The principal acceptance criterion in the assessment of private-public arrangements is the cost effectiveness in meeting the Government's economic and social objectives. The cheapest proposal (in nominal money terms) is not always the most cost-effective proposal.
Value for money is achieved when the most cost-effective solution is provided, having regard to the allocation of risks of the project between the public and private sectors.
Value for money should be evident from the comparison of private sector proposals relative to the PSC. Agencies should not seek to enter the short-listing stage unless the potential for value for money is evident. If this is not the case, consideration should be given to abandoning the private sector option.