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Value Management Studies represent an organised effort applied to the analysis of the functions of systems, components, goods and services. The aim is to satisfy the required functions of the relevant building works at an economical total cost of ownership, without sacrificing the client’s performance and quality requirements.

There are risks associated with value management studies, particularly for consultants that are engaged in discreet parts of building projects. In this article, we talk about what those risks are and how to avoid them.

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Author: Farrah Motley, Legal Principal of Prosper Law.

What are the risks associated with value management studies?

When it comes to value management studies, there is a risk that it can lead to unlimited scope creep. Scope creep happens when the scope of services (that has been carefully priced) starts to expand and with no additional financial compensation.

From a consultant’s perspective, this can be risky; many consultants are not in the business of providing charitable consultancy services and the aim is to make a profit.

The risks associated with value management studies come about when:

  • the client has an unreasonably low, unachievable or overly ambitious budget for the construction project;
  • the amount of effort (in terms of staff hours, attendance at meetings and re-design) is not well defined in the consultancy agreement or scope of work; and
  • other consultants engaged in the construction project aren’t coordinating properly or are incompetent.
Value management studies

The risk of agreeing to provide value management studies where one or all of the above circumstances are present include:

  • a dissatisfied client; and
  • a low or non-existent profit margin;
  • stepping outside of your area of professional expertise;
  • a dispute under the terms of the consultancy agreement,

because of the amount of re-design and study required to achieve the construction budget.

Unlimited value management studies may lead to disputes and it is important to take steps to avoid this.

How can you define and price value management studies?

There are a few ways to reduce the risks associated with agreeing to provide value management studies. They include:

  • allocating a set number of hours with hourly rates to provide value management studies. If you go over the allocated time, the client has to agree to and pay a variation;
  • recommending to the client that they engage an experienced quantity surveyor;
  • be upfront with the client if you think the construction budget is too low or difficult to achieve; and
  • restrict the amount of value management studies to a set period of time (i.e. two weeks).

How can Prosper Law help?

Prosper Law provides legal advice to professional consultants and consulting firms in Australia. We can provide fixed-fee contract reviews to ensure that your consultancy agreement does not contain unfair contractual obligations.

Contact the team today for a no-obligation quote.

Farrah Motley | Legal Principal

PROSPER LAW – Australia’s Online Law Firm

M: 0422 721 121



A: Suite No. 99, Level 54, 111 Eagle Street, Brisbane, Queensland Australia 4000

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