10. To help in assessing whether or not to go ahead with a PFI option, departments are required to prepare a public sector comparator-an estimate of what a project would cost if conventional procurement methods were used. The Department prepared a Public Sector Comparator in 1997 and revised it in 1998 after ICL raised its bid. The net present value of ICL's bid was in each case cheaper than the Public Sector Comparator figure used (Figure 3).10
Figure 3: Comparison between ICL's bids and a Public Sector Comparator
| ICL original bid | Public Sector Comparator | ICL revised bid | Revised |
Bid | 146 | 174 | 184 | 178 |
Project/contract management | 10 | 5 | 9 | 5 |
Total costs | 156 | 179 | 193 | 183 |
Readily realisable benefit, risk and residual value | (130) | (149) | (137) | (139) |
Net cost | 26 | 30 | 56 | 44 |
Net Present Value | 15.7 | 30.1 | 37.7 | 39.2 |
Source: Lord Chancellor's Department
11. The Department acknowledged, however, that the Public Sector Comparator was not really comparable since it did not provide a national infrastructure linking Magistrates' Courts Committees together. At the time the Department felt that it had to go for the PFI route unless it could demonstrate conclusively that another approach could produce the solution required. The comparison between ICL's bids and a public sector comparator was a theoretical exercise because the Department had no IT department that could deliver a realistic alternative.11
_______________________________________________________________
11 Qq 22-23, 40, 118