MPs blast buyers' handling of PFI

27 November 2007
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27 November 2007 | Antony Barton

A lack of Private Finance Initiative (PFI) expertise in public sector procurement teams is resulting in poor negotiations with bidders, who "often have the whip hand".

Edward Leigh MP, chairman of the Committee of Public Accounts, made the comment in a statement with today's committee report on tendering and benchmarking in PFI.

He added: "The process by which PFI projects are tendered has not improved since our committee last reported on the topic, four years ago. In some respects, it has got worse."

The report reveals that since 2004 the number of deals attracting only two bidders has more than doubled, thereby increasing the risk of no competition if one of the bidders is weak or drops out. It also found one-third of procurement teams made changes to a PFI project once it had selected a single, preferred bidder.

The report recommends the OGC and the Treasury create a career structure that will attract and develop a cadre of procurement professionals that can deal with PFI projects. It also suggests a secondment model to allow interchange between buyers in the public and private sectors.

There are now 800 PFI contracts for services worth a total of £155 billion up to 2032.

SMnov2007

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