16 For a funding competition to be successful, departments must carefully consider the following aspects:
a The project agreement must be commercially viable. Without a commercially viable agreement there is a risk that the subsequent due diligence by funders will result in changes being made to the project agreement during the competition and a probable delay to financial close. The use of standardised contract terms, which are known to be acceptable to financiers, should help departments to negotiate commercially viable contracts and to attract greater competition in sources of finance.
b High quality advice is essential. When appointing advisers, departments need to consider whether an adviser has sufficient commercial experience, specifically in the PFI market, and suitable experience of raising finance.
c The competition must be planned in advance. Early planning will help to avoid cost increases and any potential delays to the completion of the project. Departments will also need to judge carefully the number of potential funders asked to bid.
d The evaluation criteria must be well thought through. In particular, departments and their advisers need to consider carefully the appropriate funding structure in relation to the risks transferred and recognise that the lowest cost does not always represent the best value.
e The capability of the department's own project management to take on the additional responsibilities inherent in a funding competition.