VfM is a way of helping investment decisions to be made on an efficient, effective and economical basis that best targets the investor's priority objectives.
VfM has become an important concept in the public sector's decision-making criteria, and its broad application means that it is applied in distinctive (but consistent) ways at different stages of investment approvals, procurement processes and in project planning. The following discussion10 and Figure 5 illustrates this layering of the VfM concept as it is applied in public sector processes, and how its application cascades from government to agency to project management levels.
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10 As this Guidance Note addresses project alliances, the discussion that follows assumes that the investment proposal analysed in the agency's Business Case requires the delivery of a major capital project to achieve the promised community service benefit and that the procurement options analysis recommends delivery by alliancing. It should be noted that such assumptions are significant, as the decision to construct and own major capital asset has normally significant long-term funding imposts; and the decision to deliver a project by alliancing requires a robust and comprehensive argument.