Construction Value Management

Construction Value
Management

Table of Contents
INTRODUCTION.............................................................................................................................
MAIN BODY
1. Concept of Value For Money 3
2.Factors That Impact The Value Of Money 5
3.Factors to mitigate the failure of components 6
4. Opportunities for Value Management for Public Sector Infrastructure Organizations 7
CONCLUSION
REFERENCES

INTRODUCTION
Public sector organizations are those organisations whose controllers, managers and
operators are either government or government authorized agencies. There main objectives are to
provide good quality products and services to the customers and conduct all those activities
which are for the beneficial of the public. Construction is the process of making building or
infrastructure. It takes place at particular location. Construction is also an industry which
contributes 6 to 9% of the gross domestic product (GDP). It is a long process which starts with
the planning and ends until the project is built and prepare for the use. Value management refers
to the management of value in order to improve and sustain the balance between the needs and
wants of the stakeholders and resources which can be used to satisfy their needs and wants.
Report will highlight the concept of value for money (VFM), its failure factors and
solutions/approaches to mitigate the failure factors. Report will also describe the opportunities
for value management in public sector infrastructure.
MAIN BODY
1. Concept of Value For Money
VALUE FOR MONEY (VFM)
Value For Money (VFM) is the term which refers to the measurement of the
effectiveness, equity, economy spent and efficiency of the product. It also refers to the optimum
combination of cost, quality and conformable to meet the needs and wants of the customers.
In simple words, Value For Money (VFM) is the assessment of the maximum benefits
and utility from the products that customers has gained within the boundary of the available
resources. The variable used to measure the benefits and utility of the products involve cost,
money, quality, convenience, resources use, fitness for purpose, timeliness/availability,
customers' objectives and materials etc.
There are four key terms (which are generally known as 4E )which is used by UK’s
public sector audit agencies in Value of Money's definition (McKevitt, 2015). These 4 key terms
are as follows -
Value for money development should be Economic.
The public sector organizations of UK should buy raw materials and inputs at low cost
for the relevant and good quality. If the price of raw materials and inputs are high, this would