Module 7 PPP/PFI Contracts (1 day)

Aims

To understand the key issues surrounding the procurement of major public sector projects using the PFI/PPP models.

 

To understand the different stages, structures, potential advantages and disadvantages of PFI compared to traditional procurement and the current situation in the PFI/PPP market as a result of the credit crunch and political change.

 

To understand the tendering timetable, the key procurement regulations and how organisations can ensure they are achieving continuous value for money on operational delivery from PFI/PPP Projects.

 

To understand the lead up to preferred bidder stage, financial completion and managing and monitoring contracts.

 

To provide auditors with a 14 stage PPP/PFI procurement process, concentrating on the areas that often cause auditors difficulty in practice. Each learning outcome will include the roles that auditors might play in addressing controls and risks and the key areas upon which they should focus their reviews.

Learning Outcomes

1 - Introduction and Overview

  • Understand the background to the use of PFI/PPP to fund public sector infrastructure projects and how it compares with the traditional procurement model.
  • Be able to discuss the merits and demerits of using PFI/PPP and the need for organisations to ensure and demonstrate that its chosen procurement approach is efficient and economical.
  • Learn from best practice and how to avoid the costly mistakes of the past.
  • Explain different PFI/PPP models using real practical examples.
  • Describe the key stakeholders (internal and external) involved and the importance of comprehensive planning.
  • Understand the preliminary stages of PFI/PPP project and practical hints and tips.
  • Appreciate the current status of PFI/PPP arrangements in the current financial climate.

2 - Planning Phase

  • Appreciate procurement options appraisal to build a robust and commercial business case for PFI/PPP procurement.
  • Understand how to select and prepare internal teams and source experienced external advisors.
  • Be aware of the key financial risks involved in PFI/PPP projects including value for money/ affordability, future demand changes and how public sector organisations can ensure the proper delivery of services under the terms of the contract.
  • Consider best practice in the planning, development, delivery and governance of PFI/PPP project management and the key areas upon which auditors should focus
  • Understand project finance concepts, including different sources of finance, the requirements of the different funders of PPP/PFI projects, typical funding structures and the trends in the funding of PPP/PFI projects in a credit crunch.
  • Analyse strategies for selecting the route to market, specifying the requirement stakeholder engagement and approaching the market.

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