MARKET FAILURE

PFI needs a robust competitive process to deliver fully its benefits. Delivering the long term outcomes at a good price relies on competitive tension during the procurement phase.

Issue

Question

Market abuse or failure

Is there any evidence from similar projects (in scope or location) to suggest that there will be a shortage of good quality financially robust bidders? 

Is there any evidence of market abuse?

Procurement issues

Was there a good response to the PIN/OJEU notice?  

How many potential bidders passed the PQQ criteria? Are the financial robustness and capacity of the bidders sufficient? 

Is there evidence of good competitive tension in pricing of risks etc?

OVERALL

Overall, in considering this procurement, is the project team satisfied that there is a sound competition?  

EFFICIENT PROCUREMENT PROCESS 

A good procurement is important to sustain market interest.

Issue

Question

Efficient Procurement

Is there a realistic project plan, and has this been adhered to without undue delays? 

Are bid costs likely to be proportionate to the contract value?  

Will any aspect of the procurement impact adversely on market interest? (e.g. restrictions imposed by Competitive Dialogue procedure) 

Are there any problems emerging with the way the procurement is structured?

Authority 

Resources 

Does the procuring authority have the necessary resources to conduct a good procurement? 

Are sound project governance arrangements in place?

OVERALL 

Overall, is the way that the procurement process is proceeding likely to have an adverse impact on the delivery of VfM?  

RISK TRANSFER 

The decision to proceed with PFI is dependant on the market appetite for the project 

Issue

Question

Wider issues

Is the competition delivering the proposed risk transfer being? 

Does the Authority confirm that the nature of the deal and/or the strategic importance of the work still make it suitable for delivery through PFI?  

Is there still confidence that all the key VfM drivers will be preserved.

OVERALL 

Overall, is the risk transfer achievable, given an assessment of the competition, and the procuring authority's constraints?