PFI—standardisation of contracts
PFI—standardisation of contracts

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • PFI—standardisation of contracts
  • Background
  • Development of variant PFI model contracts
  • PF2
  • Practical use of PFI/PF2 model contracts
  • PF2 model contracts

Produced in partnership with Foot Anstey LLP, revised in partnership with CMS

This Practice Note looks at the standardisation of contracts in relation to PFI and PF2, and considers the practical use of model form contracts.

Background

The history of model, or standard form, contracts in the PFI context is a long one. Even before the July 1999 publication by HM Treasury of version 1 of 'Standardisation of PFI Contracts', there had been various Technical Notes issued by the Treasury Taskforce for Projects, containing guidance and contract drafting which would later inform a plethora of sector-specific or project-type-specific model project agreements and supporting contracts.

Version 1 of Standardisation of PFI Contracts was published largely in response to the second review of PFI undertaken by Sir Malcom Bates, commissioned on 12 November 1998, which was carried out in tandem with Peter Gershon's review of central government civil procurement. A key theme of Bates's second PFI review was the need to consolidate and strengthen central coordination in PFI procurement, coupled with a need for greater standardisation of contractual terms. The main reasons (albeit not stated in precisely these terms) are fairly obvious:

  1. reducing PFI procurement time/expense by avoiding unnecessary wheel reinvention

  2. achieving more robust contract positions for the public sector, and reducing the ability of private sector contractors to divide and conquer

  3. enabling like-for-like