Findings
The findings are structured following the project lifecycle. They have been developed with consideration given to the associated VfM expectations at each stage of the lifecycle as articulated in state government guidelines.
The various state government guidelines are complementary and the differences are not considered material. For convenience, the Victorian Department of Treasury and Finance (DTF) Investment Lifecycle Guidelines were used as the starting point to tailor the following lifecycle stages appropriate for this research:
Figure E.1: Project Lifecycle model used for this study
The following points describe the Study's key findings from each stage of this lifecycle:
Key finding 1: Business case - Defining the project's VfM proposition |
Business cases often did not clearly define the project VfM proposition to the rigour required for investment decision making.
Particular findings of note:
• The average increase from business case cost estimate to Actual Outturn Cost (AOC) was of the order of 45-55%.
• The business case assessment of an optimum delivery method often tended to 'default' to alliancing using a non-price selection approach for Non-Owner Participants (NOPs) and did not consider a range of other delivery options.
• In general a robust program and budget was not evident from the business case stage.
Key finding 2: Procurement strategy - Owner's rationale for selecting the alliance delivery method |
Having considered project specific requirements, the primary reasons for selecting the alliance delivery method, in addition to those contained in the DTF Project Alliancing Practitioners' Guide were:
• To achieve early project commencement through early involvement of the NOPs.
• To progress the project development in parallel with the project approvals.
In general, Owner's specifically used alliancing and the non-price competitive selection approach to attract key resources and capabilities to a project in a buoyant construction market.
Key finding 3: Selecting the NOPs - Non-price and price competition Non-price competition |
It was found that when non-price selection approaches were used to select NOPs:
• Owner representatives generally indicated moderate to high levels of satisfaction with the selection process.
• Owner representatives sometimes noted that the selected NOP team members were either not made available to the project or left prematurely.