2.1  Definition of the PSC

The PSC is an estimate of the hypothetical, whole-of-life cost of a public sector project if delivered by government. The PSC is developed in accordance with the required output specification, the proposed risk allocation and is based on the most efficient form of government delivery, adjusted for the lifecycle risks of the project. This is referred to as the Reference Project.

A PSC is a model of the costs (and in some cases, revenues) associated with a Proposal under government delivery. A PSC:

•  is based on the most efficient likely method of providing the defined output currently available to the public sector;

•  takes into account the potential impact of risks on the costs (and revenues) associated with a proposal over its life; and

•  is expressed in terms of the net present cost (or value) to government of providing the output, over the life of the proposed contract period.

The PSC reference project will be defined and costed to provide the same level and quality of service expected of the private sector.