Feasibility Study Rationale

Purpose Of Feasibility Study

 1. PROJECT PROPONENT
- The very first user of the Report will be the Project
Owner or Proponent, or the Person or company interested
in undertaking the project being evaluated and possibly the
one “footing the bill” for the study. The proponent does not
have ti be an investor, although in most instances he is.
Purpose Of Feasibility Study
 2. Equity Investors/ Leader
 The proponent often does not have the
enough funds to finance the entire
project. And even if he does, he may not
be wiling to risk all of it on this one
project. So he invites or convinces other
parties, to put in money into project.
(through a PROJECT STUDY)
Purpose Of Feasibility Study
 2. Equity Investors/ Leader

 In some cases, the additional investors are

the proponent’s relative (Family Business)
or among his friends (Friendly Business)
 Another potential group of investors are
the Suppliers themselves, particularly on
highly technical items such as those related
to alternative sources of energy.
Purpose Of Feasibility Study
 2. Equity Investors/ Leader
 Small and medium- sized projects may
able to obtain loan from a local bank or
financial institution.
Purpose Of Feasibility Study
 Government Regulatory feasibility
-another party that may ask for feasibility Study that
may grant tax incentives, permits or licenses, [ includes
B.O.I. Board of investments and P.E.Z.A. Philippine Export
Zone Authority.
- the role of a feasibility to them is to provide basis for
dicision,
Objective and Scope of the Study
 1. Proposal writing- If the proponent needs a
third party intervention to undertake the study,
the latter needs to prepare and submit a formal
proposal to the former.
 2. Bases for Objective Scope- as a consultant you
should use it to determine the approach that you
should follow in meeting the objective of the
study in laying out the work out the plan and
timable, and determining the man power needed
in conducting a Study.
Purpose Of Feasibility Study
 3. Sources of Data- you want to know where to get
information you will need to better understand the
objectives and scope of the prospective feasibility study
engagement.
Private Sector Data Sources
 Direct Client Interview- appointment with
perspective client. This is used to clarify his
requirements.
 Indirect Client Interview- though Phone,
Fax, Email Inquiry
Public Sector Data Sources
 They normally issue terms of
Reference(TOR),a formal request for
consultancy service, a formal invitation to
bid, a written document from the client to
refer to in preparing your proposal.
Before you could submit proposal to
Public Sector you should:
1. Submit a letter of Intent (LOI) with all your
cridentials.Your qualification should be
sufficient.
2. If you are pre qualify, then the cleint may invite
you to a meeting to allow people like you to
clarify any issue that is unclear to TOR
3. The client sometimes allow qualified bidders to
submit written questions.
4. You arenow give 30 days to submit your
proposal
TIPS ON PREPARING A PROPOSAL
 Brainstorming
 Is a technique used to gather one’s thoughts before the start of a
project.
 Everything that comes out of the mind related
to the topic, whether trivial or important.
 All possible source of relevant data that will
eventually be gathered for the purposes of
the study
 Similar studies that you have done in the past
 Call your Friends, your colleagues, your staff
to a meeting.
 New technologies may give new approaches
 Determining the contents of proposal is
accomplished by referring to similar prior to
proposals
Constructing an Outline
 You need an outline that will serve as your
guide prior to and throughout the study. It
should give you idea of what activities to
include to your proposal to shoe the client
that you know to conduct a project
feasibility study
Writing the Draft Proposal
 Crucial part if the proposal Preparation
Activity.
 You must have a very clear idea already of
the scope of the work, the approach and
work plan and the fee you will charge.
Proofreading and Finalizing Proposal
 Stage where the quality of the proposal is
checked. Errors in your proposal is the first
thing that the client will notice when you
send it out.
 Check for grammar and typographical
Errors.
Contents of the Proposal
 The Covering Letter
 Addressed to the client’s decision maker
or authorized office who requested for the
proposal
 Open your letter with an expression of
Gratitude to the client
Contents of the Proposal
 The Covering Letter
 Include duplicate of the covering letter, which
should provide space at the lower left hand side of
the page where the client can affix his signature to
signify the acceptance of the proposal.
 Once signed the Proposal binds both the client and
the consultants to terms stated therein relation to
the engagemen
Contents of the Proposal
 Introduction
 Background of the Study- you can mention here the Business
activity of the client, the relevance of the proposed project to
such business and other relevant circumstances related to the
proposed engagement
 Objectives and Scope of work-The specific objective of the
engagement and the aspects that will cover d by the study
General approach to Methodology
 1. Phased Approach-relevant if the project is
relatively untried or new to the Philippines
or or on the proposed sire and there is no
proof of assurance on the market yet.
 Phase I- will normally cover the market and
the legal and some technical aspects of the
study. If is not feasible, the client usually
advise not to pursue the project.
 Client Participation
 Client involvement:
 Steering Committee- This will provide direction to
the consultant on the general conduct of the study
and accept the rules presented.
 Project Coordinator- who will liaise between the
consultatns and the client’s management.
 Counterpart team- They will be able to identify
good sources of internal and some external datas.
Regular Reporting to Client
 Submit Progress reports or Milestones.
 First mile stone is after the first phase,
covering primarily the market, legal aspects
if any.
 Final phase will be Consolidate report.
Use Checklist and Questionnaire
 The students should be quite familiar with
this methodology for data gathering.
 These methods will ensure that all relevant
data are obtained from various sources.
 In some instances, it may be necessary to
make a follow up on the questionnaire to
clarify to some matters through an
interview
Work Program and Timetable
 Mobilization stage of the Engagement- A
discussion of what you normally do before going
into study proper
 This Chapter discussed the step-by-step
procedures that you need to undertake under
each aspect of the study. It also present specific
data that ewill be required by each aspect of the
project study
 Feasibility study can take from 1-3 mos,
depending on the complexibility of the study and
methodology used for data gathering
Project Organization and Management
 You ought to identify the members of the study
team and define their respective roles in conduct
of the study
 Do not forget that the client assigned counterpart
staff and the Project Coordinator
 Support this chapter by a bar chart
 Append the Curriculum Vitae of key consultants
assigned to the engagement
 List of relevant studies undertaken by the
consulting firm should be appended here.
Project Deliverable and Fees
 Client expect from the consultant at a specific intervals of the
study and at certain points in time.
 Consultancy fee are normally composed of the professional
fees of the consultants asssigned to the engagement.
 Government units and international Funding institutions
normally inquire fees per consultant, with a break down
between the compensation cost of the consultant and the
multiplier used for the current proposal.
 Billing and collection of professional fees and reimbursable
expenses are usually tied up to progress billing, which in turn
tied up to your progress reporting.