1 The objective of this study was to examine the problems that led to the termination of the PFI contract for the NPL, why these problems arose, how the Department managed them and the value for money consequences of the termination.
2 In 2000, we commenced a study into the value for money of the PFI deal however, as our work progressed we became aware of the project's instability. Rather than continue work that was likely to be immediately out of date, we decided, after discussions with the Department, to await developments. Thereafter, the Department provided us with regular briefings.
3 The termination of the contract was a first for a major PFI contract involving serious non-performance. We decided therefore to concentrate our study on this feature of the project. Using the information we obtained from the Department in 2000, from the Department's briefings and from subsequent reviews of a selection of the Department's files, we identified a wide range of issues that we considered might be pertinent to our study.
4 We analysed the issues and found that they logically fell into two high-level, chronologically ordered sets.
To link the two sets, we settled on the overarching question, "Have the Department's actions to achieve its objectives provided good value for money for the taxpayer?" We defined the two sets by the following two questions:
■ Did the Department's actions prior to signing the contract lead to the creation of a suitable contractual framework?
■ Were the Department's actions subsequent to signing the contract appropriate?