Preferred Bidder Appointment Letter

Dear Sirs

[Name of Authority] - Fire and Rescue or Police PFI Project

Following our letter to you of [insert details] and our subsequent conversations/meetings, I am writing to you to set out the position that has now been agreed between us.

Subject to receiving confirmation from you and [insert name of funders] on the points addressed in this letter, the decision has been taken by the Authority to appoint [insert name of Bidder] as Preferred Bidder.

1.  The Unitary Charge set out within your [BaFO] Bid is fixed by reference to your service proposals (subject, of course, to any significant Authority changes) and on the assumption that financial close occurs on or before [insert date].  If financial close occurs after that date, then the Unitary Charge will be increased only by movements in [insert details] from [insert expected date of financial close] up to [insert details] and thereafter increased in accordance with the proposals included in your [BaFO] Bid submission of [insert date].  The Authority will take the risk of any movement in [insert LIBOR or applicable interest rates] between [insert relevant date of BaFO or Bid submission] and financial close.  The benefit of any reduction in [insert LIBOR or applicable interest rates] (including the buffer) will be passed in full to the Authority.

2.  As regards the PFI Contract terms, we are pleased that, subject to the points noted below, you have confirmed your acceptance to these terms.  Again, we would ask for your confirmation by way of countersignature of this letter that, subject only to the points set out below, you have accepted the PFI Contract issued to you [refer to version or date of PFI Contract], so that the only issues which will require negotiation between now and Contract signature are matters of detail which are Project-specific and which remain to be agreed.

[Insert details of issues that remain to be agreed]

3.  As regards the Payment Mechanism, we would ask you to confirm, again by countersignature of this letter, that you have accepted the Payment Mechanism in its entirety subject only to:

[Insert details of Payment Mechanism issues that remain to be agreed]

We would be grateful if you, and [insert name of funders] and [insert name of sub-contractor] would countersign this letter where indicated below to confirm your approval to the terms of this letter.