PERFORMANCE-BASED SPECIFICATIONS: Exploring when they work and why

The report examines performance-based specifications (PBSs), which define desired outputs rather than prescriptive inputs, as a tool for sustainable public procurement. While PBSs can drive innovation and circular economy models, they shift the public sector's burden to the evaluation and monitoring stages and require robust data and financial frameworks to succeed.

• Performance-based specifications (PBSs) describe desired performance levels or targets as outputs rather than prescribing specific inputs or technical characteristics, allowing private sector suppliers more flexibility to innovate.
• PBSs can support sustainable public procurement (SPP) and the circular economy by incentivizing resource efficiency, waste reduction, and the use of leasing or service models where the supplier retains ownership and responsibility for end-of-life treatment.
• A significant limitation of PBSs is that they shift the administrative burden of the public authority from the initial bid-writing stage to the more intensive evaluation and monitoring stage of the contract.
• The effectiveness of PBSs varies by sector: they are generally successful in road infrastructure and lighting, but face significant challenges in Information Technology (IT) due to rapid technological advancement and the difficulty of specifying performance levels.
• Financial and budgetary barriers hinder PBS adoption, specifically the mismatch between annual public budget cycles and the long-term payment schedules required for leasing or pay-per-use models.
• The report suggests that 'green depreciation' (accelerated depreciation for assets meeting environmental standards) and revised lease accounting under IFRS could improve the financial viability for contractors engaging in PBS contracts.
• Case studies indicate that successful PBS implementation requires early market consultation, the use of design competitions to set benchmarks, and the establishment of clear Key Performance Indicators (KPIs) and sanctions for underperformance.

APA

Turley, L., Silva, M. H., Benson, S., & Dominguez, C. (2014). PERFORMANCE-BASED SPECIFICATIONS: Exploring when they work and why. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/performance-based-speculations-exploring-when-they-work-and-why.pdf

Chicago

Turley, Laura, Mariana Hug Silva, Scarlett Benson, and Carlos Dominguez. PERFORMANCE-BASED SPECIFICATIONS: Exploring when they work and why. International Institute for Sustainable Development, 2014. https://www.iisd.org/system/files/publications/performance-based-speculations-exploring-when-they-work-and-why.pdf.

Wikipedia

{{cite report |last1=Turley |first1=Laura |last2=Silva |first2=Mariana Hug |last3=Benson |first3=Scarlett |last4=Dominguez |first4=Carlos |title=PERFORMANCE-BASED SPECIFICATIONS: Exploring when they work and why |publisher=International Institute for Sustainable Development |date=October 2014 |url=https://www.iisd.org/system/files/publications/performance-based-speculations-exploring-when-they-work-and-why.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{turley2014performancebased, author = {Turley, Laura and Silva, Mariana Hug and Benson, Scarlett and Dominguez, Carlos}, title = {{PERFORMANCE-BASED SPECIFICATIONS: Exploring when they work and why}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = oct, url = {https://www.iisd.org/system/files/publications/performance-based-speculations-exploring-when-they-work-and-why.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }