Will the Cheapest Cost Today be the Best Value Tomorrow?
Awarding individual contracts to the cheapest bidder is one way to manage a limited budget. This may take immediate cost out of asset maintenance but what does it mean for longer term value?
Framework agreements are increasingly focused on the challenge of balancing project economies with the whole life cost of the asset. Other value indicators such as asset availability and the overall number of interventions are increasingly significant.
Demonstrating long term value is inevitably complicated by the fact that some benefits are not immediately recognised. For example, how to quantify the benefits of maintenance work where the results are more durable.
Other aspects of added value are easier to observe, such as when activity is coordinated with other stakeholders to minimise the impact on those who are responsible for or use the asset.
Many continuous improvement activities that drive long term value are also observable. Methods used by the Osborne team and our supply chain include:
- Quantitative Schedule Risk Assessments (QSRA) to improve the accuracy of completion date forecasts.
- Micro programming with actual performance updated live via PDAs and captured to improve future planning.
- Collaboration with higher education and industry bodies to research efficiencies and new methods that improve the durability of the asset and any works.
- Aligning reward and recognition at all levels to programme objectives, defined success criteria, shared savings, and asset performance levels.
- Black Box Thinking to bring impartial and methodical analysis to situations where something goes wrong.
Every project is a learning opportunity. What happens to this learning is critical. A good indicator that long term value will be achieved is how a contractor captures and applies that learning. Long term value comes when continuous improvement is business as usual.
Find out more by visiting Highways learning pages on our website.