On 17th March the Procurement Group came together for a session on ‘Selection By Value’ and the use of the Value Toolkit within the construction sector. The discussion focused on improving procurement practices and ensuring that building safety and long-term value are prioritised on projects.
The discussion was part of a series we are hosting on key themes from the MHCLG’s guidance on procuring for Building Safety. This session delved into Selecting By Value to avoid a “race to the bottom” in procurement practices, with insights from the Value Toolkit and how it can support better decision-making throughout a project’s lifecycle.
What does the MHCLG’s Procurement Advisory Group guidance say?
The Procurement Advisory Group (PAG) guidance explores ‘how can a procurement process avoid a race to the bottom?’ and gives tips for users including…
- Avoid a single stage fixed price procurement process, especially if there is a risk that the client may be provided with an inaccurate fixed price based on incomplete or inaccurate information.
- Use a two-stage procurement process that enables early provisional appointments, following which tender team members, tender proposals and commitments can be tested and improved upon before full implementation of the project is approved
- Assess competencies carefully against a recognised set of criteria to ensure that duty holders and other team members can fulfil their commitments and obligations.
- Ensure that evaluation criteria are detailed, measurable, weighted and accurately reflect the client’s brief and the principles of value-based procurement.
- Demonstrate a robust balance between safety, cost and quality using evaluation processes that demonstrate value and provide evidence of suitable competences in insurance for public sector clients.
The Value Toolkit: Background and Purpose
Ron Lang, from AtkinsRéalis, seconded to the IPA/NiSTA, joined the session to talk more about the Value Toolkit, it’s origins and intended purpose.
The Value Toolkit is an important tool designed to help clients, contractors, and other project stakeholders define, prioritise, and optimise value throughout the construction process. The toolkit was originally developed as part of a broader initiative focused on procuring for value in the construction industry, moving beyond simply reducing costs to improving overall project outcomes. It evolved into a comprehensive tool that drives better decision-making regarding both what we build (the asset) but also how we build it.
The Value Toolkit is particularly valuable because the construction industry often spends more time focused on procurement than the actual asset being built and whether it will serve the desired purpose. The core goal of the Value Toolkit is to ensure that value is not just protected but optimised throughout the lifecycle of the project.
The Value Toolkit can also be used to support clients to ensure all decisions made throughout the project contribute to achieving their vision, by being able to…
- articulate what is meant by ‘value’
- prioritise outcomes
- identify constraints
The toolkit helps differentiate between two key aspects of value:
Strategic/Core Outcomes: These are the fundamental needs of the project. What does the asset fundamentally need, what are you investing in the asset for in the first place?
Value Commitments: This aspect reflects broader goals beyond the core functionality of the asset. Examples might include a commitment to net-zero carbon emissions or fostering social value within the community.
Supporting Better Decision-Making Throughout the Project
The Value Toolkit supports decision-making at all stages of the project, helping project teams understand the impact of their decisions on project outcomes and recognise that different decisions made at different times can have varying impacts.
By using the toolkit, stakeholders gain a deeper understanding of how each decision relates to the broader project objectives. The toolkit reinforces the importance of continually revisiting, “Why are we doing this?” and linking all actions back to the original objectives and value commitments of the project.
Prioritising Value
The optioneering feature of the toolkit is valuable when defining value, as it acknowledges that not everything can be achieved within budget constraints. It helps identify, prioritise, and make decisions based on the essential outcomes a project must achieve. Additionally, it aids in understanding how outcomes are interrelated—changing one aspect may affect others, and selecting one option could have implications for another.
Find Out More
Constructing Excellence is the open source distributor of the Value Toolkit, visit our Toolkit page to find out more and access the Toolkit resources.
Join us for the next Procurement Group meeting on Monday 19th May or find out more about our other upcoming events via our Events Page.
