Benchmarking/market tests surveyed have mainly taken about the same amount of time as recompeting conventional outsourcing contracts

2.12  Projects varied in their response as to how long the process had taken them. This was because in a number of projects there were various issues associated with the value testing process on which parties had a difference of opinion, but these were resolved through negotiation. These were related to, for example, the validity of the benchmarking information, the criteria used for assessing market bids from alternative suppliers and the apportionment of management overhead costs.

2.13  Based on the seven projects that had completed the value testing process for soft service provision, the benchmarked projects had taken between nine and 25 months and the market tested projects between 12 and 1 6 months. In the case of St John's House, Bootle, the benchmarking took 25 months as the public sector rejected the proposed 1 6 per cent increase in the price of services as this would have exceeded the cap on the services element portion of the quarterly Unitary Service Charge. One project, Hereford and Worcester Magistrates' Court, has yet to complete the benchmarking process it began in February 2004 because of difficulties in finding comparable data (Figure 13). However, there is little incentive for the private sector to push on with the process since the contract only allowed for a service price decrease at the time of the first benchmarking exercise.

2.14  Some of the projects examined told us, that in planning to carry out the value test, informal meetings between the authority and project company may take place at any time up to two years before the process was due to be completed. Projects commented that they had underestimated the amount of time that was needed to agree to benchmarked data, or to undertake a market test. This emphasises the need for all parties involved in the process to agree to a realistic project plan with clear timescales and responsibilities. These matters are now reflected in the Treasury's 2006 guidance.

2.15  Figure 14 compares the public sector experience of value testing the soft services within PFI contracts to that of the renewal of non PFI contracts. It shows that the PFI and non-PFI sectors are very similar in terms of the timing and duration of the process although one of the initial PFI benchmarkings is taking considerably longer to complete.