What does Value for Money mean?
A. Value for Money is a term used to describe the outcome that government is aiming for in all of its procurement activities. It is the key procurement objective, and there is now a renewed emphasis on achieving value for money through planned procurement processes, including a structured tender assessment phase. Value for money means considering a range of factors in making a procurement decision, and entails a shift away from the selection of the lowest priced offer in competitive tender projects.For further information refer to Procurement Direction PO1 (Value for Money Procurement).
Value for money is one of the three primary objectives of procurement under the State Procurement Act. The State Government is responsible for achieving the best possible outcome in both financial and non-financial terms in a timely and efficient manner, commensurate with the nature of the purchase. Best value for money is achieved by applying cost-effective purchasing approaches to deliver the best overall result for money spent – not merely the selection of the lowest price. Assessment of value for money includes the initial cost of purchase, fitness for purpose, service, support, warranty, operating costs, anticipated maintenance and repair and disposal or removal of the product at the end of its useful life.
