Value For Money Matrix
Definitions of Value For Money across jurisdictions
New South Wales
At its simplest, value for money is the differential between the total benefit derived from a good or a service against its total cost, when assessed over the period the goods or services are to be
utilised
Achieving best value for money at the individual purchase level requires that in its assessments, a public authority considers cost and non-cost factors, where relevant, and makes a value
judgement about the best outcome. The value for money test may vary in complexity depending on the nature of the purchase, ranging from a simple price assessment for low value highly
commoditised goods or services, through to a detailed assessment and comparison of cost and non-cost factors.
Non-cost factors may include the following:
Western Australia
•
Fitness for purpose.
•
Technical and financial issues.
•
Supplier capability.
•
Sustainability.
•
Risk exposures.
•
Availability of maintenance, service and support.
•
Compliance with specifications.
•
Ease of inspection, communication and delivery.
The assessment of cost needs to consider any ongoing costs that may accrue beyond the initial price, including the associated costs of holding, using, maintaining and disposing of the goods or
services.
In assessing value for money, consideration should be given to whole of life costs, including the costs and benefits to Government and the community.
Consistent with the State Procurement Board definition, value for money is achieved by formulating procurement decisions that achieve the best possible outcome in both financial and non-financial
terms in a timely and efficient manner, commensurate with the nature of the purchase. Factors which may be considered in assessing value for money include:
Fitness for purpose
Service support and warranty
Whole of life cost
South Australia
Quality
Timeliness
Efficiency and effectiveness
Flexibility
Intangible costs and benefits
Price +
Best value for money – often isn’t the lowest purchase price. It is also about making quality decisions that remain good over the life of the product.
New Zealand
Get best value for money – account for all costs and benefits over the lifetime of the goods or services.
Make balanced decisions – consider the social, environmental and economic effects of the deal.
Value for money
Obtaining value for money does not mean a council is obliged to accept the lowest price. Section 186(4) of the Act specifically provides the council does not have to accept the lowest
tender.
The concept of ‘value for money’ involves taking into account both costs and non-cost factors including:
• advancing the council’s priorities
Victoria
• fitness for purpose
• quality
• service and support
• whole-of-life costs and transaction costs associated with acquiring, using, holding,maintaining and disposing of goods, services or works.
The Victorian Auditor-General’s Office defines value for money as the optimum combination of quality, quantity, risk, timeliness and cost on a whole-of-contract and whole-of-asset-life basis.
Driving value for money is the primary principle of the Queensland Procurement Policy.
Procurement must achieve the best return and performance for the money being spent. Price is not the sole indicator of value.
Queensland
The Queensland Procurement Policy includes three factors to be considered when assessing value for money:
-related factors including up-front price, whole-of-life costs and transaction costs associated with acquisition, use, holding, maintenance and disposal.
-cost factors such as fitness for purpose, quality, delivery, service, support and sustainability impacts.
Aust Govt
Northern Territory
Australian Capital
Territory
How to achieve VFM
How to achieve Value for Money
Comments
Jurisdiction
Points to note