PART TWO The parties could have reduced project risks

2.1  The termination of the PFI contract for the NPL can be directly attributed to deficiencies in JLC Ltd's original design for the new buildings. The Department identified concerns about the design. During the procurement, the Department considered that Laser would overcome the Department's concerns and so did not insist on Laser demonstrating that its design could work. Following the award of the contract, the Department did not seek to resolve its concerns by imposing a design solution on Laser because the Department wished to ensure that responsibility for meeting its specification remained unambiguously with the private sector. The Department's aim in doing so was to maximise incentives for the private sector to solve any problems, avoid costs falling on the taxpayer, and, initially, keep the value of the buildings off its balance sheet. However, the private sector failed to respond to these incentives in the manner expected by the Department.