Spend it wisely: The true meaning behind Value for Money

A core principle of major tender processes is ensuring that the procurement represents 'value for money'. It's a key criteria in awarding large projects, and is often used as a contract management assessment and auditing tool. Yet despite consistently being used as an indicator of success throughout both the procurement process and the life of any resulting contract, value for money isn't a principle that is easily defined or measured.

What constitutes value for money? And once you've identified areas of value, how do you ensure you make the most of them?

DEFINING VALUE FOR MONEY

Most jurisdictions define value for money in any procurement guidance it makes available to potential tenderers. Generally speaking, such definitions are broadly formulated around the concepts of cost, quality and risk mitigation.¹ The available procurement guidance is fairly comprehensive, but there are some new concepts and ideas developing around the creation and capture of value