The Scottish Funding Council's Decision Point ("DP") process applies to the delivery of capital projects in the further and higher education sector. In its original format, the DP process and accompanying guidance envisage capital funding and are undergoing further development for application to revenue funded projects.5
a) Before launching the formal procurement process, a Full Business Case (DP2) must be submitted to SFC for approval. A supplementary stage (DP2a) has been devised by SFC/SFT to ensure that the Full Business Cases address specific features and requirements of a revenue funded approach6. DP2a has a particular emphasis on project scope and Effective Delivery, and compliance with the Guidance is an express requirement of DP2a, but it is likely that the various components of VFM will be addressed through the DP2 and DP2a submissions taken together. In considering VfM at these stages note, in particular, that:
(i) Various VFM themes are picked up in sections of the existing DP2 guidance. These include: Options Appraisal (a review of the options appraisal undertaken at DP1 i.e. an assessment of the financial and non-financial benefits of a range of options that deliver the strategic plan and estate strategy objectives and a more detailed appraisal of the preferred option); Collaboration and Co-location; Programming and Delivery Strategy; Life-cycle Costing. The factors set out in Section 2.2 above will be relevant here.
(ii) DP2 requires qualitative consideration of procurement options (Procurement and Programme and Delivery Strategy sections). The factors set out in Section 2.2 above are relevant here.
(iii) Effective Delivery should be considered (see DP2a requirements including Management Structure; Project Team and Advisors, Procurement, Programme, Delivery Strategy; Risk Register). The factors set out in Section 2.2 are relevant here.
(iv) Quantitative comparison of capital and revenue funded options is not required.
(v) Qualitative evaluation should include completion of VFM checklist at Annex 1.
(vi) SFC will review the space and design relative to curriculum provision to secure the efficient and effective delivery of education and will review and challenge project costs. SFC will engage the services of its Property Support Services advisers to input to this review.
(vii) SFT's review of DP2/2a submissions will focus in particular on those aspects of projects that link to the delivery of VfM, as outlined in this supplementary guidance.
b) Value for money will be monitored during the procurement period through further DP reviews. The precise requirements of these reviews are being developed by SFC and SFT and will be communicated to the relevant project owners. The timing of the first of these further reviews will coincide with the existing DP3 (i.e. pre-tender) and it is envisaged that a DP3a and DP3b will follow at the pre-final tender and pre-preferred bidder stages respectively. It is envisaged that these reviews will involve SFT providing an assurance and monitoring role similar to the KSR process.
c) DP4 will take place prior to final contract award / financial close. The precise requirements of DP4 are under review by SFC and SFT and will be communicated to the relevant project owners but the following can be confirmed at this stage:
(i) Quantitative comparison of the revenue funded option with a capital funded alternative will not be required.
(ii) Confirmation of Effective Delivery will be required; the factors set out in Section 2.3 above should be considered.
(iii) Qualitative evaluation will include completion of the VfM checklist at Annex 2.
d) The current DP process and guidance envisage post-occupancy evaluation (DP5). SFC will confirm to relevant project owners in due course any revisions to DP5 for revenue-funded projects.
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5 The projects identified in the Revenue Funded Investment Programme had already passed stages DP0 and DP1 and so the process and guidance are under review from stage DP2 onwards.
6 Draft Guidance on Decision Point Process for NPD Projects issued to relevant projects on 23 February 2011.