Value selection criteria
Value-based procurement declining in private sector but optimism reigns over the new Procurement Act
Our key findings
decrease in private sector clients using value selection criteria.
no change in the public sector use of value selection criteria.
increase in public sector communication of value scoring criteria.
of contractors agree that the Procurement Act will result in better outcomes for clients.
“It depends on the values of the end user or clients. Where do they see the value? [Value] can only be achieved by executing our expertise at a very early stage and working collaboratively.”
National contractor
Contractor sentiment to the Procurement Act
What it means for projects
Absence of clearly articulated value selection scoring criteria is likely to make a project less compelling for the market. This may result in less competition being driven through whichever procurement route is planned.
What it means for client outcomes
Procurement that fails to articulate both how the client defines value and how it will assess tenders against those criteria is setting itself up for failure.
The supply chain will not be able to respond effectively and even if the contractor best able to deliver the desired outcomes is selected, not defining these outcomes makes it more difficult for the contractor to deliver them.
Andrew Fettes-Brown
Service Transformation Director and Global Board Director
It is encouraging to see the transition of industry towards better decision making in procurement. We’ve been championing Procuring for Value for a number of years. With the Procurement Act embedding performance KPI’s, we may see a genuine shift towards better outcomes.
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