Procurement Options Analysis and Procurement CACQS Webinar Mark Liedemann May 31 ,2016 1
Agenda • Introduction • Procurement Options Analysis • Procurement 2
Partnerships British Columbia (PBC) • Founded: 2002 • Shareholder: Minister of Finance • Governance: Board of Directors • Staff: approximately 30 FTEs • Business model: fee for service • Delivered: 48 + infrastructure projects o $17+ billion capital value 3
PBC Services • Project planning o Concept Plans o Business Cases • Procurement analysis • Procurement management • Design and construction oversight • Contract administration • Project communications support 4
PBC Project Sectors Transportation Public Transit Bridges Highways Airports Energy Health Hydro In British Columbia and Hospitals Biofuels Residential throughout Canada Wastewater Care Education Accommodation Primary SRO Housing Secondary Correctional Centres Post-Secondary Courthouses 5
Capital Project Procurement Models Fully Private Degree of Private Sector Risk Design Build Finance Operate Maintain Design Build Finance Maintain Models Design Build Operate Maintain Design Build Finance Design Build Design Bid Build Degree of Private Sector Involvement 6
Business Case Part B: Part A: Service Delivery Rationale Options Analysis Project Schedule Analysis • Part C: Part D: Multiple Criteria Analysis • Procurement Funding Market Sounding • Options Analysis and Financial Modeling • Analysis Next Steps Risk Analysis • Value for Money Analysis • 7
Compare Procurement Models Traditional Partnership Model Model Qualitative Qualitative Benefits Benefits Quantitative Quantitative Benefits Benefits VALUE FOR MONEY 8
Quantitative Elements Cash Flow Estimates Risk Adjustments Discount Rate 9
Project Cash Flow Estimates • Estimated by QS Capital Costs • Based on: O&M Costs • Indicative design • Preliminary project Life Cycle Costs schedule • Outline Finance Costs performance Inflation specifications • Efficiencies Owner’s Costs 10
Risk Workshop Process Allocate • Description • Best case • Impact • Most likely • Retained • Mitigation • Worst case • Transferred strategies • Probability • Shared Identify Quantify 11
To Quantify or Not to Quantify - Considerations If the risk were to materialize, would it have a Materiality significant impact (financial, schedule, public perception, program delivery)? Estimable Can it be reasonably and accurately estimated? How high is the risk ranking Risk Ranking (Low? Medium? High? Extreme?) 12
Amount of Private Finance 1,200 1,000 800 THOUSANDS 600 400 200 - 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 Unfunded Value in the Ground Unspent Proponent Security 13
Procurement Phase • Project specifications –goal is to have performance based specifications to unlock innovation • Challenges o lack of experience with performance based specifications among professionals o Desire for owner to control outcome via prescriptive specifications 14
Thank You! Mark Liedemann Vice President, Projects 604 806 4171 www.partnershipsbc.ca 15
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