APMG BBC Foundation study materials
APMG BBC Foundation study resources

APMG BBC Foundation: Commercial Case: Procuring and Contracting the Solution

APMG BBC Foundation · Work through your exam, one topic at a time.

All guide sections

Commercial Case: Procuring and Contracting the Solution

What the commercial case must prove

The commercial case shows that the preferred option can be procured and contracted successfully. Candidates must know procurement strategy, market and supplier capability, sourcing options, deal structure, payment and pricing mechanisms, risk allocation and transfer, key contract terms, contract management and exit arrangements. It must be consistent with the economic preferred option and with the financial envelope.

Traps

A common trap is treating the commercial case as merely the procurement timetable. The timetable belongs mainly to the management case. Another trap is assuming that all risk should be transferred to the supplier; risk should go to the party best able to manage it, and transferred risk must be priced. Watch for lowest-price thinking: commercial value for money considers whole-life cost, quality and risk. Also check that payment mechanisms reward outcomes, not just activity.

Worked example and rule of thumb

A training contract pays 80% on attendance and 20% on successful competency assessment after three months. This links payment to outcomes but leaves the supplier carrying performance risk it can manage. Rule of thumb: for each major risk, name the owner, the mechanism and the price effect; if any is missing, the commercial case is incomplete.