Full Business Case FBC Template
Full Business Case FBC Template
Full Business Case FBC Template
1. Introduction
This document is prepared by any Ministry Department or Agency (MDA) and it aims
to establish all the information needed to support a decision to award a contract and
commit actual funding, as well as provide a basis for the necessary project
management, monitoring evaluation and benefits realization. The FBC captures all
activities leading to negotiations with the preferred concessionaire.
A Full Business Case (FBC) is prepared for seeking approval prior to subsequent award
of contract.
• Include the qualitative assessment of the preferred bidder and a Public Sector
Comparator (PSC) and
• Provide government with an indication of the public sector client’s forward plan
for proceeding with the project and finalizing a contract with the preferred bidder.
2. Report Out
The FBC will be developed in the same format as the Outline Business Case (OBC).
Where there is material change between what was anticipated in the OBC and what is
negotiated with the preferred bidder, this should be articulated and captured in the
FBC. An FBC should include but not limited to: (1) executive summary, (2) project
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objectives, (3) financial issues and affordability, (4) stakeholder consultation, (5)
procurement process and competition, (6) risk allocation and accounting treatment,
and (7) contract and payment mechanism.
If the objectives have been developed further since the OBC was approved by members,
or if new requirements have come to light during the procurement of the project, such
as successor standards to those envisaged at the time the OBC was prepared,
appropriate commentary should be included in the FBC.
• Value for Money: an estimate of the value of money savings anticipated from
procuring the service through a PPP arrangement would have been included in the
OBC. This should be updated with out-turn costs of the PPP scheme. In addition, if
there have been material changes to the assumptions used in determining the PSC
at the OBC stage, appropriate commentary should be included on these with an
updated PSC calculated and included in the FBC.
• Affordability: The public sector client will have made an assessment of the
affordability of the project at the OBC stage. This computation should be updated
using out-turn figures for the negotiated PPP contract. Commentary should be
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included on how any material changes since the OBC was prepared are to be dealt
with.
• Internal stakeholders: Outlining how the project has been developed by the
procurement board, in consultation with members, the strategic/stakeholder
board, relevant departments and other internal stakeholders.
• Community and Staff: outlining how the local community and relevant staff have
been consulted throughout the process.
• The FBC should also explain post PPP Contract consultation arrangements for the
concession period.
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The FBC should set out the position on whether any statutory processes still have to be
completed, such as planning permissions, and if appropriate, how and when those
statutory processes will be progressed and where the risk and responsibilities for
completing that work lie.
The FBC should include a summary of the key contractual issues negotiated as part of
the PPP contract. A copy of the negotiated contract should be submitted with the FBC.
Commentary should also be included in this section of the FBC on pertinent aspects of
the payment mechanism agreed with the Service Provider, such as the key components
of the payment mechanisms, and how the performance of the Service Provider will be
monitored.
Commentary on the key commercial issues specific to this project, such as the
followings, may be included as well. They are:
• The position agreed on the treatment of taxation
• The anticipated third party revenues included or anticipated in the Contract
• The proposals included in the Contract as regards any revenue sharing
arrangements
• Any proposals for benchmarking and market testing.
• Risk sharing regime
• Conditions precedent for PPP Contract execution.
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• provide government with an indication of the public sector client’s forward plan
for proceeding with the project and finalizing a contract with the preferred
bidder.
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This section of the FBC could usefully set out the negotiated position on each of the
following topics:
• Value for money: an estimate of the value of money savings anticipated from
procuring the service through a PFI arrangement would have been included in
the OBC. This should be updated with out-turn costs of the PFI scheme. In
addition, if there have been material changes to the assumptions used in
determining the Public Sector Comparator (PSC) at the OBC stage, appropriate
commentary should be included on these and an updated PSC calculated and
included in the FBC.
• Affordability: The public sector client will have made an assessment of the
affordability of the project at the OBC stage. This computation should be updated
using out-turn figures for the negotiated PFI contract. Commentary should be
included on how any material changes since the OBC was prepared are to be
dealt with.
(4) Stakeholder Consultation
The FBC can usefully outline how the relevant stakeholders have been consulted
throughout the procurement of the PFI project. This commentary might usefully refer to
each of the following:
• Internal stakeholders: Outlining how the project has been developed by the
procurement broad, in consultation with members, the strategic/stakeholder
board, relevant departments and other internal stakeholders.
• Community and Staff: outlining how the local community and relevant staff have
been consulted throughout the process.
The FBC could also usefully explain how the consultation arrangements are to continue
throughout the term of the contract.
(5) Procurement Process and Competition
The FBC should include a summary of the competitive process followed to ultimately
select the Service Provider and the decisions taken at each stage of the procurement
process. As a minimum, it is suggested that appropriate commentary be included in the
FBC in respect of the following stages:
• The Invitation to Expression of Interest
• Pre-qualification and short-listing
• Evaluation of Request for Proposal
• Selection of Preferred Bidder
• Negotiations to financial close
(6) Risk allocation and accounting treatment
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A section should be included in the FBC summarizing the negotiated position as regards
the allocation of key risks in the PFI project. In particular, there should be appropriate
commentary on those areas where there has been departure from the risk allocation
position envisaged at the time the OBC was prepared.