Best Value Procurement
What is Best Value (BV) Procurement?
Best Value Procurement, also known as BV Procurement or BVP, is a procurement system which values other factors rather than price. Typically, BVP values the quality of the goods/services offered and the expertise of the vendor (supplier).
What does BV Procurement involve?
BV Procurement often involves the assessment of how cost-effective a project will turn out to be. By weighing up the value of a supplier’s offerings in terms of quality and expertise, you help avoid the risk of a low-reward outcome. If only price is considered, then you may get a good value-for-money service, but the product/service may be of low quality or provide little benefit to the local community (if you are considering the social value of a product/service). Therefore, in the long-term, a product/service may not be a good value for money after all.
Many buyers also consider:
- Innovation – is the product/service new and revolutionary to their market?
- Sustainability – is it environmentally friendly?
- Longevity (however this is similar to quality) – will the product last?
- Employees – how well does the workforce work?
- Management – what is their supply chain management process like?
Note: BVP practices are similar to the Most Economically Advantageous Tender (MEAT) principle, which also considers factors such as quality, social value, sustainability, and innovation.
Four Phases of BV Procurement
Typically, there are four phases to the BVP process:
- Preparation/Pre-Qualification – this allows the buyer to plan their process in advance, know what they are looking for and how they will evaluate suppliers.
- Selection – the supplier is then selected after a full evaluation of all the benefits their goods/services will bring.
- Clarification – project scope is clarified with the supplier in terms of a timeframe, deadlines, and risk management plan.
- Execution – the project is carried out according to the plan already agreed upon.
Top Advantages of BV Procurement
- Diminishes risk – by creating a BVP plan and declaring what you are looking for, you are minimising the potential risk to your company and your finances. Instead of paying high prices while getting little additional value.
- Increased healthy competition – by openly wanting higher value contracts, you can increase the incentive for vendors competing by driving down pricing and asking for added values such as innovation, social value, sustainability etc
- Streamlined process – by knowing exactly what you are looking for from a potential supplier, you streamline the process and know exactly what other values you will receive.
Top Disadvantages of BV Procurement
- Time-consuming – Creating a BVP plan can be a time-consuming process, however, the rewards gained greatly outweigh the time spent planning. You will be saving time in the long run, as without it, you may be stuck with a vendor offering too high a price and with little value added.
More Information About Us!
Procure Consult
With Procure Consult, we offer support with tender management and ad-hoc procurement consultancy. Our expert team will manage the end-to-end procurement process or offer assistance at any stage, as and when required.
Procure Health Check
With Procure Health Check, we’ll conduct a full review of the strategic and operational procurement processes within your organisation. We’ll identify the areas that need improvement and help you drive greater value from the procurement process.
Procure Analyse
The purpose of Procure Analyse is to conduct a high-level analysis of your spending activity. We’ll help you understand your current purchasing behaviour and highlight areas that can deliver greater value. Procure Analyse is also offered as part of Procure Health Check or as a standalone service.
Procure Outsourcing
With Procure Outsourcing, we deliver a range of procurement solutions on an outsourced basis, completely bespoke to you. This can range from delivering multiple tender projects as a package to delivering the full procurement function of your organisation.
Procure Post
Are you trying to find a supplier for your project? Post your tendering opportunity onto any of our 11 sector-specific portals for FREE with Procure Post!
Housed by our sister company, Hudson Discover, our portals host thousands of tendering opportunities for organisations of all sizes. For an additional cost, we’ll even help you identify your requirements and find the most suitable suppliers for your business.
Get in touch for a consultation and find out how we can help your business drive better value from procurement.
