During the business case stage, some form of quantitative analysis is typically performed in Parts B, C and D, as described in the table below.
Business Case Section | Analysis |
Part B (Investment Decision) | ■ Multiple Criteria Analysis (MCA) ■ Net Present Cost (NPC) Analysis ■ Operational Efficiencies ■ Sensitivity Analysis (MCA) |
Part C (Procurement Decision) | ■ Multiple Criteria Analysis (MCA) ■ Comprehensive Risk Analysis (includes Monte Carlo analysis) ■ Financial Analysis (PSC and Shadow Bid) ■ Sensitivity Analysis (Financial Model) |
Part D (Recommended Option Affordability) | ■ Accounting Analysis ■ Funding Analysis ■ Budget |
The focus of this paper is to describe the quantitative procurement options analysis that is used in Parts C and D of the business case. The quantitative procurement options analysis is used to:
• Assess the potential quantitative benefits of PPP procurement compared to traditional public sector procurement,
• Support the qualitative analysis of procurement options based on non-financial criteria, and
• Provide input to the funding analysis to estimate the impact that a PPP procurement option would have on project accounting.