It takes on average just under three years to tender and close a PFI deal

3.1  Tendering periods for all the PFI deals with a capital value of over £20 million that closed between 2004 and 2006 lasted an average of 34 months.15 Between 2000 and 2003, the comparable figure was 33 months. There were variations between sectors, with the average times for schools, hospitals and other deals being 25, 38 and 47 months respectively. The shortest overall tendering period was 16 months and the longest 73 months (Figure 8).

3.2  It is important for the ultimate success of a PFI deal that sufficient time is taken to ensure that tendering is done well, but despite Treasury and Departmental measures to improve and make the PFI procurement process more efficient, the average length of time taken to tender the projects which closed between 2004 and 2006 was no shorter than that for earlier projects, closing between 2000 and 2003. The lack of any official benchmark for tendering times means there is no guidance on this issue, and comparisons with conventionally procured projects are misleading. PFI deals require agreement not just on the construction of buildings or other assets but also on the services to be provided throughout a 25 to 30 year contract, and are thus inherently more complex to procure.16

3.3  In 2004, the Department for Education and Skills set up a joint venture with PUK, called Partnerships for Schools, to run the tendering of schools projects (including PFI projects) and to address some of the issues highlighted in this report. The joint venture has developed new procurement documentation, provided a central source of procurement expertise and consulted extensively with the market. It is too early, however, to determine its impact on programme delivery as most projects tendered under the programme have yet to reach financial close.

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15  This is based on our census data. The 11 local authority projects closing between April 2004 and May 2006 that we did not survey had a very similar average tendering time of 35 months.

16  OGC data for conventionally procured projects with a capital value of £20 million or greater indicated that average tendering times were approximately half those of PFI projects.