A type of 2D electronic bar code that is used to provide easy access to information (such as asset information) through a Smartphone.
In PPP contracts, whereby recurring or widespread failures across key services or assets, automatically lead to corresponding higher penalty deductions.
Remedial action taken to resolve the failure of an asset or piece of equipment.
The withholding of an element of the service fee at the end of a PPP contract until the supplier has met the required conditions for handover of the assets.
Radio Frequency Identification – radio waves which can be used to identify or track a tagged object.
Software as a Service. A web-based solution that enables businesses to run software applications over the Internet on a recurring basis, which is usually provided by an ASP (Application Service Provider). See also Application Hosting.
Service Availability Date (SAD)
The date on which a facility meets the various criteria required to make it “available” as defined by PPP contract terms – this will generally trigger payments from the procuring Authority to the SPV.
Service Level Agreement. A contract between a service provider and a customer which defines the terms, quality, and scope of the service to be provided.
A mobile phone that is able to perform many of the functions of a computer, typically with a touch screen and an operating system capable of running general-purpose applications (“apps”) in the form of a highly portable device.
Certain operational services including cleaning, security, porterage, catering, grounds maintenance, litter picking, car park management and churn management.
Special Purpose Vehicle or Special Purpose Company (SPV / SPC) / Project Company
A company set-up solely with the intention of carrying out a specific PPP project or activity. This allows the operations of the company to be ring fenced from other activities. Also assists with off balance sheet treatment.
An individual or company that provides services for a main contractor.
Business processes by which organisations manage their risks, obligations and opportunities in order to minimise impact upon the environment.
Tablet or Tablet Device
A computer contained in a single panel which incorporates the use of a touch screen as the input device to provide access to a web browser and general-purpose applications (“apps”) in the form of a highly portable device.
Unitary Payment / Charge
The payment made under the terms of a PPP, which provides a revenue stream for capital investors (i.e. re-paying principal and interest) and the costs of production for service providers.
Element of the unitary charge which varies according to usage.