Reference No: 042/2014
Request Date: 09/04/2014
Please note that the information requested relates to your construction procurement activities over the past 12 months.
The structure of a PFI contract means that the question posed in the FOI request is not really relevant. The Authority will only begin making payments for the project once the fire stations have been constructed and the facilities management services have begun to be provided. There is no payment by the Authority to the building contractor or any sub-sub contractors during the construction phase of the project. The Authority will also be making payment to a special purpose vehicle, rather than directly to the construction contractor and sub-sub-contractors – which is the market approach to a PFI style deal.
Payment under the Building Contract are managed between the special purpose vehicle and building contractor and are essentially discharged on a milestone basis. As you will be aware operating within the construction industry, the way in which payments are made to construction contractors is regulated by the Housing Grants, Construction and Regeneration Act 1996. The Building Contract for this PFI project is drafted to be compliant with the payment and ‘pay less notice’ approach as set out in the aforementioned legislation. Other than carrying out limited due diligence of the construction arrangements prior to entering into the project, the Authority does not seek to monitor such payments under the building sub-contract as this is the for the special purpose vehicle to monitor and enforce.