• The Playbook recommends that the asset condition survey is carried out as early as possible – "you cannot start too early" it says - but in any event not later than 5-years prior to contract expiry, with preparation for the survey commencing 2-years before that (i.e. 7-years from expiry).
• It sets out a helpful Survey Process Map which illustrates all of the key activities that contracting authorities and SPVs should take (either individually or jointly) to prepare for and conduct the condition survey. This starts (7-years from expiry) with the preparation of base data (such as the as-built drawings, room data sheets, O&M manuals, asset register, PPM schedules) and compilation of additional contract information (such as Annual Maintenance Plans, Five-Year Maintenance Plans, the Project Agreement & Schedules) and then moves through the various stages including the preparation of the tender documents for procuring the surveyor, procurement process and appointment of a surveyor (6 years from expiry) and the carrying out of the survey (5 years from expiry). 
• Undertaking an asset condition survey 5-years from expiry may seem early, particularly when you consider that many PFI contracts (particularly those based on SoPC4), typically require a final asset survey to be carried out only one to two years prior to expiry.
• But the purpose behind early assessment is to ensure that any deficiencies, defects or maintenance issues it identifies can be funded and rectified in advance of handback, thereby de-risking the handback process itself and in turn facilitating a smoother handover of the services.
• Whilst NISTA advocates an early asset survey being carried as "a critical part of the expiry planning process", SPVs (and their FM contractor) and contracting authorities may decide not to; the Playbook is not intended to replace contractually required handback survey(s). This decision will likely be informed in particular on the scope of existing known issues on the particular PFI scheme and the status of the relationship between the parties. 

As well as conducting an Asset Condition Survey the Surveyor will carry out an Asset Management (Compliance) Report. It is expected that the Asset Management (Compliance) Report will be completed before the Asset Condition Survey, to enable its findings to then inform that Survey.

Asset Management Compliance Report

• This comprises of an audit of Project Co/FM Co service provision.
• It includes an assessment of the data and systems in place (e.g. Room Data sheets, PPM Scheduling, O&M manuals, CAFM systems) to identify sufficiency and discrepancies.

Asset Condition Survey

• Scope: A non-intrusive, room by room condition survey of 100% of the maintainable assets, including accessible ceiling inspections. The Scope includes the use of condition assessment grades and descriptions for asset condition assessment.
• Purpose: To assess the condition of each asset against two standards, being (i) industry standard condition grading and condition indicators' and' project specific condition gradings and condition indicators (see separate headings below).

Industry standard condition gradings and condition indicators

• These are the relevant sector specific industry standard gradings and condition descriptions.
• For example in the Healthcare sector, this would be the "NHS Risk based Methodology for Establishing and Managing Backlog (2004) condition gradings and building assets and engineering assets condition indicators", where "Condition B" means sounds, operationally safe and exhibits only minor deterioration."

Project Specific condition gradings and condition indicators

• These require the surveyor to determine and agree with the 'appointers' (taking into account good industry practice) all physical asset condition/compliance requirements as required by the PFI contract.  This could be a substantial task and will require a full knowledge and understanding of the underlying PFI contract asset condition/compliance requirements. 

Both the Report and the Survey will require a review by the Surveyor of the base data to determine the extent of rectification works required to enable the asset to comply with the handback obligations under the PFI contract. Appendix B of the Playbook sets out the list of recommended base data to be audited (noting that derogations or additions may be required depending upon asset type and/or the requirements of the underlying PFI contract) and provides guidance on preparation of that data, together with how the data is expected to be made available and how it can be assessed.

A downloadable template generic tender scope and supporting documentation is included in the Playbook, providing for a standardised and streamlined approach to the joint procurement of the surveyor, including a detailed scope of requirements.

The scope of the Survey will need to be tailored for each specific project. NHS schemes, for example, should consider the Department of Health & Social Care (DHSC), Centre of Best Practice (CoBP) survey, which applies the principles of the Playbook but addresses specific issues such as fire safety and mental health requirements. 

Construction Defects:

• The survey does not include a review of compliance with the construction elements of the Authority's Requirements or the Contractor's Proposals (both contained in the PFI contract). It focuses solely on whether the assets have been maintained in accordance with the contractual standards.
• The term "Defects" is defined in the Playbook (see Appendix C) as "something which is patently, or is determined to be, a deficiency in the design and or construction of the Facilities in comparison to the Project Agreement construction requirements."
• If requested, the Surveyor will notify Appointers of any potential Defects which, in its reasonable opinion, would be appropriate for the Appointers to consider further. However, the Surveyor is not required to determine whether such issues are in fact Defects. The rationale being that that the standard of proof required in such determination is greater than, and different to, the deliverables which the Surveyor is instructed to produce.
• The Public Sector Implementation Guidance issued alongside the Playbook does acknowledge that the identification of latent defects is nonetheless important and that further investigation against the original construction requirements may still be needed either by way of a separate more detailed review or broadening the scope of the Asset Condition Survey to include such a review.

Fire Safety Survey

• Separate guidance is going to be issued by NISTA in relation to the arrangements needed to identify and address fire safety issues.

Asset residual life

• Again, an assessment of this is excluded from the scope of the Asset Condition Survey and separate guidance will be issued.

• The Project Co is expected to address the findings of the Survey through the existing Project Agreement mechanisms including maintenance and lifecycle plans and, where necessary, service improvement plans. Maintenance work for assets identified by the Survey as condition C or condition D is expected to be prioritised.
• The Playbook outlines a triage process pursuant to which Project Co will address the agreed handback non-compliance issues identified and diagrams showing the various outputs and actions from the Asset Management (Compliance) Report and Asset Condition Survey have been included.
• In summary:
  • All non-compliant survey findings (or those identified as being in Condition C or D in respect of the Asset Condition Survey) are to be triaged into three categories of (i) non-urgent, (ii) health and safety or (iii) urgent operational impact.
  • Health and safety works, and urgent operational impact works are to be logged to the helpdesk and subject to availability/performance penalties where the relevant part of the Facilities is vacated.
  • Non-urgent works are to be included in the annual maintenance plan – Project Co is required to deliver maintenance works included in the annual maintenance plan in line with the timeframes agreed.
• Non-urgent issues identified by the Asset Management (Compliance) Report will be included in a Service Improvement Plan – a plan complied by Project Co based on data generated by the Asset Management (Compliance) Review to rectify issues identified. Project Co is required to implement the service improvements in line with the timeframes agreed.

• Embarking on the Survey journey – which in the majority of cases will be several years earlier than the expiry survey regime in the underlying Project Agreement – will require agreement by all parties including the FM Co and the Lenders.
• The release of the Playbook provides a helpful framework for the parties to a PFI Project Agreement to approach evaluating the condition of the PFI assets and then rectifying any areas of non-compliance identified prior to contract expiry. However, the release of the further guidance and documentation referred to above will help with the implementation of the Playbook and make it more of a practical guide for parties to PFI contracts.
• The current absence of identifying and addressing latent defects from the scope of the Survey is notable given that a number of the high-profile disputes on PFI contracts, particularly in the health sector, have been centred around design and construction stage defects and the liability of the Project Co to rectify latent defects as they become apparent.
• Technical guidance around how to agree a programme of rectification works, use the triage process and address the legal implications of the survey process, findings, rectification works and any relief to be granted (all to be documented in a Deed of Implementation) are currently being worked on and due for release in H2 2025.