5.25 It is inevitable that changes will be required during the life of a private finance contract. Making changes requires a negotiation to change the contractual specification. Contractors often use such negotiations as ways of enhancing their profitability. There is risk to VFM if changes are not competitively tendered or if the contractor charges an additional fee to process the change.
5.26 The National Audit Office report on making changes in operational projects found that PFI deals offer sufficient flexibility, but that VFM has not generally been obtained. Larger changes were not always competitively tendered; smaller changes were relatively expensive and took longer to process than in non-PFI projects. Furthermore most private sector PFI partners charged an additional management fee of 5-10% for changes which was not justified by the work needed to process them.95
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95 Making changes in operational projects, National Audit Office (HC 205, 2007-08).