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Delivering savings from PFI contracts
We’ve been working with this key central government department to help deliver savings on one of their PFI Contracts. Our commercial expertise and in-depth FM category knowledge have been key to understanding and unlocking the potential benefits.
A benchmarking/market testing milestone had been set within the original PFI contract, enabling the client to go out to market to seek a further price reduction.
While the incumbent had put in place savings proposals, it was critical that these proposals were tested to ensure they represented value for money.
Our team undertook a review of the PFI contract and financial model. From this they developed an understanding of how the contractor was engaged and what measures they could undertake to generate greater income from their catering and retail activities on site.
The team also engaged with the contractor to ensure that best practice supply chain management was being undertaken with the contractors own supply chain.
Improvements in supply chain management
- £16m+ lifecycle savings agreed for client
- Additional £1m+ savings delivered from ensuring SCM activities undertaken throughout supply chain
- Contractor self funded developments undertaken to benefit client and enable the contractor to earn more revenue
- Enhanced retail derived revenue to contractor benefits client through gainshare mechanism
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