Compulsory competitive tendering may well be an extremely efficient method of securing the lowest possible initial price. However it is not necessarily an efficient means of ensuring true value over the longer term. In other words, CCT procurement is often a very inefficient spending strategy in the long term. Once a tender is accepted there may be expensive overruns, or the low price may reflect low quality and short life materials and workmanship.

When it comes to defining ‘Best Value’, there is one thing on which everyone agrees: it certainly doesn’t mean the cheapest. Best Value is increasingly equated with the concept of ‘whole-life costing’ where the cost-in-use of a product or service is used to evaluate its real cost over the long-term. Only by taking account of all aspects of cost, including running and disposal costs, as well as the initial purchase price, can true value for money be achieved.

A 1997 UK Ministry of Defence initiative focused attention on the need to consider the whole life costs of building work. ‘Building down Barriers’ started as a pilot project for the Ministry of Defence's property arm, Defence Estates, to explore the benefits of adopting a whole-life approach to costing.

This showed that, rather than relying on the lowest tender prices to contain costs, a small uplift in capital cost was actually shown to result in reduced overall long-term costs. In the first Building down Barriers projects, a 3% increase in capital expenditure had the effect of a 10% saving in life-cycle costs.

Since then further studies have resulted in the rule of thumb known as the “1:5:200 ratio”. This gives the approximate proportions of initial capital cost: maintenance cost: operating cost for a typical commercial building and indicates that, over its operational life, a building will typically cost 5 times its initial capital cost to maintain and 200 times its initial capital cost to run.

It has been shown that, typically, most of the future maintenance costs of a structure are built-in at the initial design stage. Reports from the insurance show that 40% of problems are the result of inadequate design information and 40% are the result of incorrect site installation or detailing. Only 20% of problems arise from the failure of manufactured components.

However, whole life costing does carry some risks. It requires a new set of skills that may be lacking in different parts of the supply chain. Many clients themselves are unable to adequately describe how they expect a new asset or structure to be used, and may be unable to convey this to the construction team. Designers, in particular need to be familiar with contemporary whole-life/ best-value cost principles and be in a position to apply them.

Despite the need for caution, the adoption of whole-life costing is rapidly gaining momentum, and Bekaert are at the forefront of providing Best Value fencing solutions - expert advice on design and specification, quality assured manufacturing and installation, all backed by the unique BEKassure™ insurance-backed guarantee