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Appendix 4 4 Key Questions in Appraising SS Options 12-02-10 V1
Appendix 4 4 Key Questions in Appraising SS Options 12-02-10 V1
12/02/10
Commercial Viability
• Option assessment requires a robust and • Can value for money be obtained from
fair selection process that leads to the various options (including any
optimisation of financial benefits (as well dependence on partners and suppliers)?
as compliance with procurement law and • If not, can the project be made attractive
standing orders of participating councils to a wider or alternative group of
required). participants?
• Once awarded a substantial change in the
scope and/or value of work can invite a
third party challenge (there are case
examples here) so it is vital that a robust
business case and procurement strategy
mentioned below is in place.
• Key features of any proposed commercial
arrangements needs to be attractive
(e.g., contract terms, contract length,
payment mechanisms and performance
incentives)
• Contracts need to demonstrate best value
and therefore a demonstrable advantage
to local tax payers.
• The procurement approach/strategy with
supporting rationale needs to be
acceptable and beneficial to the
organisations
Strategic Fit
Affordability
• Statement of available funding and broad • Can the required budget be obtained to
estimates of projected whole-life cost of deliver the whole project?
the project • If not, can the scope be reduced (or even
• A classic problem is represented by the increased) or delivered over a longer
‘hockey stick’ nature of investment period?
needed early on, with the benefits • Could funding be sought from other
accumulating later. There are various sources?
techniques to help the funding balance
between capital and revenue but every
organisation will have their ‘line in the
sand’ of viability. Some councils will be
used to longer term contracts and even
PFIs, but there still needs to be flexibility
built into contract arrangements.
Achievability
• A high level plan for achieving the desired • Can this project be achieved with the
outcome, with key milestones and major organisation's current capability and
dependencies (e.g., interface with other capacity?
projects) • If not, how can the required capability be
• The strategic importance of ensuring that acquired?
the project succeeds means that • Can the risks be managed (e.g., scale,
governance arrangements that include complexity, uncertainty)?
elected members has to be in place. • Does the scope or timescale need to
• Key roles need to be outlined, with change? Who bears the cost of change?
named individual as the project's owner;
outline contingency plans should also be
in place (e.g., addressing failure to
deliver service on time)
• Major risks should be identified and an
outline plan for addressing them; the
provider's plans for the same should be
included
© CIPFA 2010