| Component |
OBC Requirements |
FBC Requirement |
1. Economic Appraisal |
- Appraisal should fulfill requirements of NI Practical Guide to the Green Book e.g.
- Business need assessed and 'SMART' objectives detailed.
- 'Do minimum' and alternative options appraised, including e.g. variations in the scale and type of service provision.
- Suitable calculation of NPVs, consideration of unquantified factors, sensitivity analysis etc.
- Results summarised and preferred option indicated.
- Level of detail should generally be similar to that in an appraisal for a traditional procurement.
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- Business need and objectives reviewed and confirmed. Important changes since OBC detailed.
- Shadow bid model and PFI bids identified and described.
- Full details provided of appraisal of the PFI bids, including calculation of NPVs, sensitivity analysis and consideration of other relevant factors.
Relevant guidance:
OGC Bid Evaluation Guidance at:
http://www.ogc.gov.uk/introduction_to_procurement_bid_evaluation.asp; and
Treasury Taskforce Technical Note 4: How to Appoint and Work with a Preferred Bidder at:
http://www.hm-treasury.gov.uk/media/ADC/F1/ACFBEE.pdf
- Results summarised and recommendations made.
|
2.PFI VFM test |
- PSC compared with PFI option according to Stage 2 HMT Nov 2006 Value for Money Assessment Guidance.
- The relevance and application of this guidance to Northern Ireland is explained in DAO (DFP)02/07
|
- Stage 3 HMT Nov 2006 Value for Money Assessment Guidance applied, covering:
- the Quality of the Competition
- Market Failure
- Risk Sharing
- Stability of Costs
- Financial Flexibility
- Financial Structures
- Contractor Distress
|
3. Affordability |
- Projected PFI service payments estimated and Shadow Bid Model developed.
- Capital and Revenue DEL impact for both PFI and PSC fully quantified on a year-by-year basis over the whole life of the project.
- Confirmation that a PFI solution would be affordable over the whole life of the contract, taking into account all sources of existing revenue support and additional income from capital receipts or third party income.
- Confirmation that affordability analysis, and impact on budgets, is accepted by the relevant Dept or Agency.
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- Capital and Revenue DEL impact for preferred PFI bid fully quantified on a year-by-year basis over the whole life of the project.
- Confirmation that the preferred PFI solution is affordable over the whole life of the contract, taking into account all sources of existing revenue support and additional income from capital receipts or third party income.
- Confirmation that affordability analysis, and impact on budgets, is accepted by the relevant Dept or Agency.
|
4. Output Specification |
- Requirement specified in terms of service outputs required, rather than particular assets or solutions.
- Range of on-going services included in the requirement defined broadly, to offer scope for efficiencies and innovation.
- Specification pitched at a level that is justifiable as the level at which the Dept or Agency would specify it using traditional procurement, by reference to precedent, or any enhancement in specification provides greater value for money. Output specification provided at least in outline form.
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- Copy of the full detailed output specification provided.
- Any significant changes since the OBC highlighted.
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5. Risk Allocation |
- A risk register has been prepared, identifying all the foreseeable risks associated with the scheme, and making a preliminary risk allocation.
- The preliminary allocation, as a minimum, transfers the principal risks associated with design, build finance and operation of the facilities, and considers the allocation of risks associated with levels of usage, residual values, technology and obsolescence and changes in legislation or regulation.
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- Proposed risk allocation detailed in full.
- Changes in thinking since OBC recorded.
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6. Indication of Bankability |
- Evidence of commercial interest.
- Certainty of income stream to meet contract payments.
- Willingness to consider all opportunities for generation of other revenues, either from sales of assets or third party use of assets and services.
|
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7. Key Terms and Conditions |
- Following a template for commercial and legal terms where one exists.
- Heads of term or outline contract prepared.
- Proposed payment mechanism that reflects risk allocation.
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8. Suitability of Proposed Advisers |
- Arrangements for obtaining legal, financial and technical advisers, with appropriate experience, and demonstrating VFM from advisers.
- Willingness of advisers to share lessons and approaches, without undue confidentiality and copyright constraints.
- Arrangements for periodic review of performance of advisers.
|
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9. Indicative Timetable |
- Timetable prepared.
- Stages of procurement process kept to a minimum consistent with achieving VFM.
- Total elapsed time from OJEC to completion realistic.
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- Timetable updated and confirmed in detail.
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10. Project team |
- Project management experience.
- Appropriate range of skills and experience, whether from advisers or in house, for the deal envisaged.
- Accessible to involvement of Taskforce.
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- Details of proposed management structure and team updated and confirmed.
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11. Statutory Processes |
- Statutory processes addressed (such as planning permission, public enquiry etc as appropriate).
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12. Commitment of sponsors/users |
- Demonstrable support from key users and, where appropriate, consultation with those users.
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13. Tendering Process |
- The intended approach to tendering should be indicated.
- The latest EU regulations should be followed. Practical help is provided on the OGC website Guidance on the 2006 Regulations at: http://www.ogc.gov.uk/guidance_eu_procurement_4645.asp
- DFP's Central Procurement Directorate (CPD) can provide specialist advice on procurement issues.
|
- The following explained and recorded:
- the EC Directives relevant to the case;
- the method of invitation to tender employed;
- the bids received;
- the short-listing process; and
- the negotiations conducted.
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14. Accounting Treatment |
- Report progress on determining the appropriate balance sheet treatment.
- State a view on whether the project is likely to be treated as 'on or off balance sheet'
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- Provide update confirming the balance sheet treatment.
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15. Arrangements for Post Project Evaluation |
- These need to be detailed in the OBC only if it is decided to pursue a traditional procurement, in which case section 11 of NI Practical Guide should be followed.
- If PFI is being pursued, details may be deferred to FBC.
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- Details should be given as indicated in NI Practical Guide section 11 including indication of the factors to be monitored and evaluated, the time scales involved, and who will be responsible
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16. Presentation of the Results |
- Economic appraisal presented according to requirements of NI Practical Guide.
- Other material presented in the order of this Annex, using appendices for detailed assumptions as appropriate.
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- Material presented in the order of this Annex, using appendices for detailed assumptions as appropriate.
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