The term ‘value’ relates to the benefits brought by something in relation to the resources needed to achieve it. Value for money (VfM), relates to the optimum balance between the benefits expected from something and the resources expended in its delivery. Value for money is sometimes expressed as a ratio between a function and the whole life cost for that function.
The similar term ‘best value’ refers to the most advantageous combination of the whole-life cost, quality (fitness for purpose) and sustainability (in terms of the economic, social and environmental benefits) available to meet client requirements.
Best value is often referred to in relation to the procurement system introduced in the UK by the Local Government Act 1999, which charged local and national government with a general duty of obtaining best value by ‘…securing continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness.’
The Act was introduced as a manifesto commitment of the Labour government following years of compulsory competitive tendering under the previous Conservative government, and was intended to improve the quality and delivery of public services by preventing local and national government clients simply opting for the lowest cost options, as this did not always provide the optimum long-term solution.
An important aspect of best value procurement is the examination of prospective suppliers against arrange of pre-defined criteria. Values can be assigned to factors such as price, past performance, relevant experience, technical ability, sustainability, health and safety, innovation, resource availability, management skills and systems, proposed methodology and so on. The bid evaluation criteria and their respective weightings give expression to the perception of what represents the best value to the client. The supplier achieving the highest score may then be appointed.
However, the best value approach was seen by some to increase bureaucracy, and in 2011, the coalition government introduced guidance that went some way to watering down the requirements of the Act.
 Related articles on Designing Buildings Wiki
- Appointing consultants.
- Auction theory.
- Balanced scorecard.
- Bid strategies.
- Construction contract.
- Expression of interest.
- Invitation to tender.
- Key performance indicators.
- Mid tender interview.
- Overcoming difficulties in value management.
- PAS 91.
- Pre tender interview.
- Procurement route.
- Public procurement.
- Selection criteria.
- The benefits of e-procurement in construction.
- Tender documentation.
- Tender evaluation.
- Tender processes.
- Value engineering.
- Value management techniques.
- Value management.
- Whole life costs.
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