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Estate Planning Branch Initial Business Case Guidance

Estate & Infrastructure Group

Initial Business Case Guidelines

Version 1.0, 7 May 2020

Document ecosystemo Approval cover sheet. To be generated by Defence and appended to the front of the document

submitted by the IBC drafter. Cover sheet must be capable of accepting digital signatures. Consideration could be given to moving to a fully-electronic workflow document management system, with associated eSignatures, to track passage and approval of document.

o Guidance documentation. Hyperlinks to all relevant documents (for example Department of Finance Resource Management Guide No. 500 ‘The Commonwealth Property Management Framework’) to be provided via comprehensive ‘Legislation, Policy and Guidance’ section on the Defence Estate Quality Management System (DEQMS). Consideration is given to necessary security protocols to permit external access to ‘Official Use Only’ documents, such as Department of Finance Estimates Memorandum 2017/55, ‘Defence Specific Costing Requirements for Projects in the Defence Integrated Investment Program’.

o IBC webpage. IBC is to be submitted as a suite of separate electronic documents to reduce overall size of core document and facilitate shifting of detail to annexes (developed specifically for the IBC, including site surveys) and supporting documents (developed for other purposes, for example, Estate Investment Requirement, Estate Base Plans, Estate Appraisals etc.). Hyperlinks to be provided to supporting documents where practical to do so. The IBC webpage should be established at the commencement of the IBC process and populated with relevant, historical reports held by E&IG to reduce the potential for rework by the IBC drafter.

Version 2 Correct as at: 5 March 2020 Page 1/19


Decision Maker Key Questions EPB

CFI

EE SDD

Services

Contestability

Spare

DFG

Force

IPMB

EEGIS

DOF

PM&

C

PROJECT INTRODUCTIONWhat is the purpose of the IBC document?What is the scope of the IBC?What was the approach taken to develop the IBC?BACKGROUNDWhat specific Defence capability or output (Business Need) does this project contribute to?What is the current funding line provided in the approved IIP (either facilities projects within the Estate and Infrastructure Program of the IIP or the facilities components of the IIP capability projects)?What are the other current and planned IIP projects that may impact upon this project, what are the potential impacts of these projects and what opportunities exist for project delivery synergies?What WOG issues, such as economic impact and social impact, have been considered?FACILITY AND INFRASTRUCTURE REQUIREMENTSWhat assumptions and constraints/limitations underpin the IBC?What are the specific requirements for each site or project element?What is the current state of the infrastructure?Are there any key development limitations imposed by current facilities?What is the requirements development pathway?FACILITY AND INFRASTRUCTURE OPTIONSWhat options are proposed for the Government to consider?Which is the preferred option (for sustainment IBCs only)?What are the relative advantages (benefits) and disadvantages (constraints, issues) of each option?What are the key risks and opportunities associated with each option?What are the high-level costs for each option?How does the delivery date for each option compare against capability material release or initial operating dates (capability IBCs only)?What are the detailed costs for each option (including indicative cash flow)?What is the Viability and Value for Money assessment for each option?RISK MANAGEMENTAre there any significant environment and heritage considerations?What are the environmental sustainability impacts?Are there any significant contamination considerations?What key risks (non-financial and technical) have been identified and what further assessment is recommended prior to the submission of the Detailed Business Case?Are there any acquisition (including industrial capacity) risks identified for the development phase or sustainment risks identified?PROJECT EXECUTION STRATEGYIs a Public Private Partnership (PPP) appropriate for the project?What is the recommended delivery model used as the basis to inform the indicative implementation schedule and cost estimate?Are any variations from standard approval strategy, project governance sustainment approach recommended?What is the indicative implementation schedule?

Decision Maker Key Questions [Internal use only]



Document format

Checked?o The document is to be prepared in Microsoft Word using a standard Microsoft

Office font rather than a web font.

o The document is to be unbranded and is not to have any editing or printing restrictions applied.

o The document will have a dissemination limiting marker of ‘For Official Use Only’ prominently displayed in both the header and footer of every page (including annexes). Use of a security classification (e.g. Secret) is to be agreed with Estate Planning Branch either prior to the commencement of the document drafting or at the soonest possible opportunity during document preparation.

o The footer of each page is to contain the following information: page ‘x’ of ‘y’, Version No. and associated date.

o The document is to contain a table of contents.

o The document is to contain a version control table.

General Guidance on use of graphics/tableso Explore ways to present summary information for each option on a single page using tables and

graphics.o Tables should be used when presenting information to ensure appropriate summarisation. o Use aerial photos/maps to illustrate specific areas being considered for development as well as

any site limitations.



Executive Summary

Guidelines to satisfy content needs for this section:

o The principal audience for the executive summary are Band 1 and above officials. o Key information presented throughout the main body of the report should be summarised

in the Executive Summary as a separate narrative; elements of the Executive Summary should not be copied and pasted from the main body of the text as this creates repetition and unnecessary length.

o .o Presentation of information in tabular/graphical format (such as the options analysis,

indicative cash flow etc.) should be considered to ensure appropriate summarisation. o The Executive Summary is to contain the business case’s recommendations.

Recommendations may relate to the following- which option, or options, should be further developed in the DBC (sustainment IBC)- the viable options (down-selection of options), addressing the risk profile and

associated operational impacts to the Capability Manager (capability IBC)- the associated project delivery budget- proposed acquisition strategy- whether further consideration of PPP is warranted- key risk reduction studies/activities to be completed prior to the finalisation of the

DBC.o Recommendations should be styled as either endorse (a decision is required), note (no

decision is required but relate to a key element of the IBC such as the amount of the early access provision required to proceed to Second Pass Government approval) or agree (ratification that a previous decision is still appropriate).

o Recommendations are not required for standard or prescribed Defence activities.

Recommended length

o The purpose of an executive summary is to provide a clear and succinct synopsis of the IBC. Thus, the Executive Summary should be no more than 2 pages in length, excluding recommendations.

Main Body Requirements

Project IntroductionKey questions to be answered: Complete?

o What is the purpose of the IBC document?

o What is the scope of the IBC?

o What was the approach taken to develop the IBC?


o The purpose of the IBC is to provide a compelling narrative to facilitate, in-principle, agreement to a project by the Government and to provide an early access provision to IIP funding to progress project development to Second Pass consideration.



o Suggested standard wording for the purpose statement is as follows:- The purpose of this Initial Business Case (IBC) is to progress [insert project’ (the

‘Project’) through Gate 1. (Sustainment IBCs).- The purpose of this Initial Business Case is to provide costed options at P50 cost

confidence to support [insert Project Name] Government First Pass considerations (Capability IBCs).

o The scope of the IBC should be tailored to align with the overall structure of the IBC.o Where there is an annex/supporting document provided, a reference should be included

within the main body. For example, a Glossary and Acronyms Annex, which is likely to be the first annex noted in the main body as it provides explanation for terms that may not be known by the lay person (usually relating to specific subject matter or are organisation-specific terms/acronyms).

o A high-level summary of the approach taken to develop the IBC is to be provided in the main document. An Approach Annex is to provide the sequencing (and associated timeline) and description of grouped activities undertaken with a focus on stakeholder engagement activities (including site visits and community engagement), in particular who was engaged, when and where they were engaged and what were the outcomes/concerns (and any associated follow-up actions) of the engagement? Furthermore, the approach annex should detail engagement with the broader governance structure for the project, for example the Project Steering Group (recommended to be established for all IBCs).

o The Approach Annex should also detail the findings of the Smart Buyer workshop and how these have been incorporated into the development of the business case.

o For capability IBCs, the Approach Annex should outline the approach to the requirements definition stage – i.e. whether an initial User Requirements Brief was developed/approved by key stakeholders – and the level it was informed by the capability project Joint Capability Needs Statement, Workforce Plans, Operational Concept Document(s), Basis of Provisioning etc.

o The Approach Annex should detail the conduct of risk activities undertaken to determine acquisition and sustainment risks in accordance with the Smart Buyer Framework. The modelling (for example Monte Carlo simulation techniques) to determine the P50 estimate for design and construction, and acquisition risks contingencies should also be detailed.

o The process to develop the longlist of options should be detailed in the Approach Annex as well as the process used to refine the longlist of options to a shortlist of options. For example, rapid cost-benefit analysis, cost-effectiveness analysis, multi-criteria analysis, using the Defence Estate Design and Use Principles and listing any options that have been ruled out (noting that the ‘Do Nothing’ option must be presented in the IBC).

Documents to be reviewed

o This should list Defence documentation relevant to the IBC and be agreed with the Project Manager. Documents to be considered might include Estate Base Plans, informing studies (climate change, regional Living-In Accommodation (LIA) reviews, capability project planning documents etc.), the Future Defence Estate Profile 2020-2040 and the strategic infrastructure plans of Groups and Services. Additionally, consideration must be given to relevant local and state government planning documents that might inform future impacts on the Defence estate. These could include proposed local developments that further urban encroachment or impact our energy supply, aircraft operations and airspace design, or proposed infrastructure and traffic corridors that require the divestment of Defence land to implement.

o



Stakeholders to be consulted

o This should include key base stakeholders such as Service Delivery Division representatives, the local Senior ADF Officer (SADFO) and relevant stakeholders in the documents referenced above. The local community may also need to be engaged

BackgroundKey questions to be answered: Complete?

o What specific Defence capability or output (Business Need) does this project contribute to?

o What is the current funding line provided in the approved IIP (either facilities projects within the Estate and Infrastructure Program of the IIP or the facilities components of the IIP capability projects)?

o What are the other current and planned IIP projects that may impact upon this project, what are the potential impacts of these projects and what opportunities exist for project delivery synergies?

o What WOG issues, such as economic impact and social impact, have been considered?


o For capability IBCs, the strategic context, key drivers and detailed business needs will be articulated separately (such as in the White Paper). A brief summary should be provided with reference to the supporting documentation (nothing that some documents may be classified) for those requiring additional detail.

o For sustainment IBCs, the linkages with Estate Base Plans and Area Masters Plans should be summarised and these documents appropriately ‘discoverable’ via the specific IBC webpage. Consideration should be given to the overall capability provided at the base level and how this project may impact upon this overall capability.

o For all IBCs, an overview should be provided (likely via a graphic) of the impacted Force Packages and the associated Joint Capability Effects. This information will be provided to the IBC drafter by Defence personnel.

o Details of the current funding contained in the IIP broadsheet, supplemented with additional detail contained within Defence’s Budgetary and Output Reporting System (BORIS), should be provided.

o It is not simply a matter of listing related projects (including projects being undertaken under the Estate Works Program). Rather, consideration should be given to the inclusion of summary information providing an explanation of why it is related (such as location or linked capabilities (so that the overall capability effect can be stated)), any identified dependencies, alignment opportunities/risks etc. so as to determine the appropriateness of a programmatic approach. Consideration should be given to providing a summary graphic detailing where related projects are along the development continuum from initial planning to scheduled completion of construction as well as indicative development and delivery phases funding.

o The cumulative base engineering impact from an increase to the Defence population from related projects needs to be considered from the perspective of when infrastructure support thresholds will be reached (perhaps by multiple projects planning on utilising the same spare utilities capacity) and how the required infrastructure upgrades should be



funded (i.e. perhaps a proportional spread across the budgets of projects contributing to the population increase).

o Noting that in many cases there is limited flexibility in relation to the location for the proposed infrastructure development, an economic impact assessment could be undertaken to inform the IBC focussed on broader WOG considerations, including specific benefits to the broader non-Defence community (such as employment impact and whether this is to be short-term or enduring). Any impact estimates are to be presented as a deviation from the baseline option.

Documents to be reviewed: Reviewed?

o Joint Capability Needs Statement Noo Estate Base Plan and Area Master Plan Noo IIP Broadsheet No

Stakeholders to be consulted: Consulted?

o Department of Defence IIP Team for IIP funding lines Noo Estate Service Delivery Division Product Directors (Service Delivery Division) in

relation to infrastructure thresholds for bases being considered and related projectsNo

Facility and Infrastructure RequirementsKey questions to be answered: Complete?

o What assumptions and constraints/limitations underpin the IBC?

o What are the specific requirements for each site or project element?

o What is the current state of the infrastructure?

o Are there any key development limitations imposed by current facilities?

o What is the requirements development pathway?


o In the early stages of a project, it is likely that a number of assumptions will be required to fill gaps in the understanding of the project’s requirements. As such, it is important that these assumptions are clearly stated to provide a basis for tracking changes (as well as for audit purposes) as the project progresses.

o Only key (strategic) assumptions that would have a material impact upon the underpinning analysis of the IBC should be listed in the main document. Operational and tactical level assumptions should be listed on a thematic basis (e.g. location, structure, utilities support, security rating etc.) and detailed separately in a separate Approach Annex or, if appropriate, in the detailed User Requirements Brief (URB). The basis for each assumption should be detailed (e.g. stakeholder comment, reference to supporting document, professional judgment etc.). An overall level of confidence should be provided in relation to the statement of requirements.

o Details of any development constraints (limitations) imposed by existing facilities and surroundings, such as EO storage buffer zones, runway end safety areas, noise abatement zones, flood plain areas, wastewater treatment odour buffer zones, urban encroachment



etc., should be summarised in the main body of the document, with details, including an aerial representation of the associated development limitations provided in a Development Constraints Annex. Development limitations imposed by proposed facilities/infrastructure (such as provision for buffer zones) should also be noted in this annex.

o Specific requirements must be described independent of any facilities or infrastructure option – detail ‘what’ needs to be provided not ‘how’. Specific requirements should be summarised in a single paragraph in the main document with a detailed description of each requirement provided in the User Requirements Brief (noting that this is a ‘live’ document – therefore the specific version of the endorsed URB that informed the IBC must be noted in the IBC). For Capability IBCs, the User Requirements Brief should consider the facility/infrastructure requirements across all of the Fundamental Inputs to Capability (FIC).

o For large projects, spread over multiple sites, you could consider the grouping of requirements on a site basis, and for a project on a single site that includes a number of discrete facility and/or infrastructure elements, requirements should be addressed by project element. Each requirement should be prioritised (for example essential/important/desirable – noting that a list of requirements where every item is prioritised at the highest level is of limited value) and the associated risks of the requirement not being addressed should be detailed. These residual risks are of particular interest to central agencies and the strategic centre as they brief their IC representatives.

o The statement of requirements should be based purely on performance, including a proposed ‘threshold’ of performance, rather than a prescription of a solution to meet the required performance level. For example, rather than stating that the facilities requirements of the IBC are ‘four aircraft maintenance bays’, the requirement should be stated in terms of being able to provide a specified level of operational and deep level maintenance on a particular aircraft platform(s) with some level of stated concurrency. Options for how the threshold of performance is to be provided will be detailed in subsequent sections of the IBC.

o A summary of the current state of facilities and/or infrastructure is provided in the main body of the document, highlighting key specific deficiencies that have prompted the need for the IBC, as well as the extent of existing facilities available for adaptive reuse. Details for the current state facility/infrastructure assessment are to be provided in a Current State Annex, detailing which specific user requirement(s) the current asset has been mapped against, a technical description of the asset, a technical assessment of the current state asset’s capacity to support the project, and an overall technical rating (such as Good/Fair/Poor) should be provided.

o The technical description of current state assets should incorporate facts and figures, such as capacity for engineering services, m2 for areas currently utilised and the number of workstations available in administration buildings. Describe any deficiencies by reference to non-compliance with specific Australian standards, Building Code of Australia, Defence Manual of Infrastructure Engineering – Electrical (MIEE) etc. The Estate Engineering Governance and Integrity System (EEGIS) should be a considered resource. An assessment of the remaining useful life (assuming minor capital works only) for the current state asset should also be included. Detail to be referenced in the Current State Annex or provided as supporting documentation include Estate Appraisals, technical engineering surveys etc.

o A summary should also be provided in a Scope Development Annex detailing the development of the scope elements of the project with particular reference to the scope identified in Estate Investment Requirements (EIR). The Annex should also include associated KPI’s for EIR elements to inform a viability assessment, any deviations from the EIR (either scope additions (when identified, for example during the stakeholder



engagement process) and basis for inclusion) and/or deletions (when identified and basis for deletion, such as already completed by the Estate Works Program or another project, change of user requirements etc.).


o Joint Capability Needs Statement Noo Estate Base Plan/Base Development Plan Noo Area Master Plan Noo Base Engineering Assessment Program (BEAP) report(s) Noo Estate Investment Requirement(s) (EIR) Noo Department of Defence Property Disposal Programo Estate Engineering Governance and Integrity System (EEGIS)

No

o IIP Broadsheet No


o Capability Sponsor in relation to user requirements Noo Capability Manager (e.g. Service HQ) in relation to review of user requirements (i.e.

‘required’ as opposed to ‘desired’) and identification of stakeholdersNo

o Estate Planning Branch, Infrastructure Division in relation to Defence Estate documentation (such as EIRs)

No

o Estate Service Delivery Branch, Service Delivery Division in relation to current state of infrastructure and related support thresholds

No

Facility and Infrastructure OptionsKey questions to be answered: Complete?

o What options are proposed for the Government to consider?

o Which is the preferred option (for sustainment IBCs only)

o What are the relative advantages (benefits) and disadvantages (constraints, issues) of each option?

o What are the key risks and opportunities associated with each option?

o What are the high-level costs for each option?

o How does the delivery date for each option compare against capability material release or initial operating dates (capability IBCs only)

o What are the detailed costs for each option (including indicative cash flow)?

o What is the Viability and Value for Money assessment for each option?o Is the price basis used correct and applied consistently throughout the document?


o The IBC should consider a full range of options at the strategic level (e.g. where the facilities may be based) as it can cause significant delays and/or budgetary overruns if new



strategic level options are generated during the PDBC/DBC stage. o Consideration at the strategic level must include the Force Structure Plan 2019 and

Integrated Investment Program (IIP) and look at longer term capability and facilities intent. For instance, developed options may be interim step towards a longer-term solution.

o A key task of the IBC is to detail the facilities/infrastructure implications of the capability manager’s requirement and how these relate to the existing funding envelope, so that decision makers can decide to accept a reduced level of capability or, alternatively, source additional funding. Therefore, multiple realistic options are required to be detailed, with a short description provided of each option. Do not list options that have been ruled out during the initial options screening process (noting that a ‘Do Nothing’ option – detailed below – must be provided in the IBC).

o It is suggested that each option is provided with a short, meaningful title rather than simply ‘Option 2’ (for example) to increase the readability of this section of the IBC. Summary information should then be provided for each option of its relative advantages and disadvantages, risks (with emphasis on residual capability risks if the full list of user requirements is not met by the option) and opportunities (including potential multi-use and future expansion), comparison of delivery dates against capability materiel release or initial operating dates (capability IBCs only), as well as its high-level costs. If acquisition of land is required, this will likely be noted as a key risk. Detailed costing tables (detailed below) for each option are to be provided in a Detailed Costing Annex.

o A summary table/graphic should be provided, detailing the budgetary coverage of each option against the full list of facilities and infrastructure requirements to clearly identify what Defence would be getting (in terms of facilities/infrastructure) for each option.

o A summary table should be provided in the main body of the document detailing the following high-level costs for each option: Development Phase (split into separate PDBC, DBC and PWC elements where relevant), Acquisition Phase, Sustainment Phase (in-service support) and Defence Contingency.

o A separate Acquisition Risks and Sustainment Risks Annex detailing identified acquisition risks and sustainment risks for each option (and the basis of the risk ratings applied) should be provided.

o A summary table detailing the indicative cash flow for each option and the variance from the IIP provision (note the duration covered by this table will be guided by the IIP provision) should also be provided. The indicative cash-flow should be determined by the project team so as to support the optimal construction schedule. Note the purpose of the IBC is to identify the affordability of the project within the project’s acquisition and net sustainment provisions within the IIP – the IBC is not required to identify potential offsets for any identified funding shortfalls.

o For capability IBCs any potential delays to the associated DIIP capability projects are to be specifically noted in the main body of the document.

o A status quo ‘do nothing’ option is required to be presented in the IBC. This is not intended to be a no cost option but should describe the impacts of continuing the status quo, including funding already committed/scheduled, for example, repairs and maintenance under the Estates Work Program for existing facilities and infrastructure. The Do-nothing option should outline work-rounds required by the capability manager, as well as impact to the Defence Estate (i.e. increased maintenance, higher operating costs etc.) and for capability IBCs the delivery risks for the capability Note the ‘Do Nothing’ option may also include changes to Defence business practices that preclude the need to build/purchase new facilities.

o A range of facility/build options (considering both facilities and supporting infrastructure) are required, including options for the adaptive reuse of existing facilities/infrastructure, extension of existing facilities/infrastructure and/or build new facilities/infrastructure, as



well as different construction options (e.g. for a wharf requirement it may be constructed as a finger wharf, continuous wharf, pier and concrete top). Generally, these options would include an ‘in-budget’ option, providing the minimum level of capability acceptable to the capability manager’s (‘minimum scope’), and satisfying the full User Requirements Brief (‘full scope’).

o Where appropriate, noting that this will depend heavily on the requirements (such as security considerations) of the specific project, commercial options should also be considered. Note that commercial options include the lease or purchase of commercial facilities as opposed to innovative financing options (which could be applied to any option – covered in the Project Execution Strategy section of the IBC) which don’t rely entirely on Government money (at least not initially) for the development of the required infrastructure.

o All options are to be appropriately costed (P50 cost confidence) and risk-assessed in accordance with the relevant Department of Finance guidance.

o The Total Cost of Ownership (TCO) Model is to be used to estimate cost for all new IIP projects to be considered by Government.

o Cost models for each option are to be provided in a format that includes formulas and can be edited.

o Where available, the intention is to utilise existing data and design documentation from projects already completed (‘precedent design’) to inform the options of the IBC. The use of precedent design documentation in the build options avoids unnecessary design costs and improves scope certainty. As one example, where a project involves a number of new living-in accommodation rooms, there are a number of existing, tested layouts of living-in accommodation of various standards. Adoption of an existing, tested footprint reduces the risk that the scale of the build required is too low or too high (affecting cost certainty). It also provides the option to benchmark IBC estimated costs against a similar, completed project. The IBC is intended to provide preliminary designs only (with a focus on site and space considerations – i.e. that the topography is appropriate and that sufficient land is available for the prospective project), noting that the supporting design and technical studies that inform a more detailed design will be undertaken during the PDBC/DBC process.

o For most projects, the development of options will require the development of technical engineering and architectural personnel to articulate the consequences of the ‘Do nothing’ option and to document the potential build options. Noting that the IBC requires only preliminary designs, an accredited quantity surveyor may also be used to develop costing documentation (to be provided in a Detailed Costing Annex) to support the cost model. Reference should be made to recognised industry costing documentation, such as Rawlinson’s Australian Construction Handbook, and whether trade costs indexation has been applied due to concerns about concurrent demands on the local construction industry or the capacity of the construction industry to operate at a remote locality for an extended period of time.

o The basis for any cost indices applied, including design and construction, and acquisition (if relevant) contingencies, are to be clearly detailed (noting guidance about the conduct of risk assessment activities). For large or complex projects, especially if multiple sites are covered, a separate contingency % should be calculated for the scope at each site to demonstrate that site-specific risks have been considered. Specific cost model assumptions are to be listed.

o Cost models are to be presented in summary and detail formats. In relation to acquisition costs, these are to be separated into project development costs and construction costs.

o The project development costs are the key focus of the cost estimation effort in the IBC (should be at ‘tender quality’) and should provide a level of assurance, supported by



documentary evidence, that the First to Second pass outcomes can be achieved without the need to seek additional funds (i.e. in addition to the sought early access provision).

o Project development costs must be agreed by Capital Facilities and Infrastructure (CFI) Branch and must include (at a minimum) the following to be specified:- Project Management/Contract Administration- Design Services Consultant or Managing Contractor Fee- Probity Services- ICT Planning Costs- Environmental Services (including any environment impact assessments/contamination

reviews recommended to be conducted prior to Second Pass consideration)- CFI Branch Travel Costs- Contingency.

o For construction costs, the following (at a minimum) are to be specified:- Construction Costs (by project element)- Land acquisition cost (if relevant)- Design Fees- MC Management and Work Fees- PM/CA Fees- Allowance for cost escalation- Inherent and Contingent Risk (Building and Infrastructure)- Inherent and Contingent Risk (Land acquisition costs) (if relevant)- Defence contingency.

o Future sustainment costs are the calculated costs of operating and sustaining the asset over its life and includes both:- Operating costs - the estimated costs (excluding maintenance) of operating or leasing

the capital asset. These costs may include electricity, fuel, consumables, utilities and waste, building administration, lease and contract costs, levies, labour (including staff costs to manage the asset operations), rental costs, interest paid, taxes, contract costs and other overhead costs (including operating and owner cost risk). When considering rental payments, it is important to include assumptions for rent reviews and escalation, including costs associated with lease options and incentives; and

- Maintenance costs - the estimated costs incurred in maintaining the capital asset over its useful life. These costs are to include any performance management, consumables, repairs, overhauls and associated labour costs.

o In relation to sustainment costs, the estimated net building operating costs, post completion and occupation of the assets, are provided on an annual basis and then extrapolated across the agreed period (with Department of Finance) for the TCO Model. The following costs (at a minimum) are to be specified (where relevant):- ICT- EMOS- Other base services- Utilities- Assets purchased (not capitalised).

o A detailed options viability assessment (including KPI’s for each project element to inform the viability assessment) should be provided as a Options Viability Assessment Annex to support the summary findings provided in the main body of the document. The viability assessment should consider (among other matters) the extent to which the high-level scope and detailed requirements (such as in the User Requirements Brief) are being met, the risk profile including impacts to capability and facilities, and the affordability of the option. A rating scale should be used and explanation provided for the rating selected.

o A detailed relative Value for Money (VFM) assessment (noting Department of Finance



guidance on assessing value for money – which includes monetary and non-monetary benefits) supporting the summary findings provided in the main body of the document should be provided as a Value for Money (VFM) Annex.


o Department of Finance, Resource Management Guide 500, ‘Commonwealth Property Management Framework’

No

o Department of Finance, Defining P50 and P80 Manual Noo Department of Finance, Commonwealth Procurement Rules (April 2019) Noo Department of Defence Finance, Estimate Memorandum 2017/55, ‘Defence

Specific Costing Requirement for Projects in the Defence Integrated Investment Program’ (in particular Attachment A, ‘The Principles of Cost Quality Standards for DIIP Capability Projects’)

No

o Department of Defence Estate Design and Use Principles Noo Defence Estate Works Program No


o Capability Sponsor and Capability Manager in relation to option development and refinement

No

o Capital Facilities and Infrastructure Branch, Infrastructure Division in relation to the estimate of Project Development Costs

No

o Estate Service Delivery Branch, Service Delivery Division in relation to the estimate of sustainment costs

No

o CIOG in relation to the estimate of ICT costs Noo Property Management Branch, Infrastructure Division for projects that have

feasible acquisition, leasing or commercial optionsNo

o Estate Divestment Program, Infrastructure Division for projects that will potentially result in the divestment of surplus Defence properties

No

o CASG Commercial Centre of Excellence for projects that have feasible acquisition, leasing or commercial options to help articulate the nature, cost and associated risks of the proposal commercial arrangement, including the feasibility of PPP (capability IBCs only)

No

o Project Sponsor regarding cash flow in the IIP No

Risk ManagementKey questions to be answered: Complete?

o Are there any significant environment and heritage considerations?

o What are the environmental sustainability impacts?

o Are there any significant contamination considerations?

o What key risks (non-financial and technical) have been identified and what further assessment is recommended prior to the submission of the Detailed Business Case?

o Are there any acquisition (including industrial capacity) risks identified for the development phase or sustainment risks identified?




o The approach to environmental and heritage reviews must be confirmed with the relevant directorate responsible for environmental protection and assessments.

o A locality and property description providing details relevant to the environment, including distances to major town/cities, area of the base, description of base environment (e.g. the majority of the base is covered by mixed Eucalypt bushland) etc., should be provided as a Environmental Consideration/Impact Annex. Describe neighbouring land uses in the immediate vicinity of the base, in particular any likely sensitivities in relation to Defence development. Use of graphics/pictures to demonstrate the geographic proximity of key locale factors (such as neighbouring land uses) should be considered.

o A summary should be provided in the main body of the document detailing:- whether the project needs to be formally referred to the Commonwealth department

with responsibility for the environment for assessment and the basis for this assessment

- whether contaminated sites that are likely to be material to the development have been identified

- the key risk reduction studies/activities to be completed prior to the finalisation of the DBC.

o An EPBC Act finding summary table is to be provided as a separate EPBC Act Annex. The table is to be completed on the basis of each separate site (as defined by the Defence Estate) with an assessment of potentially significant impacts against an ordinal scale of No/Unlikely/May/Likely. Information is provided via reports generated by the ‘Protected Matters Search Tool’ provided by the Commonwealth department with responsibility for the environment – the search parameters should be detailed (i.e. when accessed and ‘named region’ field (e.g. postcode) – noting that these are detailed in the provided report.

o The summary table is to include the following Matters of National Environmental Significance:- World Heritage Properties- National Heritage Places- Wetlands of International Significance- Great Barrier Reef Marine Park- Commonwealth Marine Area- Threatened Ecological Communities- Threatened Species- Migratory Species.

o The summary table is to include Other Matters Protected by the EPBC Act- Commonwealth Lands- Commonwealth Heritage Places- Listed Marines Species- Whales and Other Cetaceans- Critical Habitats- Commonwealth Reserves Terrestrial- Australian Marine Parks.

o The Environmental Consideration/Impact Annex should indicate opportunities, risks and/or investigations relating to the alignment with Defence policy and programs focussed on energy, water, climate change and waste management. Details should be provided of



the risk profile, considered scope and mitigation strategies where risks are identified. A summary of the environmental sustainability impacts is to be provided in the main body of the document.

o A search of the Contaminated Sites Register (CSR) should be undertaken and a summary table detailing the following in relation to proposed development sites (only) provided in the Environmental Consideration/Impact Annex:- CSR ID Number- CSR Risk Level (Low/Medium/High – from register) and description of contamination

including location- Development site- Likelihood of contamination issue being material to proposed development

(Low/Medium/High) and basis for assessment.o Consideration should be given to broader contamination risks not detailed in the CSR, such

as PFAS (contact Defence’s PFAS Investigation and Management Program).o A graphical overlay showing identified and potential contamination sites relative to

proposed development sites could be provided.o For key risks and further assessment required a summary table is to be provided in the

main body with supporting information provided in a Key Risk/Further Assessment Annex. The summary table should provide for each specified risk aspect (see below) a description of the identified risk, whether a further assessment is required (No/Yes) and the summary of recommended actions. The following aspects (at a minimum) are to be listed (Note as ‘Nil’ or provide a summary description):- Ecology- Hazardous materials- Contamination- Indigenous Heritage- Historical (Build and Landscape) Heritage- Water Quality/Hydrology- Aircraft Noise- Emissions- Bushfire.

o Site Specific Annexes of key risks are to be provided in the annexes where multiple development sites are being considered.

o An assessment of the capacity of the local construction market for each project site to support the project cognisant of forecast WOG Commonwealth construction (not just Defence) as well as major state/territory infrastructure under development is to be conducted. For very large projects, or those in regional or remote areas, comment if industry capacity constraints in the local market are a risk, and if so, what mitigations are proposed.

o A detailed risk register (including proposed risk mitigations) of all identified acquisition and sustainment risks is to be provided as a Risk Register Annex.


o Joint Capability Needs Statement Noo Estate Base Plan and Area Master Plan Noo IIP Broadsheet Noo Department of Defence, E&IG Risk Management Process (February 2016) Noo Department of Defence, Estate Risk Assessment Tool (ERAT) Noo Department of Defence, Smart Buyer Framework No



o Defence Estate Contaminated Sites Register Noo Defence Estate environmental reports (heritage, contamination, flora and fauna) No


o Directorate of Environment Protection and Assessments (Environment and Engineering Branch, Infrastructure Division) in relation to approach for environmental and heritage reviews

No

o Defence’s PFAS Investigation and Management Program in relation to PFAS risk Noo Estate Service Delivery Branch Product Directors (Service Delivery Division) in

relation to potential sustainment risks (and through them Estate Maintenance and Operation Services (EMOS) contractors)

No

Project Execution StrategyKey questions to be answered: Complete?

o Is a Public Private Partnership (PPP) appropriate for the project?

o What is the recommended delivery model used as the basis to inform the indicative implementation schedule and cost estimate?

o Are any variations from standard approval strategy, project governance and sustainment approach recommended?

o What is the indicative implementation schedule?


o Detail is to be provided within the main document as to whether the project is subject to screening for suitability for delivery under a PPP – if so, initial assessment of the project is to be completed against the PPP Suitability checklist (completed checklist provided within a Procurement Options Assessment Annex) with a summary of the checklist findings provided in the main document (including whether there is likely to be any commercial interest in a PPP).

o A summary within the main document of the recommended delivery model is be provided. A detailed qualitative multi-criteria evaluation (as a Delivery Model Annex) against the relative advantages and disadvantages of the following traditional delivery options (noting that there may be multiple contracts depending on the complexity of the project (e.g. multiple site and/or multiple facilities)) is to be provided:- Head Contractor Contract (Design and Construct)- Head Contractor Contract (Construct Only)- Managing Contractor Contract- Commercial options (such as Project Alliance and/or PPP).

o If the standard approval process is to be followed no commentary is required. Likewise, project governance should only be noted if changes are recommended to existing arrangements and only variations to the standard sustainment approach are to be noted.

o If land acquisition is required for the project, key activities and associated timelines should be detailed in the main body of the document.

o A high-level indicative implementation schedule (factoring in the time required for necessary Government consideration (including PWC review if relevant)) and associated table of indicative implementation milestones should be provided in the main body of the document (with key assumptions underpinning the schedule noted). A detailed indicative



implementation schedule (such as a Gantt chart) should be provided as an Implementation Schedule Annex.


o Department of Infrastructure and Regional Development, National Public Private Partnership Guideline (December 2008)

No

o Department of Defence, PPP Suitability Checklist (November 2011) Noo Department of Finance, Commonwealth Procurement Rules (April 2019) Noo Department of Defence, Smart Buyer Framework (and outputs from any Smart

Buyer workshops conducted)No


o Capital Facilities and Infrastructure Branch, Infrastructure Division in relation to recommended delivery strategy

No

o Property Management Branch, Infrastructure Division to agree the property delivery strategy recommended for Defence property (property lease/licences, acquisition, disposal) related options

No

o Environment and Engineering Branch, Infrastructure Division in relation to the approach for environmental impacts affecting the project schedule

No

AnnexesAnnexes need to be tailored to suit the particular project and should provide explanatory or evidence-based information beyond what is presented in the main body. The aim of annexes is to provide additional detail that would interrupt the flow of the narrative if included in the main body of the document.

Note that details relating to annex inclusions is provided earlier in this document with the name of the specific annex bolded. Annexes should be listed in the order in which they are referenced in the main body.

Annexes to be collated/developed and made available to key decision makers:

Background:o Glossary and Acronymso Approach Annex (including sequencing, Smart Buyer Workshop Report,

stakeholder/consultation documentation, Logic and benefit Maps and Joint Capability Needs Statement)

o Economic Impact Statement

Facility and infrastructure Requirements:o User Requirement Brief (URB)o Statement of Requirement (SoR) Report o Development Constraintso Current Stateo Scope Development

Facility and infrastructure Options:



o Detailed Costing (Including: Capital Cost Estimate Report, Cost Plans, cost models (TCO), cash flow requirements, P50 Cost Estimate Risk Register, Cost models etc.)

o Acquisition Risks and Sustainment Risks o Options Viability Assessment o Value for Money (VFM) Assessment

Risk Management:o Environmental Consideration/Impacto EPBC Act o Key risks/further assessmento Site specific annexeso Risk Register

Project Execution Strategy:o Procurement Options Assessment (including the Public Private Partnership (PPP) Suitability

Checklist)o Delivery Model Assessmento Indicative Implementation Schedule



Distribution Chart for Annexes [Internal use only]Annexes to be distributed EPB

CFI

EE SDD

Services

Contestability

Spare

DFG

Force

IPMB

EEGIS

CASG

DOF

PM&

C

BACKGROUNDGlossary and AcronymsApproach AnnexEconomic Impact StatementFACILITY AND INFRASTRUCTURE REQUIREMENTSUser Requirement Brief (URB)Statement of Requirement (SoR) Report Development ConstraintsCurrent StateScope DevelopmentFACILITY AND INFRASTRUCTURE OPTIONSDetailed CostingAcquisition Risks and Sustainment Risks Options Viability Assessment Value for Money (VFM) AssessmentRISK MANAGEMENTEnvironmental Consideration/ImpactEPBC Act Key risks/further assessmentSite specific annexesRisk RegisterPROJECT EXECUTION STRATEGYProcurement Options Assessment (including the Public Private Partnership (PPP) Suitability Checklist)Delivery Model AssessmentIndicative Implementation Schedule
