International Construction Law Review
THE PRICE-QUALITY METHOD: LEGAL IMPLICATIONS OF THE EVALUATION PROCESS
LOW SUI PHENG
Department of Building National University of Singapore
JOHN BARBER
Centre of Construction Law and Management King’s College London
PAULINE S P ANG
Defence Science and Technology Agency Ministry of Defence, Singapore
I. INTRODUCTION
Although value for money is a universal concept that applies to all sorts of procurement decisions, it is a term that is most frequently used in the context of government procurement. Indeed, government procurement policy is largely shaped by the need to demonstrate value for money as proof of sound procurement decisions. Connaughton and Green pronounce that “Value for money is the optimum combination of whole life cost and quality to meet the client’s requirement …” 1
Bower sums it up as follows, in the context of government procurement:
“Government policy regarding procurement is that it should be based on best value for money and that all public entities should seek to secure continuous improvement in value for money. Best value for money means taking into account the optimum combination of whole-life costing and quality necessary to meet a public entity’s requirement. Thus all procurement decisions should be based on robust assessments of all the options in each set of circumstances throughout the life of a contract through effective contract monitoring and control.”2
How is value for money defined, and how can it be achieved? Other than the more common definitions given above, various methods of achieving value for money have also shaped its definition. For example, from a value management point of view, value for money depends on two components
1 John N Connaughton and Stuart D Green, Value Management in Construction: A Client’s Guide
(London: CIRIA, 1996) at 8.
2 Denise Bower, Management of Procurement
(London: Thomas Telford Publishing, 2003) at 188.
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The Price-Quality Method
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