Term | Meaning |
|---|---|
ACT Wellbeing Framework | The framework established by Government that comprises 12 ‘domains of wellbeing’ that reflect the key factors affecting the overall quality of life for Canberrans. Refer to the Strategic and Policy Alignment Guidelines or the ACT Wellbeing Framework website for further information. |
Alliance | See ‘Pure Alliance’ or ‘Competitive Alliance’. |
appraisal
| A considered ‘before the fact’ assessment of a project, Program or Precinct. The process involves defining objectives, examining options, and weighing up costs and benefits. |
appraisal period | The period of time over which costs and benefits associated with a project, Program or Precinct should be measured. Refer to the detailed Economic Appraisal Guidelines for further information. |
Australian Government Building and Construction WHS Accreditation Scheme | The Australian Government Building and Construction WHS Accreditation Scheme requires agencies to ensure that only builders who are accredited under the scheme can enter into contracts for building work either funded directly or indirectly by Australian Government agencies. Refer to the Office of the Federal Safety Commissioner website for further information. |
Australian Industry Participation Plan | A national plan to ensure full, fair and reasonable opportunity for Australian industry to compete for work. Refer to the Australian Industry Participation Plan for further information. |
Availability PPP | A PPP project where Government pays PPP Co for the availability of the infrastructure asset and the performance of related services. Refer to the Guidelines on Delivery Model Analysis for further information. |
Base Case | A statement of the realistic activities that would be required if the project, Program or Precinct is not undertaken. The Base Case is a ‘do minimum’ case where only minimal expenditure is used to sustain existing levels of service delivery, the current state of operation or to achieve Government’s previously determined service standards. The Base Case is not a ‘do nothing’ case; rather, it is the minimum essential expenditure option. Refer to the Options Analysis section of the Business Case Guidelines and the detailed Economic Appraisal Guidelines for further information. |
base year | A particular year chosen to express the real dollar values without inflation in a consistent way through discounting. Refer to the detailed Economic Appraisal Guidelines for further information. |
benefit | The measurable and advantageous change resulting from an outcome that one or more stakeholders experience. The term ‘benefit’ covers both advantageous changes that can be measured in monetary terms and those advantageous changes that are real but that cannot be expressed in monetary terms. Benefits that cannot be expressed in monetary terms may include social and environmental benefits. It is the value that an investment is expected to provide to an organisation, government or customers. The positive consequence of addressing an identified problem. Benefits should be supported by measurable key performance indicators (KPIs) where possible. Refer to the ILM and ILW Guidelines, the Needs Analysis section of the Business Case Guidelines, the detailed Economic Appraisal Guidelines and the Guidelines for developing a BRP for further information. |
Benefit to Cost Ratio (BCR) | The ratio of the expected present value of net benefits to the present value of net costs. Refer to the detailed Economic Appraisal Guidelines for further information. |
Benefits Manager | The Agency or individual with overall responsibility for ensuring that the project meets its objectives and delivers the projected benefits. Refer to the Guidelines for developing a BRP for further information. |
Benefit Owner | The Agency or individual responsible for a specific benefit, its tracking and realisation. Refer to the Guidelines for developing a BRP for further information. |
Benefits Realisation Plan (BRP) | A plan to assess the benefits identified in the ILM or subsequently against those realised. It involves defining the benefits to be realised, assigning ownership and responsibility for each benefit and management and monitoring of the benefits. Refer to the Guidelines for developing a BRP for further information. |
Benefits Register | A register kept to monitor the benefits and costs that are expected to be realised from the successful implementation of a project, Program or Precinct. Refer to the Guidelines for developing a BRP for further information. |
Building Code 2016 | The Code for the Tendering and Performance of Building Work 2016 is established under the Building and Construction (Improving Productivity) Act 2016 and sets out the Australian Government’s expected standards for companies that wish to undertake Commonwealth-funded building work. Refer to the Australian Building and Construction Commission website for further information. |
Business Case | The document that articulates the rationale for undertaking an investment. It is a documented proposal to meet a clearly established service requirement. It considers alternative solutions, and identifies assumptions, benefits, costs and risks. The development of the Business Case is based on a clear statement of the problem and benefits from addressing that problem. |
Business Case for Project Development Funding | The document that articulates the rationale for requesting funding for the front-end planning and due diligence work required to progress a project through the Capital Framework. It outlines the key project characteristics, reasoning behind the funding request and information on how the project will be developed. Refer to the Business Case for Project Development template for further information. |
Cabinet | Cabinet is the ultimate decision-making body of Ministers of Government. Refer to the Project Governance Guidelines for further information. |
capital expenditure (Capex) | Capital expenditure involved in creating or upgrading assets, including costs associated with planning, procurement and delivery. |
cashflow | Capital expenditures, operating expenditures, one-off costs, revenues and any release of capital involved in a project over time. Although it is important to evaluate the level and timing of the upfront capital costs, often the operating and maintenance costs over the project, Program or Precinct’s life have an equally large financial impact. Also called ‘profile of costs’. Refer to the Financial Analysis section of the Business Case Guidelines for further information. |
Competitive Alliance | Like a Pure Alliance, but the Target Outturn Cost (TOC) forms part of the selection process. Refer to the Guidelines on Delivery Model Analysis for further information. |
Consequence | The cost, quality, or timing impact if a risk event is realised. Refer to the Guidelines for undertaking Risk Analysis for further information. |
Construction Management (CM) | A delivery model whereby Government contracts a Construction Manager to manage and coordinate the construction works as its agent. Government prepares the scope and engages the designer and construction contractor directly, with the Construction Manager acting as the agent. Refer to the Guidelines on Delivery Model Analysis for further information. |
contingency | Costs that may occur, based on past experience, but with some risk and uncertainty regarding their amount. Contingency allowances provide a statistical confidence level for an estimate. Contingency allowances are applied to both the total estimated project capital cost and the whole-of-life cost estimates. Refer to the Guidelines for undertaking Risk Analysis and the Financial Analysis section of the Business Case Guidelines for further information. |
Controls | Measures that manage and/or modify the Likelihood of a risk event occurring. (Footnote: As defined by the ACT Government, Risk Management Policy 2019, 2019.) Refer to the Guidelines for undertaking Risk Analysis for further information. |
cost | The measure of what has to be given up in order to obtain something. While frequently the same thing, the financial cost of a good is conceptually distinct from its opportunity cost. The opportunity cost is the value of the best alternatives or other opportunities which have to be forgone in obtaining an item or achieving an objective. See ‘opportunity cost’, ‘economic cost’ and ‘social cost’. |
Cost Benefit Analysis (CBA) | A method of economic evaluation for projects, Programs or Precincts that is used to determine whether an option is beneficial relative to the Base Case. A CBA converts the costs and benefits into dollar terms, allowing them to be weighed up against each other. It differs from a financial appraisal or evaluation as it considers all gains (benefits) and losses (costs), regardless of to whom they accrue. Refer to the detailed Economic Appraisal Guidelines for further information. |
delivery model analysis | The analysis undertaken to determine the optimal delivery / procurement model for the project. Refer to the Guidelines on Delivery Model Analysis for further information. |
Delivery Partner (DP) | A delivery model where Government engages a Delivery Partner to assist in project planning, programming, design management and construction management, typically for a program of projects, in return for a management fee. Generally, Government precludes the Delivery Partner from performing design and construction work for projects, requiring it to tender them competitively and engaging the contractors directly. The DP model may have an incentive or gain-share, pain-share structure based on target costs and completion dates, and on quality measures. Refer to the Guidelines on Delivery Model Analysis for further information. |
depreciation | Reduction in the value of an asset, generally from wear and tear, over time. |
Design & Construct (D&C) | A delivery model where Government procures consultancy services for an integrated design and construction outcome. Procurement generally takes place based on a Concept Design or Preliminary Sketch Plans and fully documented functional, technical and performance requirements. It has a fixed price and timetable. Under a two-phase D&C model (used more for smaller projects), scope, time and budget must meet Government’s requirements at the end of the design phase before entering the construction phase. Refer to the Guidelines on Delivery Model Analysis for further information. |
Design then Construct (D then C) | A delivery model where Government procures a design consultant to prepare the design to a construction-ready standard (generally Final Sketch Plans or Final Design). This design then is the basis for the construction tender, generally on a fixed-price basis. Also called ‘Construct Only’. Refer to the Guidelines on Delivery Model Analysis for further information. |
Design Construct Finance Maintain (DCFM) | A form of Availability PPP. A delivery model that involves Design and Construction with private finance and a bundling of maintenance and support (non-core) services usually for a period of between 25 and 40 years. Refer to the Guidelines on Delivery Model Analysis for further information. |
Design Construct Finance Operate Maintain (DCFOM) | A form of Availability PPP. A delivery model that involves Design and Construction with private finance and a bundling of operations (core services) and maintenance usually for a period of between 25 and 40 years. Refer to the Guidelines on Delivery Model Analysis for further information. |
Design Construct Maintain (DCM) | See ‘Design Construct Maintain – Long-term’ and ‘Design Construct Maintain – Short-term’. Refer to the Guidelines on Delivery Model Analysis for further information. |
Design Construct Maintain (DCM LT) – Long-term | A delivery model that involves a Design & Construct contract plus a long-term facilities management and maintenance obligation. This model is like the short-term DCM but with a longer-term maintenance obligation of at least 10 years’ duration, and abatements for performance failures. Can be either two separate contracts with related parties or a single DCM contract with a special purpose vehicle (SPV) that contracts separately for the D&C and the facilities management (FM) components. Refer to the Guidelines on Delivery Model Analysis for further information. |
Design Construct Maintain (DCM ST) – Short-term | A delivery model that includes a Design & Construct contract and typically a separate contract for routine, reactive and preventative maintenance. It includes two contracts either with the same party or related parties with an interface agreement between them. The maintenance contract typically is up to five (and no more than 10) years’ duration. This contract is likely to exclude unplanned asset replacement or refurbishment. The contractor will receive predetermined monthly or quarterly maintenance payments, subject to indexation and possibly abatement for performance failures. Refer to the Guidelines on Delivery Model Analysis for further information. |
Design Construct Maintain Operate (DCMO) | A delivery model that involves Design and Construction with a bundling of maintenance and operations, of at least 10 years’ duration and typically 20 years’ or more. Generally, involves a single contract between a special purpose vehicle and the ACT. Refer to the Guidelines on Delivery Model Analysis for further information. |
deterministic risk methodology | A method of estimating contingency as a predetermined percentage of the base estimate. Refer to the Guidelines for undertaking Risk Analysis for further information. |
Discount rate | The rate at which future cost and benefit streams should be discounted to a present value to reflect the time preference for money. Refer to the detailed Economic Appraisal Guidelines for further information. |
discounted cashflow | The technique of discounting expenditures and revenues of a project, Program or Precinct over time to their present values. |
discounting | Process of applying a rate of interest or a time value of money (expressed as a percentage rate) to a monetary sum. Used to find the present value of sums receivable or payable in the future; also of sums received or paid in the past. Refer to the detailed Economic Appraisal Guidelines for further information. |
distributional analysis | A qualitative analysis of the relative impacts of the project, Program or Precinct’s costs and benefits on different groups in the community. Refer to the detailed Economic Appraisal Guidelines for further information. |
Document & Construct | A delivery model where Government engages a design consultant to prepare the design to a Final Sketch Plans stage and obtains Development Approval and then procures a contractor to complete and document this design and to undertake construction, generally on a fixed-price basis. The Contractor is responsible for and assumes the risk for the final design and constructability. Refer to the Guidelines on Delivery Model Analysis for further information. |
double-counting | The analytical error of misidentifying costs or benefits so that they are counted twice instead of once only. |
Early Contractor Involvement (ECI) | A delivery model where Government develops a functional design brief, which informs a Concept Design and a pre-tender estimate for construction. Tenderers bid fixed price to develop detailed design, and target price (with fixed prelims, margin and overheads) for construction. The Contractor then develops design and finalises fixed construction price. Government either accepts this price or tenders a Construct-only contract. Often used for enabling works for a major project. Refer to the Guidelines on Delivery Model Analysis for further information. |
Early Presentation of Project (EPP) | An informal presentation to MPC, FABG and ICA to present the outputs of initial activities and seek guidance to support the project, Program or Precinct’s development. Refer to the Guidelines on undertaking an EPP for further information. |
Economic Appraisal | A systematic means of identifying and measuring the economic, social and environmental costs and benefits of a project, Program or Precinct and presenting them in monetary terms. It justifies and provides evidence for the need for investment. The key tool used to conduct this analysis is a Cost Benefit Analysis (CBA). Additionally, a Multi-Criteria Analysis (MCA) should be used alongside the CBA to consider the economic benefits and costs that are unable to be expressed in monetary terms. The Economic Appraisal considers costs and benefits not just to Government, but to the ACT community as a whole. It shows:
Refer to the detailed Economic Appraisal Guidelines for further information. |
economic cost | Opposite of ‘benefits’. Disadvantageous changes resulting from an outcome that one or more stakeholders experience. These Guidelines use the term ‘economic costs’ to cover social costs, environmental costs and other costs that are not monetary. See ‘cost’. Refer to the Guidelines for developing a BRP for further information. |
Economic Impact Assessment | A method of estimating the impact that Government investment in a project, Program or Precinct is expected to have on the economy in a selected geographical area. Refer to the Guidelines on Economic Impact Assessments for further information. |
economic output | The level of overall economic activity supported by a project, estimated through the total transaction for goods and services. |
escalation | Escalation is the increase in the price of goods or services over time due to a combination of inflation, supply, demand and other external effects. |
evaluation | A considered assessment of a project. Whereas an ‘appraisal’ is invariably ‘before the fact’ (ex ante), an evaluation may take place ‘after the fact’ (ex post), or while an activity is in progress. |
Executive Steering Committee (ESC) | The highest level of governance for a project that has not been designated as a Major Project, Program or Precinct, excluding the approvers (Cabinet). Refer to the Project Governance Guidelines for further information. |
facilities management | The maintenance of an organisation’s facilities (such as building and equipment). This may apply to an individual project, Program or Precinct. |
financial analysis | A method used to evaluate the financial viability of a proposed project, Program or Precinct. It assesses the affordability of the project option(s) and the extent to which it will generate revenues sufficient to meet its financial obligations as measured by the Net Present Value (NPV) of its cashflows. All revenues resulting from and expenditures incurred under the project and across the whole of Government are taken into account. Financial analysis is required for the evaluation of integrated delivery models to inform the value for money assessment of the proposed delivery model. See ‘integrated delivery model’. Refer to the Financial Analysis section of the Business Case Guidelines for further information. |
Flexible or Relationship delivery models | A group of delivery models that are suitable for projects where the private sector cannot bear full price risk, and/or where the project scope is incomplete at contract signature. Refer to the Guidelines on Delivery Model Analysis for further information. |
float | Flexibility included in the project timetable to deal with unforeseen issues that could arise for a broad range of reasons. |
Functional Design Brief | The document that sets the project’s objectives and outcomes, it’s scope of works and scope of services and supports the Business Case in demonstrating the project’s readiness to progress to Stage 3 – Procure. Refer to the Functional Design Brief Guidelines for further information. |
Government | The ACT Government. |
Guidelines | These Guidelines for the Capital Framework. |
Hazard | Future events that may affect the project and result in different outcomes than predicted. These outcomes are often expressed in terms of cost, time, and quality. Hazards can be categorised into risks and uncertainties. Refer to the Guidelines for undertaking Risk Analysis for more information. |
Impact | The expected magnitude of the risk event on the cost, time and/or quality of service derived from its Likelihood and Consequence. Refer to the Guidelines for undertaking Risk Analysis for more information. |
Indigenous Participation Plan | A plan to support the objectives of the ACT Aboriginal and Torres Strait Islander Agreement 2019-2028 focussed on employment and economic participation for Aboriginal and Torres Strait Islander peoples in the ACT. Refer to the Aboriginal and Torres Strait Islander Procurement Policy for further information. |
inflation | A sustained rise in the general price level. The proportionate rate of increase in the general price level per unit of time. Refer to the Financial Analysis Guidelines for further information. |
Infrastructure Investment Lifecycle | The six-stage lifecycle of an investment from planning through to benefits measurement and Post Implementation Review. The six stages are Stage 0 – Plan, Stage 1 – Develop, Stage 2 – Prove, Stage 3 – Procure, Stage 4 – Implement and Stage 5 – Measure. Refer to the overview Guidelines for further information. |
inherent risk | The level of risk with the current controls in place and implemented. |
Input-Output (I-O) modelling | A quantitative form of economic analysis that models the effect of a policy or investment on the economy of a certain geographic area based on the existing interdependencies between industries. The analysis allows the flow-on economic impacts from a direct change to the local economy to be estimated in terms of changes in economic output and employment. This form of analysis does not consider substitution impacts, or what would happen if the relevant industry ceased to exist. Refer to the Guidelines on Economic Impact Assessment for further information. |
Integrated delivery model | A group of delivery models that are suitable for complex projects and involve bundling of services including facilities management (FM) and a greater degree of private sector involvement. Refer to the Guidelines on Delivery Model Analysis for further information. |
investment | Commitment of the resources of an organisation with the expectation of receiving a benefit. |
Investment Logic Map (ILM) | A one-page document that depicts the need for an investment. It documents the logic that underpins an investment. This includes the definition of the problems and needs and the identification of strategic and project options. Refer to the ILM and ILW Guidelines for further information. |
Investment Logic Workshop (ILW) | A highly focussed session led by an accredited facilitator to create an ILM. Refer to the ILM and ILW Guidelines for further information. |
Key Performance Indicator (KPI) | An indicator that, with its associated measures and targets, will provide evidence that expected benefits have been delivered. KPIs should be SMART. Refer to the ILM and ILW Guidelines and the Guidelines for developing a BRP for further information. |
lifecycle costs | A project’s replacement and refurbishment, capital maintenance and asset management costs for the life of the asset. |
Likelihood | The chance (or probability) of the Consequences of a risk event occurring. (Footnote: As defined by the AS ISO 31000:2018, Risk management – Guidelines, 2018. ) Refer to the Guidelines for undertaking Risk Analysis for further information. |
Local Industry Participation Plan | A plan which applies to all approaches to market in the ACT to ensure the ACT consider local capability and economic benefits for Canberra when determining the best available procurement outcome. Refer to the Local Industry Participation Plan for further information. |
Managing Contractor (MC) | A delivery model in which Government appoints a Managing Contractor, typically early in the delivery process to manage the scope definition, design documentation and construction. The MC engages subcontractors to deliver the works. The MC is responsible for administering these subcontracts and normally accepts some delivery risk. The managing contract typically has a fixed management fee (often a percentage of subcontract values) plus reimbursement of subcontractor costs. Often, there is a performance incentive for delivery within the timetable and budget. Refer to the Guidelines on Delivery Model Analysis for further information. |
material changes | A significant or important change that will result in a consequential impact. |
Mitigation strategies | Measures that manage and/or modify the Consequence should a risk event occur. (Footnote: As defined by the AS ISO 31000:2018, Risk management – Guidelines, 2018. ) Refer to the Guidelines for undertaking Risk Analysis for further information. |
Multi-Criteria Analysis (MCA) | A decision-making tool that involves a ‘non-monetary’ valuation that enables decision makers to overcome difficulties in handling large amounts of complex information in a consistent way. It establishes preferences between options by ranking each option against a set of agreed evaluation criteria and their established relative importance. Refer to the Multi-Criteria Analysis Guidelines for further information. |
needs analysis | An analysis of the reason a new investment needs to be considered, the problems to be addressed, potential opportunities and benefits to be realised. Refer to the Needs Analysis section of the Business Case Guidelines for further information. |
Net Present Value (NPV) | The present value of a project’s revenues (i.e. positive cashflows) minus the present value of a project’s initial capital costs and future operating and maintenance costs (i.e. negative cashflows). Refer to the Financial Analysis section of the Business Case Guidelines and the detailed Economic Appraisal Guidelines for further information. |
nominal costs | Real costs that have been adjusted for expected escalation over time. They represent a future value expressed in a certain time period (for example, financial year 2021). Future nominal cost estimates are expected real costs, increased by expected inflation. See ‘escalation’. Refer to the Financial Analysis section of the Business Case Guidelines for further information. |
operating expenditure (Opex) | Operating expenditure, including ongoing operations, staffing and maintenance costs and costs associated with periodic repair or upgrade work required. |
opportunity | A reason to consider an investment. See ‘problem’. Refer to the ILM and ILW Guidelines and the Needs Analysis section of the Business Case Guidelines for further information. |
opportunity cost | As capital is limited, the expense of not undertaking an alternative investment. See ‘cost’. |
options analysis | A structured, objective and evidence-based process in which a range of options (both capital and non-capital) are evaluated against a set of relevant criteria to determine the recommended option(s) that maximise the public value to the ACT community. Refer to the Options Analysis section of the Business Case Guidelines for further information. |
P-value | A level of confidence in which the actual costs will be less than or equal to the estimated cost, reflecting an additional contingency on the project’s costs. For example:
Refer to the Guidelines for undertaking Risk Analysis for further information. |
Post Implementation Review (PIR) | A report to evaluate whether the project outcomes set out in the approved Business Case have been achieved and what lessons can be learnt to inform future project delivery. Refer to the Guidelines on undertaking a PIR for further information. |
PIR Advisor | An advisor who helps to conduct the PIR process and complete the PIR Report. Refer to the Guidelines on undertaking a PIR for further information. |
PIR Coordinator | An individual who helps to coordinate and organise the PIR (or lessons learnt workshop for Tier 3 projects). Refer to the Guidelines on undertaking a PIR for further information. |
PIR Steering Committee | The Project Board or Executive Steering Committee. Refer to the Guidelines on undertaking a PIR for further information. |
Precinct | A discrete set of geographically interrelated projects and associated expenditures and revenues. A Precinct includes several individual projects which are located in close geographic proximity. These projects combine to realise an ultimate outcome that cannot be achieved by an individual project alone. |
present value costs and revenues | Represent the value on a specified date of a future cashflow calculated using a discount rate. The concept of the time value of money is that money today is worth more to individuals and the Government than the same amount of money in the future. Also called ‘discounted costs and revenues’. |
problem | The reason to consider an investment. It is supported by evidence and includes both the cause and effect. A lost opportunity is also considered to be a problem. Refer to the ILM and ILW Guidelines and the Needs Analysis chapter of the Business Case Guidelines for further information. |
Program | A discrete set of interrelated projects and associated expenditure and revenues. A Program includes several individual projects which have a strong relationship to each other and are staged in a coordinated manner over time. These projects are often procured separately and combine to realise an ultimate outcome that cannot be achieved by an individual project alone. |
project | A discrete one-off set of activities proposed to be undertaken to achieve a specific objective and outcome, together with associated expenditure and revenues. |
Project Board | The governance board that provides advice on the project to Government and the Project Director. Project Boards are only established for designated Major Projects and include an independent Chair and other independent Board members, to provide objective input and an additional level of oversight and scrutiny to decision making and assurance. It often comprises senior representatives from relevant Agencies. Refer to the Project Governance Guidelines for further information. |
Project Concept Brief | A document outlining the key features of a proposed project, the need it seeks to address, its scope and alignment with other policies and, at a high level, information about its costs and benefits, delivery model, governance structure and timeline. |
Project Control Group (PCG) | |
Project Director
| The person with lead responsibility for the project and who leads the Project Team. The Project Director has overall responsibility for the day-to-day management of the project, Program or Precinct in accordance with the Government’s requirements and management of all members of the Project Team. The individual filling the Project Director role is likely to change over time as the project progresses through various stages of the Infrastructure Investment Lifecycle. The Project Director is likely to come from the Sponsoring Agency during Stage 1 – Develop and Stage 2 – Prove, from MPC during Stage 3 – Procure and Stage 4 – Implement, and from the Sponsoring Agency again in Stage 5 – Measure. Key roles and responsibilities of the Project Director are shown below:
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Project Governance | The process to direct, manage and oversee the project, Program or Precinct’s delivery and provide ongoing implementation to ensure it achieves its vision, objectives and outcomes and is delivered successfully. It should also mitigate and control project risk, provide clear frameworks for decision making and assign roles and responsibilities. Refer to the Project Governance Guidelines for further information. |
Project Management Agreement (PMA) | A flexible delivery model that can provide client-side services ranging from full design and construct to construct only. Current arrangements involve the sourcing of a Project Manager (PM) from a Panel under a Work Order. The PM receives some fixed payments for its on-site reimbursable labour costs and an agreed percentage fee for off-site overheads and profit. The PM is the principal contractor and engages and manages subcontractors, suppliers and consultants. Refer to the Guidelines on Delivery Model Analysis for further information. |
project option | The possible ways in which a proposed strategic solution can be implemented. Refer to the Options Analysis section of the Business Case Guidelines for further information. |
Project Timeline | A high-level timeframe that outlines the project milestones, task dependencies, task duration, key decision points and the critical path of project tasks. |
Project Review Committee (PRC) | The governance committee that reviews and approves or, for material matters, endorses, in-scope changes to the risk categorisation and risk expenditure within the project’s contingency allowance. The RCMC or PCG may be used instead of the PRC, with the same roles and responsibilities. Refer to the detailed Project Governance Guidelines for further information. |
project scope | The scope of works and the scope of services that are required for the project. |
Project Sponsor | The Director-General or head of the Sponsoring Agency (the Agency that has responsibility for the project asset once delivered), or their nominee who is in charge of overseeing the delivery of the project, Program or Precinct. |
Project Team
| The group of officers that is responsible for assisting the Project Director to deliver the project, Program or Precinct. The Project Team is likely to consist of officers from the Sponsoring Agency, ICA and/or MPC and other Government stakeholders; and possibly external consultants. The composition of the Project Team is likely to evolve over time as the project progresses through the various stages of the Infrastructure Investment Lifecycle. The Sponsoring Agency is likely to provide most members of the Project Team during Stage 1 – Develop and Stage 2 – Prove. During Stage 3 – Procure and Stage 4 – Implement, the balance will move towards MPC. The Sponsoring Agency again is likely to provide most members of the Project Team during Stage 5 – Measure. For Tier 1 projects, the Project Team is likely to be supported by specialist external advisors, such as those with specialist knowledge in legal, financial, technical, planning and communications fields. For Tier 2 and Tier 3 projects, the Project Team may be supported by specialist external advisors if required. Refer to the Advisor Engagement Plan Guidelines for further information on the full range of advisors that the Project Team may require. |
Public Private Partnership (PPP) | See ‘Availability PPP’ and ‘User Charge PPP’. |
PPP Contract | A commercially binding long-term contract between the ACT and a private sector entity to deliver infrastructure and services under a PPP arrangement. |
Public Sector Comparator (PSC) | An estimate of the NPV cost to Government if the public sector were to procure and deliver the project under a traditional delivery model. It contains a forecast of the hypothetical, risk-adjusted whole-of-life costs for a government-delivered ‘reference project’ based on the infrastructure and service specifications provided to bidders during a PPP or DCMO tendering process. Used to evaluate project delivery under an Integrated delivery model compared to traditional procurement. Refer to Guidelines on PPPs for further information. |
Pure Alliance | A delivery model where Government enters into an Alliance with one or more Non-Owner Participants (NOPs), selected on qualitative criteria. The basis of an Alliance is a ‘no fault, no blame’ culture. The parties work together to determine the best for project solution and to deliver the project. The NOPs develop a Target Outturn Cost (TOC) under an Alliance Development Agreement and then the parties share both upside and downside of the actual cost against the TOC, on an open book basis. Competitive Alliances are now preferred over Pure Alliances. Refer to the Guidelines on Delivery Model Analysis for further information. |
real costs | Costs expressed in terms of a base period (e.g. $X in 2020-21 prices) and do not take into account the effects of inflation over time. Real costs are generally used to analyse trends and movements in cashflows over time exclusive of the effects of inflation. |
residual risk | The level of risk that remains with further controls such as mitigating strategies and treatments in place. Refer to the Guidelines for undertaking Risk Analysis for further information. |
residual value | The value of an asset to the owner at the end of a predefined period such as a term contract duration or economic appraisal period. |
revenue | Inflows or other enhancements, or savings in outflows, of service potential or future economic benefits in the form of increases in assets or reductions in liabilities of the entity (other than those relating to contributions by owners) that result in an increase in equity during the reporting period. |
risk
| See ‘risk event’. Refer to the Guidelines for undertaking Risk Analysis for further information. |
risk allocation
| The allocation of responsibility for dealing with the Consequences of each risk through retention of the risk by Government, its allocation to the private sector or a sharing between the two. Refer to the Guidelines for undertaking Risk Analysis for further information. |
risk analysis | A process to identify the risks and uncertainties that could occur during a project, Program or Precinct’s life and potential control and mitigation strategies, assess their Likelihood and Consequences, develop appropriate contingencies, allocate the risks appropriately and monitor them on an ongoing basis. Refer to the Guidelines for undertaking Risk Analysis for further information. |
Risk and Change Management Committee (RCMC) | |
risk event | Hazards that have probabilities of occurrence that are predictable and outcomes that can be estimated with some confidence. (Footnote: As defined by Infrastructure Australia, Assessment Framework - Guide to risk and uncertainty analysis, 2021. ) Risk events are events (or circumstances) that result in a variation (either positive or negative) from the expected outcome, the consequence of which could affect the project in achieving its objectives, at least in part. Risk is usually expressed in terms of risk sources, resulting risk events, their Consequences and the Likelihoods of these Consequences occurring and impacting on cost, time and quality outcomes. Refer to the Guidelines for undertaking Risk Analysis for further information. |
risk management plan | A document which outlines the Project Team’s risk management process and approach to handling risk work. |
risk owner | A person or entity that has been given the authority to manage a particular risk and is accountable for doing so. |
Risk Register | Documents the output of the entire risk analysis process. This is a live document that is updated and refined on an ongoing basis over the course of a project, Program or Precinct’s lifecycle. Refer to the Guidelines for undertaking Risk Analysis for further information. |
risk source | An element which alone or in combination has the potential to give rise to a risk event. (Footnote: As defined by the AS ISO 31000:2018, Risk management – Guidelines, 2018. ) Refer to the Guidelines for undertaking Risk Analysis for further information. |
Safety in Design | A process which integrates hazard identification and risk analysis techniques early in the design process to eliminate or mitigate health and safety risks throughout a project’s lifecycle. |
sensitivity analysis | A technique used to assess how an outcome changes as a result of changing one (or more) underlying variable(s). It is used as a straightforward and rapid technique to gauge the robustness of estimates included in a Business Case, such as the NPV. Refer to the detailed Economic Appraisal Guidelines for further information. |
social cost | The measure of what society must give up in order to obtain something. See ‘cost’. Refer to the Guidelines on Economic Appraisals for further information. |
specialist advisors | An optional part of the Project Team. They may be internal or external to Government and provide specialist skills and experience to the Project Team. For more information, refer to the Advisor Management Plan Guidelines. |
Sponsoring Agency | Government body (Agency or Statutory body) that is responsible for delivering the project, Program or Precinct on behalf of Government. |
Stage 0 | The Plan stage of a project, which is out of scope of the Capital Framework. |
Stage 1 | The Develop stage of the Capital Framework. |
Stage 2 | The Prove stage of the Capital Framework. |
Stage 3 | The Procure stage of a project, which is outside the scope of the Capital Framework. |
Stage 4 | The Implement stage of a project, which is outside the scope of the Capital Framework. |
Stage 5 | The Measure stage of the Capital Framework. |
staging analysis | The consideration and analysis of the possible implementation and delivery of a project, Program or Precinct, broken into stages. Refer to the Options Analysis section of the Business Case Guidelines for further information. |
strategic and policy alignment | Alignment of the project, Program or Precinct with Government’s commitments, strategic policies and the broader vision and objectives of Government and Sponsoring Agency, plus national strategic policies, vision and objectives. This should influence the development of the project, Program or Precinct. Refer to the Strategic and Policy Alignment section of the Business Case Guidelines for further information. |
strategic response | The high-level strategic action that is proposed to address an identified problem and provide the identified benefits. Refer to the Guidelines for undertaking an ILM and ILW for further information. |
strategic solution | Broad solutions or approaches that can be used to solve problems and realise benefits. They are how a strategic response can be implemented. They may include non-capital solutions (such as organisational changes) or capital solutions (such as upgraded or new assets) to deliver the benefits or address the problem. Refer to the ILM and ILW Guidelines and the Options Analysis section of the Business Case Guidelines for further information. |
stochastic risk methodology | A method of calculating a contingency allowance using a probabilistic method based on the Likelihood and Consequence (cost and delay) of each risk. Refer to the Guidelines for undertaking Risk Analysis for further information. |
Target Outturn Cost (TOC) | The target cost estimate to deliver the project up until construction completion. |
Tier 1 | Projects with a capital value greater than $100m. Or, projects with a capital value greater than $25m that are considered high risk. |
Tier 2 | Projects with a capital value between $25m and $100m. Or, projects that have a capital value less than $25m that are considered high risk. |
Tier 3 | Projects with a capital value less than $25m that are considered medium or low risk. |
Tier assessment | An approach to identifying a proposed investment’s appropriate Tier based on the project’s risk and capital value. |
time preference for money | The current relative value of money now compared to in the future. The time preference of money is one of the reasons why costs and benefits are discounted when performing an Economic Appraisal. The time preference of money is due to current consumption being valued over future consumption. A dollar of marginal consumption (or benefit) today is generally preferred to a dollar of marginal consumption in the future. Refer to the detailed Economic Appraisal Guidelines for further information. |
Total estimated project capital cost | The total expected capital cost to complete the project, inclusive of an appropriate contingency allowance. Refer to the Financial Analysis section of the Business Case Guidelines for further information. |
Traditional delivery models | A group of delivery models that largely allocate construction price risk to the contractor but otherwise have low or medium levels of integration, particularly ongoing maintenance. Refer to the Guidelines on Delivery Model Analysis for further information. |
Treasury | The Treasury Stream within CMTEDD. |
uncertainty | Hazard events where probabilities of occurrence are difficult to predict, and outcomes are challenging to quantify. (Footnote: As defined by Infrastructure Australia, Assessment Framework - Guide to risk and uncertainty analysis, 2021. ) These uncertainties generally describe an event or change in conditions driven by external factors beyond the control of the Project Team, which are difficult to mitigate, however mitigation may be possible. Refer to the Guidelines for undertaking Risk Analysis for further information. |
User Charge PPP | A PPP where the private sector bears demand risk, generally through a strong and well-identified revenue stream from project users. Involves Design and Construction with a bundling of operations and maintenance, usually for a period of between 25 to 40 years. Involves private finance. The private sector has economic ownership of the asset over the contract duration and receives user charges, bearing revenue risk. Previously known as Build, Own, Operate, Transfer (BOOT PPP). Refer to the Guidelines on Delivery Model Analysis for further information. |
value for money | A balanced benefit measure assessed on a ‘whole-of-life’ or ‘total cost of ownership’ basis. The measure covers quality levels, performance standards, risk exposure, other policy effects and considerations such as social and environmental impacts as well as cost. |
Wellbeing Impact Assessment | An assessment of any investment requesting Government funding against the Wellbeing Framework. Refer to the Wellbeing Framework section of the Business Case Guidelines and the ACT Wellbeing Framework website for further information. |
Whole-of-life cost | The total expense of owning the project assets over their entire economic lives, from construction (or purchase) to decommissioning (or sale). For very long-life assets, this cost generally will cover a period of 25 – 50 years and must include all operating and maintenance costs required across the life of the asset. In addition, the residual asset value at the end of this period should also be included. Refer to the Financial Analysis section of the Business Case Guidelines for further information. |
Wider Economic Benefits (WEBs) | The impact of a project option in terms of changes to macroeconomic aggregates. Refer to the detailed Economic Appraisal Guidelines for further information. |
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