Full "PFI Type" Lifecycle Costs | Data Collection | Periodic Lifecycle Costs | Data Collection |
Analysis of cost experience from bodily similar PFI projects, completed either by the Procuring Authority or by the sponsoring Department or its associated Estates Agency | Interrogation of databases maintained either by sponsoring Departments or by professional advisers | Traditional level and timing of investment in assets in the sector on the basis of records maintained by, for example. Departmental Estates Agencies (such as NHS Estates and Defence Estates Agency) | Interrogation of databases maintained either by sponsoring Departments or by professional advisers.
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Advice provided by external experts relating to the optimum lifecycles and associated costs for particular classes of assets. | Dissemination by sponsoring Departments or lifecycle cost norms achieved in PFI projects | Traditional level and timing of investment in assets by the Procuring Authority on the basis of | Judgements of Procuring Authority made on the basis of experience of availability of funding for lifecycle investment for broadly similar categories of assets when conventionally procured. |
Particularly for equipment, guidelines published either by manufactures of by relevant professional or trade associations |
| Traditional level and timing of investment in assets in the sector on the basis of past experience |
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1.89 For the Conventional Procurement Option, Procuring Authorities need to determine both the level of Lifecycle Costs investment and how frequently it is to be introduced (for example annually, bi-annually, every ten years etc.). If Procuring Authorities choose to mimic the level and profile of Lifecycle Costs typically achieved under a PFI Option, then, other than Optimism Bias, the Spreadsheet eliminates any VfM difference related to this factor between the two procurement methods. The level of Optimism Bias to be applied to Lifecycle Costs may not differ significantly from the level applying to initial Capital Expenditure.
1.90 If Procuring Authorities choose a less prudent profile, based on their experience of the level of public capital traditionally available to support investment in Lifecycle Costs, then the Spreadsheet introduces an appropriate VfM premium. This premium represents the attritional effect that sub-optimal investment in Lifecycle Costs has on service quality, year-on-year.
1.91 Table A1.H sets out the assumptions used to adjust VfM in the Spreadsheet for the Lifecycle Costs investment profiles chosen by the Procuring Authority. The value of the various hard-wired Lifecycle VfM related assumptions tabulated below have been set at a level such that a "premium" is payable in the event that the frequency and magnitude of the on-going maintenance are less than under PFI, thereby compromising the quality of service.