VALUE FOR MONEY - IMPLEMENTATION

Currently in Australia there is an extremely high focus on Value for Money (VfM), particularly as Alliance delivery matures on public projects delivered in Australia.

Although there are many guidelines and anecdotes from a multitude of private and overseas projects, there remains a shortage of guidance available in achieving effective and efficient demonstration and delivery of VfM.

In recent DTF(1),(2) & (3) and Partnerships Victoria(4) & (5) reports, it appears that there is a major performance shortfall in the initiation of projects, including:

• Government has not adequately defined the Value Proposition and VfM criteria at Business Case, so projects have no clear specific project objectives or real means of measure VfM for that specific project;
• There is little incentive of drivers to achieve innovation and efficiency throughout projects;
• Although high performance teams are allocated to the projects, there is no evidence of ‘game-breaking’ or ‘high’ performance; and
• The cost of fast tracking aspects of the project need to be clear identified to ensure the premium is understood and the need matches the project objectives.

Exner staff has participated in significant research and practical advice in the area of defining VfM on major projects and designing systems to achieve and demonstrate VfM. Our work in this area can be illustrated by our VfM process diagram:

Areas of Exner’s work in VfM has specifically involved:

• Value Engineering workshops
• VfM Workshops and mentoring
• Benchmarking for design development/management
• Financial management
• Programme management
• Monitoring Quality outputs
• Documenting and monitoring the achievement of project objectives
• Guidance to project management team

Contact Exner to gain further information about our research into VfM and how the model can be used to add value and innovation to your projects.

Papers referred to here on VfM are located in our downloads section

(1) DTF 2006, Project Alliancing, Practitioners’’ Guide, DTF (Vic) April 2006.
(2) DTF 2009, In Pursuit of Additional Value – Benchmarking Study into Alliancing, DTF and Evans and Peck, October 2009.
(3) DTF (WA) and DTF (VIC) 2009, Exposure Draft Guidance Note No.3- Key Risk Areas and Trade Offs, DTF (WA & VIC), November 2009.
(4) National PPP Forum – Benchmarking Study Phase II, Report on the performance of PPP projects in Australia when compared with a representative sample of traditionally procured infrastructure projects, The University of Melbourne, December 2008.
(5) Partnership Victoria 2009, Partnerships Victoria Requirements, Melbourne February 2009.