As outlined above, the Owner will be disadvantaged in evaluating and negotiating a TOC with a Proponent if they do not have an equal and deep understanding of the estimate and the build up behind any TOC on offer. The Owner's Estimator ('OE') is also at a disadvantage, even with comparable skills to the Proponent, as the OE did not develop the TOC and will not have the same level of knowledge and understanding of the details.
For this reason the Guide introduced the option of an Owner's Comparative TOC (OCT) which is developed by the Owner in parallel with the Proponent in NOP selection processes. This will provide an independent comparison for the Owner during evaluation and provide the OE with a useful tool when analysing the Proponent's TOC.
If a price competitive selection process is not available to the Owner, the Owner may need to use a 'proxy', such as the OCT, with the support the OE, to assess the merit of a Proponent's Proposal. This may be the best option available to the Owner in a non-price process, where demonstrating VfM is more difficult than in a price competitive NOP selection process. Such 'proxy' comparators are not as informative as a second competitive Proposal as they rely predominantly on the Owner 'checking' the single Proponent's Proposal rather than directly comparing it to a second Proposal.
An OCT should highlight the pricing assumptions used by Proponent(s), the TOC build-up and risks. The OCT also provides useful benchmarks for informing the Owner during final negotiations until agreement of the TOC. An OCT will be of less use as a selection tool where a TOC is developed in a full price competition process, although it may provide useful insight into the quality of each Proponent and their Project Solution.