In 2009 Australian governments are expected to spend $8 billion procuring infrastructure projects under the alliance delivery methodology. The number of alliances delivered has significantly grown over the past five years and now represents one third of the total value of public sector infrastructure projects delivered in Australia.
The Treasury departments of Victoria, Western Australia, New South Wales and Queensland determined that understanding the rationale for the increased use of alliancing, and whether value for money (VfM) could be enhanced, was of sufficient public interest to require a Study.
The principle of obtaining VfM underpins good government procurement practice. All state governments have complementary definitions of VfM, however, knowing if it can be enhanced, how it can be achieved and where it can be optimised in a project's lifecycle becomes more difficult.
Evans & Peck and The University of Melbourne were engaged to:
"undertake a detailed benchmarking study of alliancing across Australia to investigate whether alliancing delivers incremental value for money (VfM) to government against other procurement methods".
The combined Research Team of Evans & Peck and The University of Melbourne designed a methodology with both quantitative and qualitative approaches, and used case studies so that the research could provide a context and narrative, and collect a range of different data types. The case studies provided a rich context with specific examples that abstracted quantitative data alone cannot. This methodology combines the rigour of quantitative data with the proven efficacy of situated context for improved analysis. The Study was undertaken under The University of Melbourne's Code of Conduct in the following stages:
1. Literature review to identify existing research to refine Study approach.
2. Research Phase 1: Scan of current alliance performance in Australia through a self evaluation survey of 46 alliances.
3. Research Phase 2: Detailed analysis of 14 alliances through a case study approach.
4. Analysis of research resulting in findings, conclusions and recommendations.
The literature review stage uncovered gaps in the current body of research, which together with learnings from Phase 1, resulted in the Research Team expanding the Study question to: How can VfM (value for money) be enhanced in the alliance delivery method?
The results of this Study are presented in this report in the following structure:
• Background and context: including purpose and structure of Study, an overview of alliancing in Australia and of VfM in the alliancing context.
• Methodology and approach: research method and rationale.
• Findings: providing a summary of the key findings drawn from the research.
• Discussion and observations: enhancing the findings with industry expertise and context.
• Conclusion: the conclusions made from the Study.
• Recommendations: addressing how to enhance VfM in alliancing based on the conclusions.
• Further research: identifying areas requiring further investigation and consideration.
• Appendices: including research results and cross case analysis.