Existing/Interim Services - Section 3.7

9  SoPC refers to the issues that arise if a Service Provider is taking over existing services, as well as contracting to provide new or additional services.  Although some Local Authority social care PFI projects will involve the provision of existing services for an initial or interim period until any new and/or refurbished facilities become operational.  The Model Contract assumes construction of a new Facility with Services commencing on completion of the Works and does not include provision for interim services.  

10  Where interim services are required, the Services Specification and payment mechanism will need to include arrangements for ensuring that the Service Provider is only paid for those elements of the Services that are delivered in accordance with an achievable Services Specification (which may have a lower performance standards than the "full" services).  The Service Payment during the interim phase should only reflect that the interim Services are meeting existing standards and should not include any payment towards a Service Provider's debt costs.  

11  Local Authorities will need to carefully consider how to deal with poor performance during any interim phase.  Service Providers and funders are generally resistant to any possibility of termination due to poor performance of the interim services.  If performance is sufficiently poor, Local Authorities should consider whether the relevant sub-contractor should be replaced.  

12  Where provision of interim services is required, the Local Authority should identify in the instructions and guidance to bidders the structure that it believes will offer Best Value within the parameters of project affordability, bankability and a reasonable and realistic approach to risk allocation.  Local Authorities will also wish to invite bidders to offer alternative approaches if improved value for money can be shown.