[Agency Logo]
[Agency Title]
[Project Title]
Project Definition Plan
[Date]
Approval
Name/Title
Signature
Date
Minister
Director General / Chief Executive Officer
Chief Finance Officer
Chief Information Officer
Other
Contact Officer
Name/Title
Email
Phone
Version Control
Version
Draft 1
Draft 2
Final
Date
Status/Action/Change
Approved By
Executive Summary
This section summarises the main results and advice from the PDP work,
particularly whether the project is ready to proceed to the tender documentation
stage.
The summary starts with a brief description of the endorsed business case option
and its purpose, and the asset definition and its cost, schedule and risk profile.
Advice is provided on:

whether there have been any material changes from the business case
parameters;

the approvals sought, such as for reduced scope and benefits, or for
increased funding or time; and

the next steps, which may involve proceeding as originally planned or applying
trade-offs to stay within the original business case parameters.
Questions

On balance, is the prognosis for the endorsed business case option good or
bad? Is the option still viable?

Will the expected service delivery benefits be achieved on time and budget? If
not, what are the main changes? What is the latest risk profile?

Why does it make sense to proceed based on the PDP? Who is accountable
for the quality of the advice and information in the PDP?
Strategic Justification
SAP Connection
This section demonstrates that the investment proposal still has a strong business
justification and high relative priority from the agency’s perspective.
The points of reference are the demand drivers and projections, and the service
delivery objectives and model in an agency’s strategic asset plan.
The PDP does not repeat the detail in the strategic asset plan, but clear, direct
links are shown to the relevant elements of the plan.
1
Questions

How would the proposed investment help to meet the service delivery
objectives, and form part of the service model in the strategic asset plan?

What ranking does the proposal have in the list of priority investment items in
the latest version of the plan?
Business Objectives
Baseline
This section repeats the original parameters for the endorsed business case
option, as the baseline against which the PDP will be compared.
The section conveys accurately the original intention of decision-makers when
they endorsed a particular option, including in terms of the service objectives,
benefits, functionality and performance; and the scope, cost, schedule and risks.
Any unresolved issues, reservations or conditions are also set out clearly, for
example, if decision-makers required closer attention to the scope or cost, or the
capacity of industry to deliver on schedule.
No advice or analysis is required at this point. The purpose is only to provide
clear, easy access to the business case parameters to confirm the baseline for the
PDP work.
Material Variations
Impacts
This section itemises and explains any proposed material variations that would
affect the parameters for the endorsed business case option.
In practice, it may be more effective to explain a material variation in the relevant
section later in the PDP (on the project’s scope, cost, schedule or risk). However,
by way of illustration, the following table shows how the advice can be conveyed
concisely in terms of project quality, cost and schedule.
2
Table One: Material Variations
Parameter
Business Case
PDP
Variation
Scope
2 x wharf extension
and refurbishment
As in the business
case
Nil
Total Cost
$50m
$55m
$5m
* Capital
$20m
$25m
$5m
* Recurrent
$30m
$30m
Nil
Schedule
6 months
8 months
2 months
Risk
Medium
Medium
Nil
The reason for, and the value for money impact from each variation is explained.
In the case of the wharf extension example above, the justification for the
$5 million increase in the capital cost might be that it would enable the use of
stronger foundation material that would add ten years to the life of the asset. The
project schedule would be extended by two months to secure the next available
order in the production line for the material. Recurrent costs would not increase
because no additional or specialist maintenance would be required. The risk
profile would be unchanged because the construction work could still be
completed during favourable weather conditions.
If there are no material changes, the reason for continued confidence in each of
the original parameters is explained.
Questions

What is the reason for, and the impact of each material change?

When was the change first identified by the agency and what action was taken
in response?

How would value for money be achieved if the change is approved?

Is there potential for more change and further risk?

How will controlled and innovative proposals be facilitated during the tender
negotiation and evaluation stage, and closed off thereafter?
3
Delivery
Scope
This section summarises the main features of the asset and non-asset initiatives
that will be delivered and provides a detailed description of the scope of the
proposal.
The summary highlights the challenges and assumptions that relate to the asset
definition and the non-asset, demand control initiatives.
The scope of the proposal is described in detail, in accordance with the guidance
provided in the SAMF PDP module.
Any material changes identified in the preceding section of the PDP are included.
The scope for asset expansion to meet agreed future demand is also made clear.
The advice is based on a value management review which focuses on the value
for money to be gained from the efficient configuration of the asset to suit service
delivery recipients and operators. Further information is in the SAMF Value
Management module.
Questions

How will the functions and layout of the asset help people receive and deliver
services effectively, efficiently and safely?

What detailed stakeholder and end-user consultation was done to ensure that
the asset and non-asset initiatives are focused on the essential functions?

What scope does the asset have for improvement to meet higher levels of
demand in future?

Which Australian and overseas benchmarks were used as points of reference
for the asset definition, and why were they useful?
Copies of the value management review and the stakeholder consultation and
benchmarking reports should be available.
4
Cost and Schedule
This section provides the latest estimates for the cost and schedule for the
endorsed option.
Particular attention is paid to the cost and schedule drivers, to the whole-of-life
operating costs, and to the adequacy of the contingencies for project cost and
schedule slippage.
Questions

Is the previous Budget allocation (for the approved business case option) still
adequate and well-phased?

On what basis could the refined cost and schedule estimates in the PDP be
described as accurate?

What is the quality of the sub-estimate for each cost and schedule driver, and
for material, unresolved elements such as the construction, land assembly or
environmental approvals?

Are there any material elements of the project for which there remains a high
risk of a cost increase or schedule slippage?
Procurement and Finance
This section identifies the procurement and financing methods that are most likely
to achieve value for money for the State.
The advice is based on procurement and financing analysis, and workshops and
discussions among senior officers in an agency and Treasury, supported by an
informal market sounding.
Key questions include:

What are the strengths, weaknesses, benefits and risks of the recommended
procurement and financing methods?

Is the market likely to have the appetite and capacity to deliver the endorsed
business case option to the standard and within the cost, schedule and risk
profile envisaged?

Could the project be delivered under a PPP arrangement, either individually or
as part of a project bundle?

Why are the proposed allocations of procurement and financial risk to the
State and to the private sector appropriate?
5

What type of procurement contract could be pursued, fixed price or cost plus?

How will the agency ensure that it has the skills needed to manage the
involvement of consultants and contractors effectively?
Risk Profile
This section provides an overall risk profile for the delivery of the project, including
governance and accountability for results.
The section summarises the highest risks from each section of the PDP, shows
how they will be mitigated, and demonstrates that major lessons have been
learned from similar asset investments in Australia and overseas.
The advice makes clear the overall risk that decision-makers will be asked to
accept, and that agencies and industry will be expected to deal with when
delivering the asset.
The status of all significant issues that were unresolved at the business case
stage is clarified, including advice on the solutions. For example, the potential for
an efficient asset definition may have depended on a formal agreement which has
since been achieved that two parties will share an area of the facility, the
equipment in it, and the related supply and maintenance services.
Any significant issues that have yet to be addressed are highlighted, particularly
material aspects for which the Government would otherwise proceed to tender
unaware. For example, if the above mentioned agreement has yet to be achieved,
the deadline for resolution would be before the procurement method is decided
and a contract signed.
For most complex infrastructure and building projects, strong coverage of
information and communications technology risk is almost certain to be required.
To reinforce confidence that the risk profile will be well managed, a brief outline is
provided of the governance and accountability arrangements that will apply to the
project delivery team and senior decision-makers in the agency or agencies
involved.
Questions
6

Are there any fundamental aspects that have not yet been addressed, or have
only been addressed for the first time in the PDP, and for which the risks
remain high?

Who has reviewed the PDP, what were their skill levels and why was the time
they were given sufficient for a proposal of this scale?

To what extent was industry involved in developing the PDP (through, for
example, initial work on the asset definition and its whole-of-life implications)
and why was this level of involvement sufficient?

What were the major lessons learned from related asset investments?
7