1.2 Best value
What is ‘Best Value’?
This concept of ‘Best Value’ should be built into the project plan at the outset. ‘Best Value’ is a method of assessing several alternative ways of delivering a project and selecting the most appropriate. It takes into account a variety of factors, including cost, the quality of the product and delivery, and the longevity of the solution. The aim of the Best Value approach is to choose a solution that most closely meets the needs of those who will use the service or product, over the lifetime of the project.
In competitive tendering, cost is the only factor considered and the lowest cost tender is selected. Best Value extends the principle of competitive tendering by considering also the most suitable product and the best method and team to provide it. Best Value seeks to maximise the benefits of competitive tendering, such as cost control, while minimising its disadvantages, such as lack of flexibility. The main aim is to achieve high quality as well as efficient and cost-effective delivery.
A Best Value approach has recently been adopted for public procurement in Scotland. The Scottish Executive’s ‘Best Value Task Force’ has provided guidance for local authorities, other public agencies and recipients of grants on improved methods for making major purchasing decisions.
The Task Force (June 1997) identified four key principles of Best Value:
- Accountability: All ‘stakeholders’ should be satisfied that best use has been made of public funds.
- Transparency: Reasons for decisions should be provided and the information underlying decisions should be freely available. Public involvement should be encouraged and complaints procedures implemented.
- Planning framework: A philosophy of continuous improvement should be adopted and ‘performance indicators’ introduced.
- Ownership: Wherever possible, Best Value should be achieved through partnership with other agencies.
In addition, the report identified six essential elements of Best Value:
- customer focus, i.e. involving customers in decisions about service delivery; sound strategic, operational and financial management;
- performance measurement and monitoring;
- continuous improvement in terms of value for money, including full costing, a fair tendering process and specification preparation;
- adaptation of CCT – increasing flexibility, reducing bureaucracy, considering the solution most appropriate in each case, and comparing in-house and contracted-out solutions;
- three-year budgeting for allocation of ‘guaranteed’ resources – sound planning and budgeting mechanisms, indication of funding levels, monitoring of outturn expenditure and delivery, measured against budgeted expenditure and targets.
How can ‘Best Value’ be applied to access management?
‘Best Value’ raises many searching questions about how pathwork is performed:
- How can public funds best be used to provide paths that meet the needs of users and others involved?
- What quality of work can the client expect from the contractor, and what is a fair price?
- What quality of management and control can the pathwork contractor expect from the client?
UPAG has developed common standards and provides training opportunities and recognition through vocational qualifications. The UPAG has identified three distinct ways in which ‘Best Value’ can be used in pathwork:
- To decide how projects are to be delivered. Some jobs – particularly larger construction work where techniques and design are established – are best carried out by contract teams selected by competitive tender. Other jobs – particularly those involving long-term management or close working with user and landowners – may be better implemented by employees or time-based consultants. ‘Best Value’ is the process of deciding the most appropriate method and approach including who will deliver the service: staff, contractors, consultants or volunteers.
- To decide which company or team should perform the task. ‘Best Value’ uses a variety of factors, in addition to price, to help select the best team for the job. These factors include schedule, the experience of the team, design and so on. The tenders are compared with a ‘benchmark’ or predicted cost for the job, and the work is given to the team that provides the best service at a price close to the estimated cost, i.e. the cheapest quote will not necessarily be selected.
- To measure how the chosen methods and teams perform, i.e. quality assurance. Best Value measures the performance of the people involved in a project, e.g. surveyors, managers and builders, to make sure that they are up to the job and work to national standards. Best Value also ensures that standards of design and construction, especially environmental standards, are met and that good business is implemented, e.g. in terms of timing, record keeping and fairness, by all involved in the project.
To be effective, a ‘Best Value’ approach should be adopted throughout the lifetime of a path, from project planning, through construction to long-term maintenance. ‘Best Value’ is about consistent performance across a range of projects and sites: it is not an optional extra used occasionally to justify a higher price!
Best Value in how access is delivered
The provision of access and building paths in Scotland is achieved in several different ways. Usually, the work is managed by path managers working for local authorities or charities. The construction work is delivered and built by private companies on contract to the managing organisation, and the access is maintained by a loose array of methods including rangers, volunteers, and dedicated site staff. Best Value is about identifying users’ and sites’ access needs, specifying the best solution as accurately as possible, and then selecting the best combination of people to deliver.
Different projects will require different solutions and combinations of resources, depending on the site, use, location, budget, available skills and other commitments. A busy cycle route may be managed and maintained by a local authority roads department and built by a ‘black-top’ contractor. In the case of a community path signing project, the initiative may come from the local community council, assisted by the local authority access officer, with the signs made by a local craftsman and installed and maintained by local volunteers. A popular mountain path over privately owned ground may be managed by a charity, built by specialist path contractors and maintained by a combination of estate staff and contractors. ‘Best Value’ can be applied to all three projects (if they include the use of public funds), and for each of them the different combination of people and resources may represent the best possible.
Central to delivering any path project is a comprehensive brief for the job required. This may be a job description, a contract tender or a list of end-user requirements; for many access projects, it will include all three. Production of clear and concise tender and contract documents is a key element of improving performance. Flexibility is needed to meet the variety of client and project requirements. The documents for any access project should include the following standards elements:
- Project plan: The project plan provides a brief overview of why the project is needed. The plan will clearly identify responsibilities for funding, managing, delivering and maintaining the route, and show a timetable for who does what and when.
- Survey: The survey explains ‘where and what’, in both diagrammatic and written form. It will describe the site and its environment, the levels and types of use expected, access routes and safety features, so that the contractor (or other team delivering the work) knows what is required in advance and, if needed, can prepare a comprehensive tender, with a price that reflects all features of the work required for ‘comparable’ tender appraisal. Thorough surveys are the basis of a good specification.
- Bill of quantity or list of work: The bill of quantity lists the physical elements of the project, and the type, lengths and quantity of work needed. Itemised pricing is not widely used for pathwork in Scotland because of the variable nature of the terrain on many sites for which there is no ‘standard’ cost.
- Contract conditions: This provides contractually binding parameters for client and contractor to operate within, and ensures that contracts run efficiently, in a safe manner, without environmental damage or additional expense. Two standard formats are commonly used: one developed by The Footpath Trust and used by many access charities and another developed by the Institute of Civil Engineers and used by many local authorities. These will need to be adjusted to fit the circumstances of your own project.
- Tender instructions: Tender instructions inform potential contractors and others involved in how the project will be run and bids assessed. In this way the contractor knows the procedures for receiving, assessing and awarding contracts and the manager receives all the necessary information to run and monitor the project.
Best Value in selecting which team compete for the job
All contractors who want to be considered for a job should be asked to provide information about their skills and team. If they are suitable they will be awarded the status of approved contractor. Some of the key criteria for selecting suitable contractors include:
|Selection criteria||Reference criteria|
|Length of establishment||Quality of finished pathwork on last three contracts (often from referees)|
|Normal workforce (supervisory staff, teams, advisors)||Compliance with specification and environmental requirements|
|Quality control (use of construction standards and training)||Schedule performance and record for completing on time|
|Environmental control (knowledge of principles and site)||Handling remedial work on previous jobs|
|Investment in training (on-the-job, SVQ commitment)||Team’s technical and organisational skills and abilities|
|Machinery competence (certificates held)||Level of client supervision required and quality of communication and working relationship with client|
|Health and safety policy, planning and training||Health and safety compliance and improvement|
In order to meet the criteria of transparency and accountability, the client should develop written procedures for approving contractors and identify minimum inclusion criteria. Experienced contractors with no formal qualifications should not be excluded if they can demonstrate an inherent sympathy for quality. It is not necessary to rank contractors, but it could be useful to develop a ‘preferred’ list for specific pathwork, based on contractor capabilities.
Best Value is most likely to be achieved by, taking into account price and quality. Start by drawing up a ‘shortlist’ of, say, four, selecting those best suited to the job. It may be the case that there is only one suitable and available contractor for the job, in which case a negotiated contract will provide better value than a competition.
The main factors to consider during shortlisting are:
- Previous experience: How long has the contractor been established and what type of work have they carried out previously?
- Project management: Are site management systems for quality control and environment safeguards in place? Can the contractor demonstrate compliance with health and safety procedures. What machinery do they use?
- Project personnel: What experience and training do the supervisor, team members and, subcontractors have? What competence certificates do they hold?
- Availability: Is the contractor available at the right time and can they commit the time necessary to complete the project successfully?
Often, a good way to find out who might be interested in particular projects is to distribute a list of contracts for the season, or of the contracts making up a complete path network, and ask approved and potential new contractors to choose which projects they might want to bid for. If, at the same time, they are asked to describe their suitability for various jobs, then shortlists can be drawn up for a whole raft of contracts. Remember, though, that written statements are no guarantee of quality or Best Value. Experienced contractors may have an innate sensitivity that cannot be expressed in writing but could be of great value, whereas a paper qualification does not always result in commitment to quality. Use your own experience of a team’s performance to supplement what they tell you on paper, and ask other clients about their experience with different teams.
‘Best Value’ in selecting the best bid to deliver the job
Best Value is mostly known as a system to select among a collection of competing bids, based on a variety of attributes, of which price is only one aspect. In pathwork the Best Value tender is based on several measures, typically used on medium to large path construction contracts in Scotland (around £10,000 to £200,000).
Key quality indicators when assessing a contract are listed below, with approximate weightings for how important they are to the overall range of factors being considered.
|Aspect of quality||Indicator of quality||Importance to decision|
|Previous experience||Length of time operating as contractor||Medium
|Type of work undertaken/relevant experience|
|CV of projects undertaken/finished quality/references|
|Ability/flexibility to deal with new techniques|
|Resources – number of teams/supervisors|
|Project management||Quality control systems (use of construction standards)||Lower
|environment safeguard systems (knowledge of principles)|
|Health and safety compliance (policy, procedures, method statements)|
|Supervision of work/team working|
|Training commitment (on-the-job, SVQ)|
|Machinery competence certification|
|Work brief compliance||Understanding of work brief||Medium
|Environmental considerations Sourcing and movement of materials|
|Availability/resources to meet completion dates|
Tender questionnaires are designed to elicit the following relevant information:
- information about quality control, environmental safeguards, project logistics, health and safety compliance (this information is usually provided in the form of method statements);
- work programme, i.e. estimated start and completion dates and the number of days or hours thought to be required;
- contract management – supervision arrangements, quality monitoring and progress reporting;
- project personnel, i.e. the names of the proposed supervisor and team and details of their relevant experience and qualifications;
- The most important factor is that every contractor must be able to perform reasonably well in all fields and have basic ability in all aspects of quality. Any contractor who is not able to meet the minimum quality level required should not be considered, no matter what price is offered. Compare and evaluate further only on the basis of the additional abilities of each team, and their price relative to your estimate.
The quality/price ratio balances the complexity of the required pathwork and the level of quality (including innovation and flexibility) required of the contractor against the requirement for an acceptable price. The quality/price ratio could be:
- 30/70 for a straightforward job involving standard techniques and materials, and a minimum environmental sensitivity site;
- 50/50 for a complex job involving a mixture of techniques and materials and variable environmental sensitivity;
- 80/20 for an innovative job requiring unusual or new techniques and materials and maximum environmental safeguards.
Different organisations use different systems to get the right balance between price and quality. Charities such as The National Trust for Scotland and the John Muir Trust do select contractors on criteria other than price, using structured judgement and operating within agreed tolerances either side of an accurately estimated cost for the job. Typically only bids around 15%–20% of the estimated cost will be considered ‘competent’ and tenders outside this range will be queried or excluded. Bids within 10% of the estimated price are normally accepted as being within the desired price range, and the best contractor from the price ‘bracket’ is selected based on quality and how they propose to deliver the work.
Some public sector managers use a matrix system as an aid to decision making. This involves weighting each selection criterion, and scoring each bid for ability to deliver on each criterion. There are a number of systems in use, and these are usually described in a ‘procurement manual’ or similar document for each organisation. For larger contracts, many public agencies appoint a quantity surveyor to supervise the selection procedure, and the access officer is only one in a team of project staff involved.
Matrix scoring is simply a method of formalising and recording the different factors taken into account when selecting the best bid for the job. Use it if it helps you achieve a better result, but remember that it is only as good as the judgement that lies behind it.
What is of ‘Best Value’ to you?
- As a path manager you will want to use a system of selecting contractors and allocating jobs that produces Best Value for you, given your available resources. You may work in an organisation with a comprehensive and well-established system, and you may even have an in-house quantity surveyor to run the contract for you, or you may have to establish your own selection system that meets the requirements of public sector funders.
- Whichever system you choose to try and achieve ‘Best Value’, remember to record each step along the way – create a written ‘audit trail’ that includes the reasons why you decided to select the team for the job and their abilities and price, alongside the other possible options. A simple two-page log recording each stage and decision should suffice, even for fairly large jobs – and this will enable you to justify your choice as the Best Value option for the project even if it wasn’t the cheapest.
- ‘Best Value’ can produce a lot of paperwork! But remember that it should be a positive tool that helps you make sensible decisions, taking into account both price and quality, in a way that is fair and consistent. Above all, you should get what you consider to be a good result. The time and effort taken to make informed decisions should be justified by knowing that you have chosen the best team for the job within the available budget. Avoid complex selection methods, as they rarely provide Best Value.