Preconstruction Processes Manual Chapter 3 Business .../media/busind/techstdpubs/Project delivery and... · Chapter 3: Business Requirements Department of Main Roads Preconstruction

3

Chapter 3: Business Requirements Department of Main RoadsPreconstruction Processes Manual

June 2005 i

Chapter 3

BusinessRequirements

(Processes, Procedures &Approvals)

Manual Contents

Chapter 1Planning and Design Framework

Chapter 2Pre-Project Planning

Chapter 3Business Requirements

Chapter 4Design Development Process

Chapter 5Project Scoping

Chapter 6Design Management

3

Department of Main Roads Chapter 3: Business RequirementsPreconstruction Processes Manual

ii June 2005

3

Table of Contents

3.1 Business Processes, Procedures and Approvals (Project Pre-ConstructionDelivery) 3-13.1.1 General 3-13.1.2 Objectives 3-13.1.3 Delivery Management 3-2

3.2 Process Management Requirements 3-23.2.1 Selection of Project Team 3-23.2.2 Delivery Process Approvals 3-53.2.3 Application of Client Leadership Principles 3-53.2.4 Project Management Templates 3-73.2.5 Roads Implementation Program (RIP) 3-93.2.6 Estimating Process 3-113.2.7 Scope and Cost Management 3-11

3.3 Value Management 3-163.3.1 Value Management Objectives 3-163.3.3 The Value Management Process 3-173.3.4 Job Plan 3-20

3.4 Risk Management 3-203.4.1 What is Risk? 3-203.4.2 What is Risk Management? 3-20

3.5 Quality Management 3-223.6 Project Management Methodology 3-23

3.6.1 Concept Phase (Concept Planning and Project Scoping) 3-253.6.2 Development Phase 3-403.6.3 Implementation Phase 3-563.6.4 Finalisation 3-60

References 3-68


June 2005 iii

3


iv June 2005

Chapter 3 Amendments - June 2005

Revision Register

Issue/Rev No.

ReferenceSection Description of Revision Authorised

by Date

1 First Release D. Hicks Apr 2003

2 Chapter 3 Overall reshaping following feedback and a review.Content basically just updated. D. Hicks Jan 2004

3New Chapter 3- BusinessRequirements

Previous Chapter 3 - Project Delivery Processes,totally rewritten to incorporate original Chapter 4 - TheConcept Phase, and Chapter 5 - The DevelopmentPhase and renamed to reflect the new content.

D. Hicks Feb 2005

4 First Edition Release D. Hicks June 2005

3.1 Business Processes,Procedures andApprovals (Project Pre-ConstructionDelivery)

3.1.1 General

It is important for the project manager and theplanner / designer to have a clear understanding ofthe business processes adopted by Main Roads forthe delivery of Road Infrastructure Projects.

Main Roads delivers its projects using a businessmodel framework comprising:

• The Road System Manager - See Chapter 1 formore details,

• The project team appropriately qualified andexperienced,

• The OnQ Project Management Methodology,

• The Preconstruction Processes - see Chapter 4,

• The delivery approvals (ministerial, technical,progress and financial),

• The appropriate application of independentPeer Reviews,

• The RIP Rules, and

• The concept of "Client Leadership" in thedelivery of projects.

This section provides the linkages between thesebusiness requirements. In addition, the projectteam is expected to behave in a manner thatsupports:

• The establishment and maintenance of goodworking relationships between team members,and

• The "best for project" approach in the deliveryof the project.

3.1.2 Objectives

The key objective of this chapter is to explainMain Roads business processes and proceduresthat specify the requirements for identifying anddeveloping the 'right' project that satisfies theparticular network functionality need. There is aclose relationship between the pre-projectnetwork planning activities in assessing thejustification for the project, its priority and placein the RIP.

Project cost management

Accurate project Scoping and Cost Estimating arefundamental requirements for projectjustification, budgeting and cost control. Thedepartment maintains a system of total projectcost control that will ensure, with a high level ofconfidence, that actual costs will not exceed theapproved project budget. This will ensure theintegrity of earlier decisions of projectjustification, government priorities and programallocations.

Risk management

Risk management is an essential element thecontrol of project scope and cost. Risks thatcannot be adequately mitigated during the designdevelopment process are either accounted for inthe scheduled work (as provisional items) orincluded in the contingency amount in theestimate (non-contract item) for use by the ProjectManager when any of these risks actually occur.

The application of value management (valueengineering) processes at the appropriate stages ofthe process is an essential requirement to ensure:

• The right solution is selected in the optionsanalysis step, and

3

Chapter 3

Business Requirements


June 2005 3-1

• The individual design components are the mostappropriate solutions in terms of functionalityand economics.

The application of quality management principleswill ensure the requirements of the qualitystandard are carried out and recorded. The projectteam at regular progress meetings must not onlyinspect the relevant quality records but alsoensure that they are actually based on the actionsbeing appropriately carried out. The mostimportant records in this respect are:

• The work was performed using appropriatelyqualified and experienced personnel,

• The project team is fully representative of theproject lifecycle,

• The designs have been fully verified, and anyunusual features of the design have beenappropriately addressed and validated,

• The design interfaces have been checked forcompatibility especially where differentdisciplines are involved.

Main Roads defines clear lines of responsibilityand accountability for preparing, checking andapproving infrastructure preconstruction activitiesand project budgets.

3.1.3 Delivery Management

The preconstruction delivery processes aretailored to meet the specific requirements of MainRoads. They employ practices and proceduresthat enhance quality design, documentation andefficiency of the delivery processes. Themandated requirements imbedded in the MainRoads delivery processes for all roadinfrastructure projects are:

• A project management approach to ensure anefficient and effective delivery of projectdeliverables in the achievement of the specifiedoperational performance outcomes,

• A collaborative approach using clientleadership to model the way forward withregular project meetings and progressivelyapproving solutions as they evolve,

• A project team comprising:

- An appropriate blend of technical skills andexperience over the whole supply chain,

- Members committed to establishing andmaintaining good relationships to achievesuccessful project outcomes,

- Members who have a 'best for project' focusto achieve the best possible projectoutcomes.

• A risk management approach in seekingreliable project cost estimates,

• A quality management approach in seekingquality design, documentation and outcomes,

• A value management approach in seeking themost appropriate solutions (outcomes anddesign), and

• A peer review is performed to confirm that allof the critical issues have been identified andappropriately addressed.

A range of project management templates havebeen developed to specifically support thedevelopment, delivery and approval of MainRoads road infrastructure projects in compliancewith the project management methodology andthe RIP Business Rules.

The overall relationship between the projectmanagement methodology, the preconstructionprocess and the Road Implementation Program(RIP) is shown in Figure 3.1 - Application of theProject Management Methodology to thePreconstruction Process.

3.2 Process ManagementRequirements

3.2.1 Selection of Project Team

The composition of the project team must becarefully selected to ensure the appropriate mix oftechnical (i.e. team members that collectivelyrepresent the whole process from conceptionthrough to construction) and management skills

3


3-2 June 2005

Chapter 3: Business Requirements Preconstruction Processes Manual

June 2005 3-3 1

Progressive Deliverables of

Phase Activities

Proforma Templates for Road

Infrastructure Phase Deliverables

Phase

Phase Steps Options Analysis

Business Case Proposal

CONCEPT

DetailedDesign

PreliminaryDesign

DEVELOPMENT

Process Control

IMPLEMENTATION Project Management Methodology

FINALISATION

Wind-upControl

See Note 3

Risk Management Activities – Form M4213 Printout from Risk Management Computer Program

Finalisation Activities See Note 5

R4001 - Handover Report R4002 - Completion Report R4003 - Simplified Handover and

Completion Report

Project Proposal R1001 1 ------------------------- Project Proposal. The Need or Problem The required outcome Link to MR Strategies. Concept Phase Investigation Budget.

Include in RIP as a 900 series Job No. where appropriate

Risk Profile Identification

2.1.1.1.1.1.1 PRECONSTRUCTION PROCESS – (ROAD INFRASTRUCTURE) NOTES:

1. Planning Projects should have adequate lead time to deliver an approved business case for inclusion in year 5 of the RIP. 2. Construction Projects will normally enter the RIP in year 5 however urgent or political projects could enter in years 4 and 3 also. 3. Sufficient work needs to be done in the Business Case to give the Customer confidence that the Concept Estimate is of the required degree of accuracy, i.e. within ± 20%.

This means that the Business Case and Preliminary Design interface is not a rigid demarcation. 4. The District Director is responsible for initiation of the project timings as they relate to the RIP formulation requirements/timings. 5. Use the intent of the Finalisation Phase to progressively close-out activities if/when they are completed, e.g. Performance Reports for Consultant Services. 6. Sufficient work needs to be done in the Detailed Design to give the Customer confidence that the Detailed Estimate is of the required degree of accuracy, i.e. within ± 10%.

PROFORMA TEMPLATE USE: 1 Template R1001 - A stand alone Project

Proposal template. Used for all projects. 2 Template R1002 - A stand alone Options

Analysis template. Used for Type 1 Projects - significant projects that are complex, high risk or expensive and thus require higher amounts of rigour and control.

3 Template R1003 - A stand alone Business Case template. Used for Planning Projects, High Risk or Complex Projects.

4 Template R1004 - Use for Type 2 projects - relatively straight forward, low risk, projects for which a lesser amount of rigour and control is appropriate.

5 Template R1005 - Use for Type 3 Projects - small, simple projects of low cost that progress quickly through the concept phase.

Note: Project Types are described in Section 3.2.4.

Preliminary Design must be completed and approved prior to entering the firm years of the RIP (i.e. before entering year 2)

RIP Year 3 RIP Year 2Business Case must be completed and approved prior to entering year 5 of the RIP

- Milestones - Hold Points - CSA Tools application - Project Justification - Reviews (Technical & Process + Learnings) - Recommendations & Approvals A

s R

elev

ant

Preliminary Design --------------------------- Develop Preliminary Design, incl. Electronic model.

Prepare Preliminary Design Estimate

Prepare Preliminary Design Report

Conduct Road Safety Audit – Preliminary Design.

Update Project Plan. Continue Risk Mitigation Process and Risk Management Activities (Update Report – Form M4213).

Update Design Development Report (Form M4211 or Form M4212).

Detailed Design --------------------------- Develop Detail Design, including Electronic model

Conduct Road Safety Audit – Detailed Design.

Prepare Detailed Estimate See Note 6

Prepare Scheme Prototype Update Project Plan. • Continue Risk Mitigation

Process and Risk Management Activities (Update Report – Form M4213).


Prepare Tender documents, call tenders and assess tenders

Award Construction Contract.

Options Analysis R1002 2 Type 1 Projects R1004 4 Type 2 Projects R1005 5 Type 3 Projects -------------------------- Identify Options Develop Options Value Management Report. Select Preferred Option. Identify, commission and manage the delivery of relevant Work Packages.

Commence: - Risk Mitigation Process - Risk Management

Activities, and - Risk Management

Report - Form M4213) Start Design Development Report (Form M4211 or Form M4212).

Business Case R1003 3 Type 1 Projects R1004 4 Type 2 Projects R1005 5 Type 3 Projects

------------------------- Develop preferred option. Identify, commission and manage the delivery of additional Work Packages.

Conduct Road Safety Audit – Feasibility/Concept

Prepare Concept Estimate. Nat. Hwy. Planning Project Proposal Report, if relevant.

Draft Project Plan. Continue Risk Mitigation Process and Risk Management Activities (Update Report – Form M4213).


Project Management Application

DELIVERY - Monitoring and Control using the 9 Project Management Functions Integration, Scope, Time, Cost, Quality, Human Resources, Communication, Risk, Procurement

Performance – Delivery – Outcome

Need (Network Planning) Strategic Fit Required Outcomes

Project Plan - Template R2001 OR R2002 (Simplified) OR R2003 (Minor)

Figure 3.1 – Application of the Project Management Methodology to the Preconstruction Process

PRECONSTRUCTION CONSTRUCTION Delivery Activities

Risk Mitigation Activities – Form M4213 Printout from risk management computer program

Design Development Report - Form M4211 (Short Form) OR M4212

Chapter 3: Business Requirements Preconstruction Processes Manual

3-4 June 2005 1

for the project concerned. The concept phasewould include team members from the upstreamprocesses, the designers and representatives fromother specialist areas whilst the DevelopmentPhase would have fewer team members from theupstream process but strengthened with membersfrom the construction area. In addition, the teammembers must be prepared to act in the bestinterest of the project (i.e, to put the project aboveself interest advantages) together with awillingness to operate in a relational way in thedelivery of the project. The adoption of a clientleadership approach is essential to achievingrequired project outcomes (refer Section 3.2.3).

3.2.2 Delivery ProcessApprovals

There are many approval requirements built intothe delivery process. These business proceduresensure the project progresses smoothly through allsteps of the delivery process. These approvalrequirements are:

• project prioritisation,

• preferred solution,

• ministerial, (state and federal),

• technical,

• progress, and

• financial

Figure 3.2 - Project Delivery Approvals puts theapprovals into the context of the delivery process.

Estimate Approvals

For significant projects the estimates are to beapproved as specified in Table 3.1 - EstimateStages.

AusLink National Land TransportNetwork Requirements

Federal DoTaRS approvals are:

Stage 1: Funding for strategic planning studies forroad corridors and certain major work proposals.

Stage 2: Funding for pre-construction activitiesnecessary to develop the project to the stage ofcalling tenders for construction.

Stage 3a: Funding for the construction of theproject. All projects must have Stage 3a approvalbefore tenders are called.

Stage 3b: (Also referred to as a Stage 3avariation) Covers requests for funding ofvariations that occur between obtaining Stage 3aapproval and finalising the total cost of theproject. Stage 3b is normally submitted after thetotal project costs are finalised. However, in somecases project costs may not be finalised (forexample, resumption compensation can takeseveral years if contested through the courts).

These requirements may change as the AusLinkprocesses mature.

3.2.3 Application of ClientLeadership Principles

Client Leadership

Client leadership is the process of the client beinginvolved in the decision making process on aregular basis. Accordingly, the frequency ofproject meetings should be such that the client isable to have the necessary regular input into thedecision making process and also to approvesolutions as they evolve. This process shouldcontribute to:

• Reduced rework;

• Improved quality of decisions;

• Improved efficiencies; and

• Better working relationships.

Fundamentally, client leadership is more than justbeing involved - it is about modelling the wayforward to achieve the desired state throughstrong leadership and progressively addressingrisk throughout the whole process.

3


June 2005 3-5

3


3-6 June 2005

Process Step Approval Type Approval By

Pre-project Stage 1 (AusLink National Land Transport Network Planning Projects) – Strategic Planning Report to Federal Government for approval to conduct project concept planning.

DD (District Prioritisation) ED (Regional Prioritisation)

Project Proposal Template (Proposal Prioritisation, allocation of resources and funding for delivery of the concept phase).

DD (District Prioritisation) ED (Regional Prioritisation)

Project Proposal Inclusion of 900 series (concept planning) projects in the RIP.

ED (Type 1 Projects) State Minister(PPP consideration)

Options Analysis Template (Preferred option and progression to the business case).

DD (Types 2 & 3 Projects) ED (Type 1 or politically sensitive or

realignment Projects) (PPP submission confirmation)

Options Analysis Award Consultant Contract* Progress Claims:

- Progress Claim Accuracy - Financial*

PM (Progress Claim accuracy) * (Person with required level of

financial delegation).

Business Case Template (Project viability to progress the project to the Development Phase).

DD (Types 2 & 3 Projects) ED (Type 1 or politically sensitive

or realignment Projects) Award Consultant Contract* Progress Claims:

- Progress Claim Accuracy (Itemised) - Financial*


financial delegation). Business Case

Stage 2a (AusLink National Land Transport Network Planning Projects) – Project Proposal Report to Federal Government for progression to preliminary design.

Federal Minister (Recommended by ED)

Project Planning Report, including confirmation of project viability


or realignment Projects) State Minister for AIS Conditions

Award Consultant Contract* * (Person with required level of


Progress Claims for consultant contract: - Progress Claim Accuracy (Itemised) - Financial*



Preliminary Design

Stage 2b (AusLink National Land Transport Network Project) Project Planning Report to Federal Government for progression to contract formation


Detailed Design Report, including confirmation of project viability


or realignment Projects) State Minister for AIS Conditions



Progress Claims for consultant contract: - Progress Claim Accuracy (Itemised) - Financial*



Detailed Design

Stage 3a (National Highway Projects) - Funding request to Federal Government for progression to contract formation.


Call Tenders for Construction Contract. * (Person with required level of

financial delegation),

Acceptance of Preferred Tenderer (Tender analysis report) * (Person with required level of

financial delegation), Establish Construction Contract

Recommended preferred tenderer for awarding. * (Person with required level of

financial delegation),

Implementation Progress Claims for Construction Contract:


Project Manager * (Person with required level of




Approve design changes DD (Design appropriateness) * (Person with required level of

financial delegation). - Design Changes

Progress Claims for Consultant Contract: - Progress Claim Accuracy (Itemised) - Financial*



- Progress Payments Progress Claims for Construction Contract:


Superintendent (Progress Claim accuracy)

* (Person with required level of financial delegation).

- Practical Completion Acceptance of Work Superintendent AusLink National Land Transport Network Requirements

Stage 3b (also known as Stage 3a variation) (AusLink National Land Transport Network Projects) Report to Federal Government for funding approval


Finalisation

Figure 3.2 Project Delivery Approvals

Relations Management

Relations management requires establishing andmaintaining good relationships. This approachrequires both parties to develop and maintaingood relationships to ensure optimum outcomesfor Main Roads, the consultant, the communityand Government by aligning the efforts of theparties and making best use of the expertise andresources available. A start up meeting mustalways be used to agree to Key PerformanceIndicators (KPI) for monitoring the health of therelationship. Regular project meetings arenecessary to ensure relationships are consistentlyaddressed againts the KPI’s.

Client Leadership and RelationsManagement Interaction with theSupply Chain

The supply chain for any project requires strongclient leadership of all parties working towards

common goals and acceptable outcomes. It doesthis through increased integration of the supplychain in which there is increased participation bydownstream end users in the upstream processes.The use of group solving processes will provideMain Roads with better 'whole-of-life' outcomes.Figure 3.3 - 'Integrated Supply Chain' shows thefull integration of processes for a whole project.

3.2.4 Project ManagementTemplates

The mandated project management methodologymust be used to deliver all Main Roads RoadInfrastructure projects - See Section 3.7. A seriesof project management templates have beendeveloped to support the use of this methodologyfor the delivery of road infrastructure projects.They are also the key process requirements toapprove the inclusion of a project in the RIP.

3


June 2005 3-7

Figure 3.3 Integrated Supply Chain

The Purpose of Templates for RoadInfrastructure Projects

Templates support the project managementmethodology by:

• Incorporating the project managementmethodology for each step in the conceptphase,

• Acting as a project management methodologychecklist,

• Providing an explanation of the intent of eachproject management methodology requirement;

• Providing a place to document the results of theconsiderations for each methodologyrequirement with document control provisions,and

• Delivering the Project Managementconsistency required by the department.

NOTE: For the use of templates, their relationship to projecttype and how they integrate into the design developmentprocess is shown in Figure 3.1 - Application of the ProjectManagement Methodology to the Preconstruction Process.

The Role of Templates in thePreconstruction Process

Templates support the preconstruction processbecause of their alignment to the RIPdevelopment process as follows:

(a) The completed Project Proposal templaterequires approval to allow the project to:

• Proceed to the Options Analysis andBusiness Case,

• Be included in the RIP as a PlanningProject, as appropriate.

(b) The Options Analysis template requiresapproval of the Preferred Option beforefurther work is committed.

(c) The Business Case template requiresapproval to allow the project to be includedin RIP as a Construction Project (Year 5).

(d) The Preliminary Design is a stagesubmission of the Project Plan for approvalto allow the project to progress into Year 2of the RIP.

(e) The Detailed Design is a stage submissionof the Project Plan for approval to allow theproject to progress to forming a constructioncontract.

Templates and Project Type

Template selection requires the user to first assessthe project Type using the following descriptions:

1 Type 1 Projects: - significant projects that arecomplex, high risk or expensive and thusrequire higher amounts of rigor and control

2 Type 2 Projects: - relatively straight forward,low risk, projects for which a lesser amount ofrigour and control is appropriate

3 Type 3 Projects: - small, simple projects of lowcost that progress quickly through the conceptphase

The Template Selection Process is outlined inFigure 3.4 - Project Management TemplateSelection.

Project Management Methodologyand Project Type

The project management methodology requires abusiness case to justify and seek approval for theproject. Main Roads projects range from verysimple projects of a very short time duration toprojects that require significant investigations andsometimes years to develop a business case wherethe estimated cost of the project is to within± 20% of the final project cost.

The impact on the preconstruction processes isthat the business case for Type 3 projects may takeless than a week to prepare whereas Type 1projects may take several years. For a Type 1project the development of the business case mayapproach a completed preliminary design in orderto prepare a project estimate to the requiredaccuracy. For Type 2 projects the development ofthe preferred solution to meet business case

3


3-8 June 2005

specifications will range between therequirements for Type 1 and Type 2 projects.

3.2.5 Roads ImplementationProgram (RIP)

Overview

The RIP business rules specify the requirementsfor including road infrastructure projects in theRIP (Project Codes 1-99, 300 and 800, and 700where the estimated cost is greater than $200,000)Check these rules in the RIP Help database forcurrency before use.

An overview of the RIP Framework is illustratedin Figure 3.5.

Roads Implementation Program (RIP)

Each year, MR prepares the RIP in consultationwith local government, industry and otherstakeholders. It is a public statement of theplanning, construction and maintenance activitieswhich the state government intends to progressover the next five years. It contains firm(committed) funding for the first two years andplanned (indicative) funding for potential projectsin the subsequent three years. The program maybe amended during its annual review to reflectchanged priorities or circumstances.

To provide confidence for the programmanagement process, projects must meet certain

criteria before they become eligible for inclusionon the RIP. These are:

(a) Planning Projects (900 Series RIP Projects)

The project concept phase (planning) budget mustbe based on an approved project proposal andinclude the cost of completing the Concept Phase(that is conducting the options analysis andpreparing the business case). Planning projectswill be created for more complex, expensive orhigh risk projects where significant funds need tobe committed to develop the business case.

The larger of these projects could be up to 15 years before they enter the RIP in Year 5 as aconstruction project. Where significant timelapses occur between the preparation of thebusiness case and its proposed inclusion in theRIP then a project review, including the costestimate must be undertaken to ensure projectspecified outcomes, considerations, inputs, andcost are still valid.

(b) Construction Projects (RIP Projects)

A construction project is only authorised to beincluded in the RIP after a business case has beenapproved. This would usually be an output ofdistricts and region prioritization process. In mostcases the project would be included in Year 5 ofthe RIP.

The project budget must be based on an approvedbusiness case and include the total cost of theproject (that is planning, design, construction,alteration to public utilities and ROWacquisition). The budget is presented in out-turn

3


June 2005 3-9

Figure 3.4 Project Management Template Selection

3


3-10 June 2005

Figure 3.5 Overview of RIP Framework

dollars based on the expected period forconstruction.

Budget estimates must be based on the rigorousprocess of cost planning outlined in Section 4.4.2of the Project Cost Estimating Manual.

The project stages and preferred timing at whichestimates are required are detailed in Table 3.1.

This framework provides for estimates to beprepared at intervals during the concept andDevelopment Phases of the project to assistplanning and maintain control over the cost of theproject.

3.2.6 Estimating Process

3.2.6.1 Overall Framework

Good estimating is fundamental to the process ofproject cost management, providing the basis ofproject justification, budgeting and cost control.

The Main Roads estimating requirements andpractices are detailed in the "Project CostEstimating Manual". It covers the preparation ofestimates over the total life cycle of a project toprovide reliable cost information for:

(a) Initial justification of a project in thebusiness case, (e.g. cost/benefit analysis);

(b) Ongoing cost control during the project'sdevelopment, implementation andfinalisation phases;

(c) Program management

It also provides information on a range ofprocesses and techniques to suit the varyingcircumstance under which estimates are to bedeveloped. Planners and designers must consultthe Project Cost Estimating Manual for guidancewhen preparing their estimates.

Project budgets and publicly announced estimatesare in out-turn dollars (see Section 1.7 -Terminology Convention).

Project estimates are initially developed usingcurrent day costs as if all works were to be

completed in the immediate future. This is aCurrent Dollar Estimate.

3.6.2.2 Estimate Stages

The pre-construction framework provides forestimates to be prepared at intervals during theconcept and Development Phases of a project tomonitor and control project cost. The projectstages at which estimates are required are detailedin Table 3.1.

It is acknowledged that projects can varysubstantially in terms of their size and complexity,and therefore may have varying requirements asto the number and staging of estimates.

The full range of estimates as listed in Table 1would be typical of a major project of highcomplexity where significant developmentactivities take place between stages. There mighteven be a need to review estimates within thesestages to provide the necessary controlparticularly if the development of the projectextends over a long period of time. Themandatory estimates correspond to:

• Business Case

• Preliminary Design, and

• Detailed Design

It is recommended that completely revised andupdated estimates are prepared at each of themandatory stages to ensure the scope of theproject, which has been refined over time, isaccurately reflected in the estimate underpreparation.

3.2.7 Scope and CostManagement

3.2.7.1 The Process

The main objective of cost management is tomanage and control project cost from the ConceptPhase to the Implementation Phase within theprogram limit imposed by the Business Case, i.e.Concept Estimate. The principle is to design to afully validated budget.

3


June 2005 3-11

The approach is to provide a procedure toestablish project scope control that is the basis forproject cost estimation and management over theproject life cycle which also interfaces with theMain Roads project management system and alldepartmental procedures.

The project scope and cost control procedurecommences as soon as the Project Proposal hasbeen approved at the start of the Concept Phase.Project Scope and Cost Management applies overall of the project lifecycle Phases.

The full Concept Phase development cost forroutine projects is considered to be part of thenetwork planning activities. For major projects,the options analysis and the business casedevelopment costs are sourced through the RIP asplanning projects.

Under the project management methodology thefirst project estimate produced is the conceptestimate. It is produced as part of the businesscase and has an ongoing influence on allsubsequent phases. All estimates include thewhole spectrum of cost activities which make-upthe total project cost i.e. cost of design, surveys,consultant fees, materials testing, supervision,construction, project management, closeout, etc.

Using this approach, there is a requirement to:

• Provide resources for the delivery of theDevelopment Phase and manage themefficiently in order to meet the project'sobjectives;

• Identify costs associated with the delivery of:

- Concept Phase (Options Analysis andBusiness Case);

3


3-12 June 2005

Project Stage Stage of CostEstimate When Prepared Approved By

Concept Phase

Proposal(InvestigationestimateMandated)

The investigation estimate is the budget required forapproval to produce the options analysis and businesscase, and where relevant for inclusion of a planningproject in year 5 of the RIP.

Regional ExecutiveDirector.

Options

Comparative Costs of each option for comparisonpurposes only. These estimates are not refined sincethe total scope and all of the risks are not necessarilyknown at this stage.

Concept Estimate(Mandatory)

The concept estimate (within ± 20%) is an output fromthe Business Case (based on developing the preferredoption to the extent necessary to establish a reliableproject cost estimate). It is the first project estimateproduced and includes the outcomes from communityconsultation, environmental studies, geotechnicalstudies, etc. based on the preferred option. Approvalat this stage allows the project to proceed for inclusionin the RIP.

Regional ExecutiveDirector(All Projects)

DevelopmentPhase

PreliminaryEstimate(Mandatory)

The preliminary estimate (within ± 12-15%) is anoutput of the Preliminary Design Stage of theDevelopment Phase and confirms the scope and costjustification for the project. All risks should have beenidentified and accounted for in the estimate. Approvalrequired before inclusion in the RIP at Year 2.

Regional ExecutiveDirector.(All projects)

Detailed Estimate(Mandatory)

The Detailed Estimate (within ± 10%) is an output ofthe Development Phase (at the end of the detaileddesign stage). It includes the construction estimateand all other costs associated with developmentactivities. All risks should be addressed and accountedfor at this stage.

Regional ExecutiveDirector(All projects)

Table 3.1 Estimate Stages

- Development Phase (Preliminary Designand Detailed Design); and

- Implementation Phase (Construction); and

• Forecast the final project costs in order todevelop the project budget, and manage thesecosts to make sure the objectives developed inthe business case are met.

The above approach necessitates revision of thetotal project cost at each phase/ phase stage afterthe concept phase, to determine the variancebetween the revised estimate to completion andthe concept estimate (project budget).

The intention of the above exercise is to providefor an early detection of possible cost overruns, sothe Project Manager can take necessary correctiveaction in order to bring the project cost within theprogrammed budget.

If at any stage of the project's lifecycle theestimated project cost forecasted at projectcompletion exceeds the project budget, re-justification is required. Alternatively, a revisedsolution meeting the budget could be developedand considered.

3.2.7.2 Scope Management

See Chapter 5 - Project Scoping.

3.2.7.3 Cost Management

Preamble

The Project Cost Estimating Manual (Main Roads2004) provides detailed guidelines on costmanagement (Section 4.5 of that Manual). Theprocedures described therein should be followedin controlling a preconstruction project. Theprocesses include:

• Resource planning;

• Cost estimating;

• Cost budgeting; and

• Cost control.

Resources

Defining the scope and preparing cost estimatesmust be undertaken by experienced competentpersonnel familiar with delivering infrastructureprojects.

From the outset of involvement in the project, it iscritical that the Project Manager engages staffand/or agents who have an appropriate extent ofexperience and proven capability for the variousfunctions and specialties that the project willcomprise. An example of this arises in the projectappreciation where engagement of veryexperienced assistants, probably with a range ofbackgrounds and perspectives, can provide themeans for timely recognition of all relevantinformation needs, areas of vagueness oruncertainty, and the extent of risk which existsand which has to be accommodated in projectmanagement time tables and estimates.

Cost Estimating

Production of an accurate cost estimate requiresclear definition of the project scope. Scopedefinitions and project estimates are undertakenor reviewed at each phase in the project life cycle.Refer to Section 3.7 of this manual and to theProject Cost Estimating Manual for more details.

When the preferred outcome option has beendeveloped, a concept estimate of its total cost isrequired so that the project can be evaluated onthe basis of benefits and costs. This estimate mustbe itemised (Construction, Planning and Design,Project Management, and Administration) toshow the relevant cost components of delivery.

The concept estimate needs to forecast the finalproject cost with sufficient accuracy for thebusiness case evaluation decisions to be valid andthe total budget allocation to be realistic. For thisreason, a substantial itemized contingencyamount might need to be included in the conceptestimate to cover the high inherent risks anduncertainties in estimating costs at this stage ofthe project.

Thorough appreciation of the project, itscomplexities and the extent of uncertainty thatprevails at any stage is essential when preparing

3


June 2005 3-13

the implementation cost estimates and estimatesfor investigation and design activities.

Project managers are accountable for the accuracyof project estimates and for ensuring that projectsare delivered in accordance with the approvedscope.

Cost Budgeting

The project budget is a summation of the Concept(Options Analysis and Business Cases Stages, asrelevant) Development, Implementation andFinalisation budgets.

The first step towards reduction of the risks anduncertainties arise in the process for handover bythe client to the chosen Project Manager. Ideallyat this point the client requirements are fullydefined and available for reference in thehandover process.

Irrespective of the completeness of the formalbrief at this point, it is critical that the ProjectManager formally enters into a period ofappreciation of the project dimensions, objectivesand background. The more thorough thisappreciation, the more will risks and uncertaintiesbe reduced.

Project Cost Control

Project performance must be measured regularlyto identify variances from the project plan. Thesevariances are fed into change control processesfor the project. Variances that threaten theobjectives of the project will trigger an adjustmentto the plan by repeating the appropriate planningprocess. This could result in an adjustment to theplan in areas other than the area where the majorvariance occurred.

Cost control is concerned with influencing thefactors which create changes to the cost baseline,identifying when changes have occurred, takingcorrective action to correct cost overruns orprevent their reoccurrence and informingappropriate stakeholders of authorised changes.For example cost overruns could be occurringthrough scope creep. This may prompt action toreview the process of scope control as well asreviewing the design strategy for achieving the

project objectives. If the variances are largeenough they might prompt a review of thebusiness case and re-justification of the project.

Project cost control commences with the conceptestimate, which establishes the project budget.

The purpose of the Concept Estimate is twofold.Firstly, it is used to establish the project budget.Secondly, it forms an integral part of the projectjustification process, when benefit cost ratios arecalculated.

The estimate of project costs includes an item tocover the cost of risk in the event of risk actuallyoccuring as follows:

• Risk Contingency Amount

Risk Reserve and Variation Reserve are includedin the project estimates as itemized contingencies.

Although the project's budget is formed from thecombined value of both the Base Estimate and theContingency Allowance, these two componentsshould be monitored and project managedseparately.

Consequently, when producing the Earned ValueChart, there should be two graphs presented, onerepresenting Basic Estimate, and the secondreferring exclusively to the ContingencyAmounts.

Bear in mind also that the project budget alwaysrefers to the forecasted costs at projectcompletion. Furthermore, at any time, whenassessing the project progress, the costs associatedwith the remaining activities should be projectedto the project completion date and if anydiscrepancies (overruns/ under runs) between theoriginal project budget and the forecasted cost atcompletion are detected, the appropriatemanagement action should be undertaken.

As the project progresses through theDevelopment Phase, revised and updatedestimates are required to be prepared to reaffirmproject justification and affordability, which iseasy to do if the estimated cost does not increasebeyond the budget. The project scope and riskassessments need to be accurately documented in

3


3-14 June 2005

order to justify a change in scope and hence theproject cost.

Project cost control concentrates on the Conceptand Development Phases, each of which containsa number of tasks and deliverables. The mandatedestimates provide review opportunities to assist inproject cost management. The estimating stagesare shown in Table 3.1 - Estimate Stages.

Project Cost Peer Review

The objective of peer reviews is to confirm that allof the critical issues have been identified andappropriately addressed at each stage of thepreconstruction process in order to giveconfidence that the project cost is to the requiredaccuracy. Reviews should be undertaken at thestart of each phase of the process at the least. Inthe Development Phase, reviews should be doneat the start of the Detailed Design as well as at thestart of the Preliminary Design to ensure that theproject is in scope.

These reviews target the key issues of theproject e.g.:

• The identification and treatment of project risksensuring mitigation on a progressive basis;

• The identification of all relevant stakeholdersand addressing of their requirements;

• The appropriateness of the solution in relationto the need and operational performanceoutcome; and

• The rigour of scope and estimating with respectto project costing.

Project estimates are to include the costs of allresources and activities required to deliver theproject.

Estimates are a prediction of the final cost of theproject and as such should be rounded up to thenearest $1000 in recognition of the level ofuncertainty in the final outcome.

Review of estimates is mandatory and should beundertaken by an experienced estimatorindependent of the project team. Projects to be

referred to Project Development Office (PDO)include:

• State funded projects with an estimated costgreater than $20 Million,

• Federally funded projects with an estimatedcost greater than $10 Million,

• All high risk or complex projects.

Estimate reviews are to be performed by peerreview groups as detailed in Table 3.2.

Table 3.2 Peer Review Group Composition

3.2.7.4 Project Evaluation

In order to be included in the RoadImplementation Program, candidate projects forevaluation must be generated from the directionsincluded in the approved Transport InfrastructureStrategy (Federal, State or Regional).

According to the current "Evaluation Guidelinesfor Road Projects" prepared by InfrastructureDevelopment Division, the initial projectjustification is a two stage process.

The first stage of the evaluation process involvesa Cost Benefit Analysis (CBA) carried out inaccordance with the Cost Benefit AnalysisManual for Road Infrastructure Investment (MainRoads 1999).

ProjectValue

$M (OT)Leader Team

DD M(TP) M(ID) Functional Leaders

< $5MM(TP)/M(ID)

As appropriate fromRS&E, PDO andregion/district

$5M to$20M DD

> $20M D-DG/RED

Functional Leaders/EDs/GMs from:- RS&E- SP&D- F&BS

3


June 2005 3-15

It was recognized that CBA alone could notprovide the full basis for evaluation because of itsinability to take account of a number of relevantfactors. Therefore, a set of guidelines for thesecond stage of the project evaluation process wasdeveloped.

The relevant parameters of Stage 2 evaluation areas follows:

• General Considerations

* Policy / strategy match

* Risk / feasibility

- Socio / political

- Technical / delivery

* Network effects

• Development Outcomes

* Economic

* Trade

* Regional

* Sensitivity test of travel time

• Social Justice Outcomes

* Equitable access

* Community viability e.g. Rural Employment

• Environment Sustainability Outcomes

* Impacts on Natural environment

* Impacts on built environment

* Impacts on cultural environment

• Safety Outcomes

* Hazardous goods

* Vulnerable groups

These requirements are fully incorporated in theproject management templates for the ConceptPhase Stages of Project Proposals (authorisesplanning project to be included on the RIP), andthe Business Case (authorises a constructionproject to be included on the RIP).

3.2.7.5 Financial Management

The numbers used for projects and jobs are to bedetermined using the Road Program ManagementSystem (RIPA). A project can have one or manysubsequent job numbers.

These project and/or job numbers are to be openedin the Queensland Government FinancialManagement System (QGFMS) after notificationof the pre-construction phases of the project hasbeen given. The job number for each phase willinclude a character that identifies that projectphase in the QGFMS. The owner's costs foractivities in each phase will therefore be availablefor monitoring or review purposes.

A business unit costing system shall be used bybusiness units to record their actual costs for eachitem of work in each of the phases for pre-construction and/or construction work. Thissystem shall be capable of providing data andanalysis results, and be linked to the QGFMS forsharing specific information to aid in monitoringor review of performance and cost control.

3.3 Value Management

Main Roads have been designing and constructingroads for decades. Over this time roads haveprogressed from old narrow dirt tracks, to pavedroads, and on to the modern motorways of today.Continuing funding pressures has made itincreasingly important to develop processes thathelp us to achieve greater value for the availablefunds. One way we can do this is to apply theValue Management (VM) to our process fordeveloping road infrastructure projects.

3.3.1 Value ManagementObjectives

The goal of a VM study is to achieve designexcellence in the delivery of road infrastructure.Its objectives are to improve quality, minimizetotal ownership costs, reduce construction time,make the project easier to construct, insure safeoperations, and assure environmental andecological goals. The VM team is looking for the

3


3-16 June 2005

optimum blend of scheduling, performance,constructability, maintainability, environmentalawareness, safety, and cost consciousness.

Main Roads defines Value Management (alsoreferred to as Value Engineering) as thesystematic application of recognised techniquesby a multi-disciplined team to:

• Identify the function of a product or service,

• Establish a worth for that function,

• Generate alternatives through the use ofcreative thinking, and

• Provide the needed engineering functions toaccomplish the specified purpose (requiredoperational outcomes) of the project.

This process should deliver these objectivesreliably, and at the lowest life-cycle cost withoutsacrificing safety, specified quality, andenvironmental attributes of the project. Thissection on value management has been tailored tothe delivery of road infrastructure andconsequently it has a strong value engineeringemphasis.

3.3.2 Value ManagementApplication to RoadInfrastructure Projects

Volume 1 of MRPDS requires VM application toall large or complex projects and for the physicalpackaging for projects estimated to cost more than$20M.

VM can be applied at any point in the designdevelopment process, but to obtain maximumeffectiveness, VM studies should be undertakenas early as possible when the impact of decisions(on life-cycle costs) is the greatest.

For road infrastructure projects VM can providebenefits in the development and delivery phaseswith respect to:

• Identification of the best solution 'preferredoption' to the need/problem and achieving therequired required outcomes (For identifyingand developing options and conducting optionsanalysis),

• Achieving the best value in the development ofthe preferred option. (There is a strong focus onengineering functions in this part of theprocess),

• Identifying the best physical packaging methodto maximise value in the construction process.

To maximise benefits VM must be an integral andessential part of the delivery process scheduledroutinely into the design development process inareas offering the greatest potential forimprovement and/or value. Also, see Figure 3.3 -Integrated Supply Chain.

3.3.3 The Value ManagementProcess

Main Roads is responsible for getting the bestoverall project value for the taxpayer. Applyingthe VM process to suitable projects will helpachieve this purpose. Simply stated, VM is anorganized application of common sense andtechnical knowledge directed at finding andeliminating unnecessary costs in a project.

A team of 5 to 8 persons with diverse backgroundsseems to work best. The length of time requiredfor a study varies and is dependent upon thecomplexity of the project. The VM team effortshould be done at one time rather than spreadingit over several weeks or months. By doing this theteam members do not have to becomereacquainted with the project and momentum ismaintained.

The most frequently heard first response to apresentation on VM is "we do it all the time, butwe don't use that name!" However, it is highlyunlikely that they do, do it all of the time. ValueManagement has many elements, such as, teamwork, functional analysis, creativity, cost-worth,and the systematic application of a recognizedtechnique. Unless all of these elements are used, itisn't VM and it will not yield the results that a VMstudy will yield.

The "systematic application of recognizedtechniques," referred to in Section 3.3.1 isembodied in the VM Job Plan. The Job Plan is anorganised plan of action for accomplishing VM

3


June 2005 3-17

studies and assuring the implementation of therecommended changes. The Job Plan contains thefollowing 9 stages:

1. Selection

2. Investigation

3. Analyse

4. Speculation

5. Evaluation

6. Development

7. Presentation

8. Implementation

9. Audits

Stages 3 to 7 inclusive are performed by the VMteam. The other three Stages should be carried outin accordance with Section 3.3.2 and the criteriashown in Stage 1.

The intent of each Stage is described as follows:

Stage 1 - Selection:

Project selection is outside the control of the valuestudy team. In general, the criteria used to selectprojects includes:

• high cost projects,

• projects where the Business Case just does notstand up,

• projects with large risks exposure,

• important, but low priority projects that fail tomeet budget affordability, and

• problem projects.

Stage 2 - Investigation:

The investigation stage is where the value studyteam first becomes involved. In this stage, theteam determines what they know about the projectfrom readily available information and what theymust know in order to really define and / or solvethe problem. It is in this stage of the VM study

that we identify the elements that have the greatestpotential for value improvement.

The Investigation stage immediately brings thethree fundamental concepts of VM (function,cost, and worth) to bear on the problem. It is theseconcepts that make the VM process different fromall other management and cost control techniques.This stage requires the team to ask and answer thefollowing basic questions:

• What is it?

• What does it do? (what is the function?)

• What must it do? (is its function basic?)

• What is it worth?

• What does it cost?

Most of the information required in this stage isreadily available. The length of the project, trafficprojections, design speeds, and the majorelements designed into the project can be easilyidentified from a review of the plans and otherdocumentation. The projects cost estimate wouldonly be known if the VM study is performed afterthe Business Case has been completed.Sometimes the VM team must dig harder for otherinformation to adequately complete theinvestigation stage.

Applying Pareto's Law of Distribution will giveyou an idea of where to start looking for potentialsavings. It states that 80% of a project's cost willbe in 20% of the work. Preparing a project costmodel will begin to identify your targets ofopportunity.

Stage 3 - Analyse:

Identifying the engineering functions your projectand its elements perform is the next step in theVM process. Function denotes the specificaccomplishment to be achieved by an element orcombination of elements in the overall design.The value methodology requires that we describea function by the use of two words - an action verband a measurable noun (that is acted upon).

For example, the function of a bridge is to "crossobstacle." The bridge doesn't care (nor do we)

3


3-18 June 2005

whether that obstacle is a drain, river, creek,railroad, another highway or a building. Its basicfunction is to provide a means to cross thatobstacle. If it does not accomplish that function,we wouldn't buy it, therefore the cross obstaclefunction is basic. We want to be as non-specific aspossible to leave us many options to perform thegeneralised problem or function that we havebefore us.

By the end of the Analysis Stage we haveidentified our high-cost elements, functionallyanalysed them, and assessed their cost / worthrelationships. This phase of the VM job planidentifies the areas of a project that are ripe forfurther value study.

Stage 4 - Speculation:

The speculation or creativity stage is next. This iswhere the power of the VM technique manifestsitself. The team applies brainstorming techniquesto develop good alternatives to the way the projectis currently designed. Brainstorming forcespeople to be creative. The mechanism thatproduces this phenomena is called synergism -which means that one idea triggers other ideas orthoughts through: similarities or like ideas;contiguous or adjoining ideas; contrasting oropposite ideas; and sound alikes.

The value study team applies creativity to itsfunctional statements which it has selected fromthe cost/worth estimates. It uses the genericformat of the function to speculate on all possiblesolutions to the problem presented in thatfunctional statement.

The team uses brainstorming to generate a largelist of potential solutions to the problem describedby the two-word function and then in the nextphase are able to rapidly pare the universe downto a manageable few ideas through the feasibilityanalysis.

Stage 5 - Evaluation:

Evaluation of the best alternatives is next. Theadvantages and disadvantages of each remainingalternative are listed. Of course, if thedisadvantages far outweigh the advantages of anyalternative, it is dropped at this point.

Each advantage and disadvantage is described ingeneral terms. The team can perform a weightedmatrix analysis to determine which alternative isbest based upon the relative importance of each ofthe desirable criteria which must be addressed.This analysis satisfies the VM objective toachieve the best blend of performance, cost, andschedule. The objective is not to gain perfection.

Stage 6 - Development:

Once the team selects the best alternative, it isfully developed through sketches, cost estimates,validation of test data, and other technical work todetermine if any assumptions made during thestudy are in fact valid. The final step beforepresenting the teams recommendations tomanagement is to formulate an implementationplan which describes the process that the agencymust follow to implement any recommendations.

The final product of a value study is the formalVM report and the presentation of the team'srecommendations.

Stage 7 - Presentation:

Once the team has completed its VM Report it isnecessary for the team to present its findings tomanagement/ Project Manager. Where projectimprovements and/or cost savings are identifiedthese need to be supported by relevant evidenceand supportive dialogue where necessary.

It is important to realise that it is the responsibilityof management/ project manager to either acceptor reject the findings of the team. It would be mostunusual for recommendations not to be acceptedbut political considerations may dictate the finalposition.

Stage 8 - Implementation:

No recommendation for a savings is a savingsuntil it has been implemented. In this respect it isthe responsibility of management/ projectmanager to take the appropriate action to ensurethat the accepted suggestions are incorporatedinto the project at the earliest opportunity.

3


June 2005 3-19

Stage 9 - Audits:

This stage determines the amount of savingsgenerated by the VM study based on the amountof recommendations implemented in theconstruction project. A cost benefit analysis on thevalue of the VM Study could also be worthwhile.

3.3.4 Job Plan

Each stage of the Job Plan includes several tasks.It is the melding of the various tasks andtechniques, coupled with finesse in theirapplication that makes the VM process work. Anexample of a Job Plan is shown in Table 3.3 -Value Management Job Plan.

3.4 Risk Management

3.4.1 What is Risk?

A risk is any exposure to potential loss or damagethat can impact on a project. The risk of aproposal may include both potential benefits andpotential costs. In most cases, risks are taken soas to achieve some advantage and managing risksis associated with making decisions.

Risks can generally be grouped under fourheadings:

• Physical - injury or damage to persons orproperty.

• Legal - breaching legal obligations.

• Moral/Ethical - harm to the organisation'sreputation.

• Financial - loss of assets of the organisation.

• Risks are made up of two elements:

- the likelihood of something happening, and

- the magnitude of the consequences if it did.

It is a requirement for all Main Roads projects tobe delivered using a risk management approach.This requires all external and internal project risksto be identified and continually managed using a

risk mitigation strategy to eliminate or minimisethe risks during the development process of theproject.

It is not always possible to eliminate all risks butthey can be managed appropriately and thisshould occur at that part of the overall process thatis best situated to manage then. Risk should not bemanaged by off loading to another party when itcan be best managed some where else. Becauserisk is an inevitable consequence of change, thebest time to manage risk is as part of planningchange. Where risks cannot be eliminated it is arequirement to provide a risk contingency amountto cover the likelihood of a risk occurring in theproject cost estimate.

3.4.2 What is Risk Management?

Risk Management (RM) has been described as"all the things you need to do to make the futuresufficiently certain". RM is regarded as therational processes that will allow risk to bemanaged well and can be defined as "the culture,processes and structures which are directedtowards the effective management of potentialopportunities and adverse effects." RM issystematically identifying threats (risks) to theorganisation and developing ways to minimisethose that do occur.

RM is not designed to stifle innovation or changebut to ensure that the associated risks areunderstood and treated in a way that will make thedesired outcome more likely and at the lowest netcost. The RM process provides for the systematicapplication of management policies, proceduresand practices to the tasks of establishing the riskcontext, identifying, analysing, evaluating,treating, monitoring and communicating risk.

Typically, good RM will be proactive. Equally,good RM will be a routine activity and willtherefore be integrated into general managementactivity. RM should be a part of the organisation'sculture rather than being seen as somethingseparate. Even if the process used is informal, itshould be documented and based on a knownsystem.

3


3-20 June 2005

3


June 2005 3-21

Sta

ge

Ob

ject

ive

Key Questions Techniques Tasks

Sel

ectio

n

Sel

ect P

roje

ct What is to be sudied?

Who is best able to study problem?

What must be kown to start study?

Solicit project ideas Identify high cost / low value areas

Plan the project Obtain authorisation to proceed Allocate resources

Speculate on project sources Develop plan to identify projects Evaluate projects for potential Present projects to management Select projects for VM studies Implement study plan

Inve

stig

atio

n

Inve

stig

ate

Pro

ject

What is the project? What is the problem? What is the cost? What is accomplished now? What must be accomplished?

Get information from best sources

Get all facts & available costs Work with specifics Identify the functions Challenge everything

Speculate on data sources Develop plans to gather data Implement data search plan Investigate project - audit data Speculate on functions performed

Ana

lyse

Fun

ctio

n &

C

ost

What is the basic function worth? What are secondary functions

worth? What are the high cost areas? Can any functions be eliminated?

Evaluate by comparison Put $ on specifications & requirements

Put $ on key tolerances & finishes

Put $ on key standards

Analyse costs Analyse functions Evaluate function cost / worth Evaluate project potential Select specific study areas

Spe

cula

tion

Spe

cula

te o

n A

ltern

ativ

es

What else will perform the function?

Where else may function be done?

How else may function be done?

List everything - be imaginative Use creative techniques Defer judgement - do not criticise Be courageous

Select techniques to be used Speculate on alternatives Speculate on parameters

Eva

luat

ion

Eva

luat

e A

ltern

ativ

es How might each idea work?

What might be the cost? Will each idea perform basic function?

Weigh alternatives Choose evaluation criteria Refine ideas Put $ on each main Idea Evaluate by comparison

Speculate on evaluation criteria Evaluate alternatives Select the best alternative

Dev

elop

men

t

Dev

elop

A

ltern

ativ

es

How will the new idea work? How can disadvantages be overcome?

What will Be the total cost? Why is the new way better? Will it meet all the requirements? What are the life-cycle costs?

Get information from best sources, specialists & suppliers

Consider specialty material, products & processes

Consider standards Use new Information Compile costs - work with

specifics

Speculate on information needed Speculate on information Sources Develop a plan of investigation Develop selected alternatives Select preferred alternatives Develop implementation plan Audit data

Pre

sent

atio

n

Pre

sent

A

ltern

ativ

es

Who must be sold? How should idea be presented? What was the problem? What is the new way? What are the benefits? / savings? What is needed to Implement Idea?

Make recommendations Use selling techniques Be factual Be brief Give credit Provide an implementation plan

Develop a written proposal Speculate on roadblocks to acceptance

Present VM study alternatives

Impl

emen

tatio

n

Impl

emen

t A

ltern

ativ

es

Who is to implement change? How will plans / contract be amended?

Have all resources been allocated?

Translate plan into action Overcome problems Expedite action Monitor project

Develop change document Implement approved alternatives Evaluate process

Aud

its

VM

E

ffect

iven

ess What were the outcome benefits?

What were the solution benefits What were the cost savings?

Evaluate against expectations Evaluate functionality performance

Evaluate by cost savings

Confirm operational functional Confirm engineering functionality Analyse cost benefits

Table 3.3 Value Management Job Plan

The long term maintenance of structures (e.g.bridges) and civil works (e.g. drainage) areserious issues for the department. The design mustincorporate good design practices that minimisethe future maintenance requirements of thecompleted works together with detailing thatprevents water running down the exposed faces ofabutments and piers of bridges and the like.

There are three main stages in RM namelyidentification, assessment and treatment. Insummary, the ten steps to develop a riskmanagement plan are:

1. Make a commitment as an organisation,particularly at the executive level, to RM.

2. Identify all possible threats and risks.

3. Assess the likelihood and consequences ofeach risk.

4. Decide to accept or treat each risk.

5. Determine treatment options for allunacceptable risks.

6. Formalise the RM action plan.

7. Implement the treatment options.

8. Communicate information to everyoneaffected.

9. Review the RM action plan at appropriatepoints.

10. Identify any new risks and update your plan.

The RM process is outlined in the diagram below.

The prime test of good RM is whether themeasures taken will protect achievement of goalswithin the accepted tolerance of risk. Asecondary, but still important test is whether thisis achieved in the most efficient (lowest cost) way.The risk management process is recorded in FormM4213 - Risk Management Record.

3.5 Quality Management

All designs are required to be delivered using afully certified Quality System that complies withAS/NZS ISO 9001-2000. In most instances these

requirements will be incorporated into normalbusiness procedures. Quality design and designdocumentation is a requirement for allplanning/design projects prepared for MainRoads. The specific requirements where recordsare required to be produced and made available allthrough the delivery process are:

• The name of the person responsible forsupervision of drawing production, includingthe layout and suitability for its intendedpurpose,

• The name of the person responsible forchecking the readibility, accuracy andsuitability for construction purposes,

• The name of the primary designer,

• The name of the design verifyer (verification asper AS/NZS ISO 9001-2000), includingrecords of this verification,

• The name of the design certifying person whosupervised the design as required by theProfessional Engineers Act 2002,

• Records of design interfaces being checkedwhere different design disciplines are involved,especially where the design(s) are prepared byindependent sub- consultants,

• Records of how any unusual features of designhave been addressed.

Planning and design is a very complex processthat requires skill, care and diligence to beexercised in the preparation of engineeringdrawings and specifications in accordance withthe ethics of the Engineering Profession. It is veryimportant for the consultant undertaking designservices to:

• Conform with the provisions of the ContractDocuments,

• Check relevant safety aspects of the design;

• Consider the relevant environmental issues inthe design, including the long term impact ofthe constructed works on the environment;

3


3-22 June 2005

• Consider the relevant economy of the designusing a value management approach; and

• Review the design and design detailing forconstructability appropriateness relevant to theconstruction site concerned.

Designs must fulfil the stated requirements of thebrief and comply with the requirements ofrelevant Codes of Practice and AustralianStandards. In addition, the design must complywith the requirements of the relevant Main Roadsmanuals and the Brief/ Operational performanceSpecification.

Aspects of design that do not comply with therequirements specified in the departmentsmanuals of design must be submitted forspecialist approval before being incorporated intothe design.

The design control process requirements arespecified in Chapter 6 - Design Management.

3.6 Project ManagementMethodology

General

All expenditure or organizational resources needto be formally controlled and documented. Thefirst step in that process requires individuals andorganizations to understand the customer's need,think about how it can be satisfied and justify whyit should be satisfied by their organization.Developing a clear and common understanding ofthe problem is fundamental to achieving customersatisfaction.

Projects are undertaken in an environment of risk,because all factors that might impacts on theproject are not generally known, resulting in adegree of uncertainty. Projects are divided intoseveral project phases to provide bettermanagement control of project scope and cost.Collectively, the project phases are known as theproject delivery life cycle.

Each phase is marked by the completion of one ormore milestones and usually incorporates a

review of project performance to date. Thedeliverables, and hence the phases, are part of agenerally sequential logic designed to ensureproper definition, scope and cost control of theproject.

The project phases adopted by Main Roads(including RoadTek) and Queensland Transportare:

• Concept

• Development

• Implementation

• Finalisation

Preconstruction activities are performed in theConcept and Development Phases only. However,the intent of the Finalisation phase is alsoapplicable to the closeout of each of these twophases.

The methodology also requires projectmanagement activities and work managementactivities to be separated to ensure the projectmanagement actives are fully understood andimplemented. History shows us that technicalpeople have a very strong focus on workmanagement as one would expect but this usuallycomes at the expense of project management.Figure 3.6 shows the project managementactivities and work management activitiesseparated by phase steps.

The delivery processes for project managementand work management activities are referenced bya 'P' and 'W' prefix respectively as shown inFigure 3.6.

Use of Project Proposal Templates

It is important to understand that roadinfrastructure projects range in complexity, sizeand cost with project risk ranging from low tohigh commensurate to the project complexityand/or available information. Because of this aseries of project management templates have beendeveloped to assist in the appropriate applicationof project management to road infrastructureprojects, i.e. the intensity of application will be

3


June 2005 3-23

3


3-24 June 2005

G

EN

ER

IC R

OA

D I

NF

RA

ST

RU

CT

UR

E P

RO

JE

CT

CO

NC

EP

T

DE

VE

LO

PM

EN

T

IMP

LE

ME

NT

AT

ION

F

INA

LIS

AT

ION

Pro

ject

Pro

po

sal

Pro

ject

Initi

atio

n F

orm

Pro

ject

Tea

m

Det

erm

ine

Fun

ctio

nal

Req

uire

men

ts

Dev

elop

"C

once

pt P

hase

In

vest

igat

ion

Bud

get"

R

evie

w &

App

rova

l Id

entif

y, d

evel

op a

nd s

ubm

it W

ork

Pac

kage

Brie

fs

Dev

elop

pla

n to

del

iver

con

cept

ph

ase

Set

up F

inan

cial

Man

agem

ent

Str

uctu

re

P1

Op

tio

ns

(So

luti

on

s) A

nal

ysis

R

evie

w P

roje

ct T

eam

E

valu

ate

Opt

ions

P

repa

re R

epor

t P

rodu

ce C

onsu

ltant

Per

form

ance

Rep

ort(

s)

Rev

iew

& A

ppro

val

P2

-

Bu

sin

ess

Cas

e R

evie

w P

roje

ct T

eam

P

repa

re O

utlin

e P

roje

ct P

lan

Dev

elop

Con

cept

Est

imat

e P

repa

re T

wo

Sta

ge P

roje

ct

Eva

luat

ion,

incl

. (B

CR

) P

repa

re B

usin

ess

Cas

e P

rodu

ce C

onsu

ltant

P

erfo

rman

ce R

epor

t(s)

R

evie

w &

App

rova

l P

repa

re H

ando

ver

Pac

kage

P3

Pro

ject

A

dm

inis

trat

ion

P

roje

ct In

itiat

ion

Re-

esta

blis

h P

roje

ct T

eam

&

Offi

ce

Rev

iew

Han

dove

r P

acka

ge

P8

Pro

ject

Ad

min

istr

atio

n

App

oint

Pro

ject

Man

ager

F

orm

Pro

ject

Tea

m

Set

up P

roje

ct O

ffice

E

stab

lish

Adv

isor

y G

roup

S

etup

Fin

anci

al M

anag

emen

t Str

uctu

res P4

Pro

ject

Pla

n

Rev

iew

Doc

umen

tatio

n C

onfir

m S

cope

D

eter

min

e/D

evel

op, i

mpl

emen

t & m

anag

e:

-

Impl

emen

tatio

n P

lan

-

Res

ourc

e M

anag

emen

t Pla

n -

R

isk

Man

agem

ent P

lan

-

Del

iver

y S

ched

ule

-

Est

imat

e an

d C

ash

Flo

w

-

Rep

ortin

g pr

oces

ses

-

Pro

cure

men

t Pla

n -

Q

ualit

y P

lan

-

Com

mun

icat

ions

Pla

n D

ocum

ent P

roje

ct P

lan

Rev

iew

and

App

rova

l P

erfo

rman

ce R

epor

ting

P5

Pre

-Co

nst

ruct

ion

Rev

iew

B

rief T

eam

/ Con

trac

tors

B

rief C

usto

mer

and

Key

S

take

hold

ers

P7

Est

ablis

h C

on

trac

t S

urve

y M

arke

t P

repa

re C

ontr

act D

ocum

enta

tion

Invi

te O

ffers

E

valu

ate

Offe

rs

Neg

otia

te

Dev

elop

Sch

edul

e D

evel

op E

stim

ate

and

Cas

h F

low

O

btai

n A

ppro

vals

P

6

Eva

luat

e P

roje

ct

Per

form

ance

E

valu

ate

agai

nst

Suc

cess

Crit

eria

P

repa

re

Com

plet

ion

Rep

ort

(PC

R)

Rev

iew

and

A

ppro

val

P1

1

Gen

eral

A

ccep

tan

ce

Con

firm

Phy

sica

l C

ompl

etio

n C

onfir

m R

ecei

pt o

f all

Doc

umen

tatio

n C

onfir

m M

aint

enan

ce

Arr

ange

men

ts

Pre

pare

Han

dove

r R

epor

t R

evie

w a

nd A

ppro

val

P1

0

Clo

se-o

ut

Clo

se P

roje

ct O

ffice

C

lose

Pro

ject

File

s C

lose

Fin

anci

al

Acc

ount

s V

alue

and

Reg

iste

r A

sset

D

isba

nd T

eam

P1

2

Po

st

Imp

lem

enta

tio

n

Rev

iew

C

onve

ne a

Pos

t-Im

plem

enta

tion

Rev

iew

Tea

m

Pla

n an

d R

evie

w

Und

erta

ke th

e R

evie

w

Pre

pare

Pos

t-Im

plem

enta

tion

Rev

iew

Rep

ort

Rev

iew

and

App

rova

l

P1

3

Dev

elo

p P

refe

rred

Op

tio

nD

evel

op P

refe

rred

Opt

ion

Iden

tify,

Com

mis

sion

&

Man

age

the

deliv

ery

of

rele

vant

Wor

k P

acka

ges

Pre

sent

the

pref

erre

d op

tion

for

com

mun

ity c

onsu

ltatio

n an

d/or

targ

eted

feed

back

, as

appr

opria

te

Pre

pare

Aus

Link

Pro

ject

P

ropo

sal R

epor

t, if

rele

vant

D

evel

op C

once

pt E

stim

ate

Upd

ate

Des

ign

Dev

elop

men

t R

ecor

d (M

4213

) U

pdat

e R

isk

Man

agem

ent

Rep

ort (

M42

11 o

r M

4212

) W2

Dev

elo

p O

pti

on

s Id

entif

y O

ptio

ns

Dev

elop

Opt

ions

for

com

paris

on p

urpo

ses

Com

men

ce R

isk

Man

agem

ent

Pro

gram

Id

entif

y O

ptio

ns

Iden

tify,

Com

mis

sion

&

Man

age

the

deliv

ery

of

rele

vant

Wor

k P

acka

ges

Con

duct

Tar

gete

d C

onsu

ltatio

n D

evel

op O

ptio

n U

pdat

e R

isk

Man

agem

ent

Rec

ord

(M42

13)

Com

men

ce D

esig

n D

evel

opm

ent R

epor

t (M

4211

or

M21

2)

W1

Pre

limin

ary

Des

ign

F

urth

er D

evel

op P

refe

rred

Opt

ion,

incl

udin

g D

esig

n O

ptio

ns In

vest

igat

ions

C

omm

issi

on a

nd M

anag

e D

eliv

ery

of W

ork

Pac

kage

s P

repa

re P

lann

ing

Rep

ort

Est

ablis

h R

OW

Req

uire

men

ts

Pro

duce

Ele

ctro

nic

Mod

el

Con

duct

Com

mun

ity E

ngag

emen

t and

Con

sulta

tions

P

rodu

ce R

oad

Saf

ety

Aud

it P

relim

inar

y D

esig

n D

evel

op P

relim

inar

y D

esig

n E

stim

ate

Con

duct

Des

ign

Rev

iew

U

pdat

e D

esig

n D

evel

opm

ent R

epor

t (M

4211

/ M

4212

) U

pdat

e R

isk

Man

agem

ent R

ecor

d (M

4213

) C

heck

Des

ign

Inte

rfac

es

App

ropr

iate

Tre

atm

ent o

f Unu

sual

Fea

ture

s of

Des

ign

Con

duct

Des

ign

Ver

ifica

tion

Che

ck D

raw

ings

W5

Det

aile

d D

esig

n

Com

plet

e D

esig

n of

Pre

ferr

ed O

ptio

n P

rodu

ce R

oad

Saf

ety

Aud

it P

relim

inar

y D

esig

n P

rodu

ce fi

nal E

lect

roni

c M

odel

D

evel

op D

etai

led

Des

ign

Est

imat

e C

ompl

ete

Eng

inee

ring

Dra

win

gs &

Spe

cific

atio

ns

Pre

pare

Sch

eme

Pro

toty

pe

Fin

alis

e D

esig

n V

erifi

catio

n F

inal

ise

Des

ign

Dev

elop

men

t Rep

ort -

M42

11/ M

4212

F

inal

ise

Ris

k M

anag

emen

t Rec

ord

– M

4213

C

ondu

ct D

esig

n R

evie

w

W6

Co

mp

on

ents

/Wo

rk

Pac

kag

e R

equ

irem

ents

D

efin

e E

lem

ent

Req

uire

men

ts

Est

ablis

h C

ultu

ral H

erita

ge

Req

uire

men

ts

Det

erm

ine

Env

ironm

enta

l M

anag

emen

t Req

uire

men

ts

Det

erm

ine

Saf

ety

requ

irem

ents

P

repa

re th

e R

equi

rem

ents

S

peci

ficat

ion

Det

ail W

ork

Pac

kage

s

W4

Op

tio

ns

(Des

ign

) A

nal

ysis

R

evie

w fu

nctio

nalit

y of

de

sign

com

pone

nts

Ana

lyse

Tec

hnic

al, D

eliv

ery,

an

d V

alue

asp

ects

of

Opt

ions

A

dopt

mos

t app

ropr

iate

de

sign

opt

ion

solu

tion

for

the

rele

vant

func

tion

W3W

OR

K M

AN

AG

EM

EN

T

Tes

t an

d R

evie

w

Pre

pare

for

Tes

ting

Tes

t Ele

men

ts

Tes

t Sys

tem

P

repa

re fo

r C

omm

issi

onin

g

W9

Pro

du

ce O

utp

uts

E

stab

lish

Wor

kpla

ce/ S

iteC

onst

ruct

pro

ject

W8

Co

mm

issi

on

C

omm

issi

on

W1

0

Des

ign

Ch

ang

es

Dev

elop

Brie

f C

omm

issi

on &

Man

age

the

deliv

ery

of r

elev

ant

Wor

k P

acka

ge(s

) S

eek

appr

opria

te

appr

oval

s w

here

ext

ra

fund

s ar

e re

quire

d

W7

Man

age

Pro

ject

Pla

n

Mon

itor

Pro

gres

s M

anag

e Is

sues

M

anag

e C

hang

e R

epor

t Pro

gres

s P

repa

re c

onsu

ltant

pe

rfor

man

ce r

epor

ts

P9

PR

OJE

CT

MA

NA

GE

ME

NT

No

te:

The r

efe

rences in the b

ottom

right hand c

orn

er

of each a

ctivity

gro

up

are

use

d fo

r cro

ss r

efe

rencin

g

to text

that describes the p

urp

ose o

f each lis

ted p

oin

t, a

s follo

ws:

Pro

cess

Act

ivit

ies

Ref

eren

ce

Pro

ject

Man

agem

ent

Wo

rk M

anag

emen

t

Ref

. S

ecti

on

R

ef.

Sec

tio

n

P1

3.6

.1.1

.1

W1

3.6

.1.2

.1

P2

3.6

.1.1

.2

W2

3.6

.1.2

.2

P3

3.6

.1.1

.3

P4

3.6

.2.1

.1

W3

3.6

.2.2

.1

P5

3.6

.2.1

.2

W4

3.6

.2.2

.2

P6

3.6

.2.1

.3

W5

3.6

.2.2

.3

P7

3.6

.2.1

.4

W6

3.6

.2.2

.4

P8

3.6

.3.1

.1

W7

3.6

.3.2

.1

P9

3.6

.3.1

.2

W8

3.6

.3.2

.2

W9

3.6

.3.2

.3

W1

03.6

.3.2

.4

P10

3.6

.4.1

.1

P11

3.6

.4.1

.2

P12

3.6

.4.1

.3

P13

3.6

.4.1

.4

Figure 3.6 Generic Road Infrastructure Project - Activity Breakdown Structure

less for small low risk projects than large high riskprojects.

The project management templates and theirapplication sequencing for Type 1, 2 and 3projects is shown in Figure 3.7 - ProjectManagement Templates.

The project management Project Proposaltemplate (Template R1001) has been developed asa mandatory requirement to initiate a project.Refer to Section 3.2.4 - Project ManagementTemplates.

3.6.1 Concept Phase (ConceptPlanning and ProjectScoping)

The concept phase is a three-step deliveryprocess, which requires a sequential project build-up from network planning/ pre-project planning toa project budget and inclusion in the RIP. It is

during this phase that the major decisions on thescope of the project are made and the greatestability to influence the project outcomes exists.

The three steps are:

• Project Proposal

• Options Analysis

• Business Case

3.6.1.1 Project Management

3.6.1.1.1 P1 - Project Proposal

The need for the project will be determined by itsorigin or initiating factors normally identifiedduring the district road network management androad link strategy process. The network and linkstrategies in turn support the state networkobjectives and Integrated Regional TransportPlans (if available).

3


June 2005 3-25

Figure 3.7 Project Management Templates

The project should be based on the higher orderstrategy documents, their identified future actionsand desired outcomes. These actions may includeregional development and employmentobjectives.

The need for a road construction project will alsobe balanced against other network priorities andfiscal allocations.

General

All expenditure of organisational resources needsto be formally controlled and documented. Thisactivity, the first step in that process, requiresindividuals and organisations to understand thecustomer's need, think about how it can besatisfied and justify why it should be satisfied bytheir organisation. Understanding the problem isthe key to the solution.

Scope

This activity covers the tasks required to initiatethe project, understand and articulate the need,assess this against the organisation's businessobjectives and priorities, then develop a plan forconducting the options analysis and producing thebusiness case.

Purpose

The project proposal step includes:

• Accept and initiate the project;

• Defining and understand the problem,including the current situation (Check that theroad Functionality has not changed sinceoriginal design);

• Identifying the operational performanceoutcome required to be achieved when solvingthe problem (See the Operational performanceSpecification);

• Defining the scope of the project deliverablesand outcomes;

• Linking the project to the strategic businessplans (e.g. confirming strategic fit)Project evaluation is carried out in the contextof road network needs, government and local

government priorities, political imperatives,industry requirements, local and otherstakeholder requirements all within theframework of Main Roads strategic objectives;

• Preparing a budget (planning) to deliver thebusiness case (based on information from pre-project activities, e.g., link studies, analysis ofenvironmental constraints/opportunities basedon Road Corridor Environmental Assessmentdata);

• Validating application of the Public PrivatePartnership (PPP) policy to the project.

• Provide a plan for the development the conceptphase,

• Preparing a proposal report (all projects) bycompleting Template R1001 to:

- Justify why the organisation should proceedwith the project;

- Secure funding for delivering the nextstages (e.g. for the Options Analysis and theBusiness Case);

- Seek approval to proceed to the next stage(i.e. the Options Analysis) with assignmentof appropriate resources; and

- Seek approval to proceed as a planningproject on the RIP, if applicable.

Responsibility

The customer & sponsor have primeresponsibility for initiating this activity. A projectmanager will be appointed and assumeresponsibility for management of the tasks.

Communication and consultation

It is important to adequately communicate andconsult in the preparation of the proposal. Manycustomer needs are often not entirely unique andit may be possible to satisfy a number ofcustomers under the one proposal. Alternatively asimilar problem may already have been addressedwhich could eliminate or reduce the need for anew project. If the project is approved then theproposal sets the baseline from which scope can

3


3-26 June 2005

be controlled and project performance measured.It is fundamentally important to activelycommunicate and consult widely with all keystakeholders in the preparation of the proposal.Both the sponsor and project manager must takean active role in this regard.

Tasks

1. Project Initiation

2. Prepare Proposal

3. Prepare Briefs for Work Packages

4. Review and Approval

A. Private Public Partnership (PPP)Consideration

For projects to which the PPP process is to beapplied the Concept phase mirrors Stages 1, 2 and3, the "feasibility" phase of the PPP Policy andVFM Framework (see www.sdi.qld.gov.au).There are a number of common activities in bothwith the PPP process relying heavily on the manyinvestigations done in the Concept phase.

To aid in the validation that the PPP processshould or should not be applied to a particularproject the PPP Unit (SP&D) should notified priorto commencing this phase, even as early asnetwork planning activities.

B. Project Initiation

Prior to commencing work on the project it isnecessary to identify and appoint:

• The Project Manager (Concept)

This will clarify roles and responsibility ofvarious parties and avoid disputes andmisunderstandings.

The Concept Phase Project Manager is the personresponsible for the management of all activitynecessary to deliver the project proposal, optionsanalysis and business case.

Objectives

The objectives of the project proposal are to:


• Understand and articulate the need;

• Conduct an initial stakeholder analysis andimpact assessment;

• Outline the risks;

• Provide a plan for the conduct of the next(options analysis) stage of the project;

• Justify why the project should proceed; and

• Seek the release of the required resources.

Scope

The completed Template R1001 together with itsattachments, e.g. operational performancespecification, budget, risks, etc. assist in thedecision of whether the proposed project is to bedeveloped to a business case stage. This isbecause all project proposals need to beprioritised and approved as not all projectproposals will get approval particularly if theirpriority is low.

Apart from the details provided from networkplanning details will not be known for all featuresof the project. The purpose of the options analysisis to identify the preferred solution and thereforethe project proposal must avoid identifying thesolution. To reasonably satisfy the question ofwhether the project should precede it will benecessary to provide detail commensurate withthe level of risk.

Cost Estimates

A project proposal is about defining andunderstanding the problem and then identifyingthe operational performance outcomes andtherefore it should be clearly understood that aproject estimate is not possible at this stage.However, a budget does need to be established toundertake the planning activities as required bythe options analysis and the business case. Pre-project activities will assist in the identification ofrequired work packages to assist in thepreparation of a planning budget.

3


June 2005 3-27

C. Project Proposal Template

Below is a step-by-step description of therequirements and issues for each section in theConcept Project Proposal template.

Details of the project:

(i) District Name

The name of the Main Roads District

(ii) Local Government name

The name/s of the local government/s in whichthe project is located e.g. Banana Shire.

(iii) Road name

The name of the road and if the name changeswithin the project area refer to both names and theroad number e.g. Leichhardt Highway, 26A.

(iv) Road Section

The section of the road between two knowntownships, urban areas or place names e.g.Westwood - Taroom.

(v) Project Number

The number allocated to the project, normallyassociated with a shire / road / project, series ofnumbers e.g. Banana Shine / LeichhardtHighway / (specific link) … 8 / 26A / 305.

The shire number is constant within the shire andthe road is a constant for the length of the road,however the project number will normally beassociated with a link or intersection along theroad.

(vi) Project location

The place name or location descriptor e.g. BananaFloodway; or West of Ranch Road; or 94.7-101.4km from Block Creek

(vii) Project Name

Some projects are large enough to warrant anindividual name usually based on local names.

(viii) Executive Summary

Summarises the key points of the proposal with aclear focus on describing the problem oropportunity, the scope boundaries, outlining therisks and provide a summary of the approach andresources required to the next stage.

Purpose of the Project Proposal Document

The purpose of the project proposal is to identifythe need for the project, establish the expectedoperational performance outcome includingpotential benefits based upon the current state ofknowledge and understanding.

Outline the processes to be used to develop theconcept phase.

Ensure funding and senior management supportfor the concept phase development.

Establish link to the strategic/business plans.Project evaluation is carried out in the context ofroad network needs, government and localgovernment priorities, political imperatives,industry requirements, local and other stakeholderrequirements all within the framework of MainRoads strategic objectives.


The project should be based on the higher orderstrategy documents, their identified future actionsand desired outcomes. These actions may includeregional development and employmentobjectives.


References

In the development of the Project Proposal thereare many potential references most will usuallyrelate to pre-project activities such as, Link

3


3-28 June 2005

Studies, Regional Investment Strategies, TrafficStudies, etc.

Stakeholders

Understanding the current situation may providean insight into the problems, needs and/oropportunities along with their associated impactson internal and external stakeholders.

Identify stakeholders (internal and external) whomay now or in the future have an interest in theproposed project, illustrating the consultationundertaken in the development of the proposal.Consultation with these stakeholders may impacton the project acceptance or influence the type ofsolution.

Notwithstanding a project technical justificationor acceptable cost, if the community is not likelyto support the proposal then delivery will bedifficult. If community acceptance is not evidentthen consultation and project outcomes andoutputs may need to be revisited.

Consultation should be carried out pursuant to theDepartments 'Community Consultation Policyand Guideline'.

Project background

The project may be initiated for any number ofreasons, however most will originate through theroad network management process. Examples ofinitiators will be:

• State, Regional and National road networkmanagement needs.

• Integrated Regional Transport Planning (IRTP)outcomes and deliverables.

• Local government planning schemes andinfrastructure agreements.

• Large private development, such as a shoppingcentre; new export opportunity, or mine.

• Public reaction to road traffic conditions.

• Safety.

• Road condition.

• Road traffic noise amelioration.

The proposal background may influence the typeof solution and it is therefore important tounderstand the associated safety/ functionality/road network/ previous maintenance history/ etc.Also update with any relevant information fromthe options analysis development.

Current situation


Purpose/Objectives of the Project

This is a brief description of what the project isaimed to achieve in terms of:

• What initiated the project?

• What are the desirable outcomes?

For example, the traffic volumes and number ofaccidents on a road warrant some action toimprove levels of service; the solution howevermay or may not involve works within thatcorridor.

If a development project is initiated but notalready addressed within the district strategiesthen the strategies will need to be revisited. Forexample, if a new primary industry required routeupgrading and the project was initiated within thenetwork planning context then the Link Strategy,Investment Strategy and Statements of Intent (ifavailable) should be amended. The amendmentmust reflect if not the new intended use of the linkand network, but the reprioritisation of funds andthe potential delay to projects on the originalprogram.

Outcome Scope of the Project (Operationalperformance Specification as an appendix to theproject proposal)

To get the 'right' project and to reduce rework it iscritical that the project scope be made as clear andunambiguous as possible. At the proposal stagethe solution may not be defined and so the scopeshould be expressed in terms of:

3


June 2005 3-29

• The need or problem to be solved

• The expected operational performanceoutcomes.

(i) In Scope Specification

The purpose of a scope statement is to define theproject boundaries to facilitate effectivemanagement of deliverables on time and toagreed/approved cost. Typically these could be:

• Improve flood immunity.

• Reduce traffic congestion on a nominated partof the road network.

• Improve the rideability of a nominated sectionof road.

• Improve trafficability during the wet season.

The scope outlined in any previous documentshould be confirmed here or updated as necessary.

(ii) Out of Scope Specification

To clearly define the project scope it can behelpful to list works that will not be delivered aspart of the project. This is important, as it willminimise the potential for rework or additionalwork and is a critical aspect in managing/avoidingproject scope 'creep'.

Some out of scope items may well be deemednecessary but the work needs to be procured viaother means and this interface needs to be wellmanaged.

(iii) Related Projects

Any related projects impacting on this projectneed to be identified, e.g. joining to a bridge underconstruction.

Impacts such as timing, availability of materialsor workforce, may also pose significant risks tothe project unless they are identified and managedin possibly a broader context.

(iv) Constraints

Restrictions that will limit the way the objective isto be achieved and includes anything that mightimpact on the successful development and/or

implementation of the project e.g. restrictedworking hours or limited vegetation clearances,need to be identified.

(v) Urgency

If there are any aspects of the project or theproject itself that are urgent they should beidentified stating reasons for such urgency andwhat action is required.

(vi) Assumptions

It is very important for all assumptions made inproducing this proposal be itemised anddocumented.

Assumptions can encompass resourcing,authorities' permits, weather and constructability.

Impacts

(i) Internal

Describe when, where and how the project willimpact on areas within Main Roads and includean outline of both positive and negativeinfluences, e.g. better vehicle movements in andout of weigh in-motion sites, weigh in-motion sitenot considered during project development.

(ii) External

Describe the impact that the project will haveoutside Main Roads and includes both positiveand negative impacts on external stakeholders,e.g. rearranged traffic movements, improvedtraffic flow.

Method to Date

The steps taken so far in the development of thisproposal consist of data and informationgathering, targeted consultation, including theprocurement of supporting work packages, asappropriate. 'Template R2002 - Project Plan' givesa listing of generic considerations that should beused as a check list to ensure all potential risks areaddressed.

3


3-30 June 2005

Risks/Issues

Risk is the chance of something happening thatwill have a detrimental impact upon the agency,project or other objectives. Risk events can berelated to the project management process (e.g.fiscal, time or resources) or project planningactivities (e.g. community pressure, culturalheritage or geological). It is extremely importantthat the identification process is thorough andincludes both external issues and technical risks.

Findings

Outline the key findings, both financial and non-financial, that support the recommendation. Atthis stage a cost / benefit will not be have beenaccurately quantified. However, some indicationof possible cost / benefit should be given to justifycontinuance of the project to the options analysis.

Recommendations

At this stage information should be sufficient tomake a recommendation to proceed to optionsanalysis and to include the project in the RIP as aplanning project only. Where the project is aplanning project it will require the establishmentof a planning budget for RIP purposes. In theevent where the proposal is not approved revisitthe expected operational performance outcomeand rework with a view to achieve approval of theproposal.

Plan to next Stage

A documented plan is required to guide bothoptions analysis and business case development.It should facilitate communication amongstakeholders, and to document approved scope,and identify the dates and milestones in the nexttwo stages. Resources required to complete thiswork together with their cost must also bedocumented.

3.6.1.1.2 P2 - Options (Solutions)Analysis

General

The solution options analysis is to be conducted inaccordance with the plan detailed in the approved

proposal. The overall purpose of this optionsanalysis activity is to select a preferred solutionfrom the partially developed options that flowfrom the previous activity and document theentire options analysis process. Once the preferredoption is agreed a business case is developed tojustify the inclusion of the project in the corporateprogram of work. It is important that the 'donothing' option is evaluated as part of this analysisto provide a baseline against which the costs andbenefits can be assessed.

Scope

This activity covers the comparative evaluation ofthe option solutions identified in workmanagement activity Develop options and theselection of the preferred option for furtherdevelopment under work management activityDevelop preferred option. The scope includes thepreparation, review and approval of the optionsanalysis report.

Purpose

The Options Analysis step includes:

• Reviewing the project proposal and developinga clear understanding of the problem and theoutcomes required by the customer (outcomespecification);

• Identifying all plausible problem solutionoptions (technical and non-technical) using avalue management approach that will satisfythe specified requirement(s) (options couldinclude alternative alignments, differentlayouts, coordination of traffic signals, orpublic transport schemes);

• Developing and assess solution options using avalue management approach that assessesimpacts, benefits and cost to a level of detailthat enables a comparative evaluation to clearlydetermine the preferred option, includingconducting Road Safety Audit (Feasibility) foreach option, where relevant. (It is importantthat the 'do nothing' option is considered as partof this analysis to provide a baseline againstwhich the costs and benefits can be measured);

3


June 2005 3-31

• Ensuring project environmental sustainabilitythrough appropriate environmental assessmentand management (refer to the Road ProjectEnvironmental Manual for guidance);

• Selecting the 'preferred solution' to satisfy therequired operational performance outcomedescribed in the project proposal, ensuring thatit is within the defined outcome scope of theproject;

• Defining the solution scope of the preferredoption (refer Chapter 5); and

• Preparing the Options Analysis Report andcompleting Template R1002 for Type 1Projects, Template R1004 for Type 2 Projectsand Template R1005 for Type 3 Projects to:

- Seek approval of the preferred option;

- Seek approval to proceed to the next stage,i.e. the Business Case;

- Confirm planning budget requirements;

The approved options analysis report authorisesthe project to move to the business case stagetogether with an approved preferred option.

The options analysis is to be conducted inaccordance with the plan detailed in the approvedproposal. The overall purpose of the optionsanalysis activity is to select a preferred optionfrom the partially developed options that flowfrom the previous activity and document theentire options analysis process. Once the preferredoption is agreed a business case is developed tojustify the inclusion of the project in RIP. It isimportant that the 'do nothing' option is evaluatedas part of this analysis to provide a baselineagainst which the costs and benefits can beassessed.

The deliverable from this activity is the optionsanalysis report.

Responsibility

The project manager is responsible for thisactivity. and will need to consult widely withstakeholders and with all appropriate technical

and professional support either internal orexternal to the organisation.


Considerable communication and consultationbetween the customer, project team and theappropriate technical and professional staff inidentifying and developing the options is required.The customer and other stakeholders must beactively involved in the option analysis process togenerate a sense of participation in and ownershipof the final solution. Independently selecting anoption and imposing it upon the stakeholders willcreate resistance and lead to project failure.

Tasks

1. Comparative evaluation of options

2. Prepare options analysis

3. Review & approval

A. Private Public Partnership (PPP)Consideration

The work done here mirrors of the PPP process atStage 2 "Preliminary Assessment' except that onlya range of viable technical solutions aredeveloped. The recommended option referencedbelow is one of the viable technical solutions thatgo into Stage 3 of the PPP process "Business CaseDevelopment'.

B. Options Analysis Process

The options analysis is to be conducted inaccordance with the plan detailed in the approvedproposal. The overall purpose of the optionsanalysis activity is to select a preferred optionfrom the partially developed options that flowfrom the previous activity and document theentire options analysis process. Once the preferredoption is agreed a business case is developed tojustify the inclusion of the project in RIP. It isimportant that the 'do nothing' option is evaluatedas part of this analysis to provide a baselineagainst which the costs and benefits can beassessed.

The deliverable from this activity is the optionsanalysis report.

3


3-32 June 2005

Options Analysis Compilation ProcessRequirements/ Considerations

The requirements and considerations that theplanners/ designer must take into account, assessand include as relevant in the compilation of theoptions analysis are:

Objectives

The objectives of this activity are to:

• Select the best solution for satisfying the need;

• Obtain agreement of the selected option; and

• Obtain approval to proceed with thedevelopment of the business case.

Scope of The Solution (Preferred Option)

The scope of this activity covers the comparativeevaluation of the options, prepare options analysisand review and approve the deliverablesidentified in work management activities:

• Develop operational performancerequirements;

• Identify Options; and

• Develop options

The use of Templates R1002 or R1004 or R1005together with its attachments will assist in thedecision on whether the project is to proceed tothe business case.

Cost Estimates

Only comparative cost estimates are prepared aspart of the options analysis development.

C. Options Analysis Template

Below is a step-by-step description of therequirements and issues for each section of theConcept Options Analysis template.

Review of Project Proposal

A review is required of the project proposal for allitems up to and including Risks/Issues, i.e.

1. Introduction

2. Project Customer, Sponsor and ProjectManager

3. Stakeholders

4. Background

5. Current Situation

6. Purpose/Objectives

7. Scope of Project

8. Impacts

9. Method to Date

'Template R2002 - Project Plan' gives a listing ofgeneric considerations that should be used as acheck list to ensure all potential risks areaddressed.

Risks/Issues

The review should focus on what has changedsince the preparation of the project proposal,including any issues that may have beenoverlooked at that time. Where a change hasoccurred up-date the relevant details and includein the options analysis template. Include any risksidentified in 'Out of Scope' and 'Related Projects'.All risks should be recorded in Form M4213 -Risk Management Record.

D. Options Analysis Report

This section should explain in full all optionsidentified in response to the proposal, includingthose not recommended.

Risks at this stage may not be fully understoodhowever with the development of the preferredoption they will progressively get sharper.

Each option should be analysed separately. Thefollowing subheadings should be used forevaluation of each option. The information shouldbe presented in order of ranking. The sameinformation should also be presented in serialformat or in a table comparing each option. Thebasis for ranking options should be detailed in thissection.

• Strategic Fit

3


June 2005 3-33

• Feasibility

• Costs

• Benefits

• Option Specific Risks/Issues

• Impacts

• Timing

• Deliverables

• Others

• Assumptions

• Dependencies/Constraints

Recommended Option

This section should give the reasons why thatoption is recommended. Where an option involvesa number of steps or actions, each should bedetailed in the recommendation.

This section should also outline the costs incurredto date on previous stages of the project (i.e. for anOptions Analysis, expenditure incurred for thepreparation of the Project Proposal and for theOptions Analysis and the resources required, cost,and time frame for the next deliverable (BusinessCase).

A recommendation could also include changing orredefining project scope.

Business Processes/Operational performanceRequirements

Provide a summary of the Business Processchanges and the Business Operationalperformance Requirements Specificationscompleted to this point. Also refer to the BusinessProcess Analysis (BPA) and the BusinessRequirements Specification (BRS).

The operational performance requirements needto be clearly identified in terms of existing anddesired conditions, e.g. existing capacity vsproposed capacity, existing safety record vstargeted safety proposal.

Plan to Next Stage

Describe the next step recommended in thisOptions analysis. Identify the key dates/milestones in the next process (e.g. BusinessCase).

Also, describe the resources (specific item andnames where available) and the associated coststo complete the next step (e.g. Business Case) andwhere/how funded. This does not include totalproject costs or benefits at this stage.

E. Use of Project Options AnalysisTemplates

It is important to understand that projects range incomplexity, size and cost with project risk rangingfrom low to high commensurate to the projectcomplexity. In the context of the requirements andconsiderations that need to be addressed projectmanagement project Options Analysis template(Template R1002 or R1004 or R1005) have beendeveloped as a mandatory requirement to initiatea project. Refer to Section 3.2.4 ProjectManagement Templates.

3.6.1.1.3 P3 - Business Case

General

This is the final activity in the concept phase. Thesole purpose of the business case document is topresent a case for including the project in the RIP.Main Roads have an array of potential projectscompeting for limited resources and will beendeavouring to put together a RIP that offers thegreatest benefits in terms of value for money andadvancing the organisation's strategic objectivesand priorities. To support the organisation, it iscritical that the business case presents a completeand unbiased justification of the project.Embellished, inflated or under resourcedjustifications could lead to significantdepartmental embarrassment and lostopportunities.

To facilitate the transition from the concept phaseto the Development Phase, a handover package isrequired. This package is particularly importantwhen a time delay or change in project managermay occur between phases.

3


3-34 June 2005

Included with the business case is the preliminaryproject plan, this document is included to providedirection and control of project activities postproject approval. The plan should also includeprovision for the orderly termination of theproject if approval is not given.

Scope

This activity covers the tasks necessary to developand present a justification for the project'scontinuation and the tasks necessary to prepare aplan to progress the project once the business casehas been considered.

Purpose

The purpose of the Business Case is to:

• Review:

- the proposal to develop a clearunderstanding of the customer's requirement(outcome specification);

- the solution options analysis report tounderstand the reasons for selecting thepreferred option (solution); and

- the scope of the preferred option.

• Develop the preferred option as a documentedsingle problem solution ensuring that it iswithin the scope of the project, includingconducting Road Safety Audit (Feasibility).The business case will include appropriateinvestigations, consultations and developmentto establish the project cost to within ± 20% offinal project cost);

• Ensure development of the preferred optionachieves:

- Environmental sustainability throughappropriate environmental assessment andmanagement (refer to the Road ProjectEnvironmental Manual for guidance).

- Economic solution through good designpractice.

- Constructability practically and efficiency.

• Preparing the Business Case report andcompleting Template R1003 for Type 1

Projects , Template R1004 for Type 2 Projectsand Template R1005 for Type 3 Projects toseek approval for:

- Delivering the preferred solution option;

- Delivering the construction budget;

- Including the project on the RIP as aconstruction project; and

- Proceeding to the next phase, i.e. theDevelopment Phase.

• Develop the justification for including theproject in the RIP.

• Put together a handover package to facilitatethe transition to the next phase.

• Develop a draft project plan for directing andcontrolling project activities after the businesscase has been accepted.

• Develop a plan for the orderly termination ofthe project if the business case is not accepted.

Responsibility

The project manager is responsible for draftingand submitting the business case. The customer isresponsible for timely approval.


It is important that the project manager maintainsclose communications with stakeholders. It isparticularly important that all stakeholders areaware of the importance of an honest justificationand provide the project manager with unbiasedadvice. The business case, if accepted, providesan important baseline in determining projectscope. Effective communication at this stage willensure that all stakeholders make a contribution todeveloping this important document and that, ifaccepted, the business case will produce outputsand outcomes that will satisfy the customer need.

Tasks

1. Prepare preliminary project plan

2. Prepare business case

3. Review and approval

3


June 2005 3-35

4. Prepare handover package

A. Business Case Template

Below is a step-by-step description of therequirements and issues for each section of theBusiness Case template.

The paragraph number corresponds to theTemplates R1003 and R1004.

Details of Business Case

A review of the options analysis is required of theproject options analysis for all items up to andincluding - Risks/Issues, i.e.:

1. Introduction

2. Project Customer, Sponsor and ProjectManager

3. Stakeholders

4. Background

5. Current Situation

6. Purpose/Objectives

7. Scope of Project

8. Impacts

9. Method to date

10. Overall project risks/issues

'Form M4211 or M4212 - Design DevelopmentReport' gives a listing of generic considerationsthat should be used as a check list to ensure allpotential risks are addressed.

11. Options

Provide a summary of the options considered andwhy the recommended option was chosen. Whereavailable, an executive summary of the optionsanalysis paper should provide this information.

12. Options Analysis

Identify the risks associated with the projectdevelopment and implementation. Document inthe Risk Management Record (Form M4213).

Include any risks identified in 'Out of Scope' and'Related Projects'.

The process requires a sound understanding of therisks, including how they are mitigated duringpreparation of the Business Case.

13. Issues

Also, review what has changed since thepreparation of the options analysis, including anyissues that may have been overlooked at that time.Where a change has occurred up-date the relevantdetails and include in the business case template.

List all known issues to be resolved.

14. Business Processes/Operational performanceRequirements

Confirm summary of the Business Processchanges and the Business Operationalperformance Requirements Specificationscompleted to this point. Also refer to the BusinessProcess Analysis (BPA) and the BusinessRequirements Specification (BRS).

The operational performance requirements needto be clearly identified in terms of existing anddesired conditions, e.g. existing capacity vsproposed capacity, existing safety record vstargeted safety level.

15. Delivery Approach

Outline of steps to complete project(Development and Implementation Phases), i.e.the steps to be taken to implement the businesscase, including the procurement of supportingwork packages, as appropriate:

• Detail the resources required to deliver theproject;

• Detail any standards which are applicable;

• Describe how the project schedule (timeline)will be managed;

• Outline the consultation process to be used;

• Describe how project change will be managed;

• Describe how project issues will be managed;

3


3-36 June 2005

• Described how project risks will be managed;

• Provide a high level schedule containing keyactivities and milestones (Refer Chart 1 inChapter 2 for guidance); and

• Identify major items that need to be procuredand any significant supply time delays that maybe expected.

Also, review the proposed implementationmethod, e.g. Design and then construct, Designand construct.

16. Financial Issues

(i) Financial Costing Requirements

All projects must have a fully itemised cost of theproject by phase step, as follows:

• Concept Phase for the preparation of:

- the options analysis; and

- the business case;

• Business Case for the preparation of:

- the design development; and

- the detailed design;

The acquisition cost of all work packages is to beincluded in the relevant phase step.

The expected year for programming of funds isincluded in the RIP.

(ii) Funding

Identify source, timing and cost distribution byfinancial year, as appropriate.

17. Project Performance Measurement

Detail how the performance of the project will bemeasured during the project's life. An exampletable format is shown below.

18. Product Benefits Realisation

Include the actions that will ensure that thebenefits are realised. Nominate the stages ordecision points at which assessments should bemade or corrective actions taken within theproject.

Detail how the benefits of the project will bemeasured. This may or may not be during the lifeof the project. An example table format is shownbelow.

19. Recommendation

Provide a summary of reason why the projectshould proceed to the next stage and identify theimpacts of not proceeding.

Justification for the project could be based on acombination of the following factors:

• Benefits to the business operations

• Strategic direction

• Cost/Benefit analysis

• Technology

• Legal Costs to the Project should be given.

Also include the costs incurred to date onprevious phases of the project (i.e. for a BusinessCase, the expenditure incurred for the preparationof the Project Proposal, the Options Analysis andthe Business Case) and the resources required,cost and time frame for the next deliverable (theproject outcomes through to completion).

Note: A recommendation could also include changingor redefining project scope.

SuccessCriteria Responsibility Measurement

method KPI Target

Success Criteria Responsibility

3


June 2005 3-37

3.6.1.2 Work Management

General

To ensure stakeholder's needs and expectationsfrom a project are delivered it is essential thatproper management of project deliverables isperformed.

The work management activities in the conceptphase are:

• Develop options

• Develop preferred option

3.6.1.2.1 W1 - Develop Options

General

Having developed a plan, and gained approval forthe conduct of an options analysis, the next step isto develop a clear and thorough understanding ofthe problem to be solved. Understanding theproblem is the key to the solution. It is criticallyimportant to identify the stakeholders and obtaintheir assistance and involvement with identifyingand developing the options.

A cost estimate is required for each option. Costestimates at this stage are not estimates of theproject cost and must not be released outside theproject. The estimate is only developed to a levelthat enables a comparative evaluation of optionsto occur and an informed selection to be made.

Scope

The scope of this activity covers the worknecessary to:

• Develop a clear understanding of the customerrequirement.

• Identify all plausible options that could satisfythe requirement.

• Develop and cost those options to a level thatenables a comparative evaluation to clearlydetermine the preferred option.

The level of detail required in this activity isgoverned by the requirement to clearly determinea preferred option.

Purpose

The purpose of this activity is to:

• Determine the operational performancerequirements.

• Identify the options.

• Develop and cost the options.

• Present the options for comparative evaluation.

Responsibility

The project manager is responsible for thecoordination of this task. External personnel mayconduct the work elements.


Communication and consultation between theproject manager and the work teams is critical indetermining that all plausible options areidentified and developed to a level of detail justsufficient to support their comparative evaluation.Effective communication and consultation withthe customer and users is important to ensure thatthe solutions identified and developed will satisfythe customer's need.

Tasks

1. Develop operational performance requirements

2. Identify solution options

3. Develop options

A. Develop Operational PerformanceRequirements

Guidance

The operational performance specification/Briefdetails the requirements and specifications for allelements of the intended delivery process.Requirements should be reviewed for purpose,necessity, feasibility and tolerances.

3


3-38 June 2005

Responsibility

The project manager, component managers andteam leaders have responsibilities in accordancewith the project plan.

References

Product development methodologiesOrganisational procedures

B. Identify Solution Options

Identifying solution options is the first step in thedesign development process. It is a creativeprocess of synthesising and implementing theknowledge and experience of humanity toenhance the welfare, health, and safety of allmembers of the community, with due regard to theenvironment in which they live and thesustainability of the resources employed. Theplanner/designer must display detailed technicaland professional understanding and the wiseapplication of that understanding in theidentification of options that appropriately satisfythe problem or need being addressed. Theidentification of options must be within thecontext of the processes and technicalrequirements identified in Chapter 4 - Planningand Design Processes.

C. Develop Options

The development of solution options is acontinuation of the identification processcomplying with the requirements of Chapter 4that specifies the requirements and considerationsfor the design development process applicable toall of the technical options.

3.6.1.2.2 W2 - Develop PreferredOption

General

The development and definition of the preferredoption that flows from the options analysis willnot be sufficiently rigorous or reliable to supportthe definition of the business case. The scope,cost, quality and schedule information presentedin the business case is used to select theorganisation's program of work; it sets the initial

baseline against which the project's performancewill be assessed. This activity develops thepreferred option information to a level thatsupports development of the business case.

Scope

The scope of this activity covers the worknecessary to develop the preferred option to alevel sufficient to support the submission of thebusiness case. Cost estimates produced during thisactivity are likely to be made available topersonnel external to the project and musttherefore possess a commensurate confidencelevel, i.e. to within ± 20% of the total projecr cost.

Estimate accuracy is dependent upon:

• Correctly identifying all of the work itemsnecessary to deliver the project

• Accurately calculating the work item quantities

• Appropriately assessing and applying MarketForces to the unit rate cost.

Purpose

The purpose of this activity is to conduct:

• Conduct an appropriately detailed scopedefinition.

• Provide a detailed list of assumption andconstraints.

• Conduct an appropriately detailed risk analysis.

• Conduct an appropriately detailed stakeholderand impact analysis.

• Conduct a detailed business process analysis.

Responsibility

The project manager is responsible for thecoordination of this task. External personnel mayconduct the work elements.


Communication and consultation between theproject manager and the work teams is critical indetermining that the option is developed to a level

3


June 2005 3-39

of detail just sufficient to support the submissionof the business case. Effective communicationand consultation with the customer and users isimportant to ensure that the solution describedand justified in the business case is what is neededto satisfy the need.

Tasks

1. Develop Preferred Option

A. Develop Preferred Option

Developing the preferred option is a continuationof the design development process based on moreinformation and data becoming available fromvarious work packages. The extent ofdevelopment is set by the requirement to achievean estimated project cost within ± 20% of the totalproject cost.

3.6.2 Development Phase

The Development Phase is a two-stage process tosuit RIP timing / alignment and Right-of-Way(ROW) acquisitions. These stages are:

• Preliminary Design; and

• Detailed Design.

This section provides a detailed description of thetasking to be undertaken during the DevelopmentPhase of the project lifecycle.

The Development Phase commences followingthe approval of the business case and theallocation of organisational resources. For someprojects the approval of the business case and theallocation of resources occur simultaneously. Formany projects however, the allocation ofresources occurs as an independent process sometime after the approval of the business case. It isnot uncommon for there to be a time delay ofmany months or even years between the conceptphase and the Development Phase.

Scope

The scope of the Development Phase includes theestablishment of the project managementorganisational structure, project planning,

solution design and contract formation. The majorproducts in terms of project management are theproject plan and arrangements for contracts.

Objective

The overall objective of the Development Phase isto set up the mechanisms for effectiveimplementation and management of the project.

Key Activities

The Development Phase consists of the followingkey activities:

Project Management:

• Project Administration

• Manage Project Plan

• Establish Contract

• Pre-Construction Review

Work Management:

• Design Options Analysis

• Requirements Definition

• Preliminary Design

• Detailed Design


3.6.2.1.1 P4 - Project Administration

Each project, regardless of size, requires theproject team and its management structure to beformally established.

The scope of this activity covers all tasksassociated with raising and establishing theproject team and project office. The output fromthis activity is a formal project control structure.

The major objectives of this activity are to set inplace the mechanisms and the people to facilitateproject management, including:

• Appointing a project manager

3


3-40 June 2005

• Setting up the project team structure

• Establishing the project office and controlstructure

• Establishing a Project Advisory Group

• Establish Financial Management Structure

This activity follows the approval of the businesscase. However, preliminary work, such asidentification of skills and personnel, and the needfor an advisory group, should be commenced inparallel with development of the business caseand included in the draft project plan thataccompanies the business case.

(a) Appoint Project Manager

Select the best person based on appropriatetechnical and management skills matching thecomplexity and size of the project.

(b) Establish Project Team

Select a project team that has technical andmanagement skills matching the complexity andsize of the project. It is essential for the projectteam to include representatives of the keytechnical disciplines. It is important for theProject Team to be established early in the processto ensure resources are available when required.

(c) Establish Project Office

If the project is to be managed from its owndedicated office rather than the normal workplaceit's important for a suitable project office beestablished to conduct the project managementaffairs of the project. This could include provisionfor meetings, model and other graphic displays,and be suitably located for meeting attendees, siteaccess and suitably equipped with appropriateoffice equipment.

(d) Project Advisory Committee

These roles and their relationship to theorganisational management structure need to bedetermined for each project or type of project,taking into account its scale and nature. Theinterests of the various roles differ. If any oneperson is allocated more than one of these roles,

then they will, at times, be placed in a position ofattempting to satisfy competing interests.

These arrangements propose advisory committeesrather than steering committees. This recognisesthat the State Purchasing Policy (SPP), andnormal administrative arrangements require thereto be one accountable officer. This officer maywell seek advice from a group that is currentlycalled a steering committee. However, suchofficer cannot justify arrangements outside theSPP simply because a committee voted for it. Ifthe committee cannot authorise spending, it isn'tsteering, it is really advisory in nature. These rolesrelate to the project organisation model (seeFigure 3.8 - Project Organisation ModelDiagram).

Figure 3.8 Project Organisation Model Diagram

Business support staff for major or significantprojects may also be required.

The Role of this group may vary from project toproject and this needs to be established at the firstmeeting. Typical responsibilities of the group are:

• Are good working relations being maintained?

• Are defined outcomes being achieved?

3


June 2005 3-41

• Reviewing function

• Could perform the function of a peer reviewgroup

• Could be used as a 'sounding board'

• Internal Project Management review forPM/QA/supervisor/cost clerk/etc.

• External interfaces

(e) Establish Financial Management Structure

It is important for project cost to be tracked topermit proper monitoring of project expenditurefor the various stages of the project, e.g. optionsanalysis, business case, design development anddetail design. The adoption of corporate costcodes must occur to provide uniformity across thedepartment.

3.6.2.1.2 P5 - Project Plan

The project plan is the vehicle to guide thedelivery of the Development Phase in two steps:

• Preliminary Design, and

• Detailed Design

The requirements of a project plan are:

(a) Review Current Documentation

The outputs from the concept phase (BusinessCase) and the supporting data/information andassumptions (e.g. traffic counts and analysis, linkstudies, surveys, etc.) are critical inputs to theDevelopment Phase, Stage 1. It is very importantto understand how the preferred option wasarrived at as its acceptance is necessary beforecommencing the Development Phase (Stage 1).

Also, information from similar projects such asproblems and adopted solutions could assist inminimising the risk to project outcomes.

(b) Confirm Scope Definition

The project definition delivered from the conceptphase needs to be understood and confirmed aspart of the project acceptance process.

The project scope may need to be further definedto ascertain if changes are required as a result offurther information being obtained.

This is a critical requirement in the control ofproject 'creep' and 'over' design.

(c) Determine Implementation Strategy

Produce a Work Breakdown Structure (WBS) thatidentifies a logical sequence of activities toachieve the outcome, i.e. geotechnicalinvestigation, survey, community consultation,environmental investigations, cultural heritage,traffic reports/data, hydraulic studies, riskidentification and assessment, etc.

(d) Allocate Resources

Only human resources that are appropriatelyeducated, experienced and relations oriented shallbe appropriately assigned to perform the work.This is a critical aspect in the assignment of tasks.

Human resources need to be supported byappropriate site conditions and 'tools of trade', e.g.computers with the relevant software.

(e) Perform Detailed Risk Analysis

At this stage it is very important to identify all ofthe potential risks which might either stop theproject progressing to construction or cause anexpansion of scope during the delivery of theproject. A risk analysis with appropriateallowance made in the project cost estimates is animportant requirement in calculating a realisticproject 'scope' estimate.

The risk identification checklist is a guide to assistin the process of identification and assessment,and the development of contingencies.

(f) Produce Draft Schedule

Extend the WBS to include task duration, cost andresource requirements together with taskdependencies and hold points, e.g. a Gantt Chartor network diagram. The schedule provides thebasis against which a projects performance ismeasured. Float should be built into the scheduleto allow for contingencies and downtime.

3


3-42 June 2005

Resource levelling may be required for majorprojects.

(g) Produce Budget Estimate

This is the approved budget in outturn dollars forthe project. The project costs must not exceed theProject Budget. The Client approves the ProjectBudget at key stages throughout the Project Lifecycle and this budget is normally based on theProject Estimate or Anticipated Final Costsubmitted for consideration. The Project Budgetmay also include:

• The stage at which it was approved;

• A submission, review or approval date;

• A comment where applicable;

• Assumptions made; and

• A brief description of the scope of work.

A. Project Plan Template

Below is a step-by-step description of therequirements and issues for each section of theProject Plan template (R2001).

The front cover provides the Details ofProposed Project:

District: The District name

Local Government: The name/s of the localgovernment/s in which the project is located e.g.Banana Shire.

Road Name: The name of the road and if thename changes within the project area refer to bothnames and the road number e.g. LeichhardtHighway, 26A.

Section: The section of the road between twoknown townships, urban areas or place namese.g. Westwood - Taroom.

Project Number: The number allocated to theproject, normally associated with a shire/road/project, series of numbers e.g. Banana Shine/Leichardt Highway/(specific link) …..8/26A/305.

The shire number is constant within the shire andthe road is a constant for the length of the road,however the project number will normally beassociated with a link or intersection along theroad.

Project Location: The place name or locationdescriptor e.g. Banana Floodway; or West ofRanch Road; or 94.7-101.4km from Block Creek

Project Name: Some projects are large enough towarrant an individual name.

Executive Summary: Summarises the key pointsof the proposal with a clear focus on describingthe problem or opportunity, the scope boundaries,outlining the risks and provide a summary of theapproach and resources required to the next stage.

(a) Introduction

(i) Purpose of this Document

The purpose of the project plan is to detail howthe project will be managed and to provide abaseline for the measurement of progress.

(ii) References

List any documents to which this document refersand could include reports on any previousinvestigations carried out. Include all previousdocuments prepared as part of this project.

(b) Project Customer, Sponsor and ProjectManager

Enter the name of the project customer togetherwith the name of the project sponsor and theproject manager on the front cover of the projectplan.

(c) Stakeholders


Review previously identified stakeholders andupdate as appropriate (internal and external) whomay now or in the future have an interest in theproposed project, illustrating the consultationundertaken in the development of the proposal.

3


June 2005 3-43

Consultation with these stakeholders may impacton the project getting up or influence the type ofsolution.

Illustrate the consultation undertaken withstakeholders in developing this document and thekey findings of that consultation. List allstakeholders with an interest in this documentincluding internal and external stakeholders.

Consultation should be carried out pursuant tothe Department's 'Community ConsultationPolicy and Guideline'.

The stakeholders are:

(d) Background

Provide a brief history to bring the reader up todate on the subject matter and associated businessissues.

This section should describe the history of theproject. It should include details of:

• Who initiated the project and how it wasinitiated.

• Describe the products and/or services.

• Describe any other initiatives carried outpreviously to address related issues.

(e) Current Situation

Describe the current situation and the problems,needs and/or opportunities along with theirassociated impacts on internal and externalstakeholders.

(f) Purpose/Objectives

(i) The Purpose

Provide a statement of what the project isexpected to achieve including potential benefitsbased upon the current state of knowledge andunderstanding.

For example, the traffic volumes and number ofaccidents on a road warrant some action toimprove levels of service; the solution howevermay or may not involve works within thatcorridor.

(ii) Links with the Department's StrategicObjectives

The proposal background may influence the typeof solution and it is therefore important tounderstand the associated safety/ functionality/road network/ previous maintenance history/ etc.Also update with any relevant information fromthe options analysis development.


The project should be based on the higher orderstrategy documents, their identified future actionsand desired outcomes. These actions may includeregional development and employmentobjectives. Establish and document link to thestrategic/business plans.


If any project is initiated but not already addressedwithin the district strategies then the strategieswill need to be revisited. For example, if a newprimary industry required route upgrading and theproject was initiated within the network planningcontext then the Link Strategy, InvestmentStrategy and Statements of Intent (if available)should be amended to reflect if not the newintended use of the link and network, but the

StakeholderArea

StakeholderRepresentative Responsibility Interest/

Context

3


3-44 June 2005

reprioritisation of funds and the potential delay toprojects on the original program.

Project evaluation is carried out in the context ofroad network needs, government and localgovernment priorities, political imperatives,industry requirements, local and other stakeholderrequirements all within the framework of MainRoads strategic objectives.

(g) Scope of Project

To get the 'right' solution and to reduce rework itis critical that the project scope be made as clearand unambiguous as possible.

(i) In Scope

The purpose of a scope statement is to define theproject boundaries to facilitate effectivemanagement of deliverables on time and toagreed/approved cost. The operationalperformance outcome is arrived at by the analysisof operational performance outcome options.Typically these could be:

• Improve flood immunity.

• Reduce traffic congestion on a nominated partof the road network.

• Improve the rideability of a nominated sectionof road.

• Improve trafficability during the wet season.

The scope outlined in any previous documentshould be confirmed here or updated as necessary.All items included in the scope of this projectshould be itemized and documented.

(ii) Out of Scope

To clearly define the project scope it can behelpful to list works that will not be delivered aspart of the project. This is important, as it willminimise the potential for rework andmisunderstanding and it is a critical aspect inmanaging/avoiding project scope 'creep'.

Some out of scope items may well be deemednecessary but the work needs to be procured viaother means and this interface needs to be wellmanaged and documented.

(iii) Related Projects

Any related projects or proposals impacting onthis project needs to be identified together wit itsrelationship to this project, e.g. joining to a bridgeunder construction.

Impacts such as timing, availability of materialsor workforce, may also pose significant risks tothe project unless they are identified and managedin possibly a broader context.

(iv) Constraints

Restrictions that will limit the way the objective isto be achieved and includes anything that mightimpact on the successful development and/orimplementation of the project e.g. restrictedworking hours or limited vegetation clearancesetc., should be identified early in the process.

(v) Urgency

If there are any aspects of the project or theproject itself that are urgent they should beidentified stating reasons for such urgency andwhat action is required.

(vi) Assumptions

It is very important for all assumptions made inproducing this proposal be itemised anddocumented.

Assumptions can encompass resourcing,authorities permits, weather and constructability.

(h) Impacts

Identify areas of potential impact, the nature ofimpact and who will be impacted (internal andexternal). Include both the impacts envisagedduring the life of the project (i.e. costs, disruptionsto traffic, temporary local traffic arrangements,etc.) and ongoing impacts resulting from theproject's implementation, e.g. traffic noise, heavyloads, etc.

(i) Internal

Describe when, where and how the project willimpact on areas within Main Roads and includean outline of both positive and negativeinfluences, e.g. better vehicle movements in and

3


June 2005 3-45

out of weigh in-motion sites, weigh in-motion sitenot considered during project development.

(ii) External

Describe the impact that the project will haveoutside Main Roads and includes both positiveand negative impacts on external stakeholders,e.g. rearranged traffic movements, improvedtraffic flow.

(i) Method to Date

The steps taken so far in the development of thisproposal consist of data and informationgathering, targeted consultation, including theprocurement of supporting work packages, asappropriate. 'Template R2002 - ProjectDevelopment Details' gives a listing of genericconsiderations that should be used as a check listto ensure all potential risks are addressed.

(j) Business Processes / Operationalperformance Requirements

Provide a summary of the business processchanges and the Business RequirementsSpecifications.

(a) Business processes needing addressing:

- does the recommended option require thedistrict to modify any of its existingbusiness procedures?

- Are the existing district processes andprocedures for managing projects adequatefor this project?

- Are any special requirements required forthe management or implementation of thisoption?

(b) Operational performance requirementsdocumentation:

- Existing and desired conditions.

(k) Broad Strategy

During development of the business case andpreliminary plan, a broad strategy for producingproject outputs and outcomes should have beendocumented. This step now requires refinement of

the strategy to produce a Work BreakdownStructure that identifies a logical sequence ofactivities required to achieve the projectobjectives.

Activities to cover include:

1. Investigation.

2. Design.

3. Preparation.

4. Procurement

5. Building.

6. Testing.

7. Implementation.

8. Review.

Break the project down into phases, activities andtasks. As more information becomes available anduncertainties are reduced, further workbreakdown can occur.

(i) Project Control

Project control is the coordination of planning,organising, monitoring and controlling of allaspects of a project in a continuous process toachieve its objectives, both internal and external.It is a discipline requiring the application of skills,tools and techniques and the balancing ofcompeting demands of product or servicespecification, time and cost, within prescribedconstraints.

(ii) Integration

Describe how the various elements and theirimpacts on each other will be controlled toachieve successful project outcomes. In particularreview impacts on scope, time, cost and quality.

(iii) Scope Management

Describe how changes to scope will be managed(including software tools to be used, papersystem, etc, as relevant).

(iv) Time Management

Describe how changes to time and resources willbe managed (including software tools to be used,

3


3-46 June 2005

paper system, etc, as relevant). Refer to attachedproject schedule breaking the project intoactivities (Work Breakdown Structures)displaying start, finish, internal resources,external resources and major milestones.

(v) Cost Management

Describe how changes to cost will be managed(including software tools to be used, papersystem, etc, as relevant). Refer to attached budgetestimate breaking the project into activities (WorkBreakdown Structures) displaying the estimatedcost for internal resources and external resources.

(vi) Quality Management

Describe what quality systems are being used tomanage the project. If the standard corporatesystems are being used, document any changes ormodifications specific to the project. This couldinclude quality plans, project specific workinstructions, safety or environmentalmanagement.

Quality requirements are expressed in theexpected project outcomes, the brief from theconcept phase, relevant standards, manuals andreferences, quality assurance systems (ISO 9000)and human resource selection.

Project review requirements are specified in theproject plan. The types of reviews that should beperformed are:

• Reviews by the project team

• Peer reviews by experts external to the projectteam

• Value management reviews

A final review must be performed for all projectsand in addition any learnings for use in futureprojects should be documented and circulated.

All design activities are to undertaken inaccordance with the requirements of a fullycertified Quality Assurance System.

Also, allowing appropriate time to deliver theproject together with appropriate remunerationare critical success factors. Quality can also be

confirmed by the verification of design, customerapprovals, etc.

(vii) Human Resources Management

Describe the approach to be taken with thedeployment of internal and external resources.Provide a project team organization structure anddescribe roles and responsibilities.

Provide details of any project specific trainingrequired.

Refer to a responsibility matrix, if required.

(viii) Communication Management




All projects will require regular meetings toaddress:

• Relations issues

• Progress issues

• Expected project outcomes

• Technical issues

All meetings shall have approved documentedminutes circulated to an approved distribution list.

All requests, submissions and approvals shall bein writing.

For major projects a communicationsmanagement plan is essential.

(a) Internal Communication

Detail the project reports to be produced. Identifywho will produce them, who will receive themand what action is required from the receiver.

3


June 2005 3-47

(b) External Communication

Describe the communication processes for allinternal parties including Executive Management,Advisory Group Members, Stakeholders,Sponsor, Director, team members, and users.Refer to a detailed communication plan, ifrequired.

(ix) Risk and Issues

(a) Risk

Describe how the project will manage risks(including software tools to be used). Refer to theRisk Management Record (Form M4213)showing identified risks, severity, likelihood andmitigation actions. A listing of typical risksencountered on civil engineering projects isincluded in the Risk Record for user guidancepurposes only.

Risk is the chance of something happening thatwill have a detrimental impact upon the agency,project or other objectives. Risk events can berelated to the project management process (e.g.fiscal, time or resources) or project planningactivities (e.g. community pressure, culturalheritage or geological).

(b) Issues

Describe how the project will manage issues(including software tools to be used). Refer to anattached listing of issues.

A risk or opportunity will become an issue if theevent occurs.

Issues can be resolved either within the scope ofthe project as currently defined or via a change tothe project.

(x) Procurement Management

Identify how external goods and services will beprocured, e.g. by sole invitation, RCC, D&C,Alliance, etc. This includes contract/subcontractmanagement, ROW acquisitions, materialprocurement, contract administration.

The timing of going to tender needs to bereviewed against the schedule.

In all cases procurements must use standard MainRoads procurement methods, includingprocurement management practices.

(xi) Environmental Management




(xii) Cultural Heritage Management

Describe the approach to be taken with thedeployment of internal and external resources.Provide a project team organisation structure anddescribe roles and responsibilities.

Provide details of any project specific trainingrequired. Refer to a responsibility matrix, ifrequired.

(xiii) Safety

Describe the approach to be taken with thedeployment of internal and external resources.Provide a project team organisation structure anddescribe roles and responsibilities.

Provide details of any project specific trainingrequired. Refer to a responsibility matrix, ifrequired.

(xiv) Operational Issues

Identify any known operational issues. This couldinclude asset transfer/ownership, commissioning,handover support, maintenance, warranty.

Relations management is an integral part ofestablishing and maintaining good operations

All projects will require regular meetings toaddress:

• Relations issues

• Progress issues

• Expected project outcomes

3


3-48 June 2005

• Technical issues

All meetings shall have approved documentedminutes circulated to an approved distribution list.

All requests, submissions and approvals shall bein writing.

For major projects a communicationsmanagement plan is essential.

(xv) Project Performance Measurement

Detail how the performance of the project will bemeasured during the project's life. An exampletable format shown below is acceptable.

(xvi) Project Benefits Realisation

Detail how the benefits of the project will bemeasured. This may or may not be during the lifeof the project. An example table format is shownbelow.

3.6.2.1.3 P6 - Establish Contract

(a) Review Project Acquisition Strategy

The acquisition strategy (in-house, outsourced,partially outsourced, prequalified suppliers etc)should have been identified in the Business Case.The strategy adopted should be reviewed againstthe criteria of providing efficiency and value formoney. Confirmation from higher managementmay also be appropriate.

Consultation with industry associations is DMRpolicy. All districts should discuss proposedmethods of delivery with industry associationsduring the decision making process.

(b) Undertake Market Survey

Main Roads uses a prequalification system toobtain the best value for money but with minimaloverall cost to government and industry.

• Preconstruction

Generally, Main Roads uses a PrequalificationSystem for the engagement of consultants onengineering projects. These engagements areprivate selections on rotation from theprequalification system. An agreed anddocumented brief is a mandated outcome of thisprocess. This system is administered by the RS&Egroup.

For other acquisitions, e.g. geotechnical,environment, community consultation, landsurveys (terrain, features), etc. the Main Roadsuses standard procurement system is used"Manual for the engagement and use ofconsultants". E.g. how tenders are to be called forthe type of contract selected, eligible tenderers,tender analysis & selection.

• Construction

Generally, eligibility of organisations to tender foropen Main Roads Major Works Projects isdetermined by the Major Works PrequalificationSystem. This system is administered by the RS&Egroup.

The Main Roads Project Delivery System manualdocuments the various delivery options availablefor construction works. E.g. how tenders are to becalled for the type of contract selected, eligibletenderers, tender analysis & selection.

(c) Formalise Agreements

Where project development is to be undertakeninternally, formal agreement to proceed is givenby management in the form of signatures on therelevant internal documents. This task alsoincludes formal commitment of resources within


method KPI Target


method KPI Target

3


June 2005 3-49

your organisation, as indicated in the Project Planand relevant supporting plans.

If the project is to be covered by a formal contract,that is, when implementation is to be undertakenby external contractors, Local Governments orinternal commercial units, ensure that allproposed contractual arrangements have beenagreed and all required signatures obtained.

(d) Initiate Supplier Selection Process

Suppliers need a clear understanding of therequirements and contractual conditions set by theorganisation. This task is necessary to ensure thatappropriate documentation is developed to enablesuppliers to provide detailed proposals formeeting the requirements.

A detailed brief should be developed whererequired and should include such requirements as:

• The Solution Specification (The brief)

• Standards to be adopted.

• A list of deliverables

(e) Conduct Evaluation

All responses need to be evaluated to determinewhich supplier best meets the requirements of thebrief/tender. This task is essential to maintainingpublic accountability.

(f) Conduct Contract Negotiations

All proposed amendments, concessions, waivers,and standards need to be negotiated and agreed byboth parties to remove ambiguities anduncertainties from contractual document. Just asthe organisation has gone through the process ofreviewing contractual issues and preparing fornegotiations, so too has the potential contractor.Now is the time for all issues and differences to beresolved in order to minimise risks associatedwith the contract.

3.6.2.1.4 P7 - Pre-ConstructionReview

(a) Submit Project Plan for Approval

Management needs to be satisfied that anappropriate plan has been established for efficientconduct of the project through the lifecycle.Approval of the Project Plan will provide thebasis for approval to proceed to projectimplementation. Approval of the plan will alsosignify agreement by key stakeholders withrespect to their commitments to the project interms of provision of resources and support.

The Project Plan should be submitted to theAdvisory Group or the delegated approvingauthority for consideration. The approvingauthority will view the plan to confirmconsistency with management policies andprocedures, and to ensure that all probable issueshave been identified.

(b) Setup Financial Management

Prior to committing RIP funds, it is essential thatappropriate measures are established to enablemanagement of project funds. The Organisation'sfinancial management procedures will need to befollowed.

(c) Brief Project Team

This is probably the first opportunity that theProject Manager has to address the team as ateam. It is therefore an important basis forbuilding a team identity. It is essential that eachmember of the team understands the scope andobjectives of the project in outline, and is aware ofproject constraints. Only on this basis will therebe informed review by the team of their individualroles, Terms of Reference and assignment briefs.This will enable any remaining errors to beidentified. It is also important that team membersunderstand where they fit in the project and howthey can contribute to the success of the projectand benefits to the organisation.

Ensure that all team members are fully conversantwith all standards and procedures relating totechnical deliverables, project requirements andquality management, and to the administration ofthe project.

3


3-50 June 2005

(d) Brief Customer and Key Stakeholders

The Project Manager should conduct a meetingwith the customer. The members of the projectadvisory and management teams, and contractors,should also be invited to attend this meeting.Items for the agenda will include:

• Relations management.

• Project Plan.

• Contracts.

• Project Budgets.

• Administrative Procedures.

This meeting should identify any remaininganomalies which can be corrected prior to movingto the Implementation Phase. Meeting Minutesare to be recorded and distributed to allstakeholders.

A project plan detailing the project execution andproject control shall be produced and includedocumented planning assumptions and decisions.It must also facilitate communication amongstakeholders and document approved scope, cost,and scheduled baselines. The extent of the detailincluded in the project plan must be relevant to theproject size and complexity.

3.6.2.2 Work Management

3.6.2.2.1 W3 - Options (Design)Analysis

Review Business Case

The Business Case and supporting documentationwill provide a wealth of information relating tothe current system and the user requirement. It isessential that this documentation be reviewed as ithas a client focus and should emphasise thefunctionality (what the solution is to do). TheProject Manager must develop and maintain acomprehensive understanding of the actualrequirements in respect of a product, service orcombination of both. The Business Case providesthe baseline definition for the development of asolution. Clearly defined and agreed requirements

are also necessary for development of anunambiguous Scope Definition.

In some instances the customer, internal orexternal, may be uncertain as to the actualrequirement. This might also be evident from theoptions analysis undertaken to raise the BusinessCase. The documentation of the technicalunderstanding of the requirement and thevalidation of this understanding with the customerthrough negotiation can provide an effectivemeans of focusing attention on areas ofmisunderstanding or uncertainty.

In reviewing the Business Case, the ProjectManager should address the following:

• The customer's problems (real or perceived) asthese must be solved in any solution that isoffered.

• The operational performance requirements.

• The size and location of the project.

• Timing of the requirement.

• Constraints that may apply to the project, suchas cost or related activities.

• Justification for proceeding.

Conduct Design Options Analysis

In conducting options analysis, the followingguidelines need to be observed:

a) Technical Viability

Need to:

• Confirm the functionality of the option.

• Ensure all technical standards have been met.

• Determine the best design option for meetingthe outcome requirements.

b) Resource Viability

Ensure the right mix of management and technicalskills for analysis of each option.

Implementation agencies have been consulted todetermine:

3


June 2005 3-51

• Any specific lead-times for studies,investigations, consultation, inputs from othergovernment departments, industry and localgovernment, etc.

• Any constraints that may apply to the timing ofspecific support to deliver the above.

• Specific needs of other parties in respect of theformat and type of data provided.

c) Cost Benefit

Initially, only broad estimates for cost might beavailable; notwithstanding, all cost elements needto be considered (e.g.: capital, training,documentation, management, maintenance andwhole of life costs, etc).

Similarly all benefits, including those that cannotbe given a dollar value, are determined, based onavailable information.

The cost or benefit to the organisation isdetermined in accordance with current financialmanagement policies (Net Present Value, InternalRate of Return, Payback Period, etc).

d) Safety

Check that the option complies with documentedsafety standards. An options safety audit is arequired output from this process. The optionshould also be tested to determine itscompatibility to adjacent sections.

e) Risk

Risk is to be determined with respect to suchissues as cultural and organisational aspects,technology, finance, schedule and scope.

For projects that are large or complex, by natureof the customer's requirement or the combinationof services and products being proposed, it maybe necessary to conduct a formal briefing of theimplementation agencies/divisions. This willensure a common understanding of therequirement and hence technical, resource andfinancial implications.

It is important that any constraints that may applyto the delivery of the project to the customer be

fully documented at this time and as necessarydetailed in the tender or documentation.

Define High Level Statement of Works

The preferred solution needs to be defined interms of the work required to implement thesolution. This may include a summary of the worksupported by drawings, aerial photographs, etc.

3.6.2.2.2 W4 - Components/WorkPackage Requirements

Define Sub-Solution Requirements

Estimating requirements on the total solution is adifficult task. The solution must be broken downto components against which specificrequirements can be allocated, e.g Pavementdesign, drainage systems, traffic signals, etc. Thisprocess will also assist in determining processflows and interface requirements. Breakdown (thebig lumps already identified) into work packagesusing functionality as a guide. Each functional(discipline/major task) area satisfies an allocatedportion of the basic solution functions.

For each sub-solution defined, requirements areallocated in terms of:

• Outputs and technical requirements.

• Design constraints.

• Interface requirements.

• Availability.

• Maintainability.

Establish Cultural Heritage Requirements

For certain projects cultural heritage can have asignificant impact in developing the solutionrequirements and producing the solution design. Itis important that any cultural heritage issues areidentified in the planning processes and theappropriate requirements developed andincorporated.

3


3-52 June 2005

Determine Environmental ManagementRequirements

For certain projects environmental issues canhave a significant impact in developing thesolution requirements and producing the solutiondesign. It is important that any environmentalmanagement issues are identified in the planningprocesses and the appropriate requirementsdeveloped and incorporated. Prepare anenvironmental management plan in accordancewith departmental policy documents.

Safety Requirements

For certain projects safety issues can have asignificant impact in developing the solutionrequirements and producing the solution design. Itis important that any safety management issuesare identified in the planning processes and theappropriate requirements developed andincorporated.

Prepare Solution Requirements Specification

A detailed design brief is prepared in accordancewith the standard format defined in our policiesand procedures. The document is an aggregationof the sub-solution requirements developedduring the previous task. When completed thefollowing checklist needs to be applied to confirmconformance with expected outcome of preferredoption:

• Confirmation of the requirement (is therequirement necessary?).

• Confirmation that the requirement is not over-specified (limiting solutions, leading topotentially higher costs).

• Confirmation that compliance with therequirement can be tested and verified.

• Assurance that adequate margins andtolerances have been identified.

• Ambiguity checks.

• Confirmation that standards have been tailoredsufficiently.

For projects involving business process changes aBusiness Requirements Specification is used torecord and obtain agreement on the new orchanged business requirements resulting from theproject. The Business Requirements Specificationaddresses not only the "what" but the "how" of theproject's implementation. Although specificallytailored to business process projects the BusinessRequirements Specification has broaderapplication and should be considered by allprojects.

A Business Requirements Specification templateis provided for this purpose.

Define Detailed Statement of Works

The detailed design brief is reviewed to determinethe tasks required to complete the design. Theindividual tasks are then sorted into the detailedwork packages required to complete the finalsolution.

Solution Design

This is the last of a series of three activities in theDevelopment Phase that takes the preferredoption and develops and refines it to a statesuitable to commence the implementation phase.Having defined the operational performancerequirements for the solution in the previous twoactivities this activity now finalises the solutiondesign. This is the final opportunity for thecustomer to influence the design before contractsare formed for its supply.

The scope of this activity covers the tasksassociated with and preparing the final solutiondesign.

The deliverable from this activity is an agreedsolution design.

The objectives of this activity are to:

• confirm the understanding of the customer'srequirement

• identify current or previous projects that canassist the design process

• conduct a market review to establish what themarket can provide

3


June 2005 3-53

• design the solution in sufficient detail tosupport the procurement plan

• obtain customer agreement to the design

Communication between the design agency,project manager and customer is criticallyimportant during this activity. This is the finalopportunity for the customer to ensure that theproject staff understands their need and how thesolution is to be employed. Understanding therequirement is the key to the solution.

Joint Scope Definition

In formal consultation with the client, review theproject documentation developed to date,including:

• Needs Analysis.

• Options Analysis.

• Requirements Definition.

• Business Case.

• Recommended Solution RequirementsSpecification (completed form includingattachments approved by the relevant position).

• The Project Plan.

The purpose is to confirm the understanding ofthe customer's requirement and how the solutionwill be operated and supported. The customer isbriefed on the implementation strategy, method ofprocurement, and solution design and theiragreement obtained.

Review Technical Precedents

Existing design solutions can provide a usefulstarting point for defining a new or improvedsystem. This task will minimise the possibility ofduplication of effort and outcomes.

Review the corporate repository for informationon recent projects, including variations whichmight be similar to the current requirement.Determine if any of the elements or componentsof the system being reviewed could be used aspart of the solution or as the basis for developingthe new solution requirements.

Identify Departmental Standard Solutions

Development effort is both time consuming andexpensive. Existing departmental standards suchas Standard drawings, standard specifications,contract provisions, and standard systems shouldbe adopted, where relevant. Use of non standardsolutions requires approval from the client.

Prepare Design

Drawings, electronic design models,specifications, contract provisions, designestimate, and electronic schedules are completedin accordance with the solution specification.Design is undertaken in accordance withDepartmental Policies, Processes and TechnicalManuals.

Submit to Customer for Review

The client must be satisfied that the SolutionRequirements Specification and the SolutionDesign, are appropriate, comprehensive,complete, and reflects the stated and agreed need,and that the specification/design is in accordancewith the agreed project scope.

The Solution Requirements Specification/Designis reviewed with the client, or clientrepresentatives, usually as a formal SolutionDesign Review, to confirm that all needs havebeen met. It is also appropriate to indicate to theclient where opportunities exist for alternativesolutions and cost savings. This process shouldhappen throughout the development of the designand the client should take a lead role byprogressively approving the design as it evolves.This process is best undertaken in a face-to-facemeeting to minimise the probability of omissionor misunderstanding of the requirement. Once thespecification/design is complete, the client shouldsign-off to this effect.

External Communications

a) Scope:

The scope of this task is the actions necessary forgenerating support for the project from externalstakeholders and other interested parties.

3


3-54 June 2005

b) Objective:

The objective of this task is to increase awareness,encourage acceptance and to develop support forthe project.

c) Deliverable:

The deliverable from this task is an externalcommunications plan that specifies all thecommunication activities covering stakeholderconsultation and community relations on theproject in sufficient detail to enable successfulcompletion and implementation of the project.

External Stakeholder Consultation

It is important to consult with affectedstakeholders external to the project team to ensurethat the project reasonably accommodates theneeds of affected stakeholders and that projectdevelopment is not adversely affected by externalissues. Successful project outcomes often rely onthe cooperation of external parties. This isachieved by the use of a Communications Plan.

Key elements of the Plan are:

• Identifying the stakeholders, including LG,other Government Departments, BusinessGroups and relevant community groups.

• Developing the methods for dealing with thecommunity and industry groups

• Preparing display materials

• Selecting appropriate personnel in order toexplain effectively the project details, includingtechnical details such as assumptions, reasonsfor aspects of the design solution, etc.

• Seeking support from other agencies /individuals

Community Relations

Develop the requirements for an implementationcommunity relations plan.

Key Steps:

1. Identify external parties requiring information

2. Develop community relations strategies/actions

3. What & How

These requirements will assist the contractor inpreparation of an acceptable Community LiaisonPlan as per Clause 13 of the SupplementaryConditions of Contract (Form C6838) of RoadConstruction Contract (RCC).

• Design Development Requirements/Considerations

Design Inputs

Generally speaking design considerations arecontained in Form M4211 or M4212 - DesignDevelopment Report. These considerations areidentified through Legislation, Investigations,Studies and Consultations. They also identifyrisks and issues that need to be addressed duringthe development of the project.

Also refer to Chapter 4.

NB For some projects these considerations mayneed to be known for the development of optionsand for the development of the preferred option.

3.6.2.2.3 W5 - Preliminary Design

Design development is an iterative process thatoften involves changes when output from aparticular step indicates the need to revisit anearlier decision (e.g. in the investigation anddesign activities, any of the listed items canprovide outputs which indicate that a review ofoptions or a previous decision is warranted).

The Development Phase Manager is the personresponsible for the management of all activitynecessary to deliver the preliminary design, andthe detailed design. The first task of the projectmanager is to preview the preliminary ProjectPlan and update as appropriate. The project plan isused as the control mechanism for the delivery ofthe Development Phase. Selecting an appropriateteam to deliver the Development Phase is acritical success factor in the achievement of asuccessful project.

The Preliminary Design stage develops thepreferred problem solution (approved in the

3


June 2005 3-55

business case), keeping within the scope of theproject. For a road infrastructure solutionactivities include:

• Finalising the geometric design solutionproduced in the business case, e.g. horizontaland vertical alignments, cross sections, andmajor intersection layouts, includingconducting Road Safety Audit (PreliminaryDesign);

• Conducting design options analysis for majordesign solutions, e.g. a bridge vs. a largeculvert;

• Designing major components (e.g. pavementdetails, bridges, retaining walls, storm waterdrainage systems);

• Preparing electronic models;

• Preparing the Preliminary Estimate; and

• Determining ROW requirements (e.g.resumption drawings, lease requirements,native title arrangements).

• Ensure project environmental sustainabilitythrough appropriate environmental assessment(refer to the Road Project EnvironmentalManual for guidance).

• Ensure the design is an economic solution.

• Ensure that functionality of design componentsare appropriate for their intended purpose

• Ensure the constructability of the project ispractical and efficient.

• Confirm the project cost is within the limits ofthe business case cost estimate. This is veryimportant as ROW acquisitions may be held updue to project re-justification requirements ifthe project cost has increased during thepreliminary design step.

3.6.2.2.4 W6 - Detailed Design

The Detailed Design step finalises the design by:

• Completing details of all components(geometry, bridges, road furniture, etc),

including conducting Road Safety Audit(Detailed Design);

• Designing routine cross drainage together withassociated environmental treatments;

• Designing other miscellaneous items (e.g. gullypits);

• Project environmental certification (refer toRoad Project Environmental Manual forguidance).

• Documenting the design (Scheme Prototype),and

• Establishment of the construction contract.

The detailed design step produces engineeringdrawings and an electronic model for constructionpurposes. It also delivers final project schedulesand estimates and all other construction contractdocumentation relevant to the type of contractproposed.

ROW acquisitions occur during the preparation ofthe detailed design. This is necessary to ensure theproject may be constructed during the RIPtimeframe.

3.6.3 Implementation Phase

The Implementation phase is used forconstructing the works. This section describes theactivities & tasks required in the implementationphase.

This phase covers the activities necessary toproduce, test and commission project deliverablesin accordance with the project plan. The scopemay also include the decommissioning of anyexisting or legacy systems and the migration tothe new system if included in as part of theproject.

The purpose of this phase is to ensure that:

• project implementation occurs in accordancewith the project plan

• project progress is monitored and trackedagainst the planned schedule

3


3-56 June 2005

• unacceptable variance is identified early andaction taken to bring the project back on track

• the products and deliverables are produced tothe required standard and specification

• the product or service is commissioned andbrought into operation

Major activities are:

Project Management: -

• Project Administration

• Manage project plan

Work Management :-

• Design Changes

• Produce outputs

• Test and Review

• Commission

Responsibility

The customer, sponsor & project manager haveresponsibilities in this phase.


General

The discipline of planning, organizing,monitoring, and controlling all aspects of a projectin a continuous process to achieve its objective,both internal and external.

3.6.3.1.1 P8 - Project Administration

Each project, regardless of size, requires theproject team and its management structure to beformally established. Where all phases aredelivered by the same project manager and projectteam the requirements of this activity are usuallya continuation from the previous phase. Wherethis is not the case the project administrationactivity will need to be reestablished.

The scope of this activity covers all tasksassociated with raising and establishing the

project team and project office. The output fromthis activity is a formal project control structure.The major objectives of this activity are to set inplace or confirm the mechanisms and the peopleto facilitate project management.

Tasks

1. Project initiation

2. Establish project team and office

3. Review handover package

A. Project Initiation

Prior to commencing work on this phase of theproject it is necessary to identify and appoint/confirm the Project Manager and project team.

This will clarify roles and responsibility ofvarious parties and avoid disputes andmisunderstandings.

The Implementation Phase Project Manager is theperson responsible for the management of allactivity necessary to monitor and control theconstruction process.

Objectives

The objective of the implementation phase is to:


• Understand the need and how the contractdocuments require this need to be satisfied;

• Understand requirements and conduct impactassessment in relation to:

- The stakeholders

- The environment, and

- Any other project specific issues

• Outline the risks;

• Seek the release of the required resources.

Scope

To ensure the administration requirements areestablished and set-up to facilitate contraction

3


June 2005 3-57

administration and to support the projectsuperintendent, e.g. project office, project files,payment process, etc.

B. Establish Project Team and Office

Establish Project Team

Select a project team that has appropriatemanagement skills matching the complexity andsize of the project. It is essential for the projectteam to include representatives of the keytechnical disciplines to ensure the intent of thedesign is not compromised. It is important for theProject Team to be established early in the processto ensure resources are available when required.

Establish Project Office

If the project is to be managed from its owndedicated office rather than the normal workplaceit's important for a suitable project office beestablished to conduct the project managementaffairs of the project. This could include provisionfor meetings, model and other graphic displays,and be suitably located for meeting attendees, siteaccess and suitably equipped with appropriateoffice equipment.

C. Review handover package

The project manager and superintendent mustreview the contract documents and the projectproposal to develop a clear and commonunderstanding of the need for the project togetherwith the required outcomes. It is most importantthat the intent of the design is not compromised inany way. This is the fundamental basis for theaccepted price.

This review is an essential requirement if theproject manager is to guide the project through toa successful conclusion.

3.6.3.1.2 P9 - Manage Project Plan

General

Activities and tasks are conducted in accordancewith the project plan. The project managermonitors the project's progress against theschedule and plans to ensure activities remain on

track. In an ideal world the activities will occur asplanned and the project manager will have little todo. In reality risks eventuate and issues arise thatthreaten the project's success. The projectmanager must address those issues and guide theproject through to a successful conclusion. Thismanagement work may involve supervision ofinternal & outsourced or contracted resources andmay involve developing and administeringvarious forms of contract.

Scope

This activity covers all tasks associated withimplementing the plan, tracking progress,managing issues and controlling change. Thisactivity produces several outputs:

• Regular project update reports

• Updated issues, risk and learnings registers

• Approved change requests

• Records of meetings

Purpose


• Control the project so it is completed on timeand within budget:

• Control changes

• Manage risk and issues

• Keep stakeholders informed

• Capture learnings

Responsibility

The project manager is responsible for thisactivity.


It is important that the project manager maintainseffective communication to enable the earlyidentification of problems. Early identificationwill enable remedial action to be taken before theproblems develop into issues.

3


3-58 June 2005

Tasks

1. Monitor progress

2. Manage issues

3. Manage change

4. Report progress

3.6.3.2 Work management

General

The management of project deliverables, egoptions, in order to meet stakeholders needs andexpectations from a project.

3.6.3.2.1 W7 - Design Changes

General

This is an activity of the implementation phasethat is only used when there is an approvedchange to the design. This could be a result of anynumber of issues such as unexpected:

• ground conditions,

• location of public utility services,

• error in original design,

• etc.

Scope

This activity covers the work required to providea new or modified design to suit the currentcircumstances.

Purpose

The purpose of this activity is to ensure that thedesign meets the new requirements of the site andthe actual design function to allow theconstruction to continue without comprising therequired outcomes.

Responsibility

The project manager and customer are jointlyresponsible for this activity.


The project manager should consult with thesponsor and customer to determine how theactivity will be conducted and exploited.

Tasks

1. Redesign required aspects of the works

3.6.3.2.2 W8 - Produce Outputs

General

This activity is the "do it" activity. Whateveroutput the project was raised to produce isproduced here. The work may be carried out in-house or produced externally under contract.

Scope

This activity covers all tasks necessary to producethe project deliverables.

Purpose

The purpose of this activity is to produce therequired project outputs.

Responsibility

The project manager, component managers andteam leaders are responsible for this task as perthe responsibility assignment matrix in the projectplan.


Close communication and consultation betweenthe various production agencies and project teamduring production will assist in keeping progresson track and help identify problems early.

Tasks

1. Establish workplace/ site

2. Deliver project outputs

3


June 2005 3-59

3.6.3.2.3 W9 - Test and Review

General

Testing is an essential element of quality control.It ensures that you get what you asked and paidfor. The solution design specification shouldcontain acceptance criteria for all the works,whether delivered internally by componentproject managers or by external contractors.

A testing regime should be developed covering allitems in the design specification.

Scope

This activity covers the tasks associated withtesting components, products and services toensure they meet the required specifications.

Purpose


• Confirm the acceptance testing criteria.

• Ensure that all deliverables are tested prior toacceptance and commissioning.

• Ensure products comply with definedrequirements and specifications.

Responsibility

Individual testing tasks will be assigned in theproject plan Responsibility assignment matrix.


Communication between the production teams,test agencies and project office will speed up thetest and evaluation process.

Tasks

1. Prepare for testing

2. Test elements

3. Test system

4. Prepare for commissioning

3.6.3.2.4 W10 - Commission

General

This is the final activity of the implementationphase and transitions the product/solution fromdevelopment and production to operationalservice.

Scope

This activity covers the work required to confirmthat the product/service functions as intended andcan be accepted onto the organisation's assetregister.

Purpose

The purpose of this activity is to ensure that thefinal product/service is ready to be placed intooperation, producing the intended benefit.

Responsibility

The project manager and customer are jointlyresponsible for this activity.


The transition of the product/service tooperational use is a key milestone and offers goodcommunity relations and marketing opportunities.The project manager should consult with thesponsor and customer to determine how theactivity will be conducted and exploited.

Tasks

1. Commission

3.6.4 Finalisation


General

The discipline of planning, organizing,monitoring, and controlling all aspects of a projectin a continuous process to achieve its objective,both internal and external.

3


3-60 June 2005

The project management activities in thefinalisation phase are:

• General Acceptance

• Evaluate Project Performance

• Close-out

• Post Implementation Review

3.6.4.1.1 P10 - General Acceptance

This activity signifies the formal completion ofthe project manager's obligations to the customer.Once the product or system has been delivered to,and accepted by, the customer, the projectmanager responsibility to the customer ceases.

Scope

This activity covers the tasks required to hand theproject over to the customer, and to ensureongoing maintenance/support arrangements are inplace.

A handover report is signed that transitionscontrol of the product from the project office tothe customer.

Purpose

The purpose of this activity is to ensure customersatisfaction with and acceptance of the projectdeliverables and handover package, including thehandover report.

Responsibility

The project manager and customer are responsiblefor this activity.


Communication and consultation between thestakeholders is important to ensure that all of thecustomer's requirements and concerns areidentified and addressed. This is the last practicalopportunity for the customer to voice their views.

Tasks

1. Confirm physical completion

2. Confirm receipt of all documentation

3. Confirm maintenance arrangements

4. Prepare handover report


A. Confirm physical completion

Guidance

The purpose of this activity is to prove to thecustomer's satisfaction that all deliverables agreedto as part of the project have been delivered inaccordance with the approved plan. This activityis usually conducted as a formal meeting betweenthe project manager, the customer and majorstakeholders.

The project manager needs to demonstrate that thedelivered product(s)/services(s) are completed tothe required standard, documented, ready forimmediate use, operating properly and to thecustomer's satisfaction.

Responsibility


References

- Project plan

- Contract documentation

- Proposal and business case

B. Confirm receipt of all documentation

Guidance

The following documentation, as appropriate,needs to be assembled, ready for handover tooperations and asset management:

• As constructed plans

• Operations manuals

• Guarantees and warranties

• Training packages

3


June 2005 3-61

• List of outstanding defects

Responsibility

The project manager and customer are responsiblefor this task.

References

- Project plan


C. Confirm maintenance arrangements

Guidance

The project manager should confirm thatresponsibilities and procedures for ongoingmaintenance are established and that the termsand conditions of maintenance agreements andcontracts are documented, understood and agreed.

Plans should be in place to handle any remainingdefects, or defects that may arise during the initialoperating period.

Responsibility

The project manager and customer are responsiblefor this task.

References

- Project plan


D. Prepare handover report

Guidance

Prepare a handover report that identifies allvariations to the original contract and seeksacknowledgment from the customer that:

• All deliverables have been delivered.

• All training has been completed.

• The product/service has been fully tested andoperates to specification.

• All appropriate documentation has beenprovided.

• The service support arrangements are in place.

Responsibility

The project manager is responsible for this task.

References

- Project plan


E. Review and approval

Guidance

The handover report needs to be reviewed by thesponsor prior to presentation to the customer forsignature. Presentation to the customer usuallyoccurs at a formal meeting. In preparing for themeeting the project manager should:

• Provide early warning to the customer of theintention to commence preparation of thehandover report.

• Schedule a meeting with the client to reviewand agree the handover report;

• Provide a copy of the handover report to theclient a reasonable time ahead of the meeting.

• At the meeting, be prepared to discuss anyissues that may have influenced the client'ssatisfaction with the way the project wasdelivered, and which may impact onacceptance of the products and services.

Responsibility

The project manager, sponsor and customer haveresponsibility for this task.

References

- Handover report

- Project plan


- Proposal

- Business case

3


3-62 June 2005

3.6.4.1.2 P11 - Evaluate ProjectPerformance

General

The project manager's direct responsibility to thecustomer ended with the sign off of the handoverreport however the project manager still bearsconsiderable responsibility to the sponsor and thedelivery organisation. Of particular importance isthis review and evaluation activity which seeks toevaluate the project performance in terms of thesuccess criteria and key performance indicatorsestablished in the concept phase. In addition thereview seeks to identify changes to organisationalprocesses and procedures that should be fed backinto the strategic, business and project planningprocesses to improve organisational performance.

Scope

This activity covers the actions necessary toreview and evaluate the project's performance andproduce a project completion report.

Purpose


• Identify and document how the projectperformed in terms of the success criteria andkey performance indicators established in theconcept phase.

• Evaluate the organisational processes andprocedures used throughout the project,identify where problems occurred, andrecommend improvements.

• Identify and explain any variance between theinitial baseline plan, contract and schedule andtheir final versions.

• Assess how well the individual managementplans performed (risk, safety environment, etc)and identify procedural modifications thatwould improve their performance.

• Document the evaluation in a projectcompletion report.

Responsibility

The project manager is responsible for thisactivity.


Communication and consultation with allstakeholders is important to obtain a fair andhonest appraisal of the project's performance. Itmay be appropriate to use a method ofcommunication that protects the identity of peopleto help elicit useful criticism.

Tasks

1. Evaluate against success criteria

2. Prepare Completion Report (CR)


A. Evaluate against success criteria

Guidance

Project success criteria specified in the businesscase should be reviewed. This task reviews theproject's actual performance against thosemeasures to determine project success.Performance should be reviewed against bothinitial and final baselines. Any variance betweenthe initial versions and final versions of theschedule, plan and contract need to be identifiedand justified. The review seeks to identifychanges to organisational processes andprocedures that should be fed back into thestrategic, business and project planning processesto improve organisational performance.

This task also includes, in effect, an audit toensure that all project finalisation activities havebeen completed. Final costs are determined andcompared with the various estimates producedthroughout the project lifecycle to determine howwell the estimation process performed.

Responsibility

The project manager has responsibility for thistask.

3


June 2005 3-63

References

- Handover report

- Project plan


- Proposal

- Business case

B. Prepare Completion Report (CR)

Guidance

The project completion report documents thecomplete project's performance and provides asuccinct history of changes to the originallyjustified proposal. The report further documentslessons learnt for use by subsequent projects.These lessons should be fed back into theorganisations strategic, business and projectplanning processes to ensure mistakes are notrepeated and provide the opportunity for thingsthat worked well to be repeated in subsequentprojects.

This report includes the results of the previoussteps evaluation of project performance againstthe pre-determined success criteria. It alsoevaluates project governance arrangements.

The project completion report template appearsunder the templates tab.

Responsibility


References

- Handover report

- Project plan


- Proposal

- Business case

C. Review and approval

Guidance

The completed project completion report shouldbe circulated to all relevant stakeholders forreview prior to submission to the sponsor forapproval.

On completion, the signed project completionreport is stored in a way that makes it accessibleto other project managers as required.

Responsibility

The project manager is responsible forcoordinating the review. The sponsor isresponsible for a timely consideration andapproval of the report.

References

- Project completion report

- Handover report

- Project plan


- Business case

3.6.4.1.3 P12 - Close-out

General

This activity closes down the project office anddisbands the project team. It is critically importantthat this activity is thought through and conductedthoroughly. The project team must maintain theirvigilance to ensure that all the work is completedin a timely and efficient manner. There is asignificant risk that motivation and the level ofeffort put into the project can drop offconsiderably after the product or service has beenhanded over to the customer and some teammembers start looking toward the next project.This activity involves the handling and disposal ofassets and finances and must be conducted inaccordance with the appropriate organisationalinstructions, regulations and legislation. The dataand information generated under the project is avery valuable corporate asset and must be sorted,

3


3-64 June 2005

indexed and stored appropriately. It is particularlyimportant to provide appropriate reward andrecognition for the efforts of project staff. Theproject manager must provide adequate referencesfor staff members and assist with their placementin new positions.

Scope

This activity covers the tasks associated withclosing down the project office includingadministrative and financial closure and thedisbandment of the project team.

Purpose

The purpose of this activity is to ensure that:

• All stakeholders are informed of the imminentproject closure.

• All project office assets are appropriatelydisposed of

• Project ledger accounts are closed off.

• Project information is stored and archivedappropriately.

• All applicable financial and administrativelegislation, regulations and instructions arecomplied with.

• All project staff are debriefed and assistanceprovided for subsequent placement.

Responsibility

The project manager is responsible forcoordinating this activity.


Communication and consultation withorganisational administrative, financial andhuman resource staff is essential to ensure that thenecessary requirements and regulations are met. Itis important that all stakeholders are informed ofthe intention to close the project office to allowthem to raise any issues that still remain.

Tasks

1. Close project office

2. Close project files

3. Close financial accounts

4. Value and register asset

5. Disband team

A. Close project office

Guidance

If the project team has been working from aproject office, this office needs to be closed or thespace reallocated. This may involve endingleases, removing furniture and equipment,disconnecting power or removing site offices.

Responsibility


B. Close project files

Guidance

In addition to all of the key project documentsproduced during the course of the project,substantial amounts of paper and electroniccorrespondence will have been received andgenerated which constitute a valuable corporateasset and form an important historical andauditable trail for the project.

It is of vital importance that this information issorted, indexed and stored in an appropriatemanner in accordance with applicable legislation,regulations and instructions. Much of this wealthof information will be of great use for futureprojects and needs to be readily available to staffwithin the organisation. It may be necessary toplace appropriate controls over sensitive,commercial or personal information to preventinappropriate access.

Arrangements need to be made for storing/archiving both paper and computer files.

3


June 2005 3-65

Responsibility


References

- Applicable administrative regulations and

- Procedures

- Project plan

C. Close financial accounts

Guidance

Project cost centres/internal orders need to beclosed and paper financial records appropriatelystored/archived. Assets, both office assets andproject deliverables need to be returned to theirowner. Records of all disposals need to be keptand any proceeds credited to the project ledger.Any remaining lease, rent or hire agreements mustbe terminated.

Responsibility


References

- Applicable financial management procedures

- Project plan

D. Value and register asset

Guidance

Any new assets need to be recorded and valued insuch a way that makes subsequentrevaluation/depreciation possible.

Responsibility


References

- Organisational asset valuation guidelines

E. Disband team

Guidance

Endings can be difficult. Appropriate communityrecognition and reward should be given for theefforts of the team. It is also important for theteam to maintain their vigilance to ensure that allwork is conducted and standards of work don't fallaway while looking for other work. It is generallybeneficial to have a wrap up function/wake.

Project team members will posses vitalinformation on the project that needs to becaptured and recorded as part of the projectrecord. Feedback should be sought from them.Final performance reviews should be carried out,and any certification of experience forprofessional bodies/qualifications should becompleted.The project manager should assistproject staff with placements after project closure.

Responsibility


References

- Organisational human resource managementprocedures

- Project plan

3.6.4.1.4 P13 - Post ImplementationReview

General

The Post Implementation Review (PIR) is anactivity conducted after the project has beenclosed down and the project's product or servicehas been in operation for some time. The activityis not strictly a project activity as the project nolonger exists. It is more an organisational activitydesigned to evaluate the outcomes generated bythe project in relation to the original need andidentify lessons for improving organisationalprocesses and procedures.

Not all projects require a formal postimplementation review; the sponsor must exercisejudgement in selecting which projects to review.The conduct of the review should be considered as

3


3-66 June 2005

a project in its own right and planned andmanaged accordingly. In many cases thepersonnel conducting the review will not be fromthe original project team staff who will have sincemoved on.

Scope

The scope of this activity covers all tasksassociated with the post implementation reviewfrom the raising of the implementation teamthrough to the approval of the review report

The deliverable from this activity is a postimplementation review report.

Purpose


• Raise a review team and conduct the review.

• Identify the outcomes and benefits generatedby the project.

• Determine the final cost of the project.

• Evaluate the outcomes in terms of the originalneed.

• Identify lessons learnt in terms oforganisational processes and procedures.

• Document the review.

Responsibility

The project manager, sponsor and customer areresponsible for this activity.


The post implementation review is a project in itsown right and requires the level ofcommunication and consultation necessary toraise any project. Stakeholders must be identifiedand their views and concerns canvassed.Considerable communication between theimplementation team and the sponsor is necessaryto understand the requirement and plan thereview. Where possible the review team shouldconsult with the original project team to gain agreater understanding of the original project.

Tasks

1. Convene post implementation review team

2. Plan the review

3. Undertake the review

4. Prepare post implementation review report


A. Review and approval

Guidance

The post implementation review report needs tobe circulated to stakeholders for review prior tosubmission to the sponsor for approval.

Responsibility

The project manager is responsible forcoordinating the review and submission of thereport. The sponsor is responsible for a timelyconsideration and approval.

References

- Post implementation review report.

3


June 2005 3-67

References

Road Planning and Design Manual Queensland Department of Main Roads

Road Policy Manual Queensland Department of Main Roads

Project Cost Estimating Manual Queensland Department of Main Roads

Project Estimating Road Transport Authority of New South Wales

A Guide to the Project Management Body ofKnowledge Australian Institute of Project Management

Project Management ManualQueensland Department of Main Roads

Value EngineeringUnited States Department of Transportation(Federal Highway Administration -Infrastructure)

3


3-68 June 2005