Feasibility Study Def

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FEASIBILITY STUDY

A feasibility study is essentially a process for determining the viability of a

proposed initiative or

service and providing a framework and direction for its development and

delivery. It is a process for making sound decisions and setting direction. It is

also a process which:

is driven by research and analysis usually involves some form of consultation

with

stakeholders, community, users,

etc.

focuses on analyzing, clarifying and resolving

key issues and areas of concern or uncertainty very often involves basic

modeling and testing. of alternative

concepts and approaches.

A Project Feasibility Study is an exercise that involves documenting each of the

potential solutions to a particular business problem or opportunity. Feasibility

Studies can be undertaken by any type of business, project or team and they are

a critical part of the Project Life Cycle.

When to use a Feasibility Study?

The purpose of a Feasibility Study is to identify the likelihood of one or more

solutions meeting the stated business requirements. In other words, if you are

unsure whether your solution will deliver the outcome you want, then a Project

Feasibility Study will help gain that clarity. During the Feasibility Study, a

variety of 'assessment' methods are undertaken. The outcome of the FeasibilityStudy is a confirmed solution for implementation.

Council involvement. The following are more specific

circumstances that may prompt the need for a

feasibility study:

significant capital investment is required.

significant City funding or public fundraising is required.

significant commitment or exclusivity of City land or building floor space and

time is required.there is no clear champion

financial viability is in question (costs compared with anticipated revenues)

community needs require further analysis and validation

there is potential to reach a large market segment or affect a large number of

people

accessibility to the service is an issue (pricing barriers, physical barriers,

Example of Feasibility Study http://www.papercamp.com/print/Example-Of-Fe

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discriminative social

barriers, proximity, geographic equity, etc.)

there is a perception of competition with existing service providers (commercial

or

community based) and the Citys mandate or role may be questioned

there is no clear indication of the preferred method or source of delivery

public safety is concernedthere are significant legislative requirements (health, safety, liability,

certificationrequirements) related to the initiative which

concern, impact and relate to the City

there is significant risk inherent in the service initiative (financial, political,

public liability,social, etc)

the initiative entails significant operating requirements (ie. financial,

administrative,staffing, materials and supplies, skilldevelopment, customer

service, training/development, etc.)

Responsibility for a Feasibility StudyThe City may assume lead role if there is no organized proponent or

organization attached to an identified need or service concept. Alternatively, the

City may assist or team up with a community group or private proponent who is

advocating a new community service or program.

In any case, the City must be involved in the feasibility study process as a key

stakeholder and provider of resources to support a service and to ensure that

community needs and interests are represented accurately.

Typical Contents of a

Feasibility Study

A typical feasibility study will:

verify community needs for a proposed leisure

service

assess the benefits and overall value of a

proposed service to the community

assess market conditions and trends

articulate a service concept (ie. format, content, theme, objectives/outcomes)

determine required resources (capital and operating)

determine costs and financing strategies (ie. Financial Analysis)

review service delivery options and recommend the most effective deliverystrategy.

determine the Citys role and impacts (financial, resources) in the delivery of the

service

produce an implementation strategy for the development and delivery of the

new service


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The following summarizes typical contents of a

feasibility study. The level of detail, analysis and

involvement may vary depending on the nature

and scale of the proposed initiative.

1. Service Concept

DescriptionOrigin

Conformance with City policies, goals and

directions.

2. Community Benefits/

Outcomes Assessment

Personal Health

Build strong families and healthy communities

Ecological Survival

Economic Generator

Human DevelopmentQuality of Life

Reduces self-destructive and anti-social behaviour

Reduces health care, social services and police/justice costs

3. Community Needs

Assessment and Market

Analysis

Target markets/profiles (geographic/ demographic)

Needs assessment (ie. product or type of service)

Market supply and competition

Market share goals (production or service volume goals)

Trends analysis- socio-economic, demographic, environmental, recreational, etc.

Short term

fad or long term need?

Market growth potential

Impacts to current markets

4. Service Concept

Development

Content

FormatProvision Levels

Criteria/Standards (ie. quality, accessibility, safety, customer service)

5. Resource Requirements

Capital- land, structure, space, furnishings, fixtures, equipment, computers,

technological


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systems

Facility provision options (rental/lease, renovations, re-using/re-adapting

existing

facilities, joint venture, new development)

Operating- staff (administrative, instructional, supervisory/management),

utilities,materials,supplies,etc.

6. Service Delivery/Management Options

Review service delivery options in light of

the following criteria:

Cost efficiencies

Accessibility

Affordability

Leadership capacity and commitment

Public interest

Liability-regulatory considerations

Service quality and customer responsivenessResource/financing capacity

Service integration and continuity

7. Financial Assessment of

Preferred Options

Capital expenditure projections

Operating cost projections

Capital and operating financing strategiespricing, subsidy, grants, sponsorships,

fundraising, etc.

8. Recommendations

Preferred service delivery approach

City role and impacts (ie. financial, resources)

Implementation strategy

Typical Feasibility Study

Process:

The following summarizes a typical

feasibility study process for a

community leisure service:

Phase 1 Project Development: Identify stakeholders, develop a steeringcommittee, produce a terms of reference, call RFP and retain consultant if

necessary, consulting services agreement, refine process timelines and

milestones, develop task teams, clarify roles and responsibilities,

communications plan, etc.

Phase 2 Background Research: Collect data, trends analysis, market analysis,

community


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demographics profile, identify issues and opportunities related to contemplated

service.

Phase 3 Community Consultation: Community needs assessment through focus

groups, forums, surveys.

Phase 4 Service Concept Development: Develop service concept and format,

resource

requirements, capital requirements, service delivery alternatives, financialstrategies, etc.

Phase 5 Community Consultation and Market

Testing: Obtain input on service concept and format, delivery alternatives,

costing and pricing

strategies. Focus groups, surveys, forums, etc.

Phase 6 Final Recommendations: Develop final

recommendations on the service format, preferred

delivery approach, City role and involvement and implementation strategy.

Feasibility Study Format* Production. This category explains, among other things, the project timeline.

* Marketing. Here you will address how the project will be marketed and the

cost for that marketing in terms of staff hours and other resources.

* Technology. Here you will describe the type of technology that will be used,

along with additional technology needed for the project to be successful.

* Raw Materials. Raw materials, both imported and local, that will be used

during project implementation.

* Utilities. This is a breakdown of the utility costs, including gas, electric, water

and even telephone used during the implementation phase.

* Manpower. The manpower category is a projection of the staff hours

needed and the cost for compensating these employees.

* Investment. Based on the items above, the investment category will outline

the exact amount needed to get the project off the ground.

* Profitability. In this final part of the feasibility study, you should outline your

projections for when the project will turn profitable, and the expected return on

the investors investment.

Feasibility Study Process

Step 1: Review of Master Plan Findings

The Master Plan Study is to be reviewed and recommendations confirmed. This

is particularly relevant if the following has occurred:* re has been a considerable delay between the completion of the Master Plan

Study and commencement of the Feasibility Study

* Significant change in government policy

* Change in service needs/demographics

* Change in site, conditions and/or changes to the Health Services / Agencys

service and/or Business Plans.


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* If any amendments to the Master Plan Study are to be incorporated into the

Feasibility Study they must be clearly identified, including reasons for the

changes endorsed by the Project Control Group and approved by the

Department.

Step 2: Analysis of Functional Brief

The consultant analyses the Functional Brief, refer to the Master Plan Studies

Guideline to ensure that the services to be provided and the manner in whichthey are to be delivered is completely understood.

The analysis will require a comprehensive appreciation of the functional

requirements and relationships of the various programs and activities,

functional relationship diagrams and identification of key functional needs. The

Functional Brief should be the source of this information.

Should the consultant require additional information or clarification, the PCG

should be notified immediately and requested to provide the appropriate

response.

The Functional Brief may need to be refined/confirmed following this analysis

phase and the final form should be endorsed by the PCG prior to proceeding tothe next phase.

Step 3: Area Allocation Model

An area allocation model incorporating the space utilisation analysis should be

undertaken, including frequency of use and potential for multiple uses between

programs. Refer to the figure, Example of an Area Allocation Model.

Step 4: Confirmation of Site Influences

The consultant should investigate and confirm relevant information on site and

location issues, which may impact on development options. These include:

* Access

* Public Transportation Services

* Topography

* Site services

* Authority requirements

* Planning Schemes and Requirements

* Existing buildings

* Orientation

* Views

* Adjoining developments & easements.

Step 5: Identification of Viable Development Options

A number of viable operational and detailed physical planning options should be

identified. These options should be based on the Master Plan Study outcomesand other information.

The options should be developed to such a level of detail to enable a full

comparison. The level of information for each option should include:

* Concept site and floor plans

* Impact statement on site and engineering services

* Site conditions and existing buildings


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* If appropriate, the potential to incorporate existing buildings giving due

consideration to the existing building condition/fabric survey recommendations

* Construction implications

* Staged works.

Step 6: Evaluation of Options

An evaluation of each option is to be undertaken, including a full assessment of:

* Operational efficiencies* Physical planning benefits

* Capital costs

* Life cycle costs

* Recurrent costs

* Future developments

* Asset maintenance and disposal potential

* Accessibility

* Quality of service delivery

* Construction implications

* Implementation program* Staging of works/disruption to services

* Risks associated with the project.

The option evaluation recommends the preferred option(s) and also provides a

detailed justification. PCG approval is required prior to the refinement of the

preferred option(s).

Step 7: The Report

A Feasibility Study report is to be prepared which documents the finding and

outcomes of Steps 1 to 6 and also incorporates the following information:

* Executive Summary - summation of the project objectives, key issues and

recommendations on a maximum of 2-3 pages

* Conditions Brief and Design Summary - Summary of existing building

conditions, Functional and Design Brief Requirements and the design philosophy

* Confirmation of preferred site

* Options - drawings and statements on all options identified clearly outlining

the preferred option

* Full Scope of Works - describe all additional works which may be associated

with the development of the preferred option(s) including:

* Major works

* Site and engineering services

* Landscaping

* Construction staging costs* Temporary accommodation

* Hazardous material (e.g. Asbestos) removal

* Demolition

* Soil contamination removal

* Fire safety

* Impact on support services


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* Equipment

* Heritage issues.

* Capital Costs - a Cost Plan B must be developed for the preferred option. It

will be prepared on an elemental basis by a Quantity Surveyor. It should

comprise all costs associated with the project including:

* Asset acquisition

* Building works* External works and services

* Building services

* Construction staging costs

* ESD and infrastructure costs

* Furniture/equipment

* Special equipment

* Fees

* Contingency allowances

* Special factors

* Locality allowance* Delay allowance for escalation and rise and fall

* Asset realisation

* Commissioning costs.

* Recurrent Costs - a statement of the recurrent cost implications of the

preferred option, including both operational and asset costs:

* Operational

* Staffing

* Vehicles

* Support services

* Other ancillary operating costs.

* Assets

* Temporary accommodation/services

* Energy

* Maintenance

* Commissioning costs.

* Drawings - development plans of all options being considered and refinement

of the preferred option(s) to concept plan level. (On small simple projects scale

1:100, on other projects scale 1:200. Drawings should clearly identify the scope

of new and refurbished works, future expansion, surplus assets and staging of

works)

* Implementation Program - develop a proposed timetable for implementationof the project including staging of works, and associated cash flow projection

that incorporates any time constraints, which may be imposed by associated

works or other relevant factors such as approval processes. (Note: the approval

process varies for projects procured under Partnerships Victoria)

* Procurement Method - provide a preliminary statement of the preferred

procurement methods considered applicable for the project (e.g. traditional


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lump sum, construction management, design and construct)

* Analysis and Evaluation The report should provide an analysis and

assessment of all viable options. The evaluation process should outline the

criteria for assessment and the justification for the preferred option should be

clearly articulated

* Strategic Business Case - The Feasibility Study report will provide a summary

of the outcomes of The Strategic Business Case.* Preliminary Business Case - Undertaken following the completion of the

Schematic Design, however, there may be circumstances necessitating the

preparation of this Report following the completion of the Feasibility Study

phase. The requirements of the Preliminary Business Case Report are as

outlined in the Department of Treasury & Finance website under the Gateway

heading.


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Documents

Feasibility Study Def