The comparison of the PSC and the Shadow Bid models represents a key part of the business case for any project, but the contribution of the quantitative analysis work to the project does not end with the approval of the business case by B.C. Treasury Board. The PSC and Shadow Bid are dynamic procurement tools and need to be continually updated during the procurement process to reflect any new information discovered about existing assumptions. The PSC model does not, however, reflect financial innovation coming from the private sector. When the Request for Proposals (RFP) responses are submitted, the PSC is locked down and no further changes are made to it. The resulting finalized PSC model is then used during the evaluation process to assess proposals. After selection of the preferred proponent is announced and financial close reached, the value for money analysis can be completed.
The value for money report is a document that assesses both the quantitative and qualitative benefits achieved by the government structuring the project as a PPP. In measuring the quantitative benefits achieved through the PPP, the PSC is compared directly to the winning bid. The two financial models are compared on an NPC basis and the difference between the two values (total NPC) is published in the Project Report: Achieving Value for Money as the net quantitative benefit achieved.
To ensure that the VFM is not over-reported, as discussed in section 6.1, the preferred proponent's actual project IRR will be used for the VFM calculations in the Project Report where the financial close model project IRR is less than or equal to the discount rate used in the business case analysis. If the financial close model project IRR is greater than the discount rate used in the business case analysis, the discount rate in the business case will be used.