'Best-for-project' is a common expression that is usually defined in alliance agreements. The term is generally understood to mean that the alliance Participants direct their decisions towards the shared, collective vision and objectives of the alliance (including time, cost, quality and reputation), rather than self-interested goals (such as maximising profit). Best-for-project generally refers to actions and decisions that fit within the alliance principles developed by the alliance Participants and incorporated in the alliance agreement. A best-for-project approach is intended to drive all decision-making processes within the alliance.
In assessing projects at both the initial Business Case stage and upon project completion, the government considers VfM in a wider context than the best-for- project concept. That is, when making the decision whether to fund a Business Case, the state will apply the best-for-state concept (see section 4.2 for further discussion). This Guidance Note is prepared on the basis that all VfM Reporting will also be prepared and assessed in a manner that transcends the individual project and considers the overall government perspective. This includes ensuring that all project decisions take into account the following issues:
• the impact of project decisions on whole of life cycle costs;
• the potential for project decisions to have a benchmarking impact on other projects and/or policies;
• the financial outcome of the project should not compromise the funding of other government priority projects; and
• any impact of the proposed asset on the environment, lands and other government assets.
| Scenario: What is the best for the community? The alliance for 'Route 66' is well advanced in its planning and has taken the initiative to hold a 'community legacy workshop'. Exciting initiatives have been identified that are supported by the alliance and that will improve community amenity for many years to come. These initiatives are outside the Business Case, and will cost approximately $5 m. The alliance workshop was facilitated on a best-for-project basis. However, when considering whether to fund the initiatives, the Owner decided that a greater public good for the state's community could be achieved if $5 m funding was instead applied to one of the high accident road intersections or railway crossings located across the state. That is, the Owner's decision to take a best-for-state approach in relation to the legacy issue took precedence over the alliance's best-for-project decision making. |
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11 The expression 'state' here is used to denote all the government entities of Australia, which include the Commonwealth of Australia and all Australian State Governments and Territories.