1.8 This note is designed to be broadly relevant to any PFI Contract nearing the end of its term and especially to those considering alternative options for some continuity of services once the original term has expired.
1.9 As a general rule of thumb Contract Managers should consult this guidance before they begin planning for exit and transition at a minimum of 3 years prior to the natural end of the Contract term.
1.10 Allowing three years should eliminate the risk of not having sufficient time to undertake
any tasks which could have long lead times, such as
• the preparation for any new procurement, especially if there is expected to be a need for a new PFI or other complex procurement form; and
• making arrangements for a retention fund to bring assets up to the required standard set out in the original project documentation. A condition survey, for which technical advice may be required, will help to judge if a retention fund is necessary.
1.11 In some cases, having made this initial early assessment of the relevant issues, it may not then be necessary to commence any action for some time after that. However, given the potential operational and financial consequences of this process over-running, it is far better to begin the planning too early rather than too late.
1.12 At the beginning of the planning period the Authority should consider whether professional legal advice may be required. Issues which may require legal advice might include:
• Staff Transfer issues and especially application of the Transfer of Undertakings Exit provisions in the current contract, especially where the rights and obligations necessary to achieve a successful exit are perceived to be either unclear or incomplete.
• Interpretation and application of EU procurement directives; and
• (Protection of Employment) Regulations (TUPE).
1.13 Although much of the content of this note may also be applicable to early termination, it has not been written with this situation primarily in mind and there are likely to be other important factors outside the scope of this guidance which will also need to be addressed in these circumstances.