Can my project still be approved if the project cost estimates from the Stage 2 Alternatives Analysis change after receiving vendor responses in Stage 4 Project Readiness and Approval?

As part of the PAL funding strategy, Budget Change Proposal (BCP) requests are initiated based on the Total Project Cost estimates derived from the Stage 2 Alternatives Analysis. When the project proposal reaches Stage 4, cost estimates are reevaluated based on vendor bid responses and the selected vendor’s costs are integrated into the Agency/state entity’s Total Project Cost estimates. See Figure 1 for an illustration of the PAL Funding Strategy.

SIMM19 FAQ Stage 4

If the “Total Project Cost” in the Stage 4 Project Readiness and Approval significantly deviates from the “Total Project Cost” estimated in the Stage 2 Alternatives Analysis, the Agency/state entity may be required to take action in accordance with the following conditions.

Project Condition at Stage 4 Agency/State Entity Action Admin Action Result
Total Project Cost estimated in Stage 2 is greater than or equal to Total Project Cost estimated after bids are evaluated in Stage 4 No Action Necessary Project approved based on final project cost Award Contract
Total Project Cost estimated in Stage 2 is within 20% or $5 million (whichever is less) of Total Project Cost estimated after bids are evaluated in Stage 4 Revise PAL Stage/Gate Deliverables to reflect change in project cost (may include updated budget action for increased funding to specific budget years, redirected funds, etc.) Project approved with condition that updated PAL document is approved Award Contract
Total Project Cost estimated in Stage 2 is within 20% or $5 million (whichever is less) of Total Project Cost estimated after bids are evaluated in Stage 4
  1. Perform additional analysis to determine cause of variance and viability of project.
  2. Negotiate with vendor to reduce project costs to within 20% or $5 million of estimated Total Project Cost.
  3. Revise PAL Stage/Gate Deliverables to reflect results of negotiations (changes to scope).
Project is not approved, proposal is on hold pending additional analysis to determine viability of project Proposal on Hold