CP3P Core Concepts and Principles 3

Question 1

Value for Money (VfM) in a PPP context is best defined as:

Accepted Answer

The optimal combination of whole-life cost, risk, and quality to meet user requirements

Answer

VfM considers whole-life cost, quality, and risk together rather than lowest upfront price.

Question 2

What is a Public Sector Comparator (PSC)?

Accepted Answer

A benchmark estimating the risk-adjusted whole-life cost of delivering the project through traditional public procurement

Answer

The PSC is a hypothetical risk-adjusted cost of public delivery used to test whether a PPP offers better VfM.

Question 3

A project passes the value-for-money test but the government cannot fit the payments into its budget. Which test has it failed?

Accepted Answer

Affordability

Answer

Affordability assesses whether the government's payment obligations fit within its budget constraints, separate from VfM.

Question 4

Which of the following is generally a poor candidate for a PPP?

Accepted Answer

A small, short-term project with rapidly changing technical requirements

Answer

PPPs suit large, long-term projects with stable, specifiable outputs; small or fast-changing projects rarely justify the transaction costs.

Question 5

What does 'whole-life costing' mean in a PPP?

Accepted Answer

Considering design, construction, operation, maintenance, and renewal costs over the contract term

Answer

Whole-life costing captures all costs over the asset's life so that upfront savings do not create higher later costs.

CP3P - Public-Private Partnership Certification Practice Test