3 The methods we used in the examination of the South Western franchise were:
a Review of files and management information
■ For specification and procurement: We examined the following key documents: the Business Case, Stakeholder Briefing, Invitation to Tender, Office of Government Commerce Gateway reports, evaluation assessments, the franchise agreement and the submissions to Ministers;
■ For management and monitoring: We examined: the franchise agreement and related National Rail Franchise Terms; the service level agreement; the service quality plan, standards and monitoring system; the revenue protection plan; the business plan; minutes of the monthly franchise management meetings between the Department and the operator, along with related documents supplied by each party; and financial and performance data held by the Department and by the Office of Rail Regulation.
b Interviews
■ For specification and procurement: We interviewed the staff in the Department who had been involved in the specification and procurement, the winning and losing bidders, and the train operator link manager from Passenger Focus.
■ For management and monitoring: We interviewed the Department's Director of Rail Service Delivery, divisional manager and franchise manager, contract manager and finance manager, and the Passenger Focus link manager.
c Analysis of the financial model
■ We appointed DS A Ltd to provide us with expert consultancy advice on how well constructed are the franchise financial model and associated templates that the Department uses for analysing the revenue and cost implications of bids and for making risk adjustments to bidders' assumptions. In addition, we carried out sensitivity analysis on the Department's assumptions about subsidy profiles over the medium term.