Agencies must present and fully describe realistic options and their impacts (positive and negative).
Identify the widest possible range of realistic options at the earliest stage of the planning process. This is usually done as part of a value management study for capital projects. An iterative analysis process is appropriate for major projects or programs, which may refine option development and evaluation as the detail and accuracy of data improves through the process.
A trial or a pilot may be considered for the proposal to enhance the data available for analysis by the agency and Treasury, and as a risk mitigation measure. For a trial or a pilot the resulting data must be included in the business case. Options can be represented as scalable in the business case, so a range of incremental costs of reform can be considered. For example, showing how much funding is required to provide 50, 75 or 100 per cent of the desired result.
The first option to be considered is the Base Case. That is, what happens if the status quo is maintained? The Base Case does not necessarily mean "spending nothing", e.g. on upgrading fire safety, where the Base Case in effect becomes the "minimum essential expenditure option". The Base Case must be realistic and may involve cost penalties, or confer positive benefits. One of the benefits of "doing something" may be the avoidance of high maintenance costs.
The description of the base case is important as it may be the preferred option adopted by Government because of investment priorities in other areas of service delivery. Agencies should provide a full and accurate description of the base case.
In developing options, agencies should consider if the issue is amenable to prevention and early intervention strategies that prevent a problem from occurring or tackle the problem early in its lifecycle. Agencies should also consider demand management strategies to reduce reliance on acute (intensive high cost) service delivery.
Other practical options for meeting project or program objectives may include:
◼ reprioritising agency priorities or deferring development of project
◼ early intervention or prevention strategies
◼ demand management
◼ different service levels, scale or quality of operation
◼ apply alternative, and cheaper, technologies or materials
◼ consolidating (or disaggregating) locations for service delivery
◼ sequencing the development of the project into phases
◼ shared delivery of services with another agency, private sector or the not for profit sector or
◼ installation of new assets versus modifying existing assets or contracting out services.