17 If a separate funding competition is not to be used departments should ensure that they understand and monitor bidders' funding arrangements. Departments and their advisers will need to consider ways in which bidders can be incentivised to obtain the best priced and most appropriate form of financing. This might include:
a The traditional approach of relying on competitive tension in the overall procurement process to incentivise bidders to include the most attractive finance as part of their bids.
b Allowing bidders to suggest running a funding competition and to ensure that the bid evaluation process takes account of this.
c At an appropriate point during the procurement, benchmarking the expected funding costs.
18 We understand that, having considered the issues set out above, the Office of Government Commerce intends to issue guidance to departments on when, in future PFI projects, it may be appropriate for funding to be obtained through a separate competition.