Whole Life Value Provides Answers to National Audit Office Report

Dale Potts
New guide to ‘Whole Life Value in Infrastructure and Buildings’ could provide answers to improving public services through better construction

A new guide to ‘Achieving Whole Life Value in Infrastructure and Buildings’ could play a key role in helping the construction industry answer the challenge laid down in the National Audit Office’s report on Improving Public Services Through Better Construction (15 March 2005). The Guide has been produced under a project funded and supported by the DTI’s Partners in Innovation scheme, the Highways Agency and the Institution of Civil Engineers. It was also supported by Faithful+Gould and CIRIA.

The NAO report states that whilst there is wide recognition of the need to base procurement decisions on value for money, many are finding it difficult to design and procure construction on the wider basis of whole life value. Lack of real understanding of the whole life value concept and the absence of suitable assessment tools to assist clients evaluate the inter relationships between costs, time and quality, and the wider social, environmental and economic impacts are among the many barriers to progress highlighted in the report.

Collaboration between a number of public and private sector organisations has produced a practical guide to 'Achieving Whole Life Value in Infrastructure and Buildings' which has just been launched through a series of roadshows, and has been greeted enthusiastically by delegates drawn from a broad cross section of clients, designers, constructors, operators and industry procurement bodies. Key to its appeal is the way it not only de-mystifies whole life value by explaining the basic principles, supported by four working examples, but also provides an index of 66 assessment tools currently available and when and how to apply them - thereby directly addressing some of the problems identified by NAO.

Whilst, historically, purchasing decisions have tended to centre on initial construction costs, latest thinking is to look at the cost of developments over their entire life and focus on delivering value to all stakeholders - calling for a shift in the approach to achieving the best value solutions, from a business benefits perspective.

The roadshows organised by TRL (Transport Research Laboratory) - in Bristol, Manchester, York and London - brought together key speakers from the Office of Government Commerce, the Highways Agency, TRL, and project and cost consultants Faithful+Gould. Additionally the roadshows included demonstration of 6 decision-support tools developed by TRL, Faithful+Gould, the Building Research Establishment (BRE), Loughborough University and consultants Waterman Burrow Crocker.

Andy Green, director and head of whole life cost at Faithful+Gould, co-author of the guide, explains: "Many organisations are today adopting aspects of Whole Life Costing. Whole Life Value is a step beyond whole life cost, and involves making decisions based on broader criteria whilst also taking account of the needs of a wider range of stakeholders instead of just those typically involved in the immediate decision making process. The WLV Guide is designed to help procurers understand the basic principles and how to appropriately use the techniques and tools currently available in the market. The Guide illustrates how to achieve WLV to help practitioners overcome the barriers and shows how the various tools can be used to help bring transparency and accountability to help make better informed investment decision making."

Dr. Vijay Ramdas of TRL, co-author of the guide, adds: "The roadshows drew significant numbers of delegates from the public and private sectors, including county councils and defence estate establishments as well as contractors, designers and consultants. It is clear that some form of whole life costing is increasingly seen as critical by many and, moving forward, it is all the more important that infrastructure and buildings are viewed as an entity rather than separately. We believe it is the first time that they have been looked at together in this way."

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