6.4 In the past, PFI guidance encouraged transfer of utility volume risk to the contractor but in practice many contracts included complex bespoke risk sharing provisions. Such provisions took time to negotiate and were resource intensive to manage. It was not clear, therefore, that these arrangements offered value for money to the public sector. With the removal of soft services from PF2 as set out in Chapter 4, the argument for revisiting this approach is clear as there is even less scope for the contractor to manage the usage of utilities when its responsibilities are limited to hard FM maintenance.
6.5 In future, under PF2, variations in the consumption of utilities costs will be allocated to the public sector subject to the contractor retaining responsibility for the efficiency of the design of the building (against the energy efficiency standards developed through the procurement process). This will be done through a rigorous handover procedure incorporating a two year testing regime. If this process shows that usage of utilities is higher than the agreed efficiency standards, the contractor will be required to rectify the building or make a compensatory payment to cover the authority's loss. Tariff risk also will remain a public sector risk.
6.6 The authority should normally take consumption risk after the extended two year acceptance regime, to avoid imposing this risk on the contractor. Exceptions to this general rule may be possible only in particular sectors where:
• appropriate metering systems (which do not involve disproportionate cost) are included in the design as standard;
• the physical built environment and usage pattern is simple; and
• risk sharing arrangements are developed which are acceptable to the market and do not involve the contractor making significant ongoing reserves against the risk.
6.7 For more details see the Standardisation of PF2 Contracts Section 19.9.