Loughborough University
Leicestershire, UK
LE11 3TU
+44 (0)1509 222222
Loughborough University

Centre for Innovative and Collaborative Construction Engineering

2007

Dr Stephen Phillips

Thesis

OVID-BV: Optimising Value in Decision Making for Best value in the UK Social Housing Sector

Project Title

OVID-BV: Optimising Value in Decision Making for Best value in the UK Social Housing Sector

Company

Asset Management Surveyors

Supervisors

Acedmic:
Professor Andrew Dainty
Professor Andrew Price

Industrial:
Mr J Martin
Mr R Arnold

Director of Research:
C L Pasquire

Research Period

2003 - 2007

OVID-BV: Optimising Value in Decision Making for Best value in the UK Social Housing Sector

Context/Background

The social housing sector is responsible for a programme of construction, maintenance and refurbishment works, which is annually valued at £1 billion. In the last five years there has been a movement away from the traditional route of accepting the lowest price towards a new culture, which is based on obtaining value for money by using Partnering frameworks. These aim to align stakeholder objectives and engender trust and mutual respect between the parties. It has been suggested that the implementation of this type of long term collaborative working relationships can reduce costs by up to 30%.

Although well intentioned there are indications that within this cultural sea change focused towards the pursuit of defining and weighting the numerous quality issues within the value chain the need to produce an overall business case for the procurement process has been marginalised. This is best illustrated by moving away from accepting the direct views on performance put forward by the stakeholders within the Social Housing Sector: and referring to the decisions of independent third party reviews of "Best Value" tendering practices by courts and arbitration tribunals. These have highlighted the pragmatic problems caused by trying to define and prove the reasonableness of partnering and "value for money" frameworks. It is anticipated that this research will provide case study material that can be fed back into a Best Value system to address the fundamental issues concerning the efficacy of Best Value frameworks within the Social Housing Sector.

Aims and Objectives

This project aims to appraise the interdependent relationship between the variables of price and quality in Best Value tendering arrangements carried out by Registered Social Landlords (RSL’s). It is anticipated that this will lead to the production of a generic guidance document (or software) that can be used in the periodic continuous improvement audits of performance indicators that Best Value frameworks need to satisfy. This will facilitate the realisation of the commercial benefits of Best Value tendering over traditional lowest price tendering.

• To subject the issue of Best Value to critical review in order to refine a robust definition of its meaning within re-engineered supply chains.
• To identify the unique characteristics of the Social Housing sector and its effect of the determination of Best Value.
• To highlight the anticipated problems that will be encountered by RSL’s that focus solely on the quality issues within any procurement value chain rather than the interaction between quality and cost.
• To understand the role and use of whole life costing techniques, sensitivity analysis and benchmarking as tools to assess continuous improvement.
• To define the role and perception of value in other areas of the Best Value process such as the intrinsic economic value of marketing.
• To develop a generic guidance document (or software) that can be used in the periodic continuous improvement audits of performance  indicators that Best Value frameworks need to satisfy.

Method and Current Status

Current methods of measuring Best Value in the UK, USA & Australia will be assessed and compared.

Case studies of exemplary Best Value tendering frameworks that have already been completed within the UK Social Housing Sector will be collated and analysed.

Benefits/Expected Outcomes

The current expectation for this research is that it will lead to the following:

• A reappraisal of the relationship between price and quality in Best Value Frameworks.
• Case study material to enhance awareness of the business efficacy of the use of whole life costing techniques at tender analysis stage and during the currency of the long-term collaborative working arrangement
• "Joined-up thinking" with the results of other research within the area of Best Value.
• The initial steps towards the measurement of the "intangible" aspects of the value of quality within a construction procurement supply chain

 

 

 

 

 

 

 

 

Phillips, S., Martin, J., Dainty, A.R.J. And Price, A.D., Uncertainty in best value decision making, Journal of Financial Management in Property and Construction, 122, August 2007, pp 63 - 72, ISSN 1366-4387.

Phillips, S., Martin, J., Dainty, A.R.J. And Price, A.D., Analysis of the quality attributes used in establishing best value tenders in the UK social housing sector, Engineering, Construction and Architectural Management, 15(4), 2008, pp 307-320, ISSN:09699988.

Phillips, S., Martin, J.P., Dainty, A.R.J. And Price, A.D., Renew or repair existing window units? A best value approach, Construction Information Quarterly, 10(1), March 2008, 12-18.

Phillips, S, Dainty, A and Price, A (2007). The development of a tender analysis support tool for use in social housing best value procurement. In: Boyd, D(Ed) Procs 23rd Annual ARCOM Conference, 3-5 September 2007, Belfast, UK.  Association of Researchers in Construction Management, 797-798.    

Phillips, S., Price, A.D. And Dainty, A.R.J., Achieving Best Value in Social Housing Procurement, Proceedings of the 20th Annual ARCOM Conference, 1, Khosrowshahi, F. (Ed), Edinburgh, 2004, pp. 639-647, ISBN 0 9534161 9 4.

Phillips, S., Price, A.D. And Dainty, A.R.J., Achieving Best Value in Social Housing Procurement, Ellis, R and Bell, M, RICS Foundation, Proceedings of the Construction and Building Research (COBRA) Conference, Leeds Metropolitan University, UK, September 2004, pp.

 

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Loughborough University
Leicestershire
LE11 3TU

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