As covered above, the Owner's and the government's requirements for a project are detailed within the Business Case, which in turn are incorporated in the Owner's VfM Statement. Material changes to these requirements can only be made by the original approving authorities. The Owner must ensure that governance arrangements within the alliance do not compromise this principle. In particular, the Project Alliance Agreement should ensure the alliance (including the Alliance Leadership Team) adhere to this principle.
Appropriate mechanisms should be implemented to ensure that any material changes to budget, time and quality are referred to the Owner for approval. These mechanisms (including what will constitute a material change) should be agreed and incorporated as part of the Project Alliance Agreement. Also, the alliance should understand that the Owner will need to comply with external governance requirements, and may need to seek further approval for certain material changes from the government. It is not the role of the alliance to make changes to the project that are outside the approved Business Case and the Owner's VfM Statement.
If material changes need to be made to an approved Business Case, then the Owner may need to resubmit the Business Case to government. If revisions to the Business Case are triggered by a budget overrun, the Owner should work with the alliance to develop options to address this. These can include:
• reducing scope to achieve approved budget;
• additional funding to achieve approved scope;
• staging the project into independent components; and
• termination of the alliance.
Alliances are structured so that the Owner Participants are part of and committed to the alliance. There should be a clear separation in the alliance's governance structure between the Owner and the Owner Participant, and this should also be reflected in the workflow of the alliance.
Another aspect of governance is to ensure that the processes around planning, procurement and delivery of projects to achieve the 'right' outcome (including the VfM proposition) are transparent. To this end, various governments have established a 'Gateway Review Process' that aligns with the Victorian model (refer to www.gatewayreview.dtf.vic.gov.au). This is an independent process that reviews high-risk and selected medium risk-projects and programs throughout their life cycle, helps to ensure projects are on track for success and provides quality assurance to the Owner.
The Government's risk profile under alliance contracts means that alliances are regularly subject to the Gateway Review Process. The Gateway Review Process may be tailored to take the unique characteristics of alliancing into consideration.