Assessment and Evaluation Flashcards
7 cards from real CP3P practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Assessment and Evaluation flashcards as text
In a quantitative Value for Money (VfM) analysis, what does the Public Sector Comparator (PSC) primarily represent?
Answer: The risk-adjusted whole-life cost of delivering the project through traditional public procurement
The PSC estimates the risk-adjusted net present cost of delivering the same output specification through conventional public procurement.
Which component of a PSC is intended to remove the inherent cost advantages or disadvantages of public ownership, such as tax differences?
Answer: Competitive neutrality adjustment
Competitive neutrality adjustments neutralize advantages like tax exemptions so the public and private options are compared on equal footing.
A government finds that its PSC and the shadow bid differ by less than 2% in net present cost. What is the most prudent interpretation?
Answer: The result is within the margin of estimation error, so qualitative factors and sensitivity analysis should weigh heavily
Small differences fall within estimation uncertainty, so qualitative VfM factors and sensitivity testing become decisive.
Optimism bias adjustments in project appraisal are applied to correct for what tendency?
Answer: Appraisers systematically underestimating costs and durations and overestimating benefits
Optimism bias reflects the documented tendency of project promoters to underestimate costs and timelines and overstate benefits.
What is the main purpose of a fiscal affordability assessment for a PPP project?
Answer: To verify that the government's long-term payment commitments and contingent liabilities fit within budget constraints
Affordability analysis checks that the project's direct and contingent fiscal commitments can be sustained within the government's budget envelope.
Which of the following is an example of a contingent liability that should be captured in a PPP fiscal assessment?
Answer: A minimum revenue guarantee triggered if traffic falls below a threshold
Guarantees such as minimum revenue guarantees create obligations that only materialize if specific events occur, making them contingent liabilities.
During the appraisal phase, a 'PPP screening' or 'suitability' test is mainly used to determine what?
Answer: Whether the project should be delivered as a PPP rather than through other procurement methods
Screening assesses whether a project's characteristics, such as scale, risk transfer potential and output specifiability, make it suitable for PPP delivery.