1.16 Under PFI contracts not all risks can be or are suitable for transfer to the contractor. It is clearly important that authorities continually monitor risks to which they may be exposed and take steps to manage them. In our survey, we were told by the Ministry of Defence that, under the terms of their Fixed Telecommunications Service contract, it had become exposed to the possibility of having to pay the contractor (BT) compensation of up to £12 million because the anticipated numbers of users paying for secure speech services was not sufficient to enable BT to recover its initial investment in developing this service. Proactive management by the Ministry, working in conjunction with BT, enabled a satisfactory resolution of this situation which involved changes to required volumes of users and the mechanisms for funding BT's investment in the service. On this basis, BT had agreed not to press for the compensation to which it was entitled under the contract.