18. The focus here is to ensure, given the long term nature of PFI deals, that the initial project agreement takes account of the MOD's long term requirements, anticipating any changes that can reasonably be foreseen. Accordingly an appropriate amount of flexibility should be designed into the solution to cope with anticipated changes. Also a well developed change mechanism, including pre-pricing wherever possible, should be put in place in the contract to deal with unanticipated changes over the length of the contract period. Good change mechanisms should seek to achieve at least the following outcomes:
• Clear process with clearly defined roles, responsibilities and timescales;
• Quick and efficient procedures (appropriate to the scale and complexity of the change required) with transaction time and cost kept to a minimum;
• Transparent pricing; and
• Value for money.
19. For projects requiring a considerable degree of long term flexibility consideration of shorter contract lengths, financial structures and inclusion of break points or early termination rights may be appropriate.
20. Throughout the operational phase robust control of customer requirements together with robust management and operation of the change process will be a key responsibility of the contract management organisation.
Relevant MOD policy/guidance:
• MOD PFU Guidance Note - MOD Standard Project Agreement v1 for PFI Projects
• MOD PFU Guidance Note - Making a Change in PFI Contracts
• HM Treasury: Standardisation of PFI contracts (SoPC) Version 4
• Operational Taskforce Note 3: Variations Protocol for Operational Projects