Concept Approval and Business Case - Department of Treasury

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Strategic Asset Management FrameworkRecommendationsBased on the above value for money comparison, this section should recommendthe best and alternative options, and the next steps to ensure that the significantimplementation issues are addressed.Examples of significant implementation issues include: the governance andaccountability system that would be established in an agency (and with relatedagencies); and any resource or capacity constraints for which detailed planningand corrective action should start soon to ensure that an agency can deliver theinvestment option as proposed.Options• Which of the shortlisted options is the recommended one, and why?• Which are the next-best, alternative options, and why do they offer less valuefor money than the recommended one?Implementation IssuesGovernance/Accountability• What governance and accountability arrangements would the agency apply toensure successful implementation including the:−−timing for regular progress and benefit realisation reports; and theinternal and other agency officers and committees that should be involved,and the value-add and timing for each?Resources/Agency Capacity• Which options are safely within, and which are beyond the capacity of theagency to deliver through the use of existing experience, skills and resources?• What additional resources would the agency need to develop and implementeach option, and how would these be obtained?Planning and Delivery• What would be the scope, cost and timing of the project development work?• What key approvals would be required, for example to commence landacquisitions, or formal negotiations with stakeholders?22Exposure Draft – December 2010
Concept Approval and Business CaseProcurement and Finance Plans(To support the business case only)ProcurementThe advice in support of a business case should clarify how government policies,principles, and best practices for procurement will be upheld.Advice on potential procurement arrangements should be provided in a separateplan which supports the business case (not an ACA).Key questions include:• What are the strengths, weaknesses, benefits and risks of the alternativeprocurement methods (whether design and construct, early contractorinvolvement, alliance, or PPP)?• What is the potential for collaborative planning with other agencies to achieveprocurement efficiencies – if there is none, or only limited opportunity, why isthis so?• What capacity does the market have to deliver each option to the standardand within the schedule proposed?• Why is the proposed allocation of risk to the State and to the private sectorappropriate?• What type of contract would be pursued – fixed price or cost plus?• How will the agency ensure that it has the skills needed to manage theinvolvement of consultants and contractors effectively?• Overall, what is the extent of the exposure to risk, and the magnitude of theconsequences of failure?Exit Points• What would be the exit strategy from the contracts for each option if thingsstart to go significantly wrong?• What would be the reasons for using an exit point, and the benefits, costs andnegative impact of doing so?• What would the recovery strategy and next steps be after an exit point isused?Exposure Draft – December 2010 23
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Concept Approval and Business Case - Department of Treasury

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