Explained: ‘Value for Money’ in Government Procurement

When Government has a problem that needs to be solved, ‘Value for Money’ is almost always assessed for every business putting forward a solution which solves said problem.

Often, I get asked what Value for Money really means.  Is it simply the best price offered?  Or is there more to it which Government considers when selecting a supplier? 

While there’s certainly some grey areas, Value for Money encompasses many factors which you need to be aware of.

Before making any formal submission to Government, be sure to include the following if you want to give your business a better chance of scoring highly when Value for Money is assessed:

• The quality of your goods and/or services

• Fitness for purpose of your proposal

• Your experience and performance history

• Flexibility of your proposal, including innovation and adaptability over the procurement lifecycle

• The environmental sustainability of your proposed goods and services (energy efficiency, environmental impact, etc)

• Whole-of-life costs

Businesses that can clearly articulate ‘Value for Money’ have a distinct advantage over those that can’t.  Further, simply throwing out a ridiculously cheap price to win the business doesn’t address the entire Value for Money equation.

If you really want to score highly in Value for Money, then be sure to speak to the quality of your solution; how your solution fits the problem; showcase your experience in solving similar problems; how you’ll minimise the environmental impacts of your solution, and total costs over the life of the project.