This part of the Report shows how the Contributions Agency managed the problem of negotiating a ground-breaking Private Finance deal, the first such deal aimed at providing office space. In the absence of direct precedents, the Contributions Agency proceeded cautiously, and were rightly unwilling to rush to close a deal on terms they regarded as not good enough. The procurement therefore took three years. It is not undesirable for departments to take time to make sure the deals they negotiate are right, but in our view getting good deals from the Private Finance approach depends upon securing vigorous competition between bidders. If prospective bidders expect long procurement times, then they may not wish to enter the bidding, and poor value for money may result.
Six out of eight bidders told us that they would be interested in bidding for future government accommodation projects. The remaining two said that the length and cost of the procurement in this case was such that they would hesitate to bid in future competitions unless the process could be speeded up.
A chronology ofh the key events in the project is at Appendix 4.