This phase is concerned with all the activities needed to prepare the ground for sound project formulation. The starting point will usually be a brief proposal for a project from the sponsoring agency with a request for this idea to be elaborated into a suitable investment plan. A team coordinator is then nominated, the rest of the team is appointed, administrative arrangements are finalized and terms of reference are prepared.
Checklist for Drafting Terms of Reference (Tool No. 1) provides guidance for this critical preparatory task which must ensure that the project formulation team is given all relevant information. This will usually include a general statement of intended project objectives and a provisional definition of the project's boundaries in terms of geographical areas, sectors, institutions and target groups. This provides the basis for drawing up a work plan for project formulation, for which Network Analysis (Tool No. 2) can be applied to determine in a systematic way the interdependencies among the various formulation activities, allocate tasks to team members and establish a logistical framework and timetable for coordinating the operations and for reporting.