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Project Management Journal

Vol. 50(2) 1–16
The Value for Money Concept ª 2019 Project Management Institute, Inc.
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in Investment Evaluation: Deconstructing DOI: 10.1177/8756972819827102
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its Meaning for Better Decision Making

Roy Barton1, Ajibade A. Aibinu2, and Jose Oliveros2

Abstract
The term “value for money” (VFM) is a poorly understood concept in practice. There is a lack of clarity in its application, especially
in the distinction between “value” and “money” when assessing VFM in investment evaluation and decision making. This article
clarifies the ambiguities in VFM by conceptually deconstructing its meaning using a “value triangle model” and, on that basis, we
propose a six-step VFM assessment procedure, which has been tested during VFM workshops on infrastructure projects.
Departing from the existing concept of value in value management and value engineering literature, the value triangle model rests
on Daniel Bernoulli’s concept of value as captured in his famous quotation: “The value of an item must not be based upon its price
but rather on the utility which it yields” (Bernoulli, 1954, p. 24). We deconstruct value into three components using everyday
language: useful purpose, beneficial outcomes, and important features, making it applicable to any VFM decision context. By
making a clear distinction between value and money and, by treating value and value for money as separate notions, greater clarity
of VFM is provided, thus enabling more effective measurement in practice. Implications of the proposed deconstruction of VFM
and the six-step procedure are discussed using stakeholder theory.

Keywords
decision making, money, private sector, procedure, procurement, public sector, value, value for money

Introduction
In daily life, people make “value for money” (VFM) choices
frequently: sometimes intuitively and sometimes through
explicit processes. VFM assessment is also used in the public,
private, commercial, and industrial sectors to make decisions
about entities, described as any “product, process, service, sys-
tem, or organization (or its part)” (AS 4183-2007, section
1.2.2) (Australian Standard, 2007). Even though the term
“value for money” is a common requirement in procurement
and project specifications, there is no universally acceptable
definition of what VFM is. It is a broad concept encompassing
factors, only some of which are quantifiable (Bauld & McGuin-
ness, 2006). It is often defined and conceived depending on the
context where it is being used. There is widespread agreement
in the academic literature that VFM is a difficult concept
because its meaning is rarely made explicit in public policies
(Heald, 2003; Khadaroo, 2008) or practice documents. Some-
times VFM is seen as cost effectiveness and misinterpreted as
cost reduction. In that regard, Grimsey and Lewis (2005) state
that, in many public-sector procurement endeavors, VFM “is
more often than not poorly understood and often equated with
lowest cost” (p. 375). The OECD development committee, the
UK government, the Australian government, and donors such
as the World Bank and the Inter-American Bank state that
VFM means striking the best balance between the three “Es”
(i.e., economy, efficiency, and effectiveness) (Jackson, 2012).
This approach proposes that good VFM investments should be
assessed in terms of economy (by spending fewer resources), in
terms of efficiency (by spending well), and in terms of effec-
tiveness (spending wisely) (UK National Audit Office, 2016).
Currently, most of the definitions of VFM are ambiguous
because of the lack of distinction between the concept of
“value” and “money” and as a result the process for measuring
or assessing VFM is ambiguous, lacking an explicit set of
principles to follow for performing a formal VFM evaluation.
The conventional value analysis (VA) developed by Miles
(1972) rests on function analysis. Thiry (2014) describes func-
tion analysis as “hard” value management because the goal is to
achieve a better outcome by reducing cost and or by improving
1
Australian Centre for Value Management
2
The University of Melbourne, Australia
Corresponding Author:
Ajibade A. Aibinu, The University of Melbourne, Australia.
Email: aaibinu@unimelb.edu.au
2 Project Management Journal 50(2)
quality in situations where the problem is well-defined and
understood. Function analysis makes no clear distinction
between value and money since the central focus is cost reduc-
tion. Function analysis is less clear when dealing with “soft”
value management, which, according to Barton (2000), cannot
be well-defined and is characterized by a high degree of com-
plexity, often having conflicting values and viewpoints (e.g.,
modern-day complex and non-engineering entities involving
multiple stakeholders, and where incomplete, ambiguous,
dynamic, and uncertain information must be used).
Heald (2003) observes that the meaning of VFM is rarely
made explicit in public policies. For example, OECD recom-
mends some tools for measuring VFM, namely, cost-benefit
analysis (CBA) and cost-effectiveness analysis. CBA is often
expressed in terms of the equivalent monetary value of the
benefits and costs. Although the CBA attempts to assess the
various economic costs, risks, and benefits, including their tim-
ing, as well as other less quantifiable impacts, it can grossly
understate value provided by the option being assessed since its
outcome is often reduced to financial terms. For instance, CBA
analysis of a rail project may focus on just one or two important
criteria, such as journey time, but ignore other factors that are
not readily measurable in economic terms but are important to
users. Evidently, CBA does not make a distinction between
value and money in its conception of value for money.
A report developed by Adam Smith International (2012) for
UK-Aid presents a comprehensive approach on what to con-
sider for achieving value for money at each stage of what they
call a “result chain,” which is categorized into costs, inputs,
activities, outputs, outcomes, and impact. However, in the
report, there is no explicit description of VFM assessment pro-
cedure, and thereby lacks clarity as to its meaning.
The question is: How do you ascertain value for money in
any investment decision-making context including any entity,
such as whole of government or individual projects? The pur-
pose of this study is to respond to the question in a way that sets
out principles to apply and explicit practices to follow. Our aim
is to deconstruct the underlying conceptual underpinning of
VFM using simple daily human examples of VFM decision
making as well as infrastructure projects that are relevant. The
focus of this article is not to compare specific VFM policies,
instead it proposes the value triangle model for understanding
the meaning of VFM, and on that basis, proposes a procedure to
guide VFM assessments in any context.
The procedure proposed in this article has been tested in
VFM-focused workshops on infrastructure projects. The
value triangle model has been used to inform the value man-
agement standard in one of the Asia Pacific countries. To the
best of our knowledge, it is the only known pragmatic, gen-
eric, and tested approach.
Assumption and Article Structure
This work implicitly assumes that VFM is not something that
can be calculated in the way costs of projects, products, or
services are calculated. Instead, VFM is always based on a
judgment that can be calibrated in categorical terms, such as
“good value for money,” “poor value for money,” “best value
for money”—where the terms “good,” “poor,” and “best” are
the measures, referred to as ordinal measures, which express
how various options perform comparatively (Stevens, 1946).
Although this article makes reference to the practice of value
management and to the Australian standard on value manage-
ment, the article is not about value management itself, which is
defined as a “structured and analytical process” and methodol-
ogy for enhancing decision making for achieving best VFM
outcomes (AS 4183-2007, section 1.2.13, p. 2). The procedure
described in this article may be applied with or without an
accompanying value management framework or process. Nev-
ertheless, we have used stakeholder theory to explain the char-
acteristics and the context within which the proposed VFM
procedure is generally used and how stakeholders can impact
the outcome of the procedure. This article provides greater
clarity to the meaning of VFM by making a conceptual distinc-
tion between value and money. By treating the concept of value
and value for money as separate concepts, this article sets out
generic principles to follow when making a VFM assessment.
This work is divided into five main sections apart from the
introduction and conclusion. As a point of departure, the first
section summarizes the existing VFM research and discusses
the methodology adopted in this article. Next, in the second
section, the VFM context, its definition, and its principles are
established. This is followed by a third section in which we
introduce drawing a conceptual distinction between value and
money in VFM using the value triangle model. In the fourth
section, we present the process for assessing the different
money options (i.e., cost evaluation), how to make a judgment
and identify the options with the best VFM. The scale of mea-
surement in VFM assessment are then presented. A six-step
procedure for assessing VFM is described in the fifth section.
This is followed by a discussion section, which includes a
practical illustration of how the procedure has been applied
in practice. The final section draws conclusions based on the
findings and proposes future research directions.
Value for Money in Previous Research:
A Summary and Point of Departure
After reviewing the value management literature, four conclu-
sions can be drawn: First, most of the existing definitions in the
value management domain present value as an attribute influ-
enced by cost (i.e., money) (Table 1), implying that, depending
on the price or cost of obtaining or using an object, the value of
the object can change. Explicitly separating the concept of value
from the concept of money is consistent with the original philo-
sophical and psychological definitions of value by Daniel
Bernoulli in 1738, which do not specify cost or price as a para-
meter influencing the amount of value (Audi, 1999; Dawis,
1991; Hartman, 2011; Keeney, 2009; Perry, 1914; Wagner,
1999; Zimmerman, 2001). Although it may be argued that there
Barton et al. 3

Table 1. Summary of Definitions of Value

Value Definition Reference Description

1. Relates function and cost Crum (1971) function

value ¼
cost
2. Relates cost, time, and function Norton and McElligott (1995) want þ worth þ need
value ¼
cost
3. Value index Parker (1994) function cost
value Index ¼
function worth

4. Value opportunity Crum (1971) use value+esteem value

value opportunity ¼
price

5. Customer value Thiry (1997) needs+objectives+targets

customer value ¼
resources
6. Producer and buyer value Fallon (1980) function
value producer ¼
Cost
benefit
value buyer ¼
price

7. Need and ability to satisfy Shillito and De Marle (1992) need  ability to satisfy
value ¼
cost
Pn
8. Need and ability to satisfy Shillito and De Marle (1992) worth x
value ¼ 1
n
9. Stakeholder value Thomson et al. (2006) benefits  sacrifices
value ¼ ðrelated toÞ
resources
10. Value ratio Dallas (2006) benefit delivered
Value 1
resources used

Sources: Authors based on Kelly (2015) and Dallas (2006).

is a close connection between value, quality, and cost (Kelly,
Male, & Graham, 2015), cost cannot increase or decrease the
amount of value. However, cost and quality need to be under-
stood in any attempt to increase value for money. Thus, the
inclusion of the money variable in the construction of the mean-
ing of value by most of the existing literature (see Table 1) is
unhelpful when seeking to deconstruct the meaning of VFM and
to measure for better decision making in practice. This study will
provide greater conceptual clarity to resolve this inconsistency.
Second, when assessing the amount of value an object or ser-
vice provides, the assessment should take account of values
related to human ideals, goals, priorities, needs, and so forth. This
is informed by human values theories such as Schwartz’s theory
(2012),which focuses on what is important to humans; and cus-
tomer value theory (Woodruff, 1997), which refers to customers’
perceptions of what they receive in return for what they sacrifice
(Zeithaml, 1988). By reducing VFM to financial terms, most
VFM methods, such as CBA, are strictly scientific, following a
positivist philosophical assumption, and thus, often miss the con-
struction of value by those who are affected by an object or
service. In its construction and implementation, the procedure
proposed here will adopt a constructivism paradigm whereby it
considers value as constructed by stakeholders in terms of utility
desired in an object, service, or entity and including non-human
aspects of value, such as ecological needs of the natural environ-
ment as well as the potential changes to those values over time.
Third, there is agreement in the literature that money in VFM
should be stated as an overall cost or price and not just the initial
capital cost, but the whole-life cost, including operational cost,
risk cost, and so forth, which can be analyzed and defined in a
form of net present value (Kelly et al., 2015, p. 536).
Fourth, while many of the existing VFM standards, literature,
and policy documents provide some guidance on VFM considera-
tions, they do not provide any explicit theoretically grounded prin-
ciples or procedures to support the process for reaching a VFM
decision in practice (Heald, 2003). This study will bridge this
theoretical gap by deconstructing the concept of VFM and its
meaning, and develop a six-step procedure for assessing it that is
explicit and can be followed in any VFM decision-making context.
Methodology
This article is neither a systematic review nor a meta-analysis
of previous studies. It is an exploration of the theory and
4 Project Management Journal 50(2)
practice of VFM assessment, deconstructing them where nec-
essary and testing them against logic and coherence. The anal-
ysis evaluates and challenges the existing definitions of value,
value for money, and VFM assessment in theory and practice,
and discusses their validity and logical relations. In other
words, it uses a phronetic social science approach that puts
emphasis on understanding the values and interests of social
phenomena, which differs from the epistemological approach
of natural science that seeks for laws and theories to predict
phenomena (Flyvbjerg, 2005). The approach also differs from a
descriptive approach; it consists of a reflexive process that
includes researcher knowledge as an input for the outcome,
looking for the motives and interest that are present in a spe-
cific social phenomenon. It is based on practical judgment,
whereby our argument is developed by combining and con-
trasting existing knowledge on VFM with logic and experience
from practice. It is an inductive process (Johanson & William-
son, 2013) in which patterns and inconsistencies are searched
within the existing knowledge, followed by a reflective process
for proposing how a theoretical framework can be applied in
practice. Deconstructing the VFM concept leads to a better
analysis and understanding of it (Brunet & Aubry, 2016).
Although some case examples are presented, they are not case
studies; they have been used strictly to illustrate the principles
put forward where relevant.
Value for Money: Concept and Principles
In deconstructing what value for money is, consider a see-
mingly simple decision involving a traveler’s choice between
walking across the street for breakfast in a café or the traveler
just having breakfast downstairs at the hotel where he or she is
staying. The hotel offers a dazzling array of options for break-
fast, including many types of cereals, yogurt, fresh fruit, cold
meats, cheese, and several hot breakfast options that satisfy
Eastern and Western palates, all nicely displayed in a buffet.
The traveler could easily eat in the hotel and save him or herself
the walk to the café, but the traveler instead chooses to eat at
the café. The traveler prefers the personal service, the indivi-
dually made breakfast served hot, and the barista-made fresh
coffee, also coupled with the fact that the breakfast in the café
costs less than half the price being asked in the hotel. To the
traveler, the café offers much better VFM than the hotel. It
provides the traveler with exactly what he or she wants, for
half the price of the alternative at the hotel. Whether the subject
for which VFM is being assessed is breakfast in a hotel versus
in a café or a multibillion-dollar entity such as construction and
engineering projects, or the whole of government, the princi-
ples are the same. In this breakfast example, the traveler
chooses the café option over the hotel option because it was
closest to meeting the traveler’s requirements (including per-
formance requirements) while also presenting the lowest cost.
This way of constructing VFM is different from existing
definitions in the value management domain, where value is
presented as an attribute influenced by cost (i.e., money). The
traveler’s VFM decision was not simply a “lowest-cost” deci-
sion. It was a VFM decision. The lowest cost only appeared
once the options and their relative performance had been iden-
tified. On that basis, the traveler made a judgment—the café
provided much better value for money than the hotel (based on
the traveler’s performance criteria and the advertised costs).
That judgment “much better than,” is the measure that helped
the traveler decide which option to choose. It can be argued that
exactly the same type of measure is applicable in any
investment evaluation or decision-making context. Based
on this explicit separation of value from money, the process
to determine the best VFM is always the same—define
requirements in terms of value provided, identify options
to provide those requirements, and then compare them to
see which gives the best VFM. Thus, for the sake of clarity
in the VFM assessment process, value and value for money
can be taken as separate concepts.
Consider another example involving a visit to the supermar-
ket. To a buyer, good value for money might mean that the item
the buyer regularly purchases at the supermarket is being sold
for half its usual price. The buyer needs no help in recognizing
that such an item presents good value for money. These two
common examples embody a very important principle that will,
throughout the article, form the basis for describing how VFM
can be assessed (i.e., that value for money is always about
comparisons). The supermarket item represents good VFM
compared to the usual price. The breakfast at the café repre-
sents good value for money compared to breakfast at the hotel.
At its core, VFM is a rather simple notion: It describes a rela-
tionship between something purchased and the price paid com-
pared to other options. Continuing the supermarket example, if,
on leaving the supermarket, the buyer discovers that the item is
on sale in the shop next door at a lower price, then what had
appeared to be good VFM (in the supermarket) is probably no
longer so. Hence, customers often shop around, making com-
parisons, seeking the best VFM. The examples described
appear simple, and yet VFM is actually quite a complex matter.
Using the supermarket example, assume that the buyer is pur-
chasing not just one item, but a whole week’s worth of gro-
ceries. Also, assume that despite the half-priced item, the price
for the overall purchase has actually increased. Maybe there
was a bargain for one item, but the supermarket has adjusted
other prices to compensate— “a sprat to catch a mackerel”
marketing. To assess the achievement of good value for money,
the buyer would need to determine the cost of the whole pur-
chase and make comparisons on that basis. This could be done
on a week-by-week basis at the particular supermarket, but it is
also the case that another buyer will make comparisons across
several supermarkets, selecting items from each one, to get the
best value for money. Of course, all this takes a lot of time and
effort and some buyers may factor the opportunity cost of their
time spent on such a task, adding it to the price paid for the
goods. This leads to the notion of total costs, which is important
in assessing value for money. How the various costs, benefits,
opportunities, and risks are identified and accounted for in
Barton et al.
VFM assessment is beyond the scope of this article. However,
when assessing VFM in any investment evaluation or decision-
making context, these same principles apply.
VFM is assessed based on the relationship between some-
thing purchased and the price paid when compared to other
options. The “something” here could refer to the entity—any
product, engineering and construction project, process, service,
system, or even a whole organization. There are always com-
parisons, and the intent is to consider, as far as is practicable,
total costs, including life cycle costs. The comparison will take
into account all requirements, and will recognize that some
options are likely to perform better or worse than others on a
requirement-by-requirement basis.
Value in Value for Money: The Value Triangle
Model
To develop an explicit procedure for measuring VFM, a clear
distinction and separation between value and money needs to
be made. As stated earlier, most of the existing literature incor-
porates money in their construction of value. The literature also
emphasizes that value can be enhanced when the same func-
tions can be provided at a lower cost (Kelly, 2007), which
means that a reduction in the cost of an object increases the
value of it. The problem with that assumption is that it makes
any attempt to measure value unclear. This study constructs
value from the philosophical perspective, which is referred to
here as an attribute of the object related to the perceptions of
the users, stakeholders, or decision makers regarding that
object, depending on the context; money is described as the
sacrifice that needs to be paid to obtain that value (the price of
the object). Of course, in VFM, the non-human aspects of
value, such as ecological needs of the natural environment,
need to be considered. Thus, there are four philosophical def-
initions of value: intrinsic, extrinsic, instrumental, and contrib-
utory. The intrinsic value is contained within an object before it
even exists (Perry, 1914). This means that just by imagining an
object, it can have value. Extrinsic value refers to the existence
of that object and can be related to the consequences of the
existence of that object, such as pleasure or satisfaction. Instru-
mental value refers to the object or service that provides intrin-
sic or extrinsic value. Contributory value takes into account the
setting of the object; this is the value that the surrounding
combination of factors provides to the object (e.g., a yacht in
a desert or in a lake). The non-human aspects of value can
therefore be described as contributory (e.g., environmental
aspects such as species preservation).
In 1738, the famous philosopher and mathematician Daniel
Bernoulli wrote that, “the value of an item must not be based
upon its price but rather on the utility which it yields” (Ber-
noulli, 1954, p. 24). Bernoulli’s observation has much rele-
vance to VFM assessment. Applying Bernoulli’s definition to
the breakfast at the café and the supermarket examples, the
value of the various alternatives is in their utility—their func-
tion and purpose—and the price is simply what is paid. In this
5
Useful
Purpose
The
“Entity”
Beneficial Important
Outcomes Features
Figure 1. The value triangle model for analyzing value.
context, the VFM question is: How much utility (i.e., function
and purpose) can be obtained for the money? Thus, the value is
not in the price, but in the utility and the VFM question is: How
much value can be obtained for the money? This notion of
utility is central to modern-day value management that has its
roots in a process originally called value analysis, which has
been adopted by various value management frameworks such
as SAVE International’s standard job plan and the function
analysis system technique (F.A.S.T.) developed by Bytheway
(1965). It is instructive to reflect on the origins of this process
in many ways, but especially in relation to the concepts of value
and utility. Consider the following statement made by the ori-
ginator of value analysis, Lawrence Miles (1972):
The customer wants something enclosed, held, moved, separated,
cleaned, heated, cooled, or whatever, under certain conditions, and
within certain limits; and/or the customer wants a shape, a color, an
aroma, a texture, a sound, a precious material, or whatever to bring
pleasure to him or herself or others that he or she wishes to please.
That is all the customer wants. That is all the customer cares about.
Thus, the language of function is the language of the heart of the
problem.
Although Miles’ notion of function has significantly influ-
enced the development of value engineering and value man-
agement, the use of the term function is less clear when
compared to the term value. At the same time, to provide
greater clarity, value can be disaggregated using the value tri-
angle model. Drawing on the notion that the value of an object
is based on its utility, value can be decomposed, using everyday
language, into purposes, benefits, and the important features of
an object as constructed by the stakeholder. These are analo-
gous to Miles’ reference to the customer wanting functions
“under certain conditions, and within certain limits.” This con-
ceptualization of value necessitates a separation between value
and money in any VFM assessment and decision making. Thus,
in making a distinction between value and money, the value
triangle model (Figure 1) departs from the existing value man-
agement concept of VFM as well as from the functional
6 Project Management Journal 50(2)
analysis approach adopted by SAVE International’s standard job
plan, which defined value as the ratio of function and cost. It is
also different from the Function Analysis System Technique
(F.A.S.T.), where stakeholders are required to classify function
as “basic function,” “secondary function,” “higher order
function,” “lower order function,” and “unwanted function.”
These terms are ambiguous in practice. Our proposed value
triangle model provides what appears to be the most pragmatic
and explicit definition of value in a way that can inform decision
making and VFM assessment in practice. The aim of the value
triangle model is to describe the value of any object or service in
respect to which VFM decision needs to be made. The three
components of value can be discussed and agreed upon by sta-
keholders and decision makers, namely, useful purpose, benefi-
cial outcomes, and important features. This disaggregation of
value using everyday language that all stakeholders can under-
stand makes the value triangle applicable to any decision making
in practice, including non-engineering contexts.
Useful Purpose
This refers to the purpose (or purposes) of the object or service
for which VFM is being assessed. In practice, the group of
stakeholders agrees to a “primary purpose” statement, which
might include more than one factor. The useful purpose needs
to be clearly defined in order to understand the value of the
object, facility, service, and so on. For instance, the value in
any object, such as a breakfast at the café, a supermarket item, a
hospital facility, a fleet of buses or a mining strategy, has a
strong relationship with its utility (its function and its purpose).
The role of price is simply to procure that utility.
Beneficial Outcomes
Here, the group of stakeholders comes to agreement on the
benefits that they expect to flow from fulfilling the primary
purpose, leading to the construction of a set of beneficial out-
comes. When evaluating potential alternative options, it is pos-
sible that some of the options fulfill the same purpose but
provide different benefits. The value triangle model gives a
basis to compare the options against the stakeholders’ require-
ments. This is consistent with the customer value hierarchy
model in the field of marketing, which establishes value using
three levels: attributes of the product, consequences of the use,
and customer goals (Woodruff, 1997). The beneficial outcomes
are consequences that the object can create for the stakeholders.
Different alternatives can have the same purpose but create
different consequences as a result of the differences in design
or other features.
Important Features
Decomposing value establishes a basis for making the compar-
ison and choice among alternatives. Therefore, the third com-
ponent of the value triangle model is the identification of
important features. These are factors that add value to the entity
but are not, of themselves, the primary purpose. An example of
an important feature is the reliability of a train service, whereas
the primary purpose of the train service (from the customer’s
viewpoint) is to take the customer from point A to point B.
The Value Statement
In VFM assessment, the useful purposes, benefits, and impor-
tant features can be captured from multiple stakeholders’ per-
spectives in a single statement, which can be referred to as a
value statement. Several issues could arise when stakeholders
construct the value statement. We will highlight some of the
issues in the discussion section. The value statement, consid-
ered a “statement of requirements” expressed in value terms,
may be used as a primary reference for decision making and
especially as a primary reference in determining value for
money. For illustrative purposes, some sample parts of a value
statement produced for a major waste-to-energy incineration
plant are shown in Table 2, which describes the list of value
requirements as agreed upon by the stakeholders.
The Construction of the Value Triangle:
Non-Human Value and the Time Element
The value triangle is socially constructed, typically through a
facilitated workshop, in which stakeholders work together to
define their requirements. The model will work even in the case
of a single customer (e.g., the traveler purchasing breakfast),
but for the most part, with any form of infrastructure, there are
multiple stakeholders to consider. It is these stakeholders, who
define value using the value triangle as their framework. In
constructing the value triangle, both human and non-human
aspects of value are considered, departing from the conven-
tional CBA, where human construction of values is often
missed. As indicated in the examples of value from a value
statement (see Table 2), non-human aspects of value might
include the environment, such as in the preservation of
resources, maintaining species diversity, and so forth. The
value triangle also considers the changes in value that may
occur over time. For example, in a train network project a
beneficial outcome to the driver might be to put food on the
table through employment. However, over time, the trains
might become driverless, hence taking value away from the
driver. In that regard, during the facilitated workshop, stake-
holders’ construction of value is in relation to a specified time
period (e.g., 25 years), taking into account the potential
changes in value over that period.
Money and Value for Money
After identifying the value of the entity of interest, the amount
of money needed to provide that value can then be consid-
ered—and hence, value for money. Figure 2 demonstrates this
concept. When making choices, the intention is to select the
option that has the most advantageous ratio of value to money.
The goal of VFM is not a search for the lowest cost option,
Barton et al. 7

Table 2. Sample of List of Value Requirements for a Major Incineration Plant as Agreed on by Stakeholders

Component
of Value Agreed on List of Value Requirements

Primary The primary purposes of the plant are to:

purpose(s) 1. Incinerate selected waste to required capacity/volume
2. Convert waste into energy
Beneficial By fulfilling these primary purposes, we are able to:
outcomes 1. Meet demand for incinerating waste
2. Improve efficiency in waste management and processing
3. Reduce waste going to landfill

Important Optimizing Waste to Procurement and Project

Features Process and Pollution Control Facilities and Equipment Energy Transfer Development Process

1. Safeguarding public health 1. Minimizing its land 1. Having waste to 1. Delivering the new
2. Achieving processing capacity footprint energy technologies plant as early as
of at least 2,400 t/d for 25-year 2. Managing/mitigating the that optimize energy practicable
design life visual impacts of the plant or electricity 2. Securing markets
3. Achieving and sustaining best 3. Providing infrastructure production for the plant’s
practice in plant operational for smooth traffic flows 2. Reducing internal output (power and
performance and availability 4. Ensuring durability of the plant electricity waste ash)
(e.g., thermal efficiency) equipment used in the consumption 3. Leveraging with
4. Using proven and reliable plant nearby structures/
processing/thermal treatment 5. Making it easy to do facilities for any
technologies maintenance—with synergies
5. Handing the waste feedstock shorter shut-down time 4. Enhancing WTE
from community/industry and adequate space for capability of the
6. Reducing incineration waste access private sector
going to landfill
7. Producing ash as a by-product
of incineration
8. Achieving/sustaining high
reliability (>85%)
9. Coping with peak demand—
including related transport
logistics.

$ Option A
Useful
Purpose

$ Option B
The
“Entity”
Beneficial Important $ Option C
Outcomes Features

“Value” for “Money”

“Bang” for the “Buck”

Figure 2. The conceptual model of value for money measurement.

8 Project Management Journal 50(2)
although lowest cost will feature in the decision-making pro-
cess when two or more options perform identically. In such
circumstances, the lowest cost option will always deliver the
best value for money. In the “breakfast at the hotel versus
breakfast at the café” example cited earlier, the option that
performed better was also the lowest cost and, therefore,
offered best value for money. In terms of value, the various
options will have differing attributes and usually have differ-
ent price tags (total costs, where practicable). Consequently,
the options can be compared based on their respective attri-
butes and the associated total costs, as shown in Figure 2.
VFM is therefore a search for the most advantageous ratio
of value to money.
Following from Figure 2, VFM can be defined as: “A mea-
sure used for comparing alternatives based on the relationship
between value and total cost” (AS 4183-2007). Generally,
VFM is a case of seeking out the most “bang for the buck.”
In popular vernacular, we find the ubiquitous phrase “bang for
the buck” to be a synonym for value for money (see Figure 2).
In the authors’ experience, when this phrase is used, there
seems to be no problem whatsoever in separating the “bang”
from the “buck.” But when the phrase “value for money” is
used, the “value” and the “money” frequently lose their sepa-
rateness and morph into one.
VFM Scale of Measurement
VFM involves making judgments about what option (among
identified options) will deliver the best result in terms of meeting
requirements and total cost. For the most part, selected options
will meet requirements to a greater or lesser degree—they may
incorporate different attributes. There might be, for example,
one option that comes close to meeting all requirements for
significantly fewer total costs than the others, and this might
well be judged as the best value for money even though stake-
holders may not get everything they asked for. There might be an
option that provides significantly more attributes than specified,
with only a marginal increase in cost. This, too, could be judged
as providing good value for money, depending upon circum-
stances. There are many possible combinations.
There are conflicting views in the literature regarding the
scale of measurement of VFM, usually, because there is an
implicit assumption that VFM involves an absolute scale. How-
ever, VFM is a performance measure that provides a basis for
comparing options, and such comparisons must be made on the
basis of judgment. More often than not, during the early stages
of project development there is nothing like sufficiently “hard,”
quantifiable data to measure in absolute terms. In such circum-
stances, groups of experts are capable of making judgments
using ordinal measures, such as “greater than” or “less than,”
or single words, such as “good,” “better,” and “best.” Consider
the case of selecting a route for a new highway: Stage by stage,
section by section, judgments may be made based on very
limited quantifiable information. For example, alignment to the
west will cost “a lot more than” alignment to the east (a group
Value Money Scenario 1
Value Money Scenario 2
Value Money Scenario 3
Value Money Scenario 4
Value Money Scenario 5
Figure 3. Strategies to improve value for money.
Source: Adapted from Australian Standard of Value Management
(AS 4183, section 2(e), p. 15).
of engineers will come to consensus on this). And so it is with
any project: We make judgments based upon the information
that is available using ordinal measures. Nevertheless, appro-
priateness of scale of measurement is essential in VFM deci-
sion making. In the example described earlier, the café
breakfast provided much better value for money than the hotel.
“Much better” is an ordinal measure on the basis of which the
traveler was able to arrive at the decision by comparing
the breakfast offered at the hotel with the breakfast offered at
the café. Where as the hotel breakfast included a vast array of
choices, those choices were of no interest to the traveler
because he or she knew exactly what was wanted, which was
only a small selection of the hotel’s offerings. On top of that,
the traveler may have taken into account the fact that the café
served barista-made fresh coffee, whereas the hotel did not.
Making a personal judgment that, at half the cost of the hotel,
the café breakfast offered much better value for money than the
hotel, was an easy decision. Sometimes a value for money
choice is simply the domain of one person. No one else need
be involved or even consulted. However, when it comes to
major procurement and major projects—a fleet of new buses,
the design and construction of a new hospital, or the develop-
ment of a new mining strategy—the notion of one, single cus-
tomer is not helpful and the decision-making process involves
multi-stakeholder views. There might ultimately be a single
decision maker, but it will essentially be a multi-stakeholder
task to determine the best value for money, and thereafter make
recommendations to the decision maker.
Improving Value for Money
By making a distinction between what constitutes value and
what constitutes money, it is possible to characterize the dif-
ferent possibilities that exist to improve the amount of VFM in
any decision. The AS 4183-2007 presents five possibilities to
improve VFM by changing the amount of value and/or money
(Figure 3).
In Figure 3, Scenario 1 means “increasing the usefulness,
benefits, and importance of the entity while reducing the total
cost,” and Scenario 2 means “increasing the usefulness,
Barton et al.
1 2 3 4
Build,
share Assess
Select the value
understanding,
Options provided by
and set up
each
a value
statement option
Figure 4. Six-step procedure for assessing VFM.
benefits, and importance of the entity without changing the
total cost.” Scenario 3 is “preserving the usefulness, benefits,
and importance of the entity while reducing the total cost.”
Scenario 4 means “marginally reducing the usefulness, bene-
fits, and importance of the entity while substantially reducing
the total cost.” Finally, Scenario 5 involves “substantially
increasing the usefulness, benefits, and importance of the entity
while marginally increasing the total cost.” Thus, a change in
the money parameter cannot change value, but it can change
value for money.
Value for Money Measurement: A Six-Step
Procedure
Having defined clearly the concept of value for money using
the value triangle model to describe the separation of value
from money in VFM, it is necessary to consider what, exactly,
is to be measured, how it can be measured, what process to
follow, and how to express this measure in any VFM decision-
making context. The process for performing a VFM assessment
can be described using six steps based on the value triangle
model, cost assessment, and making a final judgment. The
procedure, shown in Figure 4, can be applied to any kind of
decision-making context in practice and the result is the selec-
tion of the option that provides the best VFM.
The elements of these six steps are described as follows:
Step 1: Build shared knowledge and understanding among
stakeholders and set up a value statement. A value statement is
a statement of requirements expressed in terms of useful pur-
poses to be fulfilled, benefits to be achieved, and important
features, including performance criteria. The decision-making
team needs to agree on what the considered value is and what
the main goal of the decision to be made is, based on a purpose,
beneficial outcomes, and important features. In setting up the
value statement, value must be constructed by the stakeholders
in each context. It must be based on collective understanding
and consensus. This can be achieved via workshops, which are
intended to cultivate learning and collaboration among all par-
ticipants. The workshop helps to establish shared knowledge
and understanding of vision, the value factors, existing solu-
tions or proposals (if any), and the context of the entity in a way
9
5 6
Decide which
Assess the
Compare option gives
cost of each
the options best value for
option
money
that enables the stakeholders to work collaboratively as a group
in developing proposals to achieve the best VFM.
Step 2: Defining and selecting options. This step involves
identifying a number of options that allow the requirements
stipulated in the value statement to be fulfilled. A formal selec-
tion of options is important because it establishes the whole
spectrum of possibilities that will be assessed. It is possible that
some of the final selected options for the evaluation are an
amalgamation of other initial options first identified.
Step 3: Assess the value provided by each option. This is an
assessment that expresses the extent to which the requirements
established in the value statement (and hence, “value”) are
actually provided by the potential options. This can be
expressed in the following ways:
 A percentage; or
 Descriptive language, such as: “everything,” “almost
everything,” “slightly more than required,” “significantly
more than required,” “better than option A,” and so on.
Step 4: Assess the cost of each option. This involves an
assessment of the costs of each option (preferably, but not
necessarily, total life cycle costs). Costs and revenues will
need to be projected over a suitable period to ensure whole-
of-life issues are recognized and assessed for all of the
options. These costs are usually determined by one or more
of the following means:
 Actual purchase price;
 Actual purchase price plus differential allowances for
delivery, including time and travel expenditures;
 Actual purchase price plus delivery and interest, if
applicable;
 Approximate estimates of the above three factors;
 Approximate estimates of whole-of-life costs using stan-
dard formulas; and
 Ordinal measures using descriptive language to express
costs, such as high, medium, and low, or highest and
lowest.
Depending on the context, the assessment of cost will need
to consider an assessment of the net revenue effects of each
10
Minimum
Requirement
Multiple
Options
Multi-Option
Assessment
Figure 5. The judgment process model for value for money assessment.
option. Where whole-of-life cost estimation is used, the total
cost of all the options can be expressed in the same form, such
as net present value (NPV) or annual equivalent.
Step 5 and Step 6: Compare options, and decide which
option gives the best value for money. The measure of value
for money is determined by making a judgment. This judgment
compares the relative performance of the options. To arrive at
this judgment, each option is considered one by one, and the
following process is applied:
 Measure the extent of value (taken from the value state-
ment) actually provided by each option;
 Measure the cost of each option; and
 Make a judgment considering the ratio of value provided
to the cost.
The judging process is described in more detail in the fol-
lowing section.
The Judgment Process: A Conceptual Model
The judgment process draws on: a clear definition of what
constitutes value as highlighted in the value statement
(based on the value triangle model), a set of available
options that provides the value, and the cost analysis of each
option. The goal of the judgment process is to select an
option that provides the best VFM. The process of reducing
the amount of options is made through a combination of
three strategies that can work independently, sequentially,
or iteratively: (1) elimination using minimum requirement
considerations, (2) elimination through a single, one-to-one
comparison, and (3) elimination through a multiple-options
assessment (Figure 5).
Elimination using minimum requirement considerations is
the attempt to dismiss an option because it does not provide a
minimum value according to the value triangle model. In prac-
tice, this has the lowest potential to achieve the agreed-upon
purpose, or lacks a specific feature that cannot be replaced with
another attribute. This elimination approach can be used at the
Project Management Journal 50(2)
One-to-One
Comparison
Selected
Option
start of the judgment process, but it can also be used at any time
within the judgment process.
A second approach is elimination through a single, one-to-
one comparison. The aim here is to reduce the set of options by
comparing two specific options and eliminating the one that is
worse than the other. This is based on the law of comparative
judgment conceived by Thurstone (1927)—the foundation of
analytical hierarchical process (AHP). If at the end of the VFM
discussion, only two options are available, the better one is
selected. An example of this process occurs when two options
are practically identical, but one is cheaper than the other; in
this case, the cheaper option will always be selected, assuming
that both provide the exact amount of value.
Comparing options can often be complex. Thus, elimination
through a multiple-option assessment can be pursued. Com-
monly, scoring and weighting a set of criteria can provide a
quantitative output in selecting the option that performs better
within a set of options. The analytical hierarchy process (AHP)
and a pair-wise comparison are systematic tools used to per-
form a multiple-option assessment. However, these quantita-
tive approaches can restrict the expert’s knowledge and
obscure qualitative overall judgment of the options, which may
be critical. Also, mistakes in weightings and scoring can lead to
the wrong choice; thus, a multiple-option assessment, which
incorporates qualitative judgment can be used.
Making a VFM Judgment
Judgment in VFM assessment is based on a comparative anal-
ysis of each option. These judgments will typically be
described as “excellent,” “very good,” “good,” “fair,” and
“poor,” resulting in concluding judgments described as, “best
value for money.” The measure of value for money will always
be a judgment—“good,” “better,” “best,” and so on. To arrive
at that measure, a whole range of other measures relating to
performance and cost may be used. Some of those measures
might be “hard,” that is, actual quantities, such as fixed prices
or the number of beds required in a new hospital. Other
Barton et al. 11

Comparison of Options

Option D = 110% Option C = $80

Useful
Purpose Option A = 100% Option A = $100

Option B = 100% Option B = $110

The
“Entity” Option C = 90% Option D = $110
Beneficial Important
Outcomes Option E = 80%
Features Option E = $120

Extent of value provided Cost of the options

Ranked most to least Ranked lowest to highest

Figure 6. Making a judgment in VFM decisions.

measures could be “soft,” or ordinal measures; for example,
when considering options requiring large amounts of excava-
tion, the VFM measure can be: Area A contains a lot more rock
than Area B. Figure 6 is an example summarizing the six steps
and the judgment approach. Having worked sequentially
through steps one to four, the crucial judgment about VFM can
be made through the process of option elimination.
First, Figure 6 shows that option E is the worst performing
option and carries the highest cost. In comparison with the
other options, this represents very poor value for money and
can be discarded. Next, option D provides more than required
and costs a lot more than the others. In comparison with the
other options, this represents poor value for money, unless a
case can be made to support purchasing the additional provi-
sions. Assuming, in this case, that the decision makers wish to
spend no more than necessary, option D can join option E in the
discard pile. Option B performs the same as option A, but it
costs more. Therefore, compared to option A, option B is poor
value for money and can be discarded. Finally, a choice has to
be made between options A and C to determine which one
offers the best value for money. There is no clear, black-and-
white answer here. Option A provides 100% of the require-
ments as spelled out in the value statement, but it costs more
than option C, which provides 90% of the value statement
requirements. The question to answer is this: Is it worth fore-
going 10% of the value statement requirements in order to save
US$10? If the answer is: No, all of the requirements as defined
in the value statement must be provided, then option A repre-
sents the best value for money and should be selected. If, how-
ever, the answer is: Yes, we can live without those provisions
(or achieve them in some other way), given the amount of cost
savings they will bring, then option C represents the best value
for money. The value for money framework provides a process
to assist in making the judgment. By following the framework,
we were able to reduce the options to two and then make a
decision as to which option provided the best value for money
by taking into account the value statement, the relative perfor-
mance and costs of the selected options, and our specific cir-
cumstances. Generally, the comparison will be between “more
or less value” and “more or less total cost” across a range of
options (see Figure 7).
Making a VFM Judgment: Illustrative
Example
Redevelopment of a Civic Center
This value management study examines the design of a new
civic hub. The hub is to provide a centralized council facility
combining civic, administrative, and community functions.
The client has already decided to proceed with the project, and
the purpose of the exercise was to make a recommendation for
which option (of the three conceptual design options prepared
by the architects) would deliver the best value for money. At
the time of the value management workshop, cost estimates had
been prepared for each option. As part of the value manage-
ment exercise, a value statement had been prepared. The six-
step VFM procedure described above was used to arrive at the
group’s recommendation.
Comparison of Design Options for the Civic Center
Development
Elimination of option A: Option A was eliminated because it
was the worst performer against the value statement, and it was
the highest cost option.
12
Useful
Purpose
The
“Entity”
Beneficial Important
Outcomes Features
More or less value
Figure 7. Value for money comparison.
Comparison of options B and C: On the surface, options B
and C appeared to be very similar in terms of their performance
when measured against the value statement. With this observa-
tion, the facilitator asked the following question: Why would you
not take the lowest cost option (option B), given the closeness of
the performance of each option? This led to closer examination of
options B and C, resulting in the following observations.
Design option C for the civic center redevelopment was
found to perform significantly better than option B in two key
areas defined in the value statement as follows:
1. The library component of the design option C is in a
better location.
2. Design option C for the civic center provided a greater
potential to activate the main street and the adjoining
plaza so that there is an active visual engagement
between people on the street and those on the ground
floor of the plaza and the civic center.
Even though option B would have satisfied the basic require-
ments for these factors, the group of stakeholders made a
judgment that spending a little more money (but still within
budget) to gain additional benefits (offered by option C) would
represent the best value for money. It is important to note that
there was no quantification in this final choice. It is sufficient to
say that option C performed significantly better than option B
(i.e., an ordinal measure) regarding two criteria stated above:
location of the library and activation on the main street and the
plaza. They could have been scored, and the scores could have
been added up to give the appearance of a calculated result,
but the scores (e.g., 1–5) would still be ordinal measures—judg-
ments, rather than objective measures (e.g., counting bricks).
Discussion and Implications
This study deconstructs the concept of value for money. It
clarifies what exactly is to be measured in VFM decisions,
Project Management Journal 50(2)
Option A
$ Option B
Option C
More or less total cost
the unit measurement to be used, and proposes a six-step
procedure for measuring it. This study contributes to the the-
ory and practice of VFM assessment. The most evident dif-
ference between the VFM concept, the procedure proposed,
and those adopted by other value management (VM) bodies of
knowledge is the explicit separation between the concepts of
value and money when assessing VFM. It also recognizes that
value and value for money are separate concepts. The existing
definitions conceive value in terms of lowest cost or resources
to perform a function (see Table 1). The concept of value
analysis (VA) and value engineering (VE), originally devel-
oped by Lawrence Miles, rests on the principles of function,
the role of multidisciplinary teams in developing options, and
the applications of a structured plan (1972). However, Miles’
value analysis is focused on product improvement and cost
(Thiry, 2014). The existing VFM assessment approaches do
not separate the concepts of value and money. Thus, the
approaches tend to focus on “hard” value management,
whereas modern-day VFM contexts are more complex,
involving multiple stakeholders as well as many interrelated
and changing entities, such as the whole of government
requiring integrated and strategic VFM decision making
(Thiry, 2014), which can be achieved using “soft” and
“strategic” value management methodologies (Barton, 2000;
Thiry, 2014). The proposed value triangle modeled aggre-
gates the concept of value into three categories using plain
language, which can be used as a catalyst for seeking consen-
sus among stakeholders. The separation between the concepts
of value and value for money results in a better alternative
procedure that gives greater clarity to what is being assessed
in VFM and provides a more explicit procedure to follow. The
procedure is “soft” and can support strategic VFM assess-
ment, which can help achieve utility in any complex
decision-making context, so that that the outcome, if imple-
mented, meets the needs and requirements of the stakeholders
involved within a specified time period.
Barton et al.
In some of the VFM assessment workshops conducted by
the authors, using conventional value analysis and value engi-
neering language for classifying functions such as, “value,”
“basic function,” “secondary function,” “higher order
function,” “lower order function,” and “unwanted function,”
always led to requests for further explanation (e.g., “What do
you mean by a basic function?” or, What do you mean by
value?”). Whereas when the concept of value was expressed
in the workshops in terms of “usefulness,” “beneficial out-
comes,” and “important features,” it was never challenged,
nor was any further explanation ever sought. The separation
provided a useful basis for correct identification, analysis,
and assessment of utility expected by the stakeholders. The
term “useful purpose” was never challenged in the work-
shops, nor was any further explanation ever sought. Also,
separating the notion of value from that of value for money
was never challenged in the workshops, nor was any further
explanation ought.
Based on the analysis presented in this article and on the
authors’ experience using the concept in practice, making a
clear distinction between value and money, and treating value
and value for money as separate concepts, provide greater
clarity and increases the probability of making better VFM
decisions. The value triangle model and VFM procedure can
be applied to VFM decisions of the private sector, the individ-
ual person, or to public-sector entities where value must be
conceived in terms of public value. Public value is about
achieving social outcomes and, in those contexts, value is about
collectively desired social outcomes rather than just individual
people’s satisfaction (Moore & Hartley, 2008). In VFM deci-
sion making involving a single decision maker, such as the café
breakfast example presented at the outset of this article, the
construction of the value statement and judgment process is
less complex. It involves a single human stakeholder, and the
utility sought is satisfaction by a single person. However, com-
plex VFM contexts such as large infrastructure projects, orga-
nizational decision making, or entities such as the whole of
government, are characterized by multiple stakeholders, with
competing multiple objectives, competing values coupled with
information asymmetry, power differences, and incomplete
information about alternative courses of action. Also, these
contexts are characterized by both high levels of uncertainty
and ambiguity (Siggelkow & Rivkin, 2005; Thiry, 2014). The
overall goal for entities such as the whole government, might
be how to best use resources, whereas on large infrastructure
projects, the goal for the overall management of the project
might be to meet or exceed stakeholder needs and expecta-
tions (Project Management Institute, 2008). In these complex
decision-making contexts, satisfying multiple stakeholders’
needs and expectations is not straightforward because the
needs and expectations of stakeholders can differ and even
be incompatible. In such contexts, stakeholder management
theory provides some insights that can support the implemen-
tation of the six-step procedures proposed in this article.
13
The basic notion of stakeholder theory is that a project has
relationships with many individuals, groups, and organizations
in its external environment (Bourne, 2005). The stakeholders
may also be different in terms of their importance, power,
legitimacy, and influence in the process (Mitchell, Agle, &
Wood, 1997). Because of these differences, ethical dilemmas
could arise when setting up the value statement, especially if
the voice of all-important stakeholders must be considered,
which also includes non-human voices (e.g., species preserva-
tion). To produce a value statement that represents a collec-
tively desired, useful purpose, beneficial outcome, as well as
captures the important features expected from the entity being
assessed rather than just an individual person’s satisfaction, the
stakeholders affected by the project need to be managed (Moore
& Hartley, 2008). They must be identified, engaged, involved,
given an appropriate level of voice, and allowed to adequately
participate in the process (Aaltonen, Jaakko, & Tuomas, 2008;
Heywood & Smith, 2006). The VFM assessment process must
adopt stakeholder engagement and participatory practices, which
facilitate learning and create shared understanding and knowl-
edge. Van der Woerd (2009) proposed these principles for a
participatory approach in stakeholder decision making: capacity
building, power sharing, recognizing the intrinsic value of all
stakeholders, and autonomy. Detailed discussions of these are
beyond the scope of this study.
Adequate and appropriate stakeholder engagement in VFM
decision making plays both an instrumental and non-
instrumental role. It is likely to increase the ability to identify
all the varieties of interests, needs, and requirements of those
affected by the decision being made and/or its outcome.
Because no one stakeholder possesses all of the information
needed to reach a better VFM decision (i.e., information asym-
metry), a participatory approach to VFM can increase the abil-
ity to capture quality information that can form the basis for
making better VFM decisions. The joint construction of the
value statement by all the stakeholders can lead to a shared
understanding of the useful purpose, beneficial outcomes, and
important features expected. The shared understanding reduces
conflict, fosters collaboration, and increases the legitimacy of
the VFM decision. Stakeholders are more likely to be satisfied
with VFM decision outcomes and impacts after the fact if they
have been adequately involved in the process leading to the
decision. This is based on the social psychology concept of
voice, which postulates that stakeholders would defer to deci-
sions arising out of a process in which they had adequately and
jointly participated (Aibinu, 2009; Tyler & Bladder, 2000).
Expecting stakeholders to be satisfied with the benefit resulting
from a VFM decision after implementation is irrational where
their involvement was limited. In some VFM decision-making
contexts, poor involvement of stakeholders when constructing
the value statement is a risk because it may lead to expensive
changes after the decision is made and the entity fails to meet the
requirements and needs of important stakeholders. At the same
time, adopting a completely rational approach can be costly and
impractical because it is impossible to seek out all of the
14
information about all possible alternative courses of action
(based on Simons’ 1957 concept of information asymmetry and
bounded rationality). To ensure better VFM decisions that all
stakeholders can accept, it is more prudent to identify a limited
number of options and then narrow them down to a few feasible
solutions that can provide the utility stated in the value statement
(based on Simon’s 1957 concept of satisfying).
These suggestions carry implications for project managers.
In traditional project management, project managers often
coordinate inputs from all stake holders in written form. In
implementing the procedure proposed, the need for shared
knowledge and understanding among stakeholders when con-
structing the value statement means that the project manager
role must shift from being just a project coordinator to becom-
ing an integrating manager and a facilitator.
Conclusion and Future Research
The concept of value for money is commonly used in many
disciplines and is also used in the public, private, commercial,
and industrial sectors to make investment decisions. However,
the concept remains unclear in practice. This article deconstructs
VFM and proposes a six-step procedure for assessing value for
money in any context. The approach uses the value triangle
model to disaggregate value and make it possible to compare
between different alternatives. One important feature of the
model is the use of ordinal measures to determine, not how much
value an option has, but which option has more value than
another. The use of the value triangle model allows a separation
of value and money and gives better clarity to the value for
money concept and its application in practice. Also, in the six-
step procedure proposed, value is treated as a separate concept
from value for money, thereby providing greater clarity on how
VFM is assessed, what is measured, and how it is measured. In
seeking the best value for money, decision makers need to work
out how much value each option offers and how much money
each option costs, and then compare the results to see which
option, according to the criteria, values, and circumstances, pro-
vides the best value for money. Whether VFM is done through
the explicit process proposed in this article or intuitively, ulti-
mately, value for money is always a matter of judgment. What is
of value to one person or organization may be of no value to
another, and thus the notion of value for money will change from
person to person, organization to organization, place to place
and, indeed, time to time. Wherever one is in the procurement
cycle, following the steps outlined in this article will help to form
the basis of that judgment. Future research is needed to further
systematically validate the procedure using a detailed case study
approach. The dynamics of the relationship among stakeholders
in the VFM decision-making process also needs a detailed and
empirical exploration.
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to
the research, authorship, and/or publication of this article.
Project Management Journal 50(2)
Funding
The authors received no financial support for the research, authorship,
and/or publication of this article.
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Author Biographies
Dr. Roy Barton is a catalyst in purposeful decision making.
He was formerly an associate professor and head of Construc-
tion Management and Economics at the University of Can-
berra and also adjunct professor of Strategic Asset
Management at Queensland University of Technology. Since
moving on from full-time academic life, he works as a facil-
itator, teacher, and mentor internationally on major projects
and organizational development. He is a Chartered Construc-
tion Manager and president of the Institute of Value Manage-
ment, Australia. He was a leading team member in the
development of the New South Wales Government’s strategic
asset management framework that was designed to foster
value-for-money thinking and analysis in asset procurement
and management. He served as chairperson of the Australian
Standards committee on Value Management (AS 4183-2007).
Dr. Barton earned his doctorate from James Cook University
researching the concept of value for money within the com-
plexities of major construction and engineering projects. The
results of this research directly informed the work of the Aus-
tralian Standards committee on Value Management. The
research results also continue to inform his current practice,
which includes delivering master classes in various parts of
the world, designed to build organizational cultures that help
to optimize value for money. Additionally, Dr. Barton con-
tinues to work with project teams on major construction and
engineering projects, particularly at the early stages of plan-
ning and design, facilitating exercises to achieve best value
for money from those projects. He is a Life Fellow of the
Institute of Value Management, Australia, and is a member
of the Chartered Institute of Building. He can be contacted at
roy.barton@acvm.com.au.
Dr. Ajibade A. Aibinu is senior lecturer at the Melbourne
School of Design, the University of Melbourne. He is the
16
immediate past assistant dean (research training). He earned his
doctorate from the National University of Singapore. His
research primarily focuses on efficiency factors in the produc-
tion of built assets to ensure value-for-money outcomes. Topics
include digital technology adoption (including BIM), cost man-
agement and modeling, contract management, construction
project management, and economics. He employs both quali-
tative and quantitative methods using data mining and statisti-
cal modeling of construction data, and analytical techniques
such as structural equation modeling and artificial intelligence
prediction algorithm (neural networks). He has published
numerous research papers in reputable journals and has pre-
sented at numerous international conferences. His work has
been cited several times and most notably by the Honorable
Sir Vivian Arthur Ramsey, the retired judge of the High Court
of England and Wales and the Technology and Construction
Court. A paper he co-authored, and originally published in the
Built Environment Project and Asset Management Journal,
won the Outstanding Paper award in the 2017 Emerald Literati
Network Awards for Excellence. He won the Best Reviewer
Award and prize for International Conference on Modelling
and Building Health and Safety in Singapore in 2012. In
2012, he also won the Melbourne School of Design Teaching
Excellence Award. In 2013 and 2018, he was a visiting aca-
demic at Delft University of Technology, Netherlands where he
Project Management Journal 50(2)
worked with companies in the Netherlands, Finland, and the
United Kingdom on building information modeling adoption
case studies. Ajibade has also been involved in monitoring
multimillion dollar World Bank assisted education projects in
Africa. He is a member of the Australian Institute of Quantity
Surveyors (MAIQS) and was an Associate of the Chartered
Institute of Arbitrators. He can be contacted at aaibinu@unim
elb.edu.au.
Jose Oliveros is a PhD candidate at the Faculty of Archi-
tecture, Building and Planning of the University of
Melbourne. His research focuses on designing an ex-post
evaluation tool for infrastructure public-private partnership
projects, from the perspective of multiple stakeholders and
based on the project success concept. He is an industrial
engineer with a master’s degree in engineering project
management. He was regional head director of the TECHO
NGO, which has the aim of eradicating slums in Chile and
Latin America. He worked as the project manager of
UCO1202, a government-funded project to improve inter-
nationalization and research performance of doctoral pro-
grams at the University of Concepción, Chile. He is also a
lecturer of project management at the industrial engineer-
ing department in the University of Concepción. He can be
contacted at joseo@unimelb.edu.au.