Stage 2 - Project Level Assessment - Refer to Section 5 of Guidance

Requirement

Details Assessed

Undertaken /
Comments /
Action
Required

1. Confirm that the case for NPD/alternative procurement routes has been tested

If this has not been confirmed at Programme Level:

1. Review the project characteristics against the criteria included within Appendix A to determine whether the project is suitable for privately financed / NPD procurement and complete/update the relevant pro forma.

2. Confirm the capital value is of sufficient size for NPD / alternative forms of procurement funded by private investment.

2. Qualitative Assessment of NPD / alternative procurement routes verses conventional procurement - project level

1. Review, confirm and complete applicable pro-forma below relating to:

• Viability of project

• Desirability of project

• Achievability of project (in particular market capacity and likely bid competition / market interest to be reviewed)

2. Consider wider VfM factors and generic VfM factors

3. Review proposed Project Timetable

4. Confirm proposed risk allocation

5. Confirm benefit assessment and deliverability

6. Support evaluation and decision with evidence from previous projects.

Report findings should include the results of the assessment of the viability, desirability and achievability of NPD procurement. (This should include the pro-forma checklists and the results of the workshops which assessed these.)

3. Quantitative Assessment - application to a specific project

1. All relevant costs assessed in accordance with the CPAM guidance note. Supporting assumptions should be detailed.

2. Consideration of whether alternative procurement routes may lead to a different level of benefits compared to traditional procurement.

3. Risks, Optimism Bias, Tax Differential and transaction costs assessed. Supporting assumptions should be detailed.

4. Use past projects as historical evidence of pricing. Risk / Optimism Bias should be updated as appropriate.

5. Implications in relation to STUC Staffing protocol considered

6. Where required, a CPAM and shadow bid model should be developed to inform the assessment of the affordability and VfM implications of the project. Detailed sensitivity testing and scenario analysis should be undertaken. Note that the CPAM model should only be maintained to the point of bid receipt. Any significant changes from Stage 1 assessment should be noted and commented upon. The Report should identify if costs have increased by greater than 25% from Stage 1 and explain why.

The Report should be complied by Procuring Authorities / Agencies / Directorate with input from advisers as appropriate. All input assumptions should be reviewed and verified and sensitivities run.

4. Combined Overall Evaluation

1. Quantitative and Qualitative evaluation outputs are considered in conjunction.

2. Overall project timescales are confirmed.

3. Confirm that standardised documentation will be adopted, and a full explanation of any deviations to the standard provided.

4. Conclude on the suitability of the project for privately financed / NPD procurement.

The above features should be recorded within the Report.

5. Review of Affordability - to determine if the project can continue

1. Affordability should be assessed using a shadow bid model.

2. Consideration of alternative funding sources should be undertaken (e.g. Prudential funding, bank funding, bond funding etc) and the revenue vs. capital spend implications assessed.

3. Confirm project is affordable / supportable based upon forecast scope and delivery timescales. The affordability implications (including the affordability envelope under a range of sensitivities) should be signed off required.

The affordability assumptions and implications should be detailed within the report.

6. Review of Balance Sheets Status

The accounting implications of the project should be assessed and recorded within the Report.