Advisor Engagement Plan

Purpose of this section of the Business Case

The purpose of this section is to identify the full range of advisors that the Project Team may require to progress the project through the Infrastructure Investment Lifecycle.

External advisors can offer a wider commercial perspective and greater experience in some areas than that available within Government. However, it is important that the Project Team considers the expertise available within Government before considering the use of external advisors. The Project Team should engage specialist advisors where their skills and experience are expected to add value to the project.

The section below discusses the types of specialist advisors and the circumstances in which the Project Team may consider their appointment.

The Project Team must answer the following key question in this section:

• What specialist advisor roles will be required to deliver the project? This includes both internal and external advisors.

Content required for the Business Case

Legal

Certain delivery models often involve complex contractual arrangements between Government and contracting counterparties (e.g. PPPs).⁠ (Footnote: For more information on a PPP delivery model, refer to the Guidelines for Public Private Partnerships.) For this reason, it is important that the Project Team considers the legal expertise it requires to deliver the project successfully. In the first instance, the Project Team should always obtain this advice from the ACT Government Solicitor (ACTGS). For large complex projects under sophisticated delivery models, the project may require bespoke contracts that may involve the use of external lawyers. If engaging external legal advisors, the Project Team must do so through ACTGS.

Legal advisors play a key role in developing the risk allocation matrix and the contract management structure, and in the preparation of project agreements. The advice of legal advisors – working in collaboration with other advisors – may be appropriate in several areas including:

• The procurement approach to be taken
• The structure of the transaction
• Contractual issues in relation to the request for expression of interest and request for binding bid documents
• The market sounding process
• Drafting of the Functional Design Brief
• Drafting and finalisation of project agreements
• How project agreements will achieve the allocation of risk and the commercial terms with the preferred proponent
• General issues as required such as taxation, property, planning and environmental law, competition law and intellectual property.

Financial, commercial and procurement

A financial and commercial advisor would typically provide the following services, although any individual project will not necessarily require all of them:

• Assistance with the preparation of the Business Case
• Assistance with developing the cost estimate
• Advice on the development of the Functional Design Brief
• Advice on carrying out Risk Analysis (including facilitation of risk workshops) and the identification, quantification and allocation of risk
• Market sounding
• Structuring and drafting the bid documentation to ensure good quality responses from the private sector
• Ensuring the payment structures offer the optimum balance of risk and reward.

In relation to procurement, the role of the financial and commercial advisor may include:

• Appraising commercial principles
• Assessing alternative delivery models
• Developing Expression of Interest (EOI) and Request for Proposal (RFP) documentation
• Running EOI and RFP evaluation processes
• Assisting in drafting commercial terms and parameters for contracts
• Providing ongoing commercial advice for contract management.

The use of a financial and commercial advisor is mandatory for projects using an Integrated delivery model. In these cases, the financial and commercial advisor should provide advice on procurement under the recommended delivery model, noting that ICA can provide at least initial advice on procurement and that the Project Team will need to involve ICA throughout the procurement and delivery of these more complex delivery models.

A PPP financial and commercial advisor should have direct experience with project financing and be able to explain the different risk and return expectations of different financial markets and instruments. In addition to the above services, a PPP financial and commercial advisor may also:

• Advise on the Public Sector Comparator (PSC) and likely level of the PPP Service Payment
• Provide advice on the financial evaluation of bids, including the deliverability of funding structures
• Review and check the accuracy of the bidders’ financial models
• Test the robustness of the bidders’ assumptions
• Provide financial advice and support during the period leading up to financial close.

Technical design and engineering

The Project Team is likely to require advice from technical design and engineering specialists. The skills required depend upon the nature of the project. Likely skills include design, construction, quantity surveying and engineering. Where projects involve specialist ICT or other specialist technology, technical consultants are likely to be necessary to assist with drafting appropriate performance specifications, evaluating the technical components of bids and auditing or inspecting systems during the testing and implementation phases.

For example, specific technical advice may be of particular use in the following areas:

• Assistance with defining an output specification for the physical asset and services to be provided under the proposed arrangement
• Technical assumptions that the Project Team will use in the PPP Business Case and PSC
• Assistance with drafting the request for expression of interest and request for binding bid documents
• Assistance with technical evaluation of bids, including capability of contractors
• Assistance with technical aspects of risk assessment
• Valuing assets that may be sold or transferred as part of a PPP proposal
• Technical aspects of facilities management, including the development of appropriate payment mechanisms and the monitoring and measuring of service delivery performance
• Mechanical, electrical, civil, structural, landscaping and other engineering advice required
• Undertaking peer reviews of design during the design process to ensure discrepancies and oversights are picked up and addressed early.

Probity

The Project Team may require the assistance of a probity advisor for projects that require careful management of probity issues, such as when making higher risk or complex decisions.

The role of the probity advisor is to ensure that the Project Team follows a fair, transparent, defensible and robust procurement process. This role involves ensuring that the Project Team develops an appropriate approach to probity and agrees and documents its probity processes prior to any procurement or evaluation processes taking place. The probity advisor should then ensure that the Project Team follows these probity processes carefully throughout the evaluation process and ongoing procurement and contractual discussions.

Stakeholder management and communication

The Project Team may require the assistance of a stakeholder management advisor for projects that have significant impacts on the public and/or affect large numbers of people or households, including urban or residential developments.

For more information on stakeholder engagement, refer to the Stakeholder Engagement Plan Guidelines.

Transactions management

The Project Team will require a Project Manager or Director for most projects to act as the single point of contact for the project. For large complex projects such as PPP, DCMO or Alliances, the Sponsoring Agency may need to engage an external Project Manager or Project Director.

Additionally, for these large complex projects, the Project Team may also require external advisors to support or act in other transactions management roles. For example, these roles may include managing data, running a data room or coordinating other advisors.

Environment and sustainability

The Project Team may require specialists in environment and sustainability. For example, the Project Team may seek the following advisors:

• An environmentally sustainable design (ESD) advisor
• Advisors with specialist knowledge of sustainability and environmental ratings to support the Project Team in obtaining the required ratings
• Environmental specialists for projects with high environmental impacts.

Other specialists

The Project Team may require advice from other specialists. For example, specialist advice may be of particular use in the following areas:

• Projects associated with historical heritage or Aboriginal and/or Torres Strait Islander cultural heritage sites
• Projects where social procurement is appropriate
• Alliance auditors for specific delivery models
• Projects with complex supply chains
• Projects with a focus on customers
• Projects involving innovative approaches or new methodologies or technologies
• Projects with significant climate change adaptation or mitigation implications
• Projects targeted to specific people groups
• Advice regarding gender equality and social inclusion.

Appendices required for the Business Case

None required.