Redefining value in procurement

Ron Lang, Technical Director, Atkins (Former Impact Director for Value, Construction Innovation Hub).

The Value Toolkit was born from the recognition that the construction industry, and the built environment sector it serves, needs to shift from procuring for the lowest cost to procuring for value and outcomes.

The development of the Value Toolkit followed on from the Procuring for Value movement championed by Ann Bentley and the CLC, which was later enshrined in the UK’s industrial strategy and construction sector deal). It was then reinforced through the CLC’s Roadmap to Recovery and the Construction Playbook.

An exemplar of what collaboration can genuinely achieve, the Value Toolkit was developed by over 200 partners, including RICS, RIBA, UKGBC, Social Value UK, ACE, the CLC, CECA and CIOB. It is the embodiment of our sector’s ingenuity, its potential for technical innovation and, above all, its collective desire to do things better.

As we developed the themes of the Hub and began to work with stakeholders to identify their needs, we saw that, clients were operating in an increasingly complex decision-making environment. For public sector clients, there is need to demonstrate that policy is being translated into meaningful action in projects, programmes and across portfolios. For private sector, the increasing role of ESG is driving the need to demonstrate the delivery of broader outcomes beyond traditional cost, time and quality.

We learned that, in the absence of robust benchmarking data, clients struggle to articulate what value means for a given project context and to identify the outcomes they want and need to drive through investment in the built environment. Insufficient time is being spent on this aspect (value definition) at the front-end meaning design/delivery teams are often not clear on what success looks like or how they can influence it through what we build and how we built it.

It was identified that the appointment of design and construction teams with expertise across the social, environmental and economic outcome categories is critical for success, and, to make more balanced and informed decisions, we need to make sure we have broad representation.

Predictions made in design and commitments made at tender stage should be brought together to inform ‘as-built’ monitoring to ensure the teams are held to account and/or rewarded accordingly.

The Value Toolkit encourages shared responsibility (and shared risk/reward) for eventual outcomes (hence this approach aligns well with an alliancing type delivery model).

Was value ultimately delivered? Have predicted outcomes and impacts been realised? This gives reassurance that everyone involved is contributing to the development and achievement of the desired outcomes for the project.

Directly enabling clients to link key policy objectives to project outcomes, the Toolkit supports informed decisions at every stage of the project or programme lifecycle to optimise value.  Crucially, outcomes are not limited to the delivery phase but rather the whole lifecycle of the asset, creating a golden thread of value from early concept through delivery and use.

The pandemic gave us the opportunity to reset how we view value and how we embed value-based decision making in the future. While it’s too soon to know if the change started by the Hub will take root, I am proud of the work that we did, and the legacy that we leave behind for the construction and built-environment sectors.