32.2.1 The Authority must manage and control the final stage to Contract close following the appointment of the winning bidder. In the past, this has been the stage where project timetables have been most vulnerable to slippage. The Authority will be under pressure to adhere to timetables for Contract signature that are expected (by the end user and/or the relevant Government department) to be delivered on time.
32.2.2 To address the above concerns, the Authority should seek to ensure that each final bidder provides sufficient information so that the Authority can evaluate the length of time that it is likely to take to achieve Contract signature following appointment of the winning bidder. Accordingly, each bidder's final bid submission should set out:
• any final changes to the Contract (and any other draft contracts provided to the bidders) and the reasons for them (although the dialogue procedure should ensure there are no surprises here);
• representations as to how well developed the bidder's Sub-Contracts and finance documents (to the extent relevant where a funding competition is being held595) are, and confirmation that, in any event, finalisation of the Sub-Contracts and finance documents (to the extent relevant where a funding competition is being held) will not result in any request to amend the Contract; and
• an estimate of the amount of time that the bidder and the Senior Lenders (to the extent relevant where a funding competition is being held)) believes it will take to reach Financial Close following the appointment of the winning bidder.
If a funding competition is being held, the bidder will, at this stage, then be in a position to launch its pre-planned funding competition. Where a funding competition is being held the parties should refer to HMT's Draft Outline Guidance "Preferred Bidder Debt Funding Competitions" dated August 2006.596
32.2.3 To reinforce the above, Authorities should require a written commitment, from all parties, to the Contract terms and in particular the payment mechanism. This is achieved by the Authority providing a letter to the winning bidder, to be countersigned by the bidder, its lenders (to the extent relevant where a funding competition is being held) and Sub-Contractors in which the parties confirm their acceptance of and commitment to the draft Contract. The letter will also set out any issues of clarification or confirmation, which remain (though no points of negotiation should remain - see Section 32.1.2). Appointment of the winning bidder will be conditional on signature of the commitment letter.
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595 Note that in the acute PFI healthcare sector in NI, funding competitions are not being used.
596 See HMT website at www.hm-treasury.gov.uk.