A VALUE BASED
APPROACH TO
SELECTION
Professor John R Kelly
design/build – Lee Evey
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
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the old days are gone forever
the USA can put together the best diverse
innovative teams in the world provided that
the team contains a Scot.
the fundamental difference and advantage of
design/build is in the integration of the entire
team
application of VM -The Lever of Value
Project
Project Project
VALUE
Strategy Objectives Functionality
Program Design Const
Project
Operations
Falling influence over
the total whole life
value of a project
through design,
construction and in use
phases
bid
Prog/Design
Build
Use
accountability & audit
FAR permits wide scope in evaluating bids
but:
the methodology for the evaluation
procedure MUST be clear and made
explicit in the bid documents.
classification of quality - kano
“delighter”
Impact of time
Degree of
customer satisfaction
delight
neutral
“performance”
“basic”
dissatisfaction
fulfilled
absent
Presence of Characteristics
judgement factors - company


Basic - health & safety, corruption, turnover,
experience of type of work, bonding, etc.
Measurable performance – O/H & profit, number
of partnering projects, examples of value
engineering successfully implemented
judgement factors - project
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Basic – largely relate to company.
Objective measurable performance – CAPEX,
OPEX, time, number of ft2 provided,
environmental criteria, earning potential, etc
Subjective measurable performance – aesthetic,
comfort, community/political benefit, etc.
Risk – should be an overlay on basic & objective
measurable factors.
the key question

how far through the process do you have
to go before making an appointment?
 full
design & spec
 outline design & spec
 performance specification of project
 performance specification of
company/consortia
case study
Withington Community Hospital
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previously pursued through design-bid-build
£26m initial cost plan (£6m over budget)
DB Contractor appointed on performance
specification of company & interview
Similar to Construction Management At Risk but
including design
VM1 – strategic brief

issues
 budget
 sharing
facilities
 whole life costs

value equation
 flexible
design
 community & whole life cost
value equation
A. Capital Cost - CAPEX
A
B. Operating Cost - OPEX
C. Time
C
B
A
B
C
D. Environment
A
B
C
D
F
F
F
F
F
F. Flexibility
G
B
G
G
G
F
H
B
H
H
H
F
H
H. Politics / Local
Community / Service
Outcomes
A
B
C
D
E
F
G
H
3
5
3
1
0
7
4
5
E. Esteem
G. Comfort
Total
strategic task FAST diagram

Improve Community Health
 Meet
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NHS Plan
 Create Local Community Plan
 Treat People (DTC)
 Create Primary Care Resource
Focus for Community
Attract Staff
Enhance Local Health Service
VM1 conclusion
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Analyse volume of activity clinical and non
support facilities (case load) and ensure
most up to date activity assumptions
Discover / analyse comparators for
benchmarking
Outline planning application
Options to board – business case
include phase 1 with a phase 2
VM2 – project brief/ architectural
programme
patient pathways
 functional space analysis
 functional adjacency analysis
 performance specification of space
 ideas to maximise space usage

VM3 – concept design
spatial layouts audited against brief
 ideas for improvement

Output
 final sketch design
 guaranteed maximum price confirmed
The Result
Withington
community hospital
started life £6m
over budget. It was
built £½m less than
budget using VM
with an integrated
team.
A VALUE BASED
APPROACH TO
SELECTION
Professor John R Kelly