The alliance will need to understand the Owner's expectations that impact VfM outcomes in greater detail than may be set out in the Business Case.
For example, while the Business Case may analyse and cost 'cultural/heritage' issues, there may be further detailed information that the Owner can share with the alliance. Similarly, it would be inappropriate for the Owner to set out its established corporate standards for the construction of new assets in the Business Case (although the Business Case should address any proposal by the Owner to uplift such established business-as-usual standards.)
The VfM Statement should also address those project planning and delivery areas where the Owner wants a role to ensure that the VfM requirements are achieved. For example, the Owner may have governance standards and protocols, general 'business rules', corporate standards and other preferences. Examples of what the Owner may include in the VfM Statement are:
• procurement preferences for the alliance's supply chain;
• expectations regarding alliance governance;
• required reporting mechanisms;
• delegated authority of Owner Participant and powers of the ALT;
• scheduled milestones and key project deliverables;
• expectations regarding processes to be used to verify prices including TOC scrutiny and verification and the role of the Independent Verifier;
• expectations regarding the quality of the work the subject of the alliance;
• how proposed changes to the VfM Statement will be managed;
• expectations regarding skills transfer from private sector Participants to public sector and mechanisms for achieving this;
• KPIs for the alliance;
• legislative compliance and approval requirements;
• performance targets and benefit management plan;
• environmental, stakeholder and community obligations or requirements;
• communication strategy; and
• risk management strategies for the alliance.
Although the Project Alliance Agreement will set out the detailed requirements in relation to these matters, it is still useful for the Owner's specific rules and preferences to be broadly referenced in the VfM Statement. For example, the details regarding performance measurement and KPIs for the alliance can be included in the VfM Statement so that the context and links to the Business Case objectives are clearer.
Moreover, the Business Case may have aggregated the risks, costs, and benefits of many other project matters, and these can also be (disaggregated and) addressed in the VfM Statement. For example, the following may be included as appropriate:
• dealing with existing cultural heritage assets and planning restrictions;
• addressing specific environmental values, regulations, guidelines, etc;
• addressing specific social issues;
• professional services required by the alliance;
• reducing whole-of-life costs in line with corporate standards;
• governance structures within the alliance and between the alliance and the Owner;
• applying corporate standards to the alliance project;
• applying regulatory standards to the alliance project;
• applying industry standards to the alliance project;
• delivering the Owner's requirement for project specific uplift on its business- as-usual standards;
• delivering the construction program (direct costs and other indirect);
• ownership and handling of plant and equipment;
• stakeholder management;
• the application of public sector standards (e.g. the Victorian Public Administration Act 2004); and
• providing creative/innovative solutions and ideas that reduce cost or are cost neutral.