Sourcebook on Project Proposal Preparation

PART I

I
nitial project ideas are proposed 'solutions' in meeting unsatisfied needs or overcoming
constraints to development. The principal source of project ideas are development plans
(national, regional and local development plans). Project ideas can also be sourced from
technical papers, market studies, commodity studies, area resource studies or researches/studies
on investments opportunities. Other important sources of project ideas are the very people faced with
real problems or government field offices and planning units, the private sector, or even elected and
appointed officials who may have direct contact with possible project beneficiaries.

Regardless of its origin, a project should be undertaken to support the development goals and
objectives of a plan.

Proposed ‘solutions’ are also responses to particular problems or identified needs. Project developers
need to conduct thorough research on the problem at hand, draw up possible means of addressing this,
and make sure that this project will be acceptable and beneficial to a great majority and could be
sustained.

Projects have to be consistent with the perception of the situation by the target group(s) as well as the
decision-makers with their desire and capacity to improve this situation. Thus, it is important that
dialogues with the target beneficiaries be encouraged during the earliest stages of project planning and
design.

Project proponents should have a firm grasp of the present situation, the problems sought to be
addressed, the target group’s willingness to accept interventions of whatever nature, their willingness
to participate in solving the problem(s) at hand, and what projects are compatible with the
environment and the socio-economic conditions of the identified target areas.

The task of conducting an in-depth study of the community sought for the project should also be done
before the setting of project objectives. Only then can a solution be even conceptualized. Project
identification, therefore, has to be based on a detailed Situation Analysis.

The following tools and techniques that will be discussed in the next chapters are useful in analysing
the situation for project identification':

 Concepts on development projects

 Problem Analysis
 Objectives Analysis
 Alternatives Analysis
 Stakeholders Analysis
 The Logical Framework Approach

The tools described here should be used only as means or approach towards structuring data necessary
to develop projects, and not to collect nor produce data. The tools therefore greatly depend on the
adequacy and reliability of data and information that will be subjected to analysis. At the early stage
1
 Sourcebook on Project Proposal Preparation
of the project planning process, users of this book should ensure the participation of the project’s
stakeholders or all those people, groups and institutions involved in and affected by the project as well
as those regarded as valuable resource persons. This would be critical in establishing a comprehensive
and precise view of the situation of a locality.

To facilitate understanding and appreciation of these tools, a case study of a public-owned transport
illustrates their use. Please refer to Annex A for the case material, and Annex B for the sample
solutions.

2
 Sourcebook on Project Proposal Preparation

Chapter 1

A
development project is identified and implemented in order to solve
certain problems faced by majority of people within a particular
community. The people whose problems are to be resolved and who
stand to benefit from a project are referred to as the beneficiaries.

A project is defined as -- a set of specified activities carried out by a project

team of an executing agency in a fixed/limited period of time for a specific area
of operation using limited resources in order to achieve specified
outputs/objectives for a particular target group

In order to assess the role and functions of projects within the overall development process, two
important qualifications have to be made:

 Development is a process that involves a change from a present situation to a considerably

improved state. It is ideally effected or carried out in a participatory manner with the
beneficiaries contributing (services or otherwise) in its implementation to ensure its
sustainability even after the project life. The emphasis is in empowering the people in the
actual realisation of development potentials.

 Projects represent only one of the possible ways to support the development process. The
crucial importance of other and/or supplementary forms of intervention and steering (e.g.
macro-economic policies, education strategies, democratic frame conditions, etc.) must not be
disregarded.

Projects involve the use of scarce resources which have opportunity costs. These resources are
committed for specific lengths of time with the expectation of generating a stream of benefits in the
future.

Projects are designed to achieve specific goals and objectives. They are implemented within a definite
time frame and physical boundary. Projects go through several stages or phases which take place
between project conception and completion. The stages or phases constitute a specific sequence that is
cyclical in nature called project cycle.

All types of projects undergo similar phases, from identification to its maturity or termination. The
process is a cycle because upon its completion, learnings are generated which are then considered in
the design of new projects. The basic stages in the project cycle are as follows:

A. Pre-Investment Stage

1) Project Identification. Project ideas are conceived, identified, generated and selected.

2) Project Preparation. The feasibility of the project is established. This is when investigation of
the various market, technical, social, environmental, financial, economic and operational
aspects of the project are undertaken. This ensures attainment of project objectives and
strategies.

3
 Sourcebook on Project Proposal Preparation
3) Appraisal and Financing. This refers to the evaluation of the project by those who will
finance or invest resources to the implementation of the project.

B. Investment Stage

4) Implementation. The activities necessary to attain the objectives and goals of the project are
undertaken. Resources are used to generate the outputs necessary to bring about the desired
changes.

C. Post-Investment Stage

5) Project Operation. The project starts operation or the stream of benefits start to flow.

6) Post Evaluation. The project is assessed to determine the extent to which the project has
achieved stated goals and objectives. This stage assesses the intended and unintended impact
of the project after it has been operating for sometime.

Classification of Projects

Projects are classified in various ways to facilitate the selection process, the prioritization, financing,
budgeting, among others. Some of the common ways to classify projects are as follows:

1) Sectors (e.g. health, education, agriculture and transport);

2) Objectives (e.g. economic growth, social equity and development);

3) Number of purposes (single vs. multiple);

4) Area of coverage (all integrated area development like Bicol Basin Integrated Area
Development);

5) Target beneficiaries (e.g. communal fishermen);

6) Period of implementation (short or medium or long-term project); and

7) Mode of Financing (Build-Operate-Transfer (BOT) projects such as slaughterhouse, markets,

etc.).

With these basic information about projects, the succeeding chapters will examine closely the
important areas in preparing a project proposal in the form and kind required by a government agency
and other interested entities like donors and funding agencies.

4
 Sourcebook on Project Proposal Preparation

Chapter 2

Problem Analysis
Project identification begins with an analysis and recognition of a
problem. A problem is defined as a situation which is dissatisfying, i.e. falls
short of the expectation and objectives of (specific groups of) people. It can be
changed, and it requires detailed analysis and systematic planning.

Many project proposals discuss problems in a haphazard way, without explaining

the underlying reasons for persistence. These are the so-called ‘gaps’ in the problem analysis.
Sometimes problems are not formulated as existing negative situations, but as ‘absence of solutions’.

Most of the time, problems are described in very general terms (e.g., poor education), which give no
indication as to why they are so (e.g., lack of classrooms, insufficient reading materials, etc.). To be
able to pinpoint problems accurately and arrive at possible solutions, a more in-depth study must be
done and this process is known as Problem Analysis.

A comprehensive problem analysis defines the specific issues being faced by a community. It seeks to
explain the causes of these problems and the reason for their continued presence.

Problem Analysis

Problem Analysis, as a tool, seeks to identify the problems (this will serve as a starting point) and
analyse the existing situation surrounding the context of such problems.

In problem analysis, one identifies dissatisfying situations and their causes by:
 Describing dissatisfying situation as deviations between a desired end (a normative objective)
and an existing/actual situation so that the symptoms become clear; and

 Identifying the major causes of the dissatisfying situation as constraints in order to be able to
address the root causes (rather than attempting to cure symptoms).

In the process, other major problems around it and their cause-effect relationships are also identified.
But all these depend on the data and information that are available. In conducting an in-depth study of
the problem, the project team will hopefully be able to visualize the cause-effect relationship and
translate it into a diagram or what is known as a Problem Tree.

A Problem Tree illustrates how problems are linked and interrelated in a situation and defines which
appears to be the cause and effects of identified core problems and the other ramifying problems that
appear to result.

5
 Sourcebook on Project Proposal Preparation

How to do the Problem Analysis

Step 1: Identify the problems.

Using “metacards,” list all the problems. One card per problem.
Formulate each problem as a negative condition.

Step 2: Establish the cause-effect relationship among the problems identified.

From among the listed problems, try and agree on which is the cause and which is the
effect.
Example: low farm income is caused by low farm production/productivity which in turn
can be caused by lack of irrigation.

Step 3: Establish a convergence point (or points).

The convergence point for all the problems identified is referred to as the “core
problem” and becomes the over-riding concern that will have to be addressed.

Step 4: Review the diagram as a whole. Verify the cause and effect relationship and agree
on the soundness and completeness of the problem tree.

Objectives Analysis
After describing the existing “problematic” situation using the Problem Analysis, it is now important
to describe the overall future scenario after the problem is solved. This should be done to give an
overview of initial possible strategies or project design to address existing problems. The Objective
Analysis is a helpful tool towards that end. Specifically, the tool describes the means for solving the
problems and the effects of the solutions.

6
 Sourcebook on Project Proposal Preparation

How to do the Objectives Analysis

Step 1: Reformulate all negative conditions in the problem tree into positive conditions that
are:
 Desirable (what do we want to achieve?)
 Realistically achievable (what can we achieve given the technical and financial
capability of the implementors?)

Note!
Objective Analysis is not a mechanical reformulation of negative statements to positive
statements. While problems need to be addressed, they do not necessarily have to be
overcome. There are alternative ways of dealing with problems.
For example:

Levels of Solving Problems Potential Means

 Overcoming problems
- Bad soil quality - Fertilizer
- Poor access to markets - Transport
 Adjusting to problems
- Bad soil quality - Plant crops which grow on poor soils
- Poor access to markets - Production for local demand
 Reducing objectives
- Bad soil quality - No income increase possible, or:
- Poor access to markets - Outmigration of people supported
Step 2: Form a diagram showing the means-ends relationships in the shape of an
“objectives tree”.

Step 3: Review the diagram as a whole and verify its validity and completeness.
Note!
If necessary,
 Revise statement.
 Add new objectives that are relevant and necessary onto the next level.
 Delete objectives that are not necessary.

Analysis of Alternatives
From the Objectives Analysis, the planners may realize different paths towards solving the problems.
However, given the reality that there are constraints both in time and resources, the planners need to
define and have a sense of the best solution towards attaining the objective. An analysis of alternatives
is a systematic way of searching for solutions.

7
 Sourcebook on Project Proposal Preparation
How to do Analysis of Alternatives

The tool involves two major steps:

1. Search for alternative solutions: what choices do we have? You should have identified or listed
and characterized different means by which a defined status/objective could possibly be
reached or by which a deficiency could be resolved.

2. Decision on an alternative to be pursued: which choice do we make? You should have

assessed the possible alternative by applying relevant and specific criteria.

Step 1: Identify alternative sets of objectives (means-ends ladders) as potential strategies from
the objectives tree, and describe them.

For example:

Alternatives Description
A
B
C
D

Note!
 Identify several project options by combining approaches and components.

 Scrutinize which of the combinations would be the most viable.

 All alternative problem solutions considered must have a common characteristic: they must
contribute to solving a problem.

 Never include strategies or alternatives that are not analyzed. If there are strategies not in the
Objectives Analysis, go back to Problems Analysis; these may have been overlooked.

Step 2: Using Matrix 1 on Criteria Description

a. Specify and describe relevant criteria that will serve as bases for evaluating and selecting the
alternative that will be pursued by the project.

b. Decide on weights for each criterion. One criterion maybe considered more important than other
criteria. This criterion maybe given a higher weight, such as double the value of others or give
particular percentage which add up to 100%. (Optional)

For example:

Matrix 1: Criteria Description

Criteria Description Weights
1. Resources The less costly the project, the better. 15%
2. Time Frame The less time to gain impact for the beneficiaries, the 10%
better.
3. Social Impact The greater number of people to be benefited, the better 20%
4. Etc… ….
TOTAL 100%
8
 Sourcebook on Project Proposal Preparation

Note!

 Development objectives will determine:

- The chosen criteria for assessing the alternatives

- The weight of the criteria and therefore their relative importance

 Each criterion must be applicable to all alternatives.

 Criteria must be agreed upon by the stakeholders.

Step 3: Using Matrix 2 on Assessment Matrix, assess alternatives according to the criteria
description.

Criteria Alternatives
A B C D
1. Resources will require P___ will require P___ will require P___ will require P___
2. Time Frame will take ___ will take ___ will take ___ years will take ___ years to
years to be years to be to be completed be completed
completed completed
3. Social will benefit ___ will benefit ___ Will benefit ___ will benefit ___
Impact people/ people/ people/ households people/ households
households households
4. Etc…

Step 4:

a. Decide upon project strategy using a system of scoring.

Possible methods for project selection:

 Strict ranking. Each project is ranked uniquely for each criterion using numbers 1,…, n
(where n=number of project alternatives)
 Nonstrict ranking. Project alternatives are ranked allowing for non-unique standing. Some
alternatives may score the same ranking.

b. Rank alternatives according to selected method.

c. Multiply weights by scores.
d. Add up multiple scores for each alternative.

For example:
9
 Sourcebook on Project Proposal Preparation

Ranking
Criteria A B C D
Rank Wgt. Rank Wgt. Rank Wgt. Rank Wgt
.
1. Resources 1 .15 3 .45 2 .30 4 .60
2. Time Frame 1 .10 4 .60 2 .20 3 .30
3. Social 3 .60 2 .40 1 .20 5 1.0
Impact
4. etc…
TOTAL 2.0 3.0 1.0 4.0

Note!

The ranking or scoring of alternatives with respect to a particular criterion depends on an empirical
forecast of the development under different alternatives.

Step 5: Compare summed-up scores and evaluate the result.

Note!

The Analysis of Alternatives does not guarantee an “objectively” correct or optimal decision but only a
more transparent decision.

10
 Sourcebook on Project Proposal Preparation

Stakeholders Analysis
At the beginning of project planning, key actors (people, groups and institutions) who may have a
stake in the success or failure of the identified development project should be identified and studied.
This process is known as the Stakeholders’ Analysis.

People are complex beings having different interests and concerns that vary depending upon their
social class, group affiliation and economic activities. Even within the same group or community,
problems between men and women can be very different. Furthermore, there is also the possibility of
coexistence of groups with conflicting interests and those who may protest the implementation of the
project. Stakeholders’ Analysis, therefore, provides an insight into the different groups, organizations
and institutions which will influence the project’s implementation. This will determine who the key
actors are and up to what extent their stakes in the project are. Here, the different interests, potentials
and limitations are considered in the formulation of project plans.

When to use the Stakeholders Analysis?

1. During project identification. At this time, there is no project idea to speak of yet. A project idea
may, therefore, be generated from different sectors of the community by simply conducting
interviews or dialogs that would help in learning about their individual and collective concerns.

2. After decision in project approach has been made. The stakeholders analysis to be made in relation
to a project concerning, for example, increased rice production will have to focus only on those
people, groups or institutions directly benefited by the project or those who may provide help or
support to ensure the success of the project.

How to do the Stakeholders’ Analysis

Step 1: Identify individuals, relevant groups, organizations and institutions who may be
involved in or who may be affected by the proposed project
If consensus on the list cannot be reached, final decision is not needed at this stage.
Instead, agree on a tentative list and adjust in the latter stage.

Step 2: Identify their :

 Activities (groups) or tasks (organization/institution):
What do they do? These are activities or jobs they do at present before there is a
project to speak of.
 Probable interests with regard to the proposed project:
What do would they expect from the project? These are expectations on how the
project could help improve on the stakeholders' present activities, and/or their
current condition.
 Potentials (resources, skills, etc.):
What can they possibly contribute? These are the stakeholders' possible
contributions to help achieve their respective goals.
 Limitations/constraints:
What might prevent their full participation in the project? These
are factors that hinder the stakeholders from sharing their
11
 Sourcebook on Project Proposal Preparation

How to do the Stakeholders’ Analysis

potentials or contributions

Step 3: Describe consequences for the project planning

Consequences for project planning are possible actions that must be pursued by the
project to overcome the limitations/constraints as perceived by the stakeholders. These
are other possible project components/ interventions that may not have been tackled in
the Objectives Analysis.

All information gathered may be organized according to the following matrix:

Groups, Activities or Interests or Potentials Limitations or Consequences for

Organizations Tasks Expectations from (resources, skills, Constraints Project Planning
& Institutions the Project etc.)
Group 1
Group …
Group …

Expect the answers to the questions to differ according to each group’s social, political, professional,
economic and religious background. It is, therefore, important to clarify the interests and conflicts
between the groups as well as their dependency relationships.

12
 Sourcebook on Project Proposal Preparation

Chapter 3

A
fter identifying key considerations in developing the
project, it would be advisable to do a logical
connection of these considerations. The main
"elements" (objectives, activities, targets, etc.) and
components of the project have to be elaborated upon. The results of the
analysis conducted in the previous chapter will now be organized and
broken down into more detailed and concrete activity plans
through the use of the Logical Framework Approach (LFA).

The LFA is described as a set of interlocking concepts which must be

used together in a dynamic fashion to permit the elaboration of a well
designed, objectively described and valuable project (Practical
Concepts, Inc., Project Management System: An Integrated Systems Approach to Managing the
Project Cycle, Washington DC, 1979).

A shortcoming of many projects is that their planning documents are either inconsistent, incomplete or
unrealistic. A comprehensive and transparent project design must therefore:

 justify the decision in favour of the project and its funding (often through a formal contract
between different partners);
 provide the starting point for planning the details of implementation; and
 provide a general guideline for the execution of the project.

The LFA in project designing aims to assist in the planning, management and evaluation of
development activities. The LFA provides a structure or design allowing project planners and
evaluators to specify the components of their activities, and to identify the logical linkages between a
set of means and a set of ends. Thus, an LFA is an aid to logical thinking and a means by which a
project may be designed and described for analytical purposes.

DEVELOPING A LOGICAL FRAMEWORK

The construction of a Logframe is a time-consuming task but it helps planners, managers and
monitoring and evaluating personnel to specify, in advance, the goals and the means by which the
achievements may be monitored and measured. The Logical Framework process may be summarized
as follows:

13

1. WHY The project is carried out
2. WHAT The project is expected to
accomplish
3. WHAT The project aims to achieve
4. HOW The project is going to achieve its
outputs
5. WHICH External factors are crucial to the
success of the project
6. HOW The success of the project or the
achievement of project objectives
are assessed / measured
7. WHERE We will find the data required to
assess if we have achieved the
project objectives
Sourcebook on Project Proposal Preparation
This can be answered by the Development Goal
This can be answered by the Project Purpose
This can be answered by the Project Outputs
This can be answered by the Project Inputs
This can be answered under the Important
Assumptions column of the Logframe. Each of
the different levels of the Project Strategy,
particularly, the Goal, Purpose and Output
levels, normally have corresponding
assumptions.
This can be answered under the Objectively
Verifiable Indicators (OVIs) column of the
Logframe. Presumably, all the levels of the
Project Strategy should have indicators. But in
the case of the Activities level, indicators are
usually seen in the Workplan.
This can be answered under the Means of
Verification column of the logframe

The results of this thinking process and team decision-making are displayed in a matrix which
organizes the important information gathered:

Project Title Location Period of Implementation

Narrative Summary Objectively Means of Verification Important

Verifiable Assumptions
Indicators
GOAL  Measures of goal  Source of  Assumptions
achievement Information affecting the
 Method Used Purpose-Goal
Linkage

PURPOSE  End of project status  Source of Assumptions affecting

Information the Output-Purpose
 Method Used Linkage

OUTPUTS  Magnitude of  Source of  Assumptions

outputs Information affecting the
 Method Used Inputs-Outputs
Linkage
INPUTS Activities : Resources :  Initial Assumptions
 Nature and level of resources necessary about the project
 Cost planned
 Starting date
PRE-CONDITIONS
Conditions required for
starting up a project

14
 Sourcebook on Project Proposal Preparation
PARTS OF A LOGICAL FRAMEWORK MATRIX

A. DESCRIPTIVE SUMMARY

Composed of the following levels:

GOAL. This states the reason for undertaking the project. It is the ultimate objective of the
program to which the specific project will contribute. It is the overall development
orientation which is either the national or sectoral objectives or priorities (e.g. increased
income of farmers, improved health conditions, increased LGU income). This is the
outcome of the benefits of the project which usually reflects changes in the living
conditions of the beneficiaries. The key phrase is that the project simply contributes to
the achievement of Goal. It is therefore not part of the project. The Project Goal is the
basis for impact evaluation.

The Goal indicates the longer term benefits which can be expected from the project.
The extent to which these benefits can be shared with others aside from the direct
beneficiaries can be a measure for the relevance of the project to society as a whole.
This seems obvious, but it is often omitted. It should also become apparent how the
goal relates to the sectoral policies of the government.

PURPOSE. This is what the project is expected to achieve in developmental terms once it is
completed within the allocated time. Purpose is the motivation behind the production of
the outputs. It provides the picture of the end-of-project status. It indicates the 'concrete
benefits and impacts for the target groups' when the project is implemented. At the
same time, it reflects the intended response of the target group(s) and / or implementing
group(s) to the goods and services offered by the project.

Complex projects/programs may have more than one purpose (and corresponding
goals) if:

 different target groups (e.g. farmers, fishermen) are expected to take up different
innovations and corresponding changes in behaviour; and

 different changes of behaviour are expected from the target group(s) - (e.g.
production activities, hygienic practices)1

If a project does not directly work with the ultimate beneficiaries but with
implementing agencies/organisations there may be purposes at different logical
levels referring to:

 a change in behaviour of the implementors (e.g. improved services provided by this

group): Purpose Level I

 a change in behaviour of the intended beneficiaries as a consequence of the

achievement of the purpose at the implementors level: Purpose Level II

The project purpose states the reason for the project. It should describe why the project
is required by the beneficiaries and the benefits they will get from it.

1 It is not therefore proper for the project implementors to assume that the target beneficiaries will use or apply the
goods or service to be offered by the project. Rather, the project must ensure that project goods and services are used
by the target beneficiaries.
15
 Sourcebook on Project Proposal Preparation

A benefit can be a particular aspect of the well being of a person. This can relate to the
economic environment (productive, professional, etc.), the social environment (living
conditions, hygiene, nutrition, health, etc.) or even the personal environment (absence
of stress, fulfilment of aspirations, etc.) Achieving a benefit means that the
beneficiaries are able to acquire the benefit for themselves, rather than receive it from
somebody else. It is benefit resulting from a state of empowerment. Examples:
economic benefits like increased income or increased productivity are earned by the
beneficiaries. Similarly, increased hygiene in the living environment (less disease
transmission) is acquired or make possible by the people themselves.

OUTPUTS. These are the specific results that the project team must produce (goods and services
and facilities) through the proper management of inputs.

Most development projects are designed to deliver services to certain target groups.
The need for these services should be researched thoroughly in the formulation stage of
the project after identifying the causes of the persistant problems. This process is,
however, often neglected and the need for the services is not specified. Note that the
Outputs can be target for specific beneficiaries and also for intermediate service
delivery groups; e.g., teachers receiving teacher training in an education project.

ACTIVITIES. These are activities necessary to produce the outputs of the project. As there are many
activities, record only the major activities required to realize each output. It is
important to include the monitoring and evaluation activities needed for the
management of the project.

INPUTS. These are detailed estimates of personnel, goods and costs required to implement the
project. Inputs can be expressed in terms of the total project costs, or in such terms as
the number of personnel and length of their sojourn in the partner country, goods
according to their types, or local costs. The share of costs between the donor and
recipient countries should be mentioned as well. When the input list has been
completed, the relationship of the inputs and outputs should be reexamined from a cost-
benefit aspect. Usually, it takes a long period of time to complete a project, and the cost
of inputs is likely to change over the years. Since it is difficult to predict inflation rates
accurately, this should be treated as one of the project’s risk elements.

How to prepare a Logframe (General)

Step 1: Gather the key persons concerned with the project and have available a blackboard
or whiteboard to work on.

Step 2: Begin by deciding on the project purpose and goal (an objective tree may be useful)
and choose several achievement indicators which can measure the purpose and goal.

Step 3: Define the outputs necessary and sufficient to achieve the purpose.
Outputs are specific results that the project team can and must produce to achieve the
project purpose. Select quality, quantity, performance and time indicators which can
measure the outputs.

Step 4: For each output, list the necessary input activity, and resources required.

16
 Sourcebook on Project Proposal Preparation

How to prepare a Logframe (General)

Develop a schedule for when the activities will take place, agree on actions or
responsibilities for each team.

Step 5: As you work, be aware of the assumptions and list these in the appropriate column.
Be prepared to change and erase these as you go along. When finished, review your
logframe for completeness using the checklist.

How to Prepare the Narrative Summary

Step 1: Identify Project Purpose. The Project Purpose must be an objective which clearly
benefits the beneficiaries; there is a need not only to indicate the type of ‘services’
received, but also how these ‘services’ are used.

Step 2: Identify Goal. Place it above the Project Purpose in the logical framework. The Project
Purpose should contribute to the achievement of the Goal.

Step 3: Identify the Outputs necessary to achieve the Project Purpose. Outputs are all the
necessary elements of the project needed to determine the Project Purpose.

Step 4: Identify Activities necessary to generate Outputs.

Step 5: List the inputs needed in undertaking the activities necessary to generate Output.

Step 6: Identify conditions (external factors significant to the project).

 Conditions that should be met in order to start the initial Project Activities should be
placed as Preconditions in the bottom row 4th column
 Conditions additional to the Activities that are needed to generate the Outputs should
be placed in the 4th column at the level of Activities.
 Conditions additional to the Outputs that are required to attain the Project Purpose
should be placed in the 4th column at the level of the Outputs.
 Conditions additional to the Project Purpose that are contributing to the Goal should
be placed in the 4th column at the level of the Project Purpose.

Note!
 Do not be too ambitious when defining the Purpose and Goal! Purposes and Goals should be
realistic and doable.
 Under Goal, an important assumption may also be the attainment of other project's purposes.
 Logframe should be regularly monitored, especially during implementation.
 Logframe is a requirement of funding agencies, e.g. LGSP and European donors.
 Different donors require different Logframe formats.

B. THE IMPORTANT ASSUMPTIONS

17
 Sourcebook on Project Proposal Preparation
Assumptions are conditions that are not under the direct control of the project management yet are so
important that they must exist or hold true if the project is to progress or succeed.

The following are possible sources of assumptions:

 Natural Environment which is subject to natural variations that have to be taken into
account. In agricultural projects, therefore, weather or climactic conditions have to be
considered. Natural phenomena such as earthquakes, floods, hurricanes are unpredictable and
with often disastrous implications. Frequency of these natural phenomena have to be
considered in planning some projects;

 Actions of Governnment in other projects or programs at a policy or strategy level which

are higher than that of the particular project in question; and

 The extent to which significant inputs for outputs, purposes and goals achieved are controlled
by nonproject officers. These include financial resources, the technology needed , and support
necessary for project implementation.

The importance of specifying important assumptions is crucial as they are used to:

 assess the potential risks to the project concept right from the initial stages of project
planning;
 support the monitoring of risks during the implementation of the project; and
 provide a firm basis for necessary adjustments within the project, whenever it should be
required.

Other forms of Assumptions:

There are other conditions crucial to project management. As with the assumptions, they are
important and sometimes beyond the control of project management. Unlike the assumptions however,
these conditions should not only be monitored, but aggressive action should be undertaken to ensure
that they are met. The following are examples of these conditions:

1. Preconditions. The required preconditions for starting up a project (e.g. necessary budget and/or
personnel) or for its implementation with cooperating partners (e.g., partner agencies having taken
the obligation of financial or other contributions) often pose a threat to a project. Unless those
preconditions are realized, a project cannot be started or must not be continued; and

2. Sustainability Assumption. Sustainability, being one of the basic pillars of any project
intervention, must be the proper preoccupation of all responsible persons connected with the
project. It should therefore be built into the design of all the strategies, since it will not be achieved
by formulating an assumption to its respect.

How to Identify Important Assumptions

Step 1: Identify conditions that are external to the project or not under the direct control of
project management, but are so important that if not addressed will affect the progress or
success of the project.

Step 2: Assess the conditions according to importance and probability of occurrence using the
18
 Sourcebook on Project Proposal Preparation

Assessment of Assumptions Flow.

Step 3: Decide on important project assumptions and include them in the Project Planning
Matrix

Note!
 Assumptions can be derived from the objectives tree or any other source of information
concerning the framework conditions of the project.

 Assumptions must be worded as positive conditions.

Selection of Assumptions
Guide Questions

Is the condition external?

Yes No
Refer to Project Strategy

Is this condition important?

Yes No
Do not include this one

How likely is it to become reality?

Not likely Possible Very likely

Put this condition as an Do not include this one
Assumption in your
Logframe

Can this project be redesigned?

Yes No
Killer Assumption
STOP !!

C. THE OBJECTIVELY VERIFIABLE INDICATORS (OVIs)

The Objectively Verifiable Indicators (OVIs) represent a set of criteria which will indicate, in concrete
terms, that the expected results have been achieved. Their content adds precision to the statement of
intent given in the narrative summary. This process is of a more technical and quantitative nature. The
questions to be answered here are: if so much (Outputs) are provided, will so much (Project Purpose)
be achieved? And is it possible to generate the Outputs with the planned resources?

To be able to answer these, the project proposals must have clearly quantifiable targets. This is where
most proposals are wanting as only the variables are given, while the target value for the relevant
objectives are mostly unclear or unspecified.
19
 Sourcebook on Project Proposal Preparation

A fully quantified objective must have a target value with a measurable variable, specified target
group(s) for whom the service or benefit is intended, and a timeframe for its achievement or
completion.

Determining whether such expectations from projects vis-à-vis its costs are realistic requires
substantial technical knowhow. Project proposals should thus be self-contained texts with all the
information necessary for evaluation even by nontechnical people.

Specific Uses of OVIs:

OVIs will help project management to:

 specify project objectives;

 focus on important characteristics of the objective to be achieved;
 require planners to clarify what is meant by the objectives;
 tell if an objective is successfully attained by the project;
 provide a basis for monitoring and evaluation; and
 state clearly the following:
a. which goods and services a project plans to make available (output level indicators);
b. how the target group’s utilization of the goods and services (i.e. outputs/results) will affect
their activities, practices and behaviour (purpose level indicators); and
c. what benefits the target groups are expected to obtain from utilizing the project outputs (goal
level indicators) .

Salient Points of OVIs:

For OVIs to be valid and useful the following salient points should be present or considered:

1) OVIs must clearly indicate the criteria for the success of the project;

Roads 2000 miles of two-lane tarred roads

Constructed linking 15 villages to the provincial
capital by September 1984.
2) OVIs must focus on what is important in the objective for project purposes. An example of this
would be specifying water irrigation supply capabilities, or power generation capability or fish
supply capacity for a dam rather than total water capacity or the cubic meters of concrete used;

3) OVIs must be plausible, i.e. clearly related to the objective with which they are associated. This is
often taken for granted or completely ignored but is necessary to explain plausibility when, for
example, using indirect indicators (See #7); and

4) There must be a sufficient number of indicators of sufficient detail to allow adequate measurement
of the achievement of the objectives. Here, aggregates may have to broken down and other
significant characteristics (such as the location of achievement) may need to be specified.

25 sprinklers provided by 1/12/99

EQUIPMENT
400 gallons of DOT applied by 1/12/99
DISTRIBUTED
5 vehicles in good running condition by 1/1/99 20
 Sourcebook on Project Proposal Preparation

5) OVIs must be independent as a given indicator cannot reflect achievement at two distinct levels of
the hierarchy of objectives, neither should one indicator be simply a paraphrase of another
indicator nor a more detailed breakdown of another;

6) OVIs must be objectively verifiable, meaning two different observers would be able to arrive at the
same conclusion(s) regarding the status of the objective and such results can be communicated in a
clear and precise manner to a non-observer

It must be noted that this is not necessarily the same as a requirement for quantitative indicators
but qualitative indicators may be equally suitable. What is sought at this stage is the basis for
which the judgement is made should be clearly indicated and specified in a manner which will
allow others to make a judgement on the same basis;

A herd of cattle in good 400 Black Angus cattle weighing

condition 1800-2000 pounds each

Stated implicitly could be Factual—can be

interpreted in several ways measured

7) OVIs may rely on indirect indicators. It is not always possible to define OVIs which will
verifiable indications of achievement at a given level of objectives. In such cases it may be
necessary to resort to indirect indicators which should be related to the level of objective in
question.

For example, to measure the income of a particular group by using indirect wealth indicators such
as the ownership of certain appliances, quality of house construction materials used instead of
specifying actual income; and

8) OVIs must be defined precisely in terms of targets to be attained. This implies the need to specify
the nature of the OVI, its quantity, quality and the time required to achieve the objective.

Guidelines In Formulating Objectively Verifiable Indicators

NATURE Identification of indicators

Graduates employed

QUANTITY How many?

200 graduates employed

QUALITY How?
200 graduates employed in jobs which require knowledge in
chemistry

21
 Sourcebook on Project Proposal Preparation

TIME When?
200 graduates employed in jobs requiring a knowledge in chemistry
by September 1999.

LOCATION Where?

After the formulation of indicators with specified objectives and assumptions based on the above, it is
now recommended that the project strategy be reviewed and revised as needed. A good consideration
would be is whether the project strategy is still realistic and consistent.

Note!
 It might be necessary to formulate more than one indicator to specify different aspects of one
objective/assumption
 If information is lacking, find different indicators or add a new activity to obtain this information
(e.g. base line survey)
 Give targets for different points in time to allow periodic monitoring of objectives
 If an indicator is very complex/costly to verify or if changes will show only after a long time, look
for a "proxy indicator"

Hints for the elaboration of realistic target values

 analyse present situation (e.g. base line surveys)

 decide on target at end of planning period
 estimate type of development path (increasing, decreasing, linear)
 extrapolate values for monitoring dates

When setting realistic targets, the combination of quality (i.e. the minimum requirements) of the
indicator and the quantity aimed for have to be assessed together.

 A high threshold or the quality will normally be possible only with lower quantitative targets
(“intensive” project strategy)
 Less ambitious qualitative targets will allow a broader coverage in terms of quality (“extensive”
project strategy)

Sample OVI:
Necessary Facts Verifiable Indicators
Purpose: increase rice yield
Who: 500 tenant farmers
500 tenant farmers in the Mercado district
Quantity: by 50%
increased their rice yield by 50% between
Quality: maintaining the same quality of harvest
1992 and 1997, maintaining the same
as 1992 crops
quality of harvest as 1992 crops.
Time: between 1992-97
Location: Mercado district

22
 Sourcebook on Project Proposal Preparation
D. THE MEANS OF VERIFICATION (MOVs)

The Means of Verification (MOVs) ensures that the previously defined OVIs can be verified and
measured effectively by specifying the source(s) for the data. There are different possible sources of
MOVs such as official statistics, recorded data, reports and studies, among others. The reliability of
these sources should always be checked.

Usually, verification means are attained outside the project activities such as municipal or government
records. However, if these are insufficient or lacking, new data may be collected, processed and
preserved by the project team. In such cases, it is necessary to add activities for information gathering
into the project schedule. If the cost for such an activity is estimated to be high (more than 10% of the
total project cost), alteration of the Indicator may be required.

In the early stages of the project planning, it is difficult to set Verifiable Indicators or Means of
Verification since information in the project area may not usually be sufficient. A temporary action
would be to select simple Indicators and Means of Verification, and reformulate them at the latter
planning stage when data becomes available.

Means of Verification can be classified according to:

 the types of data gathered ( information required to measure OVIs)

 the sources of information consulted (physical location, people, documents must be valid,
cost should be considered and ease of access to the information)
 the data collection technique used.

Use of MOVs

Means of Verification are important because these confirm the indicators chosen are realistic since it
specifies how these can be confirmed or verified. These facilitate project evaluation by establishing in
advance how the criteria for success should be verified. And together with OVIs, MOVs form the basis of
the monitoring system of a project. In practice, MOVs can only be identified provisionally during a
workshop. These are revised as the monitoring system is elaborated.

Thus, in the acquisition of the data and information for MOVs great care should be taken in ensuring
that these actually exist (in the case of documents), that these are reliable sources even at the earliest
stages of project development. This is to avoid unpleasant surprises during the project evaluation and
will permit, if need be, modification of the use of resources or selection of others.

Reminders!
 For each indicator, one or more MOV must be specified
 When looking for MOV, consider:
- Are there required data available from secondary sources (official statistics, internal project
reports, etc.)?
- How easily available and up-to-date are these sources? and
- What are the costs, if the project has to collect primary data?
 If MOV cannot be found, the indicator has to be changed!

THE VERTICAL LOGIC OF THE LOGFRAME

23
 Sourcebook on Project Proposal Preparation

The vertical logic is based on the principle of causality in a means-ends relationship. Thus,

 the Outputs can be attained when the Activities and the Important Assumptions are fulfilled;

 the Project Purpose is attained when the Output and the Important Assumptions are fulfilled;

 the Overall Goal can be achieved when the Project Purpose and the Important Assumptions are
fulfilled; and

 the long-term success of the project is assured when the Overall Goal and the Important
Assumptions are fulfilled.

Guidelines in checking for Vertical Logic:

 Will the Project Purpose indeed contribute to the Goal (if the assumptions hold)?

The first check of the logic is whether the project purpose would indeed contribute to the goal. In
order to check this, the proposal should present evidence from knowledgeable people such as
experts, or the beneficiaries themselves, and also evaluations from past experiences. Sometimes,
the relation is rather obvious, but it also happens that completely unrealistic forecasts can be made
without any supporting data.

 Will the Project Purpose be achieved if the Outputs were delivered?

Checking internal logic involves checking whether the prediction made has been based on
reasonable grounds. Will ‘skills provided to jobless people’ lead to ‘more people employed’? This
could be, but only if very specific demands are fulfilled and if jobs are available. If this
information is not provided, the statement lacks internal logic. Checking logic would need some
subject matter expertise, although detailed technical knowledge is usually not required.

THE HORIZONTAL LOGIC OF THE LOGFRAME

The horizontal logic provides the details of a project for implementation and evaluation purposes. It
requires that of the results obtained at each of the four levels of the vertical logic be specified.

The objective here is to measure the resources and the results of the project(s) by indentifying the
Objectively Verifiable Indicators (OVIs) and Means of Verification (MOVs) for these indicators.

24