Capital Development Guidelines

The business case incorporates a more detailed assessment of the options examined in the options analysis phase of the project lifecycle. It may also include additional options and /or discard some options previously considered.

• Generally two or three options should be included in the shortlist, the two options which are most likely to deliver the desired outcomes and the ‘do nothing’ or minimal approach option.
• Information on the present service delivery performance or condition and performance and utilisation of existing infrastructure needs to be considered.
• Describe the impact on related services and assets and opportunities for integration with other government services demonstrating consideration of joined-up government.
• Include information on whether the operation, or part of it, could be efficiently and reliably contracted out.
• Provide details of capacity for variations to the design and/or life of the proposal.
• Provide an assessment of the scope to trade-off capital and maintenance costs.
• Are there interim or staged implementation solutions available?
• Include information on whether the proposal, or some aspect of existing operation, can be scaled down or closed.
• Detail the level of strategic thinking and the investment of departmental and other resources in the development of the business case.
• Provide information on whether and how the delivery options are feasible and realistic.

Consideration of Partnership Victoria delivery options should be addressed under Procurement Strategy in Section 10.

The following sub headings indicate how the options can be presented. They may need to be modified to suit the project.

Process of Option Development

Briefly explain the process of developing and evaluating the options. For most capital projects this will involve development of non asset and asset (master planning) options, review and endorsement by Steering Committee, PCG or Executive Director via a Strategic Business Case, engagement of specialist consultants, feasibility study, schematic design, QS cost reports, revenue and cost modelling by Program and agency etc. Convey a sense of the completeness and depth of information available.

Options Considered

This section should link to the Strategic Business Case options. It should document the solutions that have been considered and evaluated during the project, particularly where solutions in the Strategic Business Case have been worked up and discounted, or new solutions emerge.

It is important to demonstrate that all feasible options have been identified and considered. Provide a logical argument for pursuing or discarding each option.

The section can be abbreviated if the Strategic Business Case and Preliminary Business Case (Options Analysis) papers have been completed, or if details are well covered in the feasibility studies. Try to cover in 2 or 3 pages by using a table format.

Note any issues that are a major consideration for the option. These can be addressed as simple statements to confirm that the issue has been considered.

The feasibility of each solution should be assessed. Consider existing conditions, integration with other providers, ability to source other providers, recurrent cost data or implications, achievement of project objectives, alignment with strategy or policy, feasibility of staging, capacity to provide interim solutions.

The solutions should include, but not be limited to:

• Doing nothing – what are the consequences and issues related to not proceeding with the project. Assume that statutory and OHS requirements are met in the do nothing option.
• Non-asset solutions – what options are open to progress the project objectives with minor or no capital investment. There should be enough detail to confirm that all feasible options have been considered and there are sound reasons for not pursuing the option further. Examples of non asset solutions might include:
  • Ceasing to provide the service
  • Providing the service from an alternative location
  • Changing the service model to suit the current conditions eg provide more services from alternative locations, or patients home, reduce demands on existing infrastructure by different ways of delivering care
  • Substitution of services
  • Contracting out services
• Potential solutions achievable within any announced budget, or budget expectation. Solutions must consider new vs refurbishment options, options for staging, options for interim works and deferral of project,
• An optimal solution

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The following table formats may suit the project presentation.

High-level solutions for {} have been considered. Project findings are summarised below. 

 OR 

 OR 

This section should conclude with a rationale for the options chosen (short listed) for further development in the business case and cite an authority for the decision (eg PCG, approved Strategic Business Case etc)

Description of Options

This section should provide a summary of the options that have been taken foreword for social and economic analysis. By this phase of the project the options will have been limited to a small number of preferred and feasible options. The options presented must include a base case, an option consistent with any previous commitments or financial limits and may contain one or more alternative options.

The layout is better suited to structured paragraphs rather than a table, however a summary table could be helpful for more complex projects.

The data for this section will usually be drawn from the feasibility study and schematic design.

A possible structure is suggested below.

The discussion points should consider

• Effective life of proposal / asset
• Ability to change
• Assessment of feasibility & how realistic the option is.
  

• Base Case
  • Description of option
  • Estimated Capital Cost
  • Advantages
  • Disadvantages
• Option A
  • Description of option
  • Estimated Capital Cost
  • Advantages
  • Disadvantages
• Option B
  • Etc