In 2009, Australia’s state treasuries commissioned one of the most comprehensive investigations ever undertaken into alliance contracting: “In Pursuit of Additional Value,” a 180-page benchmarking study examining 46 alliances and 14 detailed case studies across four states.   A link to this report can be foundhere

In 2026, the insights and learnings remain profoundly relevant for how Australian and New Zealand governments and industry can optimise value for money (VfM), strengthen commercial capability, and lift project performance in major infrastructure delivery.  On a reread of this report, the very same themes and challenges are now presenting themselves 17 years later questioning whether we have learnt these important lessons along the way.  I also hear criticism of the alliancing model similar to what was the basis of this report that is not based on evidence or identifies the root causes of what is actually occurring and what we can proactively do to address it.

For alliance practitioners across Australia and New Zealand both from a government perspective and supply chain partners, this study provides a powerful evidence base for what works, what doesn’t, and where improvement is needed to ensure alliances continue to deliver on their promise of delivering outstanding value for money.  It is on all of us to look at these lessons and identify what we can do to get back to the fundamentals of alliancing.

This blog summarises the key findings through a BRS lens; linking them back to how modern alliance project teams, infrastructure delivery agencies and Project alliance boards (PABs) and Alliance Leadership Teams (ALT) can implement the lessons on today’s complex projects and programmes of work.

The summary points from the report are as follows:

1. Alliancing Has Grown—But So Have Expectations

The study highlights the explosive growth of alliancing in the 2000s, with $32 billion of road, rail and water alliances delivered between 2004 and 2009 across the East Coast of Australia and Western Australia. Public sector usage increased exponentially, while private sector use remained flat.

Why did alliancing increase during this period?

Because alliancing offered compelling benefits including:

• Collaborative decision-making
• Fast-tracked commencement of a project or programme of works at pace
• Unified risk ownership driving a shared risk model focused on solutions
• Avoidance of disputes
• Better outcomes in complexity and uncertainty in a range of areas.

But this growth also created challenges:

• Inconsistent procurement strategies across jurisdictions
• Capability gaps inside Owner organisations
• Alliances used as a “default” rather than a deliberate strategy using a Multi-Criteria Approach (MCA) to procurement model selection of delivery models
• An unclear evidence base for whether alliances truly delivered incremental VfM.

This became the central purpose and theme of the study above.

2. Weak Business Cases Undermine Value for Money

One of the strongest findings was that business cases were not providing the clarity, accuracy or rigour needed to set alliances up for success.

Key issues identified in the study included:

• 45–55% average cost increase from business case estimate to actual outturn cost of the alliance
• Delivery method selection often defaulted to alliancing without considering alternatives
• A lack of robust scope definition, risk analysis and cost planning at the investment decision point
• Insufficient advice to ministers on the price premium associated with early commencement of works

For Alliances to deliver VfM, they must be anchored in a business case that sets:

• Clear project objectives
• Clear value for money statement(s) that articulate precisely what we are looking to achieve
• Required non-price outcomes
• A robust cost and commercial management plan
• Well-defined risk ownership and risk allocation that is determined around which party is best placed to manage the appropriate risks
• Guidance on commercial mis-match and Owner capability requirements i.e. a mismatch between the commercial horsepower of the supply chain contractors and the Owner commercial team particularly where more owner input is required in the collaborative contracting models

Without this, the alliance is chasing a target without a baseline.

3. Selecting the NOPs: The Need for Competitive Tension

The study investigated both non-price (single TOC) and price-competitive (dual TOC) selection approaches. Two important insights emerged:

Non-price selection

• Strong industry preference
• Collaborative target cost development
• Faster establishment
• But increased Owner exposure to commercial mis-match with their supply chain partners through the negotiation phase and weaker VfM assurance

Price competition

• TOCs were 5–10% lower on average when price competition was used
• Establishment costs were lower, not higher, than non-price processes
• Provided greater transparency and discipline
• But required more Owner resources and commercial capability early and upfront to de-risk the commercial position of the Owner

The study’s overarching recommendation:

“Price competition should be the default unless compelling reasons exist for non-price approaches”

4. Commercial Arrangements Need Standardisation and Strengthening

The research identified significant variability in Project Alliance Agreements (PAAs) from various Owners, which contributed to unclear expectations, inconsistent incentives and unnecessary transaction costs.

Key findings included:

• Wide variation in corporate overhead and profit treatments
• Limited clarity on dispute pathways beyond the ALT
• Inconsistent inclusion of incentive/penalty regimes
• Inadequate requirements for performance security
• Early commencement of works before commercial terms were finalised

The study recommended governments and infrastructure delivery agencies move toward:

• Standardised PAAs
• Clearer Owner reserved powers
• Consistent approach to risk sharing and incentivisation
• Improved commercial acumen in Owner teams as well as an acknowledgement of the need to bring in external commercial horsepower to support the Owner team through the procurement and negotiation phases
• Stronger benchmarking and independent commercial review

5. Delivery Performance Was Strong—But “Outstanding Outcomes” Were Overstated

Owner representatives rated alliance performance above expectations across non-price objectives including safety, quality, community outcomes, flexibility and stakeholder engagement.  This is normally done through the Key Results Area(KRA)/Key Performance Indicators (KPI) Limb 3 performance payments provided to Alliances.

However, the study found:

• Little evidence of true “game-breaking” or “paradigm-shifting” outcomes, despite significant investment in high-performance teams in some instances where the owner had not been proactive around clear performance expectations
• A 5–10% average increase from initial TOC to final TOC during delivery
• A negligible 0.5% saving between the final TOC and AOC, raising questions about the reliability of TOCs as performance instruments
• Strong alignment, collaboration and absence of disputes across all alliances studied

The message from the study is clear:

Alliances excel at stakeholder engagement, collaboration, innovation within constraints and dispute-free delivery—but require more discipline around cost targeting and commercial accountability.

6. Strengthening Owner Capability Is Critical

One of the most important insights in the entire study was the mis-match of capability between Owners and NOPs.  That is, the Owner or Infrastructure Delivery Agencies simply don’t have the horsepower of their supply chain partners particularly in the commercial and governance space.

Common issues included:

• Inexperienced Owner representatives who also had not been through sufficient training both from a governance and commercial capability perspective
• Insufficient commercial capability
• Unclear decision rights in terms of the Owner representatives being empowered by their organisations to move at pace
• Weak or unclear governance above the alliance
• Owners relying on alliancing because they lacked resources to manage other procurement methods

The study highlights that alliance success “requires more capability, not less”, inside government agencies.  For today’s mega-projects, this remains one of the largest determinants of success and it is an area that government agencies must invest in more to ensure that they are able to lead the Alliance owner side in driving value for money outcomes.

7. Key Recommendations with Modern Relevance for 2026

The study offers six major policy recommendations that remain highly actionable today for Infrastructure Delivery Agencies:

• Retain alliancing as a mature delivery method for complex, high-risk projects
• Develop consistent procurement selection guidelines across states and across Australia and New Zealand as they often have the same NOPs operating across the Tasman
• Standardise alliance policy, training, and NOP selection processes nationally and extend it to NZ
• Strengthen whole-of-government oversight and knowledge sharing
• Improve business case accuracy and address the capability gap between Owners and NOPs
• Use competitive tension (price competition) as the default for NOP selection

If implemented, the research team from this study estimated “5–15% cost improvements” without harming alliance benefits.

Conclusion

Alliancing remains one of the most effective delivery models for complex public infrastructure when used deliberately and supported with strong commercial foundations.

The study reinforces that alliances do not automatically deliver VfM—but, when structured well, governed effectively, and anchored in a robust business case, they can unlock significant public value, accelerate delivery, and build strong collaborative cultures.

For BRS clients, alliance leaders and government agencies across Australia and New Zealand, the lessons are timeless and are more relevant now than ever:

“Get the front-end right, lift capability, strengthen commercial discipline, and let collaboration deliver the rest.”