Step 2 - FUNDING APPROVAL

A decision has been made to procure the property or accommodation. The procurement process starts with defining the project scope. A preliminary procurement strategy is formulated and preliminary risk, stakeholder and change management plans developed.

The investment decision needs to be justified. Depending on the value of procurement, a business case is developed with the relevant information such as the project scope, economic appraisal, financial impact statement and potential suppliers. The business case includes an assessment of the various procurement options and a cost benefit analysis to identify the optimal strategy for funding approval.

• Key Documents
• TC08-7 Revised Project Size/Risk Thresholds for the Submission of Business Cases and Gateway Reviews
• M2008-06 State Property Authority and Government Property Principles
• Key Guidelines
• TPP08-5 Guidelines for Capital Business Cases

Define project scope and objectives

A clear definition of the project is developed. This includes a concise statement of the purpose and scope of the proposed project, along with objectives, resource requirements, proposed timeframes and milestones.

Develop preliminary procurement strategy

The procurement and management of office accommodation is a specialized activity and not the core business of most agencies. In recognition of this, agencies who want to procure generic assets (offices, car parks, warehouses and depots) will have their procurement managed by the State Property Authority.

Develop preliminary risk, stakeholder and change management plans

Stakeholder and change management plans are developed to use throughout the life of the project to drive stakeholder buy-in to the project and maintain support. Managing stakeholder demands from the beginning of a project will help to keep it on time and budget.

Every project requires a risk assessment and management plan. This addresses the consequences of the project failing on service delivery, stakeholder considerations, financial implications, and wider business and government context. Plans to monitor and manage identified risks are developed and updated during the project.

Develop business case and funding request

Irrespective of the source of funding for the project, eg internal or State Budget, the investment decision needs to be justified. If funding is required through the State Budget, a detailed business case is required. As part of developing a business case, a number of key activities need to be performed:

• cost benefit assessment of options
• a Gateway Business Case Review, if the estimated cost of the project is $10 million or above, or the project is assessed as high risk using the Gateway Project Profile Assessment Tool
• market assessment that evaluates economic, social and environmental impact of the purchase and assesses the supply market segment.

The business case/ investment justification and funding approval request must then be submitted for approval.