| ACHIEVABILITY While PFI may allow a more efficient and effective combination of public and private sector skills, determining the rules that will govern the relationship between the two sectors does involve significant transaction costs. In particular, the procurement process can be complex and involve significant resources, including senior management time which may be required for project development and the ongoing monitoring of service delivery. Authority capacity and capability, together with private sector deliverability will have direct consequences for procurement times and the level and quality of market interest. PFI needs a robust competitive process to deliver fully its benefits and so the choice of procurement route should be informed by an assessment of the likely market appetite. | ||
| Issue | Question | |
| Market interest | Is there evidence that the private sector is capable of delivering the required outcome? | The project team will need to update their Stage 1 assessment by providing tangible examples of private sector delivering the services required. |
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| Does a significant market with sufficient capacity for these services exist in the private sector? | The project team will need update their Stage 1 assessment highlighting any specific supplier capacity issues. |
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| Is there likely to be sufficient market appetite for the projects in the programme? Has this been tested robustly? Is there any evidence of market failure for similar projects? | The project team will need to update their Stage 1 assessment. |
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| Have any similar projects been tendered to market? Has the procuring authority's commitment to a PFI solution for this type of project been demonstrated? | The project team will need to update their Stage 1 assessment highlighting whether any inherent factors have subsequently emerged to affect the procuring authority's commitment to a PFI solution. |
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| Does the nature of the project suggest that it will be seen by the market as a profitable venture? | The project team will need to liaise with MOD PFU to answer this question. |
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| Are the risks associated with design, development and implementation manageable bearing in mind the likely solutions to the project? | The project team will need to demonstrate that it has a good understanding of the risks through an appropriate risk management strategy |
| Other issues | Is the procurement feasible within the required timescale? Is there sufficient time for: resolution of key Authority issues; production/approval of procurement documentation; staged down-selection and evaluation of bidders, negotiation, approvals and due diligence? | The project team will need to update the Stage 1 assessment by providing a detailed timetable for the procurement process highlighting any issues that may impact upon timescales. |
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| Is the overall value of the project significant and proportionate to justify the transaction costs? | The project team will need to update the Stage 1 assessment, highlighting any issues that may impact upon transaction costs. |
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| Does the nature of the deal and/or the strategic importance of the work and/or the prospect for further business suggest that it will be seen by the market as a potentially profitable venture? | The project team will need to update their Stage 1 assessment but they may need to liaise with the MOD PFU to answer the question. |
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| Does the Authority have the skills and resources to define, deliver and support the service throughout the procurement and the subsequent delivery period? | The project team will need to update their Stage 1 assessment highlighting whether it has sufficient client-side capability to manage the procurement process and subsequent operational delivery phase. |
| OVERALL ACHIEVABILITY | Overall, is the accounting officer satisfied that a PFI procurement programme is achievable, given an assessment of the market, Authority resources and the attractiveness of the proposal to the market? | The project team will need to provide a brief narrative summarising whether there is sufficient client side capability to deliver an achievable procurement that is both attractive to and deliverable by the market. |