3.1.14 PPPs usually involve long-term contracts during which time circumstances may change. This may occur for any number of reasons, only some of which can be foreseen. The public sector therefore requires a flexible contract with suitable mechanisms for achieving necessary operational variations in a transparent, cost-effective way. Notwithstanding this, the PPP contract requires some fundamental certainty in order to be viable.
3.1.15 GPEs could incorporate, as part of the contract, a 'change' or 'variation' procedure that provides a mechanism for the implementation of such changes and a basis for calculating the consequences for the payment to the private sector and any consequential adjustment in the project's allocation of risk. Within this, two basic methods can be applied: 1) in-built tolerances (eg. a right to change space needs within parameters as part of the original deal); 2) variation procedures (eg. pre-priced options for additional capacity, or specific procedures such as benchmarking and tendering to determine the costs of the variations). Stipulating variation procedures upfront in the contract is an objective way to obtain fair prices for reasonable changes in requirements. The underlying objective is the need to balance flexibility with value for money.