Integrator

2.27 Under the integrator approach, the public sector authority procures a project delivery organisation (the integrator) to manage the delivery of a project through pre-procurement preparation, procurement, construction and into operation. The contracting authority defines the overall policy and procurement objectives in the usual way, and then works with the partner to refine requirements and agree the optimum phasing and procurement strategy. The partner manages the procurement of the underlying assets and services and then integrates them to provide an overall service to the authority. The underlying packages can include both PFI and non-PFI elements.

The integrator takes on the role of delivery partner and manages delivery of the supply chain. A key difference between an integrator arrangement and a SIP is that the integrator takes a less direct role in delivering works and services itself. This increases overall competitive pressure on the supply chain, aligns the objectives of the authority and the integrator and tends to avoid conflicts of interest. Despite the close alignment of interests between the contracting authority and the integrator, this approach does involve:

∙ clear allocation of risks and responsibilities between the private sector and the contracting authority;

∙ performance, availability and price risk being transferred in whole or in part to the integrator;

∙ the integrator being incentivised through a payment mechanism to ensure timely delivery, achievement of target costs and performance of the service to the required standards; and

∙ transparency through open book accounting.

An example of a project being undertaken using an integrator is MoD's United Kingdom Military Flying Training System (see Example 2.5).

2.28 An integrator approach may be suitable in situations where there is:

∙ some uncertainty over the long-term requirement, with a resulting desire for flexibility and incremental acquisition, for example where new technology risk is present, end-user demands are subject to change, or policy changes are likely to affect how, where and what services are to be delivered in the future;

∙ uncertainty about the timing or exact phases of works;

∙ a long construction phase and where efficiencies could be derived from dividing the project into distinct phases or parcels;

∙ limited supply-side competition to provide the entire project as one, but where the project can be sensibly divided into separate packages and competition introduced in the supply chain in a transparent manner; and

∙ scope over the life of the contract to increase efficiency through continuous improvement and innovation.