16 October 2003 | Mark Whitehead
European Union rules should be changed to make it easier for public bodies to alter the length of contracts when they are due to be re-tendered, according to a Whitehall chief.
David Smith, commercial director at the Department for Work and Pensions, told the conference that having to stick rigidly to the original renewal date created turmoil on both sides of the deal at a time when they least needed it.
In a session titled "Is there life after PFI?", Smith said many long-term deals agreed in the early 1990s, many involving big IT projects, had nearly expired.
He said greater flexibility was needed under the EU directives governing public-sector deals.
Government departments, local councils and other bodies are often barred from agreeing with their suppliers to end a contract early or to extend it before going out to tender again, as often happens in the private sector.
"A contract let now will have different requirements in 10 years," he said. "The department may have reorganised or there may have been mergers or takeovers on the supplier's side.
"The contract needs to be flexible enough to cope with change."