26. Core functions. It is of the utmost importance that the MOD has agreed a clear (and operationally justified) position regarding functions within, or adjoining, the nominal project boundary that cannot in any circumstance be transferred to the private sector under PFI. It is also helpful to have any "grey areas" defined where MOD's preference is for, say, Armed Services operation, but where proposals for private sector operation may be considered if there are compensating benefits that offer improved value for money and do not compromise overall operational effectiveness.
27. Service boundaries. The MOD must have given full consideration (i.e. to the appropriate level of authority) to possible extensions to the scope of the project to cover either additional functions within the same operational area or similar functions in different areas. It is in the nature of PFI that such proposals are likely to arise from industry in the weeks following ITN issue and it is important therefore that MOD can provide timely, accurate and justified responses to such questions.
28. Major uncertainties remaining in these two areas at the ITN issue stage represent a considerable risk to the Feasibility of PFI projects. Such unresolved issues could at best result in a sub-optimal solution being delivered and at worst result in extensive delays and/or the failure of the PFI procurement.