Governments1 seek to achieve a very broad range of social, environmental and economic objectives on behalf of the community. This results in an equally broad range of capital and infrastructure projects. There are a number of project delivery methods which can be applied to cater for the government projects on a 'fit-for-purpose' basis. The project delivery methodology should be selected on the basis of careful and knowledgeable analysis of the relevant project characteristics and risks.
Increasingly, governments are using alliance contracting to procure significant infrastructure. A key value proposition of alliancing is that government entities reduce their traditional contractual rights (under a 'risk transfer' contract) in exchange for Non-Owner Participants bringing to the project their 'good faith', acting with the highest level of 'integrity' and making decisions which are 'best-for-project'.
The success of an alliance project may be measured with reference to whether Value-for-Money (VfM) outcomes have been appropriately understood, managed, delivered and reported. This Guidance Note seeks to provide a framework for the VfM concept to be better understood and measured, in a way that is shared by the government, the Owner and the alliance. This includes recognising the role of the Business Case, and the need for both a VfM Statement prepared by the Owner for the alliance at commencement of the tender, and a VfM Report prepared by the Owner for the government at project conclusion.
Like all delivery methods, there should be continual improvements to alliancing. This Guidance Note aims to identify where alliance arrangements can be improved to further deliver and demonstrate their value to the public interest.
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1 Unless otherwise stated, the expression 'government' is used to denote all the government entities of Australia, which include the Commonwealth of Australia and all Australian state governments and territories.