At the completion of Stage 1, the results of the qualitative and quantitative assessments will need to be combined to identify which procurement approach may be suitable to deliver a programme of capital investment. This should provide justification for the preferred procurement route, on an individual project or programme basis, and recognise any limitations of the component parts of the assessment.
It should be noted that the quantitative assessment must be viewed in light of the results of the qualitative assessment. Care must be taken in evaluating the relative weighting of the qualitative and quantitative assessments. Where possible, reference should be made to previous experience and evidence bases.
Guidance on the qualitative VfM requirements is contained in the remainder of this document.
Stage 2: Project Level Quantitative Assessment |
At Stage 2, the quantitative evaluation should be updated to reflect the specific project and cost environment. The project level assessment covers the period from business case development and approval to advertising the project.
This should be completed in accordance with the Green Book (and SCIM guidance for health projects). It should be collated and reviewed by the Procuring Authority. The variables should be verified by appropriate technical support.
It is desirable that the quantitative VfM assessment of different procurement options is undertaken at a consistent evaluation point, for example typically the forecast projected "contract award" date as the base date. This base date evaluation can continue to be a reference point at Stage 2 and Stage 3 even when the actual contract award date is moved. In assessing VfM at different procurement stages and at different base dates, there is no requirement to undertake and report reconciliations of movements in VfM. Rather, VfM will be assessed between procurement options at a consistent point in time and over an equivalent appraisal period.
As with the Stage 1 discussed above, the quantitative assessment relies upon a sound evidence base, wherever possible built up from past procurement experience in relation to both conventional procurement (e.g. Design & Build contracts, traditional Management Contracts etc) and non conventional (e.g. NPD, JVs).
Where applicable (for projects assessed at the Programme Level), the shadow bid model inputs from Stage 1 will be refined to reflect any project specific changes from the previous review at the Programme Level Stage. Given the high level nature of the Stage 1 assessment, complete new quantitative information may be required for bespoke project appraisal and any assumptions carried forward should be tested. The Procuring Authority should try to understand the drivers behind any significant change in cost estimates between stages 1 and 2.