MoD must speed up PFI procurement

30 October 2008
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30 October 2008 | Paul Snell

The Ministry of Defence needs to speed up the time it takes to procure PFI projects, according to a report published today by the National Audit Office (NAO).

It found the average procurement process took 37 months at the MoD, compared with an average of 34 months across the rest of the public sector.

"Today's NAO report has highlighted some severe shortcomings, particularly the nearly four years on average it has taken for the MoD to procure each large project. That's no way to do business," said MP Edward Leigh, chairman of the Public Accounts Committee.

Tim Burr, head of the NAO, said: "The department could reduce procurement times by speeding up decision-making and by collecting better information at the outset on current and prospective use of the service and the condition of assets."

The report raised concerns a lack of information about necessary services needed in projects could affect value for money. Suppliers might increase prices because of uncertainty and procurements may take longer because of the need to clarify specification.

The audit body also found post-contract evaluations, looking at the efficiency and cost of the procurement process, were not carried out.

The MoD is responsible for more than 50 PFI projects, with service charges to suppliers reaching £1.3 billion in 2007-2008. The review did praise the department for delivering the majority of projects on time, for the expected cost and with satisfactory service.

The NAO added knowledge of the contract and project aims need to be passed on and projects benefited when a member of the contract negotiation team continued on to the operational phase.


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