Step 2: Shortlisting Suitable Delivery Models
This step involves shortlisting delivery models based on a consideration of the scale, scope, risk and whole-of-life service opportunities. Consider -
• To what extent services can be bundled as part of the project (e.g. operational and maintenance services) -
o What services are core or non-core?
o Are there are any potential constraints on packaging of services?
o What are the expected efficiencies from packaging construction, operational and maintenance components, compared with other service delivery options?
o Can the service need be contracted over the longer term?
• What is the scale of the project, including lifecycle costs?
• What is the project scope?
o Can the scope and outputs of the project be defined?
o Is the construction straightforward and established, or complex with untested challenges?
o Is the required technology proven and understood?
o Are there potential issues that may materially impact the scope during the project (complex stakeholders relations, dependence on third-party input, unknown or unquantifiable risks)?
• What are the key risks facing the project? What is government's capability to manage these risks versus a private party? Is the cost of transferring responsibility for this risk prohibitive?
The following table illustrates a shortlisting approach based on these questions, in the context of the project characteristics.
Table 1 Shortlisting of Suitable Delivery Methods
| Category |
| PPP | Project Alliance, Managing Contractor | Other |
| Scale | ||||
| Project value over [$100] million? |
|
|
| |
| If not, can services be bundled to exceed this threshold? |
| n/a | n/a | |
| Scope and Outputs | ||||
| Scope and outputs can be defined clearly |
|
|
| |
| Scope likely to change significantly prior to project completion and the potential change cannot be satisfactorily provided for in the specification |
|
| ||
| Whole-of-Life Opportunities | ||||
| Services can be bundled together to create a long-term operational/ maintenance opportunity |
|
|
| |
| Risk5 | ||||
| A significant proportion of the material risks can be defined, allocated and potentially transferred to a private party |
|
|
| |
| Unquantifiable risk that could have a material impact on project cost and objectives |
|
|
| |
| Government is best-placed to manage material risks, with the cost of transferring this risk prohibitive |
|
|
| |
denotes that the characteristics are suited to the delivery model
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4 While traditional models are typically used where significant scope changes are not expected, some methods may be appropriate in these circumstances depending on the nature and timing of the expected changes.
5 While traditional models are best suited to known and quantifiable risks, depending on the nature of the risk, some forms of traditional procurement may allow government to manage material or unknown risks more effectively (i.e. design risk through the use of construct-only contracts).