Procurement times

2.10  The average procurement time of the seven case study projects which reached contract letting was 43 months. (Figure 14 overleaf). For example, the Field Electrical Power Supplies Project took over 68 months from the initial advertisement to financial close and the Defence Animal Centre, a less complicated project, took almost 44 months. By comparison, our 2007 report on Improving the PFI Tendering Process4 found that the average procurement time for all the PFI deals across government with a capital value of over £20 million and that closed between 2004 and 2006, was 34 months. For earlier deals, closed between 2000 and 2003, the comparable figure was 33 months.

2.11  In the larger population of projects we surveyed, where data was available, the Department took on average 37 months to procure its PFI projects. In 77 per cent of the projects we surveyed (36 of the 47 projects) the Department held data on procurement times. In the other projects, mainly because of changes in project staff since the procurements, such data was not available. Larger projects often took longer to procure, the average for the Department's PFI projects with a capital value of over £50 million, where data was available, being 45 months. These larger projects were around half of the projects supplying data on procurement times.

2.12  Some of the Department's PFI projects, including some of the case study projects, are complex or deal with specialist equipment. These factors may add to the time needed in procurement compared with hospitals or schools, for which there is generally a fairly standard procurement approach based on many similar previous PFI projects. The range of the Department's in-house stakeholders who are involved in decisions about the projects and the assessment of the deals is also a factor. But some of the procurement time incurred on the Department's PFI projects is due to changes in the specification, or difficulties in obtaining data about service requirements, during the procurement period. It is in the Department's interest to be as efficient as possible in its procurement as the projects often need to be delivered promptly for operational purposes, and in the long run bidders are likely to build the cost of time spent on bidding into their pricing of PFI deals.

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4  Improving the PFI Tendering Process HC 149 2006/07.