With the NPV calc I stated that tax should be on the NPV calc the year after it is incurred as that is when it was paid. I then recalculated the payback period which took it down to 2.9 years therefore fitting in with the 3 year payback period required…
I also recommended going with government option as they had experience and the resources to do it with not much extra cost required. It also could lead to further contracts being won in the future if it was done well….