Both the PSC and Shadow Bid will be based on a full life cycle cost analysis. All costs and expected benefits resulting from each alternative should be analyzed for each viable alternative. This methodology provides a total cost picture and includes both capital and operating expenditures. The analysis should identify one-time costs of establishing the partnership, including the procurements process, as well as costs associated with monitoring the contract and liaising with the partner through the life of the contract.
Early assumptions around preliminary planning, architectural and design work, and financial projections will be required to complete these cost estimates. These estimates should only be high-level and not overly complex at this stage but should be supported by previous procurements wherever possible. Typically, the cost estimates will be based on functional program level studies. The assumptions will be further refined in the business case (Appendix 2). At the business case stage the project definition will typically include pre-design studies such as; the finalized functional design, preliminary design, project concept definition and/or schematic design. Detailed design should not be started.