2.1 APPLICATION AND IMPLEMENTATION

2.1.1 This guidance uses a range of approaches to issues from explanatory text to specific drafting. Significant parts of the standard drafting are now sufficiently well established to be included in transaction documents without amendment. The drafting specified as required drafting (and accompanying definitions) in the following Sections should not be amended (except as envisaged by its accompanying footnotes and guidance notes):

2.1.2 In certain circumstances (e.g. on large, complex or novel deals), Authorities may still need to consider making changes to standard drafting, in order to address project-specific issues. In such circumstances, which should be limited, HMT (through Infrastructure UK) must be consulted.

2.1.3 This guidance applies to all PF2 contracts in England and Wales but does not apply to ICT projects.2 The PF2 model is not suitable for Projects with a capital value of less than £50 million.

2.1.4 The HMT letter entitled "Implementation of Standardisation of PF2 Contracts", published on the HMT web site sets out the requirements for the implementation and enforcement of this guidance. In short however, relevant Private Finance Units should ensure that their model PF2 contracts for their own sectors comply with this guidance and are approved by Infrastructure UK. Any Authority which wishes to derogate from required drafting (as implemented in the relevant sector standard form) on any particular transaction must make the case for change, based on project-specific reasons, and get this approved by Infrastructure UK. While Authorities who need help in relation to this guidance can contact HMT (through Infrastructure UK), in the first instance Authorities should seek advice from relevant departmental Private Finance Units.

2.1.5 Where the Authority entering into the Contract is a local authority, some additional considerations apply. For example, it is important that it has the necessary powers to enter into the Contract and that, in so doing, it is not fettering itself in the performance of its normal public duties. In addition the Contract should be certified under the Local Government (Contracts) Act 1997. Local Authorities seeking to enter into PF2 contracts may seek advice and assistance from Local Partnerships.

_____________________________________________________________________________________________________

2 For ICT projects refer to Cabinet Office and to Local Partnerships' ICT Model Services Agreement and Guidance at http://www.localpartnerships.org.uk