Recommendations
12 Running a funding competition is a complex undertaking that requires experienced and qualified project managers and advisers on the public and private sector sides of the deal. In many cases the complexity of the competition process and the risks involved will outweigh the potential benefits. In other cases, however, significant benefits may accrue if running a funding competition is a credible option. By reserving the right to require a preferred bidder to run a funding competition, departments can ensure that the financing package supporting the preferred bidder's solution is highly competitive.
13 In the light of the benefits obtained from the funding competition for the Treas building, we make the following recommendations for future PFI deals:
- Departments should always consider the option of using a funding competition
- In the absence of competitive tension a funding competition may be essential
- In deciding to hold a funding competition, departments must pay careful attention to the structure of the deal and how the competition is run
- Departments should take a close interest in bidders' funding arrangements even when there is not a separate funding competition