Rates

2.  Where possible labour rates to be applied should be agreed with the contractor as part of the PPP/PFI negotiation whilst competition still applies. Where the PPP/PFI contractor is an SPV it is likely that labour rates will not have been agreed by Cost Assurance & Analysis Service (CAAS) and the company structure will not assist in agreement of these rates. In such instances the acquisition team commercial staff should seek to reach agreement with the PPP/PFI contractor on the labour rates to be applied to staff working for the PPP/PFI contractor. These rates may be agreed on the basis of:

•  advice from CAAS;

•  information on labour rates obtained from Government sources (e.g. job centres);

•  reference to rates for similar work undertaken in the relevant industry sector;

•  MOD agreed rates with the major sub-contractor where the main sub-contractor is the main shareholder in the SPV and MOD agreed rates exist with that sub-contractor.