Phase

What is expected from the procurement authority?

When deciding the project

Ensure that the project fits with the business requirements of the Authority.

Demonstrate that Private Finance is the appropriate delivery mechanism, usually through a Business Case (otherwise, use the best procurement route).

Ensure that stakeholders support the project's progress, in particular that all relevant stakeholders have been consulted when deciding the best procurement route.

Ensure that the desired specifications of the project are feasible and affordable.

Assess all risk associated with the project before tendering, including procurement risks.

At the contract signature

Ensure that the output specifications fully address the business requirement.

Design robust payment and performance regime.

Encourage innovation.

Demonstrate that private finance continues to be the best procurement route.

Test that the stakeholders' commitment to the project remains high.

Select the most advantageous bid, ensuring that it addresses all core business requirements and that key stakeholders support it.

Demonstrate that the selected deal is affordable.

Identify all project risks and risk-manage them, ensuring that there is a clear risk-management plan to be used once the contract goes live.

Ensure that the risks best managed by the private sector have been transferred.

Ensure that competitive finance has been achieved.

During the operation

Ensure that the asset has been delivered to contractual specifications, that it is fit for purpose and being maintained at good standards.

Ensure that price increases, if any, relate to changes requested by the authority, and that these are value for money.

Keep all stakeholders informed about the project, and test the level of satisfaction of them.

Ensure that risk mitigation procedures are in place and that risk allocation is working. If changes in the contract have implied new risks, then ensure these are consistent with the original contract.

Ensure that services provisions meet contractual specifications, and that if any difference arises proper actions are taken.

Demonstrate that private finance is, still, the best option, and that the deal is still affordable.

Benchmark, periodically, for price and quality.

Ensure that all parties are seeking to maximise quality.

The full framework matrix is available on our website: A Framework for evaluating the implementation of Private Finance Initiative projects: Volume 1, National Audit Office (May 2006)

Source: National Audit Office