Chapter 6 The Project Delivery Phase

The Owner is interested in achieving VfM throughout the project life cycle and therefore, the need to exercise commercial rigour and diligence continues after the PAA is executed and the TOC has been agreed.

As discussed in earlier chapters of this Guide, alliancing is a complex commercial relationship between the Owner and the NOPs. The PAA defines the legal obligations of the Participants to deliver the Owner's VfM Statement. Moreover, the NOP selection process and the interplay of the key alliance features should set the establishment of an integrated, collaborative and highly capable team which will be positioned to achieve the Owner's VfM Statement successfully. Nevertheless, the other interplay between the Owner's project objectives, the NOPs' commercial objectives, and the Participants' obligation to make collective decisions that are best-for-project, should be acknowledged. Issues for the Owner's attention in the project delivery phase of the alliance project include:

ensuring ongoing alignment between the commercial objectives of the NOPs and the Owner's project objectives (to deliver the Owner's VfM Statement at a fair cost);

under an alliance the Owner has the greater financial exposure to risk, however, risk management is shared equally between the Participants; and

given that the approach to remuneration under the Commercial Framework is reimbursement of NOPs' costs, there needs to be assurance that monies are being expended in a way that serves the public interest and meets public sector prudential standards.

The delivery phase of an alliance will be different for each project. The guidance in this chapter addresses the following key areas during delivery of the alliance project:

effective governance-internal and external to the alliance;

effective Owner representation and resources inside and outside the alliance, including key management and leadership roles on the ALT and AMT and the Owner's access to independent advice on the alliance's activities;

ensuring the fundamentals of good project management and project controls are established and maintained;

ensuring expenditure of public funds is prudent and appropriate, and that all cost ledgers, cost claims and cost reports are reviewed on a monthly basis and audited regularly;

creating greater certainty in the AOC by minimising the need for TOC adjustments;

ensuring rigorous review of and justification for any proposed or potential scope changes;

managing the alliance culture to ensure it is healthy and productive (i.e. it is a means to an end, not an end in itself);

ensuring 'no blame - no disputes' operates to optimise project delivery (and does not lead to 'no accountability and no disagreements' between the Owner and the NOPs); and

providing monthly progress reports to the Owner.