Public sector organisations are likely to face operational disruption, lack of service continuity and financial loss if exit arrangements are poorly managed.
Early planning, due diligence and engagement with Project Co will ensure that when ‘the keys are handed over’, the condition of the facility, services transferred and additional assets are as specified in the Project Agreement. This is to prevent, following handback, liabilities arising and immediate investment. Ongoing service provision will also require a robust strategy in order to plan for either the re-procurement of such services or providing them in-house. A detailed explanation of our procurement service can be found here.
We can provide our clients with a full package of support to manage all aspects of PFI expiry, including initial project planning, detailed due diligence, negotiations with the Project Company, remedial work strategies, transfer of services, property transfer, as well as dispute management and resolution where required. Our public sector team includes our colleagues in Employment and Property to ensure that all aspects of PFI expiry are considered.
Each PFI expiry is unique, and we offer clients an individually tailored service based on their specific circumstances and Project Agreement. Our comprehensive approach and strategic thinking allow us to provide clarity and reassurance to our clients throughout the transition process, ensuring that post PFI, the provision of services and facilities is successful and cost-effective.
Our team has extensive experience advising clients with the expiry of their PFI contracts, including:
Assisting an NHS Trust with the expiry of its contractual arrangements including the TUPE transfer of several hundreds of staff, the failure of the services provider to consult with staff correctly, successfully defending claims for such failures and obtaining compensation for the poor condition of equipment made available to run the services.
The project arrangements which, due to a variety of novations and variations, are operating very differently than had originally been intended.
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- We were able to identify that Project Co had failed during the contract period to perform the varied Project Agreement requirements;
- We successfully negotiated with Project Co’s representatives to agree the Expiry Date and terms;
- We identified that Project Co had not been contributing to the Sinking Fund in accordance with contract requirements, and were able to ensure reimbursement of hundreds of thousands of pounds for works which the Trust had undertaken but which were the responsibility of Project Co
Having previously advised on the negotiated voluntary termination of one of its PFI schemes, we are now assisting an NHS Foundation Trust in the south of England in relation to its preparation for the expiry of another four of its PFI schemes. At this initial stage, we are undertaking a comprehensive review of the Project Agreements, in the context of expiry, and advising the Trust on relevant provisions, necessary action and recommended next steps.
We are Assisting this client in preparing for expiry, with a particular focus on PPM failures and seeking to ensure that facilities are in accordance with contract requirements.
Our End-to-end support ensures compliance with guidance and toolkits issued by the Infrastructure and Projects Authority in the lead up to expiry, as well as drafting bespoke due diligence questionnaires to address key issues such as asset and TUPE transfers. We are also liaising with experts to undertake condition surveys to establish the true status of the PFI facility prior to handback.