A.1 Non conventional procurement (e.g. private finance / NPD) should be considered when the nature of the projects or the programme includes the following characteristics:
• a major capital investment programme, requiring effective management of risks associated with construction and delivery;
• the private sector has the expertise to deliver and there is good reason to think it will offer value for money;
• there is significant constraint upon capital budget availability at either Government or Directorate level;
• proven track record in delivery
• the structure of the service is appropriate, allowing the public sector to define its needs as service outputs;
• the nature of the assets and services identified as part of the projects are capable of being costed on a whole-of-life, long term basis;
• the value of the projects / programme is sufficiently large to ensure that procurement costs are not disproportionate;
• the technology and other aspects of the sector are stable, and not susceptible to fast paced change;
• planning horizons are long term, with assets intended to be used over long periods into the future; and
• there are robust incentives on the private sector to perform.
A.2 In such circumstances, there is a prima facie case for considering privately financed (NPD / non conventional) procurement. The public sector bodies (and where applicable Procuring Authorities, Agencies and Directorates) are required to confirm that these areas have been reviewed prior to undertaking the Stage 1 Programme Level Assessment.
A.3 For projects of a capital value less than £20m, the appropriateness of procuring these on an NPD basis should be discussed directly with the SFT (SGHD Capital and Facilities for NHSScotland Bodies) or the relevant centre prior to commencing the VfM assessment stages. For smaller projects it may be more appropriate to use other procurement routes for revenue financed schemes, such as hub.
The following pro-forma should be completed and submitted with the relevant Stage 1 or Stage 2 assessment:-
| NPD Consideration Checklist | Response |
| 1. Are there major capital investments requiring management of delivery and construction? |
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| 2. Is there evidence that the private sector can deliver the projects / programme and that it is likely to be VfM? |
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| 3. Are the services capable of being defined in Service Outputs? |
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| 4. Is whole life costing possible? |
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| 5. Confirm that procurement costs are not disproportionate to total costs of set up and operation? |
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| 6. Is there a technology stable market? |
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| 7. Confirm that planning for asset use over long term has been conducted. |
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| 8. Confirm that appropriate incentivisation for the private sector to perform has been considered. |
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| 9. Confirm that there is appetite within the market to take the programme / |
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A.4 The following table should be completed as part of self assessment prior to undertaking detailed VfM assessment. It will be submitted at the Stage 2 OBC assessment as applicable:
| Project Element
Detail NPD Benefit and enhancement to non NPD: | Design | Construction (including | Maintenance including life cycle maintenance | Operation of facilities (e.g. cleaning, reception, catering) |
| Quality of service |
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| Project management |
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| Risk management |
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| Improved relationships promoting synergy, quality and added value |
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| Strong financial control and management |
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| Innovation |
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| Effective exploitation of opportunities |
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Note that health projects should also consider SCIM Appendix 2a in determining the suitability of an NPD model for the project in question. SCIM guidance is available online at: http://www.pfcu.scot.nhs.uk/