1. This guidance is designed for members of the defence acquisition community involved in projects and programmes considering or using the Private Finance Initiative (PFI). The guidance is designed to help readers understand the key characteristics of a PFI procurement approach and to give them an overview of the issues and processes associated with the use of the PFI in MOD. It does not attempt to cover the subject in detail and should not be used as the sole source of information. More detailed guidance on specific topics is published on the MOD Private Finance Unit (PFU) Defence Intranet and MOD Internet sites and referenced in the guidance. It should also be read in conjunction with the MOD Acquisition Operating Framework (AOF) as it does not provide guidance on many facets of MOD acquisition not specific to PFI.
2. It is MOD policy that the following mandatory requirements regarding PFI are adhered to:
• MOD PFU must be consulted on all defence projects and programmes considering or using PFI or where there is a clear case for PFI.
• A decision to use PFI must only be made after a stringent assessment of whether it offers better value for money than conventional or other procurement approaches.
• All IAB Category A-C projects must consider using PFI.
• All PFI projects/programmes must use HM Treasury and MOD PFU mandated specific PFI terms and conditions.
• Acquisition teams must obtain MOD PFU's approval prior to issuing any PFI invitation to tender/negotiate/participate in dialogue to industry.
• MOD PFU must be consulted prior to the appointment of financial advisors.
• Functional lead assurors must consult the MOD PFU as subject matter experts before forming an assurance opinion.