3.6  Contract Length

In the event that a PPP procurement is selected as the preferred option, the SBC should include an analysis on the choice of contract length.  Optimal contract lengths for CATS procurements are generally considered to be shorter than for many infrastructure PPP/PFI projects and a typical length may be 10-12 years.  The factors to consider in making this assessment include:

•  Duration of the requirement;

•  Life of the assets underpinning the service;

•  Importance of continuity in delivering the service;

•  Ability and importance of maintaining performance incentives over time;

•  Viability of re-competing the contract regularly; and

•  Ability of the contractor to accurately forecast its cost base.