3.19 Putting together and agreeing such a comprehensive set of output specifications took longer than expected. National Savings planned to complete the project in 15 months, from inviting expressions of interest in March 1997 to the signing of a contract in June 1998, leading to a private sector partner taking over the operational service from September 1998. In the event, the contract was awarded in January 1999 and SBS formally took over the service on 1 April 1999. Key dates are shown in Figure 13.
Figure 13 |
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Comparison of National Savings' planned timetable and actual dates achieved | ||||||
This figure shows that National Savings completed the project six months later than originally planned but that slippage was only 20 days against the planned target for completion after issue of the Invitation to Negotiate | ||||||
| Original plan | Planned at issue of Invitation to Negotiate | Actual dates achieved | Slippage from original plan (days) | Slippage from dates planned at issue of Invitation to Negotiate (days) | |
Issue OJEC | 01.03.97 | - | 01.03.97 | 0 | - | |
Longlist bidders | 07.07.97 | - | 07.07.97 | 0 | - | |
Issue Information Memorandum | 28.07.97 | - | 28.07.97 | 0 | - | |
Receipt of bidders' responses | 10.10.97 | - | 10.10.97 | 0 | - | |
Completion of Invitation to Negotiate | 28.11.97 | - | 06.03.98 | 70 | - | |
Decision to invite final bids | 24.11.97 | - | 15.04.98 | 102 | - | |
Receipt of final bids | 02.02.98 | 16.07.98 | 15.07.98 | 117 | (1) | |
Completion of negotiations and recommendation of preferred bidder | 19.06.98 | 03.09.98 | 06.11.98 | 100 | (47) | |
Economic Secretary to the Treasury choice of preferred bidder | 19.06.98 | 27.11.98 | 30.11.98 | 116 | 1 | |
Award and contract signing | 24.06.98 | 09.12.98 | 05.01.99 | 139 | 20 | |
Source: National Savings | ||||||
3.20 The major reason for missing the original targets was a delay in issuing the Invitation to Negotiate caused by the time needed to refine the requirements of the project, reach a final decision on whether the project should proceed and select the final bidders. The Treasury and PFI Task Force were aware of the need to have a well constructed Invitation to Negotiate and they challenged National Savings and its advisers on the content. Following the issue of the Invitation to Negotiate, the project only slipped by 20 days against a revised timetable.
3.21 There were considerable benefits in sending out a properly constructed Invitation to Negotiate and it is questionable whether National Savings would have got such a good deal if the document had been issued on the date originally intended. In clearly specifying the benefits expected, the payment mechanism and the roles of both partners, National Savings avoided disagreements at later stages in the project, enhanced the comparability of final bids and reduced the risk that the preferred bidder might make unreasonable demands prior to taking over the operational service.