Does Competitive Procurement Deliver Best Value?

Delivering Value

The focus of most procurement processes is to identify the "Best Value for Money" by getting suppliers to compete for business on the basis of Price and Quality.

Price is what the buyer pays to the seller in return for goods or services.

Quality is a measure of the amount and "goodness" of the proposed goods or services as determined by the buyer's requirements and evaluation criteria.

Note that Quality is only a proxy for Benefits. If the requirements are traceable to the Benefits then Quality may be a good indicator of value, otherwise not.

To demonstrate the integrity of procurement it is a general requirement that competition be conducted Openly, Fairly, and Transparently. This is achieved by using a rules based process.

The problem is do the rules always identify real Value or just minimise Price for unit Quality? Specifically: do the rules prevent buyers from engaging with suppliers in ways that might lead to identifying more value?