The VFM analysis, along with the PSC benchmark, is set up prior to the start of the procurement, i.e., during the Third File. During the procurement phase, the Work Team shall adjust the PSC to take into consideration any changes which may arise from the procurement process. Adjustments may be required due to one or more of the following:
a) Changes in the time period covered by the PSC.
b) Interim changes in the assumptions, circumstances or interpretations.
c) Omissions in the calculation of the PSC model, risk analysis or the estimates.
At the Fourth File, the Work Team shall confirm VFM for the bid from the preferred bidder. The Work Team shall update the VFM analysis undertaken at Third File, incorporating any adjustments necessary to reflects changes made during the procurement phase and to reflect the final bid. These revisions ensure that the final VFM analysis reflects the actual outcomes of the procurement process.
The Work Team, in undertaking a comparison between the PSC and the preferred bid, shall take into consideration a number of differences arising from:
a) Differing assumptions.
b) Payment for design and construction under the public sector procurement route.
c) The spread of payments to the private sector under the Privatization structure.
The Work Team shall calculate the NPV resulting from the preferred bid and compare it to the NPV of the adjusted PSC. With this step, the Work team shall confirm that the preferred bid does provide value for money akin to or better than that demonstrated at Third File.