SoPC4 allows for changes to be made to the specification of soft services at the time of value testing. However there are concerns about the inflexibility of contracts to changes in services between value testing dates; and that value testing may often not give confidence in effective competitive repricing over long timeframes.
In some PFI arrangements, soft services have not been contracted as part of the PFI arrangements and Treasury's 2006 Value for Money Assessment Guidance makes recommendations on assessing the value for money of inclusion or exclusion of soft services from PFI contracts.
A case can be made that excluding soft services allows contract managers more flexibility to ensure service requirements can be adapted to changing needs, and without requiring complex contractual variation and approval requirements. However, for some projects there is a risk that this approach could risk losing integration benefits of the whole life design and costing of the asset and related services.
Question 29: Should soft services continue to be included within the contractual model alongside the delivery and finance of the public facility? Question 30: Are there alternative approaches to the contractual framework for soft service delivery for a long life facility that could result in a better balance of risk transfer, flexibility and competitive pricing? Question 31: What impact would the separate contracting of soft services be expected to have on equity and debt investors' view of the project's risks and rewards? |