Alliancing will generally be appropriate for projects that are characterised by major risks and complexities that cannot be dimensioned in the Business Case or soon thereafter. This is likely to have a material but indeterminate impact on achieving project objectives, which means that the flexibility and collaborative decision-making under an alliance contract may be desirable. Under the alliance approach, the parties can deal with any risks and complexities if and when they arise over the life of the project.
However, the existence of high-risk characteristics in a project will not, of itself, be sufficient to justify using an alliance. Significant risks, questions about the scope and complexity will nearly always characterise public infrastructure projects, and projects with these characteristics can often be satisfactorily delivered using contracting methods involving more traditional risk allocation.
Rather, Owners will need to demonstrate in the Business Case that traditional project delivery methods are incapable of delivering the objectives detailed in the Owner's VfM Statement by evaluating a range of delivery methods, including alliances.