5.34 As explained in Part 4 of this Report, the high costs of technical transition could not have been known to Ministers when approval to appoint the preferred bidder was given in September 1998. On the basis of earlier reviews GCHQ had assumed that it could meet the estimated extra costs through its existing budget provision. Further, GCHQ did not re-assess the estimated technical transition costs used in the final comparator when actual costs to be taken on board were found to be much higher at the time the PFI contract was approved in June 2000.
5.35 GCHQ has concluded that the high technical transition costs that were subsequently identified were inevitable and therefore irrelevant to the deal pursued. It considers that these costs would have had a neutral effect on whatever accommodation solution was chosen, whether the PFI deal or a conventionally financed alternative.
5.36 In this respect there would have been no benefit to it in committing resources to a re-assessment of the technical transition costs used in the final Public Sector Comparator especially as the case for the PFI deal was already very strong in cost and benefits.