This report sets the overall framework for the discussions in this MLE. It sets the introduction of a PRFS within the overall public funding system for research and investigates the role and importance of the policy objectives that govern the design of a PRFS and its two components, i.e. the assessment process and the funding formulae. The report also gives an overview of the key design parameters that define a PRFS and the design options available for policy-makers. For the evaluation component, these are the model to use for the assessment, the scope of research activity included, the indicators and assessment criteria, and the granularity and periodicity. These aspects are investigated further in the other thematic reports.