In simple terms, a value for money (VFM) analysis refers to the process of developing and comparing the total project costs, expressed in dollars measured at the same point in time, related to the following:
1. Traditional Project Delivery: Estimated costs to the public sector of delivering an infrastructure project using traditional procurement processes (under which total estimated costs are known as the public sector comparator, or PSC), and
2. Alternative Financing and Procurement: Estimated costs to the public sector of delivering the same project to the identical specifications using AFP (under which total estimated costs are known as the adjusted shadow bid, or ASB).
The difference between the public sector comparator and the adjusted shadow bid is referred to as the value for money. If the adjusted shadow bid is less than the public sector comparator, there is positive value for money by procuring a project using AFP.