1. This guide is designed for those responsible for assessing Value for Money (VFM) appraisals of projects being considered for procurement through the Private Finance Initiative (PFI). This guidance supplements HMT Value for Money Assessment Guidance1 published November 2006 and adapts it to meet MOD business practices. This guide should also be read in conjunction with the PFI Procurement Process Guidance Note2, JSP 507 (MOD Guide to Investment Appraisal and Evaluation)3 and Smart Approvals4.
2. This guide is applicable to those MOD projects that are considering procurement through the Private Finance Initiative. The VFM assessment does not apply to all procurement routes; it is applied only to programmes and projects where the Procurement Authority believes that the evidence of the benefits which PFI can offer indicate that there is a prima facie case for considering PFI.
3. In accordance with HMT rules, Information Technology-based projects and projects involving a capital investment of less than £20m should not be procured through PFI. Projects procured through routes other than PFI will continue to follow extant departmental guidance in JSP 507 to establish VFM.
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1 http://www.hm-treasury.gov.uk/ppp_vfm_index.htm
2 The PFI Procurement Process Guidance Note is currently being updated and re-titled as The PFI Handbook. Copies of PFI Procurement Process Guidance Note will be provided on request