Health service adopts countdown for PFI contract bidders

16 Dec 99
Contractors bidding for Private Finance Initiative contracts in the health service face an extra round of competition following the introduction of long-awaited guidance by Health Secretary Alan Milburn.

17 December 1999

The guidance recommends that short lists of three contractors should be reduced to two, with both preparing a priced bid, before a preferred bidder is chosen. This 3-2-1 approach will replace the system where the three-strong short list is cut back at once to a preferred bidder.

Peter Cockett, of the Department of Health's PFI capital branch, told Public Finance that the aim was to get a better final price. But he added: 'We accept that it does put more costs at the back end of the bidding process for bidders who might not get the contract.'

Since the government came to power, 31 major hospital projects have been given the go-ahead under PFI. This week it was also announced that a new £75m development would take place at King's College Hospital in south-east London.

The new guidance is more than a year late. Work began in summer 1998, with the intention of publication by that autumn. Cockett said the delay was caused by the need to update information in the light of government reforms.


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