There are a multitude of procurement strategy guidelines at federal, state and line agency level. For the purposes of this Study, how governments determine whether to use an alliance is distinguished through three core areas:
• the procurement strategy
• the procurement methodology
• the delivery method
It is generally expected that the assessment of the procurement strategy will be considered as part of the business case and will be reviewed and refined as necessary52. The purpose of the procurement strategy is to document a high level plan to achieve procurement objectives through a structured program of activity, with a focus on optimising value for money. It usually includes:
• a statement of objectives
• cost analysis
• policy context
• market analysis
• agency capability
• project characteristics
• funding
• risk analysis.
The data gathered from the above areas is the basis and justification for the procurement methodology decision which include market assessment, contract management and the delivery method i.e. alliance, design and construct, PPP etc.52
When selecting the delivery method that will best optimise VfM, there are then five recommended steps:
• Data gathering.
• Shortlist delivery models.
• Validation.
• Delivery method options analysis.
• Preferred delivery method.
When analysing whether to use alliancing as a delivery method, common project characteristics recommended by government guidelines are those listed below51:
• Numerous complex and/or unpredictable risks with complex interfaces.
• Complex stakeholder issues.
• Complex external threats or opportunities that can only effectively be managed collectively.
• Very tight timeframes (driven by project risk rather than organisational capacity).
• Output specifications which cannot be clearly defined upfront, and/or a high likelihood of scope changes during design and construction (e.g. due to technological change, political influence etc).
• A need for Owner involvement or significant value adding during delivery.