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P3 Toolkit

Analytical Tools

P3-VALUE: Shadow Bid Tool User Manual

December 31, 2013

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Chapter 2. Quick-Start Guide

While the User Manual provides detailed guidance on the Shadow Bid Tool, users may also refer to the "Quick-Start" version below for step-by-step instructions.

ACCESSING THE SHADOW BID TOOL
  1. Open the Shadow Bid Tool.
  2. Click "Enable Editing" and/or "Enable Content" on THE yellow bar across top of screen.
  3. Read the disclaimer and Click "I accept."
MANAGING INPUT FIELDS

1. Navigate to the "Assumptions" SHEET.
This sheet contains project data that provides the basis for constructing a P3 Estimate.

Input DATA in the light blue cells.

  1. Define the project.
    1. Select a scenario from the "Traffic Scenario" drop-down menu.
      Note: See the blue sheets, including "Simple Toll Example" and "Variable Toll Example" for pre-populated toll rate and traffic volume assumptions and "Toll Scenario Template" for a blank toll calculation sheet.
    2. Check all the applicable boxes under "Project Delivery Structure" to reflect the project/scenario.
      Note: Depending on what boxes are selected, irrelevant assumptions cells may turn from light blue to black.
    3. Complete the "Timing" table with appropriate dates in 'YYYY' format or in number of years.
  2. Estimate project costs.
    Note: Enter costs in base year dollars ( not current or year of expenditure dollars), consistent with the base year defined in step a) above.
    1. Itemize "Design & Construction Costs" by asset in the relevant table. Input the "Asset Type" (in Column D), cost in dollars (in Column E), and a breakdown of the expenditure across the design and construction phase (up to 10 years) as a percentage.
      Note: The "Year" columns will turn from light gray to blue as values are input. The "Check Sum" value (Column P) should equal 100 percent once the costs are allocated to year of expenditure.
    2. Input operations and maintenance costs in the "Operating Costs" table as either a percentage of construction costs (in Column E) or as a dollar figure (in Column F).
      Note: If users choose to input O&M costs as dollar values, the adjacent cells in Column E black out so that the inputs are only either dollar values or percentages.
  3. Estimate project funding, financing, and revenue.
    1. Enter assumptions regarding toll revenue leakage (percentage), revenue ramp-up assumptions, and value of additional revenues (in dollars) in the "Toll & Other Revenue" table.
    2. Enter funding resources as either a percent of construction cost (Column E) or dollar value (Column F) and allocate across the spending period (up to 10 years) in the "Funding" table.
      Note: The "Check Sum" value (Column Q) should equal 100 percent.
    3. Input the percent of project to be financed after taking into account other funding.
    4. Enter additional financing information in the "Financing" table.
    5. Input the level of equity return (as a percentage).
  4. Apply appropriate adjustments.
    1. Input inflation assumptions as percentages in the "Inflation" table.
    2. Manually input the discount rate as a percentage in the "Discount Rate" table or select "Project IRR" as the input type.
      Note: When manually inputting data, the discount rate reflected will be nominal, not real, unless users assume no inflation. Selecting "Project IRR" will reflect the project internal rate of return as the discount rate.
    3. Assess potential efficiencies that the private sector may generate under a P3 delivery structure and enter those cost, schedule, and O&M efficiencies as percentages.
    4. Input the Federal and State tax rates (percentages) that apply to the concessionaire.
    5. Enter the period (number of months) of working capital and indicate if a tax carry forward is to be applied by selecting from the drop-down menu.
    6. Enter data about each asset's depreciation, including selecting either the straight line or highway accelerated method, inputting the length of the asset's life and residual value, and either expensing or capitalizing the debt interest and fees during the construction period.
  5. Additional cost inputs.
    1. Use outputs from the Risk Assessment Tool to input the risk allocations and values of cost and schedule impacts in the "Risk Allocation" and "Risk Values" tables.
      Note: Refer to the FHWA Risk Assessment Tool and corresponding Risk Assessment Tool User Manual for information on obtaining appropriate outputs.
    2. Input additional agency costs, such as for planning and development, into the "Other Project Costs" table as dollars (in Column E) and select appropriate start and end dates from the drop-down menus.
    3. Input "Funding for Agency Costs" as a percentage if the agency has a grant specifically to cover its costs.
OUTPUTS
  1. Navigate to the "shadow bid Disclaimer" SHEET.
  2. Read the disclaimer and click "i accept."
  3. Navigate to the "VFM outputs" SHEET.
    This sheet displays the results in tabular and graphic formats as well as provides several analyses.
  4. Select "AVAILABILITY PAYMENT" from the light blue cell (B22) in the "availability payment Analysis" box and click the "payment calculation" button to run the analysis.
    1. Payment Scenario Analysis can be run using a real toll or shadow toll delivery structure.
      Note: It will be necessary to update the "Assumptions" sheet to include toll collection for the Payment Scenario Analysis to run.
  5. CLICK "CALCULATE IRR" AND REVIEW THE RESULT.
    Note: This step is only necessary if the users select "Project IRR" for the discount rate on the "Assumptions" sheet.
  6. Review the results in the net present cost (NPC) table.
    1. Note the values in the final row, which represent the value of P3 delivery to the agency.
  7. Select a percentile and value ($ or %) for the sensitivity analysis and click "run sensitivity."
  8. Adjust assumptions in the "Project scenario analysis" table using the arrows.
    Note: If users change key assumptions, the message "Please Solve Again" will appear in the "VfM Analysis" or "VfM Scenario Analysis" box to update the payment information.
  9. NAVIGATE TO THE "FINANCIAL STATEMENT" SHEET AND SELECT A RISK PERCENTILE FROM THE LIGHT BLUE CELL (F4).
    1. Observe differences in the value of assets, liabilities and equity incurred, net income, etc.
      Click "Optimize Dividend" at the bottom-left of the sheet to recalculate the after-tax cash flow

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