What 'value for money' means in Government Contracting
Value for money isn’t the same as being the cheapest option.
Agencies still need to show that public money is being spent appropriately. Price is part of that assessment, but it sits alongside capability, delivery risk, continuity, and impact. A candidate at a lower rate who is unknown to the agency or business area, hasn’t worked in that environment, or struggles to work in a team can end up being poor value. The same applies at a higher rate if the value hasn’t been proven and the delivery risk remains.
On the flip side, someone who’s already delivered in that environment, understands how things work, and works well with the team is much easier to justify (as long as it fits within the budget).
What it means in practice
Rates get a lot of attention because they’re visible. You can compare them, put them in a document, and point to them if needed. What’s harder is everything behind the number: experience, domain knowledge, clearance level, and how quickly someone can step in and contribute all matter, but they don’t show up in a spreadsheet.
Continuity matters too. Changing contractors often introduces time, cost, and risk that isn’t reflected in the hourly rate. While most business areas and delegates understand that, the challenge is explaining it clearly enough for it to hold up under scrutiny.
When agencies assess value for money, they’re looking at the whole engagement, not just the number attached to it. That includes how much delivery risk is reduced, how much oversight the role requires, the impact of losing momentum, and whether the capability lines up with what’s needed. You see this most clearly with extensions, where performance and continuity are already proven. That’s why agencies will sometimes extend a contractor at a rate that isn’t the lowest on paper, because the value has already been shown.
Value for money is also about accountability. The person approving an engagement needs to be comfortable defending that decision later, sometimes long after the work has started. That means the assessment isn’t just about whether the work will be delivered well, but whether the decision itself will stand up to scrutiny.
What this means for contractors
“Value for money” can often feel personal.
Rates are one of the few clear signals in a process that’s otherwise hard to see into, so it’s reasonable to want to be paid at the top end of the market, especially when experience takes time to build and demand is high.
At the same time, agencies are looking at how a proposed rate sits against peers and what they’ve approved before. Pushing to the very top of a range can make an engagement harder to justify, not because the rate itself is unreasonable, but because it creates an outlier that someone has to stand behind, often within tight budgets.
This is where we put a lot of thought into it. We work with consultants with these factors in mind, based on our understanding of the role, feedback and level of interest from the agency, which panel they’ve used to approach the market, the market itself, and the skills and experience they bring, to land on a rate that’s achievable for a given role and agency.
Understanding that helps explain why similar roles can be treated differently across agencies, or even across teams within the same organisation.