3.4 The Department recognised that good value for money in a negotiated deal without competition depended on the clear and real prospect that Land Securities Trillium might not win the business. The Department, therefore, created a competitive dynamic by the development of a Public Sector Comparator (PSC), constructing a should cost model, and by creating a viable alternative commercial solution.
3.5 The Department made plain to Land Securities Trillium that it would be benchmarking Land Securities Trillium's bid against a PSC based on an estimate of the cost of delivering the PRIME Expansion contract using a traditional public sector procurement model. It was priced on the basis of the existing estate contract costs, and was based on the same level of service as the proposed contract expansion. This enabled costings to be compared on a like for like basis with the bid from Land Securities Trillium. The PSC also included enhancement to the provisions of the current PRIME contract for the existing PRIME estate where required by the Invitation to Negotiate.
3.6 The Department recognised that simply comparing Land Securities Trillium's bid against a PSC would not maximise value for money, as there would be no competing bids to compare it against. The Department, therefore, prepared a should cost model. This differed from the PSC, in that it included greater risk transfer and quantified the additional savings the Department estimated Land Securities Trillium ought to be able to offer as a result of its unique position as sole supplier to the expanded PRIME estate.
3.7 To further maintain the competitive dynamic, the Department developed an alternative commercial option, which it would use if the negotiations failed. In the event, the Department did not need to implement the alternative as the negotiations proved successful. The option nevertheless had credibility as Land Securities Trillium told us that it had been a serious element in its considerations during the negotiations.