A4.6 Short-list appraisal of PPP options should take place in the same way as other options. This includes calculation of social value, valuation of wider social costs and benefits, consideration of unmonetisable benefits, application of optimism bias, risk costing and sensitivity analysis.
A4.7 The Green Book recommends that Business As Usual, a do-minimum option, the preferred way forward and at least one other viable alternative are included in the short-list. Where a PPP option is the preferred way forward at the long-list stage, at least one of the viable alternatives should be direct public provision. This is the required public sector comparator, which acts as a benchmark, and should be comparable in service output terms and asset maintenance. Additionally, if plausible, there should be an additional PPP version of the do-minimum to check for gold plating of the PPP option.
A4.8 When part of a business case changes through the process which alters cost, distribution of risk across different points in time or the transfer of risk between participants, this should be included and updated as part of Net Present Social Value (NPSV) and budget calculations. Changes to costs and risk which occur during contract negotiations, should be fed into the NPSV and public sector cost calculations. This means the appraisal of the preferred option is properly informed before a final contract is agreed.