6. As with other requirements, the contractor should be asked to provide a breakdown of the sub-contract element of the price. Many contractors are reluctant to provide this and, in some instances, sub-contractors may refuse to provide such information. Where breakdowns of the sub-contract element are obtained an assessment of the hours quoted and rates used should be made where possible. Where this is not provided commercial staff should decide whether a breakdown is required. In many cases this will not be forthcoming. However, where the sub-contractor in question is a major shareholder in the SPV, or is a part of the same company group as the SPV, the sub-contractor element should always be subject to full scrutiny including the use of CAAS where appropriate. The labour, overhead and profit rates to be used in the sub-contractor quotation should, in such instances, be that which is agreed between the MOD and the sub-contractor annually by CAAS.
7. The need to obtain breakdowns from sub-sub-contractors must also be assessed and, where necessary, the SPV advised of the need to include the necessary terms in these contracts to enable breakdowns to be obtained. This is particularly relevant where the main sub-contractor is a major shareholder in the SPV. Due to commercial issues a sub-contractor may be reluctant to provide price breakdown to the PFI contractor, in such circumstances the sub-contractor may be willing to provide this information direct to the MOD. In order to overcome the provision of limited price breakdowns acquisition teams are encouraged to negotiate clauses for insertion in the sub-contracts which oblige the sub-contractors to provide the information required.
8. For changes where the sub-contract element is high value the MOD can try to obtain agreement from the PPP/PFI contractor to price the sub-contract directly on the basis of NAPNOC including the use of CAAS where appropriate. If this approach is being considered commercial staff should be consulted.