Business Case Title
Subtitle
Department Title
[This should be the publication title for the initiative,
if it were to be funded in the budget process.]
[Please note:
1. This template can be used for both capital and output proposals with
modification for output initiatives as appropriate.
2. When completing this template you should refer to the investment
lifecycle and high value/high risk guidelines and associated technical
guidelines for more detailed explanations.
3. The extent of detail should be scaled to the relative complexity of the
proposal and some areas may not be relevant for all proposals.
4. The project options analysis (Section 4) requires a consistent
methodology applied to analysis of options with a level of accuracy
consistent with ‘concept estimate’ at a minimum. The analysis should
be evidence based and defensible with estimates of capital costs, cash
flows and ongoing output or operating costs sufficient to robustly
compare options.
5. The recommended solution (Section 5) requires a detailed cost build‐
up with significant rigor based on a design brief or project scope
statement. Accuracy of information in relation to the recommended
solution should be at a level of accuracy consistent with that of a
‘preliminary design estimate’.
6. Any text included in [ ] is for guidance only and should be deleted.
7. Forward any comments to [email protected]]
Contents
Executive summary .............................................................................................. 1
1. Part 1 Problem .......................................................................................... 2
1.1 Background ........................................................................................................................ 2
1.2 Definition of the problem .................................................................................................. 2
1.3 Evidence of the problem.................................................................................................... 2
1.4 Timing considerations ........................................................................................................ 2
1.5 Consideration of the broader context ............................................................................... 3
2. Part 2 Benefits ........................................................................................... 4
2.1 Benefits to be delivered ..................................................................................................... 4
2.2 Importance of the benefits to Government ...................................................................... 4
2.3 Evidence of benefit delivery .............................................................................................. 4
2.4 Interdependencies ............................................................................................................. 4
3. Part 3 Strategic response .......................................................................... 5
3.1 Method and criteria ........................................................................................................... 5
3.2 Strategic options analysis .................................................................................................. 5
3.3 Recommended strategic option ........................................................................................ 8
4. Part 4 Project options analysis .................................................................. 9
4.1 Project options considered ................................................................................................ 9
4.2 Stakeholder identification and consultation ..................................................................... 9
4.3 Social impacts ..................................................................................................................10
4.4 Environmental impacts ....................................................................................................10
4.5 Economic impacts ............................................................................................................10
4.6 Overall evaluation of socio‐economic and environmental impacts ................................10
4.7 Financial analysis .............................................................................................................11
4.8 Risk comparison ...............................................................................................................11
4.9 Integrated analysis and options ranking ..........................................................................11
5. Part 5: Deliverability of recommended solution ..................................... 14
5.1 Details of recommended solution ...................................................................................14
5.2 Commercial and financial ................................................................................................14
5.3 Management ...................................................................................................................17
5.4 Delivery 17
Appendix A: Benefit Management Plan ............................................................. 19
Appendix B: Financial data presentation ............................................................ 20
Appendix C: Sign‐off checklist ............................................................................ 22
Business Case Title
Subtitle 1
Executive summary
[The Executive Summary is an essential stand‐alone part of a full business case highlighting the
overall story and key points of the Full Business Case. While the Executive Summary is the first
section of the full business case, it is often the last area completed.
It should be a clear and concise plain‐English outline of the whole proposal and as a guide less than
10 pages long. Include summary tables if appropriate e.g. to establish context.
The Executive Summary should:
Describe the investment proposal in one to two sentences.
This detailed business case seeks formal approval to invest $[xxx] million in [20yy/yy] to ……….....
(This should include both capital and output factors including ongoing resourcing and expected
outcomes.) (Note: This description should serve as the summary description required for budget
publications.)
State what decision‐makers are being asked to consider or decide and, if relevant, any recent
history of consideration such as the strategic case.
Identify any overarching contextual factors
For example specify if the proposal is related to an election commitment and provide a brief
overview of how the proposal relates to that commitment. If the proposal is extension or
subsequent stage of an existing investment outline the previous funding or commitment and its
impact to date.
Briefly identify the different options considered and a summary of the evaluation of those options
(including a summarised options ranking table).
The Executive Summary needs to convey that the investment proposal:
meets an important need
is supported by strong strategic and policy merit;
optimises value for money from a whole of life perspective; and
is achievable i.e. it can be delivered on‐time and on‐budget and will realise the intended benefits
it sets out to achieve.
Where a proposal faces considerable uncertainty the executive summary and business case should
convey options to flexibly deal with that uncertainty rather than lock‐in a complete solution too soon.
At the end of the Executive Summary, insert updated Investment Concept Brief (including Investment
Logic Map) if available.
Provide reference to key supporting documentation. Add any key documents or extracts to the
Appendix of the full business case. ]
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Department Title
1. Part 1 Problem
[For output proposals the full business case is likely to be the first presentation of the proposal to
government. Given this, the Stage 1: Conceptualise guideline may assist in characterising the
‘problem’ for the purpose of this Part.
For asset proposals this Part should revisit and confirm the currency of the analysis of the problem in
the earlier strategic business case (strategic assessment or preliminary business case). This will
involve re‐presenting the information from the strategic business case, reassessing its validity and
further substantiating the existence of the problem with evidence where appropriate. The intent is
to strengthen the case for the problem, and briefly outline any significant changes since the strategic
business case.
Remember that a ‘problem’ can include a service need, issue, or lost opportunity. For further
information on populating this Part for asset submissions see the Stage 2: Prove guideline.]
1.1 Background
[Describe the context and background necessary to set the scene to introduce the problem and
benefits from addressing the problem. Outline the existing service related outputs, existing asset
base and resource commitments including lapsing status. This might include a discussion on the need
for government intervention and role of government, current service funding, service distribution
and levels, and underlying drivers of those services. This section may also introduce providers and
stakeholders relevant to the problem. ]
1.2 Definition of the problem
[Explain in plain English and in less than one page the problem(s) needing to be solved. Present the
cause of each problem, who is affected, and how they are affected. Describe the nature of the
problem for example whether it is immediate, transitory, ongoing or escalating. ]
1.3 Evidence of the problem
[Provide the evidence of both the cause and effect of the problem. Evidence might include:
demand forecasts with assumptions;
key performance indicators (KPIs) on current performance levels; and/ or
facts/examples of the problem.]
1.4 Timing considerations
[Describe why the problem needs to be solved by government at this time, noting any connections to
long‐term planning documents. Explore whether the problem is suited to a staged response. Explain
the implications of delaying a response to the defined problem such as:
physical or capacity limits will be reached
significant reductions in the level of service (quality/quantity) will be experienced
failure to meet specific government commitments or legislative requirements
requirement for urgent action at additional cost due to asset failure, system overload etc;
lead time for investment to become operational; and
any critical dependencies with related service requirements.]
Business Case Title
Subtitle 3
1.5 Consideration of the broader context
[Explain whether similar needs or opportunities exist either inside or outside your organisation that
might be addressed together with this proposal. For example, benefits of a wider sectoral approach,
integration opportunities, pilot studies in other sectors that may impact the type of response.]
4
Department Title
2. Part 2 Benefits
[For asset proposals this Part should revisit and confirm the currency of the analysis of the benefits in
the earlier strategic business case (strategic assessment or preliminary business case). This will
involve re‐presenting the information from the strategic business case, reassessing its validity and
further substantiating the evidence of benefit delivery where appropriate. The intent is to
strengthen the case for the benefits, and briefly outline any significant changes since the strategic
business case.
For agencies using the Investment Management Standard to map benefits, note that not all benefits
identified as part of an investment logic mapping process will be suitable for inclusion in an economic
evaluation of an investment proposal. Economic evaluations focus on welfare impacts on society
rather than agency specific impacts and transfer benefits. Economic benefits which would be suitable
for inclusion in economic evaluations are typically specific, tangible, and able to be monetised and
can be linked unambiguously to an investment or activity. DTF can provide case‐by‐case guidance to
agencies on this issue as needed.]
2.1 Benefits to be delivered
[Explain the key benefits that flow if the problem is solved. (These can be drawn from the investment
logic map and benefit map if available.)
List key high‐level economic, social and environmental benefits the initiative will deliver. Any dis‐
benefits or negative consequences resulting from addressing the problem must be outlined
clearly.]
2.2 Importance of the benefits to Government
[Show how this investment will help to advance the government and/or organisation to meet its
objectives. This might include reference to the size and timing of those benefits.
Describe how this initiative connects to government priorities and the department’s corporate,
strategic and long term planning documents.]
2.3 Evidence of benefit delivery
[Define the measures and key performance indicators that will show whether the benefits have been
delivered. These benefits provide evaluation criteria and objectives for the development and
selection of interventions and options.
Details of baseline, interim and target measures, dates for the KPIs and the person/position
responsible for delivering the benefits should be included in an appended benefit management plan
or equivalent, which has been updated to reflect the recommended option. Reference or include the
benefits management map.
Where appropriate (as an alternative to a Benefit Management Plan) an evaluation
strategy/framework should be included or attached. ]
2.4 Interdependencies
[Identify key interdependencies critical to benefit delivery. For example reliance on other projects or
decisions. These interdependencies may require a level of flexibility to be built into the proposal.]
Business Case Title
Subtitle 5
3. Part 3 Strategic response
[For asset proposals this Part should revisit and confirm the currency of the analysis in the earlier
strategic business case. This will involve re‐presenting the information from the strategic business
case, reassessing its validity and further substantiating the evidence, feasibility and assessment of
the strategic options analysis process. The intent is to strengthen the case for the preferred
‘strategic response’, and briefly outline any significant changes since the strategic business case.
3.1 Method and criteria
[Outline the method and criteria used to select the strategic response. Criteria should include the
extent to which interventions will achieve the proposed benefits and offer value for money. Identify
assumptions and constraints used to inform the development of strategic options.]
3.2 Strategic options analysis
3.2.1 Strategic interventions
[Explain the potential strategic interventions.
Describe and provide evidence or reasoning as to why these interventions might have an impact.
The table may be used to outline strategic interventions. Note it is not mandatory.]
Strategic Interventions
Intervention 1
Intervention 2
Intervention 3
Intervention 4
Intervention 5
Intervention 6
Intervention 7
Intervention 8
Intervention 9
Intervention 10
Table X Summary of potential strategic interventions
[The number of strategic interventions that should be considered depends on the scale and
complexity of the problem/investment.]
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Department Title
3.2.2 Strategic options
[Explain how the strategic interventions can be packaged into strategic options. This can be imported from the preliminary business case, provided that ongoing currency of
information has been revalidated. The table may be used to outline strategic interventions. Note it is not mandatory.]
Strategic options
Option 1 Option 2 Option 3 Option 4 Option 5 Option 6
Strategic Interventions
Intervention 1
Intervention 2
Intervention 3
Intervention 4
Intervention 5
Intervention 6
Intervention 7
Intervention 8
Intervention 9
Intervention 10
Table X: Strategic options
[Listed in the left‐hand columns are strategic interventions that could respond to the identified problem and deliver the expected benefits (and their KPIs). Against the listed
strategic interventions, a spread of strategic options should be structured to provide genuine alternative strategic responses to the problem. These are in the right‐hand
columns. Shade boxes and allocate percentages to shaded boxes to indicate the relative importance of each specific intervention within the option. To decide on the
importance of each specific intervention within the option, balance two factors: the importance of the intervention in developing the KPIs and the likely cost/effort involved.]
Business Case Title
Subtitle 7
3.2.3 Ranking of strategic options
[Evaluate the strategic options to determine the proposed strategic response. This can be imported from the preliminary business case, provided that ongoing currency of
information has been revalidated. Provide evidence to support this high level assessment. The table may be used to outline strategic interventions. Note it is not mandatory]
Strategic options
Option 1 Option 2 Option 3 Option 4 Option 5 Option 6
Benefits
Percentage of full benefit to be delivered 0% 0% 0% 0% 0% 0%
Benefit 1 %
Benefit 2 %
Benefit 3 %
Cost
Estimated capital investment cost (Range) $n mil ‐ $n mil $n mil ‐ $n mil $n mil ‐ $n mil $n mil ‐ $n mil $n mil ‐ $n mil $n mil ‐ $n mil
Estimated operational costs (Range) $n mil ‐ $n mil pa $n mil ‐ $n mil pa $n mil ‐ $n mil pa $n mil ‐ $n mil pa $n mil ‐ $n mil pa $n mil ‐ $n mil pa
Time
(Range) mm‐mm mm‐mm mm‐mm mm‐mm mm‐mm mm‐mm
Risks
Risk 1
Risk 2
Dis‐benefits
Dis‐benefit 1
Dis‐benefit 2
Ranking
1‐3
Table X: Evaluation of strategic options
[Costs here are indicative/order of magnitude and do not need to be precisely calculated, but need to be reasonable estimate of likely financial impact of each option.]
8
Department Title
3.3 Recommended strategic option
[Present the recommended strategic option, summarising the response and the rationale behind its
selection. For example, the recommended option may have been selected because it provides a level
of flexibility required to deal with uncertainty surrounding the problem. ]
Business Case Title
Subtitle 9
4. Part 4 Project options analysis
[Accuracy of data used to compare project options should be sufficient to robustly compare options.
Analysis of project options requires a level of accuracy consistent with ‘concept estimates’ (at a
minimum) of capital costs, cash flows and ongoing output or operating costs. A concept estimate is
an approximation of the probable cost of a program or project based on available verifiable
information. The level of accuracy used to present estimates should reflect the scale and complexity
of the investment. The level of analysis should provide sufficient information for an effective
comparison of the project options and to demonstrate that an adequate range of options have been
considered. The methodology used should be consistent across all options. Indicative costs should be
supported by evidence and defensible.
The tables in this section are a guide only and should be used, modified or not used as appropriate.
Projects which are HVHR should provide more detailed information to support assessment of
robustness.
In characterising the project options and considering their impacts, agencies should address
sustainability investment opportunities of project options. For example where significant
operational savings can be derived through specific approaches. The focus should be to identify up‐
front sustainability investments in areas of need and which are likely to deliver a good investment
return.
Further information
For more information on completing this section see the:
Stage 2: Prove guideline.
Technical guideline: Sustainability investment guidelines for Victoria’s public assets.]
4.1 Project options considered
[Expand each of the ‘strategic interventions’ included in the ‘strategic response’ into several more
detailed potential project options, including a ‘base case’ and at least one ‘market based solution’.
Aim for a maximum of around five. Refer to the Stage 2: Prove guideline for an explanation of the
base case and market based solutions.
Describe the method and rationale used to select the project options
Describe project options, including:
scope
asset and output options (or combinations);
at least one market‐based solution where possible;
potential for 3rd
party revenues;
critical assumptions or constraints (or windows of opportunity) of each option;
outline any project options considered but not evaluated and state rationale for non‐
consideration; and
at a high level, the extent to which each of the feasible options conforms to Government and
relevant agency legislation, policies, standards and strategies.]
4.2 Stakeholder identification and consultation
[At a broad level, provide an overview of the likely relative impact on key stakeholders of the various
project options, and outline their position in relation to the project.]
10
Department Title
4.3 Social impacts
[Outline the social impacts and opportunities of the proposal and identify any significant social issues
specifically relevant to particular project options (i.e. differentiating between the project options).]
4.4 Environmental impacts
[Provide a high‐level overview of the relative environmental impact analysis of the options including
specific actions required to meet all relevant legislative requirements and identified likely community
concerns.]
4.5 Economic impacts
[Provide a high‐level overview of all significant economic impacts and opportunities of the options.
‘Economic impacts’ in this case refers to impacts on key economic variables, such as value‐add,
productivity, workforce participation, unemployment and others.
This could be done in a qualitative manner (e.g. by describing possible changes and their likely order
of magnitude), or through actual economic modelling to come up with robust quantitative estimates.
The later should only be done where the magnitude of the project warrants this additional effort.
There is a wealth of data available from the Australian Bureau of Statistics and other sources, which
can assist in this endeavour – particularly when providing qualitative descriptions of possible impacts.
Where the magnitude of the project warrants providing quantitative estimates, then Computable
General Equilibrium (CGE) modelling is recommended. Like all modelling, this needs to be based on
robust assumptions/inputs that are transparent in order for it to be seen as reliable.]
4.6 Overall evaluation of socio‐economic and environmental impacts
[The expected socio‐economic and environmental impacts of the project options need to be assessed
and consolidated within a robust framework that appropriately captures and weighs these impacts.
The assessment of socio‐economic and environmental impacts is very important because it
effectively outlines what the Government would be ‘purchasing’ for its investment (in terms of the
net benefits to society).
The preferred methodology for integrating social, economic and environmental impacts is a cost‐
benefit analysis (also known as an ‘economic evaluation’). This may be combined with a multi‐criteria
analysis for impacts that are unsuited to the cost‐benefit analysis framework, such as where benefits
are difficult to monetise,. These tools should enable all key impacts to be captured in the
assessment.]
4.6.1 Cost benefit analysis (economic evaluation)
[Identify welfare impacts on society, both costs and benefits, for each project option – these impacts
include both market and non‐market specific impacts in the areas previously described as social,
environmental and economic. Describe the methodology to be used; in general this will be a net
present value assessment at an aggregate level relative to the base case. Quantify and monetise costs
and benefits at the level of accuracy of ‘concept estimate’ to ‘developed concept estimate’. Note
that the level of accuracy should be determined based on the scale and complexity of this
investment. Assumptions should be provided to justify estimates used.
Once costs and benefits have been estimated, agencies should discount impacts back to present
values and rank the project options. Note distributional impacts, while an important factor for
government decision‐making, are not included in the headline results (e.g. the net present value) of
the economic evaluation (which addresses welfare impacts to society as a whole).
For further information on completing this part see Stage 2: Prove guideline.
Outline the outcome of the economic analysis.]
Business Case Title
Subtitle 11
4.7 Financial analysis
[Provide an estimate of the capital and whole life (output) costs of the project options and describe
the process by which the estimate was derived (e.g. workshop, previous project). Costings for this
section of the full business case are at ‘concept estimate’ level at a minimum, and not extensively
detailed, but should consider whole‐of‐life differences between options over an appropriate period.
They need to be a reasonable evidence‐based realistic estimates but are not intended to be
comprehensively constructed from first principle. They need to provide sufficient detail to allow the
Net Present Value (NPV) comparison of options.
The analysis should allow decision‐makers to consider the option that will deliver the best outcomes
in line with government objectives, including Budget considerations, and will have a demonstrable
effect on output/service delivery performance.]
4.8 Risk comparison
[Risk assessment here is high level and needs to be sufficient to enable relative comparison of
options.
Describe risk assessment process for the project options analysis, which may include a risk workshop.
Risks identified should consider the financial, economic, social and environmental analyses.
Provide a summary of key risks which are critical to differentiate the success of the investment in
relation to the project options considered. Significant uncertainties may warrant a different approach
to the investment to incorporate flexibility to manage the uncertainty.
To assist in identifying the key risks to consider, the following is a (non‐exhaustive) list of risk
categories: Change in law/policy; commercial; commissioning; completion/construction; contractual;
demand; economic; environmental; financial; implementation; investment planning; management;
obsolescence; operations; organisational; political; private sector; regulatory technological; residual
value; upgrade.]
4.9 Integrated analysis and options ranking
[This section summarises at a high level the relative merits of the options considered. Details in this
section are expected to be at a conceptual level only.
To the extent that costs, benefits and risks have been quantified and valued robustly, the preferred
option is typically the one with the highest, risk adjusted, NPV.
As the headline result of the economic evaluation does not include distributional impacts or where a
project option has significant intangible (or non‐monetised) benefits, these impacts can out‐weigh
the difference in NPV between alternative options. This can alter the choice of the preferred option
and these trade‐offs need to be clarified for decision‐makers. Multi‐criteria analysis (MCA) can be a
useful tool to do this.
Selection of options can be affected by the risk/uncertainty assessment. Further, where the NPV of
an option is subject to significant uncertainty, it can be difficult to distinguish between alternatives. A
low risk, low NPV option may be preferred to an alternative with higher but more uncertain net
benefits. The level of uncertainty may suggest that flexibility needs to be built into the recommended
approach, for example allowing decisions to be made progressively as more information becomes
available.
In a summary table, provide an integrated assessment of financial and non‐financial impacts to arrive
at a ranking of project options. Where a multi‐criteria analysis is included in the integrated
assessment, outline the relative weighting of the financial and non‐financial components.
See two alternative examples of possible financial and socio‐economic analysis summary tables
below. Note, choose which table of these two options is most appropriate to your integrated
analysis. Do not fill out both.]
12
Department Title
Table xx: Presenting the results of the options analysis
Project option
1: Do Nothing
Project
option 2:
Project option
3:
Project option
4:
Project option
5:
Analysis Period (years)
Capital Costs ($m)
Output Costs ($m)
Cost‐Benefit Analysis (of monetary costs and benefits discounted at the appropriate Discount Rate)
Present Value of Benefits
($m)
Present Value of Costs
($m)
Benefit Cost Ratio
Net Present Value ($m)
Other important considerations (see the examples provided)
Intangible costs / benefits
(e.g. small, med., large)
Distributional impacts
(e.g. small, med., large)
…
Preferred option
Table xx: Presenting the results of the options analysis, with multi‐criteria analysis
Project option
1: Do Nothing
Project
option 2:
Project option
3:
Project option
4:
Project option
5:
Analysis Period (years)
Capital Costs ($m)
Output Costs ($m)
Cost‐Benefit Analysis (of monetary costs and benefits discounted at the appropriate Discount Rate)
Present Value of Benefits
($m)
Present Value of Costs
($m)
Benefit Cost Ratio
Net Present Value ($m)
Multi‐Criteria Analysis (ranking of intangible costs and benefits, if any)
Criteria 1
Criteria 2
Criteria 3
Preferred option
4.9.1 Testing the robustness of the options analysis
[Conducting a sensitivity analysis is a form of quantitative analysis to examine how net present
values, benefits, costs or other outcomes vary as individual assumptions or variables change. This
approach may be used to test the robustness of the project options analysis, particularly for larger
investments.
Provide a high level summary of the key assumptions for the options assessment. Provide a
description on the robustness of the options analysis in relation to key assumptions made.
The table below is optional.]
Table xx: Sensitivity testing results ‐ Scenario One: ………………………….
Business Case Title
Subtitle 13
Project option
1: Do Nothing
Project option
2:
Project option
3:
Project option
4:
Project option
5:
Analysis Period (years)
Capital Costs ($m)
Output Costs ($m)
Cost‐Benefit Analysis (of monetary costs and benefits discounted at the appropriate discount rate)
Present Value of
Benefits ($m)
Present Value of Costs
($m)
Benefit Cost Ratio
Net Present Value ($m)
Other important considerations or Multi‐Criteria Analysis (ranking of intangible costs and benefits, if any)
Criteria 1
Criteria 2
Criteria 3
Preferred option
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Department Title
5. Part 5: Deliverability of recommended solution
[The full business case is the first time departments are asked to address the information required in
Part 5 and speaks to the question: ‘Can the solution really be delivered?’, this section is a key part of
the full business case and should put forward a rigorous case clearly justifying why the recommended
solution is the most effective and actionable solution.
This section should include confirmation of the above analysis in the light of detailed costing and
scoping of the recommended solution as well as additional detailed information relating specifically
to the deliverability of the recommended solution, as specified below.
To avoid duplication, refer to earlier sections where appropriate.
This section should also justify why the recommended solution is preferred in relation to each
component of the analysis.]
5.1 Details of recommended solution
[Clearly state which project option (which may comprise one or a number of projects) is the
Recommended Solution, addressing the rationale for its selection in light of the integrated
assessment, stating its details (including objectives and a project scope statement).
If a major asset is required, provide a brief summary of the design and specifications to the extent
they have been developed. Note: detailed designs are not expected at this stage, however
departments must provide enough information on scope to support a rigorous costing.
Provide details on output requirements associated with changes proposed to service delivery
including VPS and non VPS staffing implications.
Where appropriate include a summary of key elements of the design feasibility study which
demonstrates the long term vision for the preferred option in the broader urban/environmental
context. Provide a ‘Design Intent Statement’ to demonstrate the intended level of design quality and
identify what design aspects of the project need special consideration.
Provide information on preferred sequencing or staging of the project solution and justify why
staging/ sequencing is required or desired.
Describe significant broader impacts specific to the implementation of the Recommended Solution.
Indicate locational details and service area impacts.
Outline how the solution is consistent with, or addresses, public interest issues such as equity, access
etc.]
5.2 Commercial and financial
5.2.1 Procurement
[Outline the procurement options analysis ‐ method and process, showing ranking of options against
criteria used to selected recommended procurement strategy.
Detail the recommended procurement strategy for this investment, justifying why it is the best value‐
for‐money option, for example due to its capacity to include flexibility or better manage risk. This
should be balanced with the related issues of time, cost, whole of life value and quality.
Outline the organisation’s experience and capability to deliver the preferred procurement method as
well as key risks and contractual issues. (Include strategy to address deficiencies where appropriate
for example intention to engage expert help.)
Business Case Title
Subtitle 15
Formulate adaptations to the preferred procurement method to ensure that quality and good design
are embedded in the process. The Office of the Victorian Government Architect can provide advice
on the selection of procurement models and potential adaptations and the design, site utilisation etc.
If a PPP procurement approach is being proposed the Partnerships Victoria Group at DTF can advise
on the additional details required.
If project alliancing is being considered, full business case requirements are different, please contact
DTF Commercial Division for further advice or consult the National guidelines.]
5.2.2 Risk assessment and management
[Provide a detailed risk assessment of the recommended solution, outlining key risks and
management strategies.]
Risk Management strategy
[Describe risk] [Outline strategy for management]
Table X: Key risks to the success of this investment
[The risks may highlight the need for a flexible approach to the investment. For example where the
uncertainties may be resolved at a point in time (e.g. success or failure of a pilot study) and flexibility
can be built in to allow an informed decision at this time (whether to proceed with the full
investment). This section should describe ‘desired flexibility’ and ‘circumstances which make
flexibility desirable.’
Provide an overview of proposed arrangements for ongoing risk monitoring and management.
Include appendix with risk management strategy and risk register.]
5.2.3 Detailed costing and economic evaluation
[Provide a detailed overview of the costing for the Recommended Solution, including capital TEI and
output costs. Include budget cash flow over a relevant period for both capital and output amounts.
The project budget estimate including: base cost estimate, base risk allocation and contingency
should be based on a project scope statement at the preliminary design estimate level.
Identify the impact on output funding and the breakdown of operating costs to key components such
as staffing, maintenance, depreciation, CAC etc. This detail should extend over a reasonable period of
years to allow a whole of life costing perspective.
Attach appropriate tables in the appendices, refer Appendix B for example tables.
Departments should consult with DTF to agree costings before submitting the business case for
Budget funding consideration.
For Asset projects:
Refer to the Investment Lifecycle’s Project Budget Guideline which provides specific guidance on
development of the project budget. The tables below are based on that guidance and may be
modified to incorporate appropriate details.]
Element Estimate Table reference
Base cost estimate $XXXm (Table 2)
Base risk allocation $XXm (Table 3)
Project cost estimate $XXXm
Contingency $XXm (Table 3)
Project budget $XXXm
Table 1: Headline project cost element summary
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Department Title
BASE COST ESTIMATE
Effective date of BCE: dd/mm/yy
Estimated date of commencement of construction: dd/mm/yy
1 Direct Costs
1.1 Materials
1.2 Labour
1.3 Plant Hire
Sub total $
2 Indirect Costs
2.1 Recurrent overheads
2.1.1 Site facilities
2.1.2 Plant & Equipment – site maintenance
2.1.3 Project management costs
2.1.4 Commercial
2.1.5 QA and Safety
2.2 Non‐recurrent overheads
2.2.1 Establishment and mobilisation
2.2.2 Disestablishment and demobilisation
2.2.3 Project insurances
2.2.4 Professional fees – design, legal, financial, etc
Subtotal $
3 Owner’s Cost
3.1 Contracted professional staff
3.2 Investigations
3.3 Land costs & resumptions
3.4 Authority fees
3.5 Owner supplied plant and equipment
Subtotal $
4 Contractor’s Fee
4.1 Profit margin
4.2 Corporate Overheads
Subtotal
5 Provisional Sums
5.1
Subtotal $
TOTAL OF BASE COST ESTIMATE $
Table 2: Base cost estimate
BASE RISK ALLOCATION AND CONTINGENCY
6 Base Risk Allocation
6.1 Escalation (period between BCE and construction)
6.2 Project Risk A
6.3 Project Risk B etc
Sub total $
7 Contingency
7.1
Subtotal $
TOTAL OF PROJECT RISKS $
Table 3: Project risks
[The Net Present Value estimate should be recalculated based on the refined costs and a more
developed assessment of the benefits for the recommended solution. For the recommended solution
agencies may need to invest in valuation techniques such as market based valuation, revealed
preferences, stated preference or benefit transfer method to better assess the monetary value of
benefits. Note: this should only be undertaken if the additional effort and expense incurred in
assigning monetary values reflects the likely size of those impacts.
Business Case Title
Subtitle 17
Based on the detailed costing of capital, outputs and benefits for the recommended solution
formalise the economic analysis (e.g. NPV and BCR) to demonstrate the economic impact of the
investment.]
5.2.4 Funding sources
[Discuss proposed funding sources including potential contributions from other levels of government,
private sector, sale of assets etc. This section should present a summary of the sources of funding
requirement for capital and output costs which will be required for budget deliberations. This should
include offsets or the consequences of adopting a market based solution. Typically this presents
budget and forward estimates with a balance of TEI and ongoing output funding. Refer Appendix B
for examples of how this information might be presented.]
5.3 Management
5.3.1 Governance
[For the recommended solution, detail the proposed project governance structure demonstrating its
appropriateness. Note: For HVHR projects, DTF must be included in the project governance structure.
A Senior Responsible Owner needs to be identified (or proposed for all investments.]
5.3.2 Stakeholder engagement and communications plan
[Provide detailed information about key stakeholders in relation to the recommended solution.
Provide an outline of key elements of stakeholder and communications analysis describing
stakeholders, their likely position on the project and plans to manage that. If available attach as an
appendix a proposed high‐level stakeholder engagement and communications strategy covering the
approach to dealing with stakeholders both upon project announcement and ongoing during project.]
5.3.3 Project management strategy
[Outline the proposed project management strategy demonstrating its suitability and robustness,
appending any detailed plans as an appendix if necessary.
Describe the organisational capability and generic systems, standards and methodology which would
allow the project to be delivered successfully.
Demonstrate in this section that the implementing organisation has the capacity and capability to
mobilise and deliver this investment.]
5.4 Delivery
5.4.1 Change management
[Outline the scope of organisational/process change management required to effectively deliver the
benefits. This may involve process re‐engineering, staff retraining etc. required to transition from
existing arrangements to support the operation of the new investment. If change management
requirements are significant consider appending an outline of the change management strategy.
Note this does not include management of proposed scope changes during implementation.]
5.4.2 Timelines and milestones
[List the major milestones and deliverables and their delivery timelines and contingencies.
Outline the high‐level project schedule, including procurement steps and statutory approvals and key
decision points for project progression, termination or otherwise.
Provide information on potential competing priorities, dependency analysis, skills, capabilities,
availability of agency staff etc.
Provide advice on public communication of project timelines (to be consistent with communications
strategy).]
18
Department Title
5.4.3 Performance measures
[Provide a statement of investment benefits. Analyse how well the recommended solution addresses
the problem and key benefits. This section addresses the effectiveness and efficacy of the proposal.
Provide references to the evidence of benefit delivery identified in section 4 and provide further
specific information on performance measurement for the proposed project, this should be a
detailed description of:
how well the recommended solution delivers identified benefits; and
the specific KPIs that relate to the recommended solution.
Refer to the appended updated benefit management plan to inform this section.
Most investments will affect output performance measures. The impact on existing outputs and
performance measures should be specified indicating both the changes to output metrics relative to
current levels and the timing of that impact.]
Output name:
Performance Measures
Unit of
measure
Change in target if proposal is endorsed
2012‐13 2013‐14 2014‐15 2015‐16 2016‐17
Quantity
Quality
Timeliness
5.4.4 Readiness and next steps
[Explain plans to transition the investment to the next stage (Stage 3: Procure)
Explain the main areas of uncertainty to be resolved in the next stage, for example, information
regarding staffing, approvals, and land acquisition etc.]
5.4.5 Signoff
[Signoffs are required by:
Primary author
The senior responsible owner (or departmental Chief Financial Officer) on Gateway’s Project
Profile Model (PPM) included to update proposal risks.
The senior responsible owner (or Chief Financial Officer) and the department’s Secretary – these
are required for full business cases to be considered by the Government.
In establishing the project budget estimate the SRO should sign off on:
The statements of the service benefits and project scope.
The adequacy of the project budget including the base cost estimate, risk assessment, base risk
allocation and contingency.
This should be supported by additional sign offs from:
– The base cost estimator; and
– The agency and its advisers on base risk allocation and contingency.
Provide details of any review process (e.g. for HVHR Gateway reviews are mandatory).
So that decision‐makers know that the business case is thorough and complete, please provide a
quality assurance checklist such as set out in Appendix C, with business case submissions seeking
endorsement from departmental Secretaries. See the Stage 2: Prove guideline for more details.]
5.4.6 Exit strategy
[Detail the exit strategy and the factors that would lead to wanting to exit either early or at term.
Investments maybe time limited or may involve pilot studies. This section allows for consideration of
what termination rights are desirable at key review or decision points for example lapsing programs.]
Business Case Title
Subtitle 19
Appendix A: Benefit Management Plan
[‘Paste Special’ as an ‘Enhanced Metafile’ for optimum picture quality.]
Include a benefit management or evaluation plan if available or complete the following table for each
KPI. ]
KPI
Baseline
Source
Interim target
Reporting forum
Start date
Frequency
End date
Responsibility
20
Department Title
Appendix B: Financial data presentation
The following tables are intended as a guide to data inclusion and should be used or supplemented as
appropriate. Operating costs should be addressed over a reasonable period to allow a whole of life
perspective – in an appropriate table. Modify tables as required, for example by adjusting period to
capture output costs from commencement of the operation of new facility.
B.1 Funding history
In the table below provide details of the funding history for this or similar/related initiatives. This
table should include funding for an earlier stage in a multi‐stage project, funding for business case
development or scoping study, funding for a lapsing program, or funding for a related program that
has broadly the same policy objective as this initiative.
Description of funding provided 2008‐09
$m
2009‐10
$m
2010‐11
$m
2011‐12
$m
2012‐13
$m
B.2 Existing funding base
In the table below provide details of the existing funding base that has been provided for this or
similar/related programs. This should include funding that is in the department’s base as well as
funding for any related lapsing programs.
Description of funding provided 2012‐13
$m
2013‐14
$m
2014‐15
$m
2015‐16
$m
2016‐17
$m
B.3 Budget impact –
2012‐13
$m
2013‐14
$m
2014‐15
$m
2015‐16
$m
2016‐17
$m
TEI
$m
capital funding
Estimated asset investment cash
flow
(Component a) 0.000 0.000 0.000 0.000 0.000 0.000
(Component b) 0.000 0.000 0.000 0.000 0.000 0.000
(Component c) 0.000 0.000 0.000 0.000 0.000 0.000
Sub total (gross asset price increase) 0.000 0.000 0.000 0.000 0.000 0.000
Funds from other sources (e.g. asset
sale proceeds, Commonwealth
funding, trust accounts) – please
specify
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
Net Impact on capital appropriation 0.000 0.000 0.000 0.000 0.000 0.000
output funding
Price change requested for
provision of output
(Component x) gross output price 0.000 0.000 0.000 0.000 0.000 0.000
Business Case Title
Subtitle 21
2012‐13
$m
2013‐14
$m
2014‐15
$m
2015‐16
$m
2016‐17
$m
TEI
$m
(Component y) gross output price 0.000 0.000 0.000 0.000 0.000 0.000
Capital asset charge 0.000 0.000 0.000 0.000 0.000 0.000
Depreciation expense 0.000 0.000 0.000 0.000 0.000 0.000
Offset from internal reprioritisation (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
Sub total (net output price increase) 0.000 0.000 0.000 0.000 0.000 0.000
Offset from revenue (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
Offset from another funding source
(eg. Commonwealth funding, CSF,
trust account) ‐ please specify
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
Net Impact on output appropriation 0.000 0.000 0.000 0.000 0.000 0.000
B.4 Revenue
Revenue increase/decrease
2012‐13
$m
2013‐14
$m
2014‐15
$m
2015‐16
$m
2016‐17
$m
Ongoing
$m
Revenue initiative 1 0.000 0.000 0.000 0.000 0.000 0.000
Revenue initiative 2 0.000 0.000 0.000 0.000 0.000 0.000
Less revenue already in
budget/forward estimates
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
Net revenue impact 0.000 0.000 0.000 0.000 0.000 0.000
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Department Title
Appendix C: Sign‐off checklist
Investment title:
Agency:
Y/N
Is the need clearly established (e.g. investment concept brief)?
Are the links to government policy(ies) and contributions explicit?
Is there a clear statement of the service benefits and project scope and are future
implications noted?
Are cost estimates provided for capital and operational phases?
Have cost and risk estimators signed off on the adequacy of their work?
Is the project budget including the base cost estimate, risk assessment, base risk
allocation and contingency adequate?
Do cost and benefit estimates and analyses show value for money?
Are the project deliverables clearly stated?
Is a benefit management or evaluation plan included?
Are risk management processes in place and assumptions stated?
Does the proposal assess the project schedule and readiness (including market appetite)?
Are governance structures identified?
Are stakeholder interfaces detailed?
Are regulatory requirements identified?
Is the project High Value/High Risk?
Have Gateway reviews been undertaken? Gate 1
Gate 2
This model checklist is designed for the project proponent’s endorsement.
Prepared by: ……………………………………………..…… Date: …………………
Approved by: ……………………………………………..…… Date: …………………
……………………………………………... …………………………………………………….
(name of approving officer or delegate) (title)
Secretary: ……………………………………………..…… Date: …………………