International Construction Law Review
HOW PFI/PPP INTERFACE AGREEMENTS IN THE UK HEALTHCARE SECTOR OPERATE IN PRACTICE1
TIMOTHY LEONE GANADO2
The aims of this study
This study reviews technical, operational and commercial as well as the legal issues that arise during the operation of the Interface Agreements. Its aim is to provide greater insight about such agreements by reviewing what has been written about them. The contents of Interface Agreements from different healthcare projects in the UK were reviewed together with related case law. The paper then presents the responses received from structured interviews with persons involved in the legal, commercial, operational and technical aspects of these healthcare PFI projects.
1.1. The relationship between the Project Company, Building sub-contractor and FM sub-contractor
In a typical PFI/PPP hospital project the Authority, typically an NHS Trust, contracts with the Project Company that is a Special Purpose Vehicle for the finance, design, construction, operation and maintenance of an agreed scheme. The Project Company is usually set up and partially owned by one of the larger construction companies often together with an investment company that provides equity.
In its simplest form, the Project Company employs the Building sub-contractor to design and construct the healthcare facility and engages a Facilities Management (FM) sub-contractor or, more specifically, a Hard FM sub-contractor for the running and upkeep of the building fabric and the building services of the facility. All three parties i.e. the Project Company, the Building sub-contractor and FM sub-contractor are then bound by a tripartite Interface Agreement as shown in Figure 1.
The procurement model chosen by the Authority could however be extended from what was described above to include Soft FM and other specialist services. Soft FM subcontracts cover part of or the entire day-to-day or hotel services, such as cleaning, catering, serving of food, portering,
1 This paper was based on the final year dissertation entitled “Interface Agreements in UK PFI Healthcare Projects” that was submitted in part fulfilment of the MSc degree in Construction Law & Dispute Resolution from King’s College London in 2011. This dissertation received second prize in the Master’s Construction Law Degree Dissertation Competition by the European Society of Construction Law in October 2012. The author would like to express grateful thanks to Mike Matheou LLB, Partner at Hogan Lovells LLP, who supervised the dissertation and contributed to this paper.
2 Eur Ing Timothy Leone Ganado B.Eng(Hons) MSc (Building Services Engineering Management) MSc (Construction Law and Dispute Resolution) C.Eng, FCIBSE.
Pt 1] Interface Agreements in the UK Healthcare Sector
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