The Department of Health is in talks with leading PFI professionals to find ways of speeding up the agreement of contract variations at large hospital scheme.
The move comes after complaints by contractors that negotiations can take up to a year. The variations in question tend to be substantial redesigns, such as the installation of an additional wing.
In the worst instances, NHS trusts have asked contractors to draw up designs for additional or altered elements, and then requested that they be re-priced after finding fault with them.
The private sector is being represented at the talks by the health division of the PPP Forum, which comprises 103 organisations. It has held a series of meetings with civil servants to improve the negotiation procedures.
Tim Pearson, head of the health forum and a director at infrastructure investment group Innisfree, said: “The reason behind these talks was that I was concerned that variations had got a bad press. People were saying they were too expensive.”
However, Pearson added that it should not surprise contractors that it took time to negotiate variations. He said: “They are complicated schemes and the client wants us to be very prescriptive in the contract.”
The more detailed the initial contract – and PFI documents are notoriously complex – the more difficult it is to make changes. This is particularly true of changes to operational hospitals, where construction work can prevent the private sector operator from hitting its performance targets.
I was concerned that variations had got a bad press
Tim Pearson, Innisfree
Contract changes are often required for these hospitals because space has to be reconfigured to accommodate new medical equipment.
One suggestion is that there should be small forums established, including clients and contractors, to agree changes quickly.
Stephen Tobin, an associate at lawyer McGrigors, said: “These forums would provide greater upfront detail of what the client wants for the contractor.”
A DoH source said: “We are talking to the PPP Forum in broad terms. It’s in the early stages.”
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