A public sector comparator (PSC) for value for money (VFM) assessment tools

Abstract

In a generic sense, when procuring Public Private Partnership (PPP) projects, value for money (VFM) assessment could be determined through a comparative analysis of contractors' proposals against Public Sector Comparator (PSC) documentation. A PSC is a hypothetical framework used as a procurement strategy tool in evaluating VFM and has been a trademark for most countries across the globe such as UK, Australia, Hong Kong and Canada. However, this strategy has not been systematically formulated and applied in Malaysia. The probable reasons for this predicament could be due to the controversy in risk calculation; lacking of nonfinancial aspects and future cash flow, inappropriate discounted rate used and the difficulty in the PSC calculation. Hence, the aim of this study is to ascertain a complete PSC framework for PPP projects embracing financial and non-financial aspects across project phases (i.e., strategy formulation; procurement; construction and operation phase). The empirical research via questionnaire survey was conducted among PPP stakeholders. The results indicated that the development of PSC framework would facilitate a comprehensive dimension of VFM evaluation for PPP projects in Malaysia.