15. PFI contracts are generally of a long term nature so not all changes that may be required can be foreseen. The NAO survey showed that 55 per cent of the authorities surveyed had already used change procedures to update their contracts. Most of the changes made related to changes in services, the introduction of new services, and additional works and changes to the design of buildings.27 The OGC considered that most of the changes were fairly minor while some, such as the authority and the contractor agreeing to joint testing of the service, were beneficial and showed that the partnership was working well. The Major Contractors Group also said that there were far fewer changes under PFI deals compared to a conventional building contract.28
16. One of the reasons authorities gave, however, for a decline in value for money was high charges for additional services.29 A recurring feature in traditional construction projects is that departments accept lowest price tenders, but contractors then seek to increase their profit margins through variations and claims for additional work.30 The OGC standardisation guidance emphasises that authorities should configure PFI contracts to satisfy themselves that change would be made on a value for money basis through the life of the contract.31
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27 C&AG's Report, paras 1.37-1.38
28 Q11
30 2nd Report from the Committee of Public Accounts, Improving Construction Performance (HC 337, Session 2001-02), para 3
31 Qs 228-230