Following on from Squirrel there is also round 2.
First time the PFI Contractor is in open competition. Second time round he has a firm grasp of the potential profit and loss and can rebid accordingly. In theory his bid may be lower than competitors as he now has experience of the real risks. OTOH it may be much higher because he knows the risks.
The counter bid may never materialise. We are X-years down market and competitors may have been taken over, change direction etc. In our last rebid out of 5 contractors one dropped out early 3 were chosen and one dropped out on the last day.
Both bids came in substantially above the budgetted figure. We could either redesign the contract to shave capability but it was already pretty thin or t ake services back in-house but that was not an option as we had shed capability. The contractor got his price. Already the writing is on the wall as we approach round 3. The contractor is already squealing as his margins are already squeezed. We are simply going to have to reserve more cash for round 3.