Improve value for money and reduce risk by consistently adopting appropriate best-practice front-end due diligence for projects.
- Low-hanging fruit
Key messages
The greatest opportunities to ensure the best solution is identified, and the right infrastructure is built, happen at the earliest stages of the project during problem identification, project origination and design. This is when the due diligence that informs a more detailed understanding of scope, cost and timeframes can remove challenges that might otherwise appear in later stages.
Australia’s governments have an important role to play in advocating for and driving best practice in due diligence through Front-End Engineering and Design (FEED) and a ‘go slow to go fast’ mentality.
If prioritised by all levels of government, due diligence can enhance project outcomes and improve the operating environment for all stakeholders. Due diligence also reduces project risks by making them less likely to incur a financial loss, miss delivery deadlines or fail to deliver the right operational outcomes.
What are the impacts?
Effective due diligence delivers better project outcomes by reducing risk and improving economic benefits over the life of the infrastructure asset. This reform supports safeguarding the sustainability of Australian infrastructure to improve the quality of infrastructure assets.
Implementing FEED can improve assurance and governance innovation through engaging with industry to deliver high-performing infrastructure assets.
How easy is it to implement?
Improving front-end processes will have significant positive flow on effects across projects’ delivery and operations, reducing costs to industry and the taxpayer.
Pivotal activities may be conducted in current business case development, reducing the complexity of implementation.
Governments can support due diligence processes by committing to a ‘go slow to go fast’ approach. Both government and industry have the capacity to implement and deliver this change.
How certain are the outcomes?
As regulators, clients and benefactors of infrastructure investment, governments have significant control of the reform.
Implementing FEED reduces project risk, improving confidence for industry. There is significant evidence that improved due diligence improves project outcomes.
| Governance |
Standard contracts
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| Quality |
Valuing innovation
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| Quality |
Early provider engagement
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| Governance |
Security of payment
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Read more about this recommendation in 3.2 Enhancing project outcomes in the 2021 Australian Infrastructure Plan.
Reform implementation pathway
This recommendation comprises of outcomes and activities, which form the reform's implementation pathway.
The implementation pathway is designed to guide change agents on the supporting activities necessary to achieve the overall reform.
For each outcome and activity, we propose change agents to act as:
- Proposed sponsor: facilitate, coordinate and champion the recommendation
- Proposed lead: deliver specific activities or lead related outcomes
- Support: share ownership, contributions or knowledge to enable the reform process.
Reduce risk, improve competition, lower bid costs and improve project outcomes by consistently applying due diligence activities to the front-end of all infrastructure projects.
0-5 years
Uplift quality of infrastructure decision-making through the development and delivery of training for key decision-makers on due diligence and de-risk, construction innovation, timing of project announcements, commercial and legal, and project governance.
0-5 years
Increase maturity and reporting of project planning and design through public-facing annual reports of de-identified Australian Government funded projects.
0-5 years
Improve value for money and reduce risk by prioritising resources and time to develop business cases, create reference designs and undertake comprehensive due diligence processes.
0-5 years
Ensure a strategic view of risk is appropriately translated to project procurement by developing and applying mature risk allocation processes that comprehensively assess and validate risk and uncertainty and fairly apportion them to the parties best-placed to manage them.
0-5 years
Improve infrastructure value for money by applying whole-of-life cost, scheduling and risk management best practices, processes and systems.
0-5 years
Improve consistency, efficiency and transparency of project decision-making by developing and promoting nationally consistent project information structures.
5-10 years
Ensure a consistent focus on value for money by developing in-house capabilities, in areas such as cost management systems and processes, scheduling, risk management, estimating and project controls.
0-5 years
Enhance the quality of decision-making by developing a nationally consistent whole-of-life infrastructure cost and schedule benchmarking tool and mandate its use on all nationally significant projects.
0-5 years