How You can use VfM to Submit more Competitive Proposals

“Value for Money” (VfM) is defined as the optimal use of resources to achieve intended outcomes.  Although this is not a new concept, it is one that you can use to make your Management Volume in a government proposal more competitive.

VfM consists of 3Es:

  • Economy.  Are your inputs of the appropriate quality and at the right price?
  • Efficiency.  How well do you convert inputs into outputs?
  • Effectiveness.  How well do the outputs help you achieve your intended outcomes?

As you see, VfM is not just about cutting costs or providing the lowest possible price.  VfM is about how short-term tangibles produce long-term results.  VfM is about five sequential factors:  input, process, output, outcome, and impact.

Discussing VfM in the Management Volume of your government program should not replace the standard topics you address, including Earned Value Management.  Instead, VfM is something you can add as part of your management and budgetary controls.  VfM will help demonstrate to reviewers that you are serious about providing good value at the appropriate cost.

Below are the topics you should discuss when you addressing VfM:

  • Costs.  Show your cost drivers and demonstrate that the customer will receive the desired quality of inputs at the best possible price.
  • What works.  Demonstrate that you understand how your inputs and processes help determine your outputs, outcome, and impact.
  • Measurement.  Demonstrate that you can measure the short-term tangibles in your financial management process.
  • Commercial strategy.  Explain how your management and pricing choices lead to greater understanding and the leveraging of resources.
  • Improvement.  Show how your customer will get maximum value from the contract by demonstrating that you have a thorough and transparent financial management system that leads to the greatest impact.
  • Reporting.  Explain how your financial and managerial reports will help the government understand how it is achieving VfM.

Using VfM in your Management Volume will show reviewers that you value transparency and scrutiny in your financial processes.  It also will increase their confidence that you will provide a government agency with best value and that you are highly likely to achieve your intended results.


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