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INT RODUCT ION Value Engineering is a co nscio us and explicit set o f disciplined pro cedures designed to seek o ut o ptimum value fo r bo th initial and lo ng-term investment. First utilized in the manufacturing industry during Wo rld War II, it has been widely used in the co nstructio n industry fo r many years.

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Balancing Security/Safety and Sustainability Objectives Construction Phase Cost Management Within This Page Introduction Major Resources

Value Engineering (VE) is no t a design/peer review o r a co st-cutting exercise. VE is a creative, o rganized effo rt, which analyzes the requirements o f a pro ject fo r the purpo se o f achieving the essential functio ns at the lo west to tal co sts (capital, staffing, energy, maintenance) o ver the life o f the pro ject. Thro ugh a gro up investigatio n, using experienced, multi-disciplinary teams, value and eco no my are impro ved thro ugh the study o f alternate design co ncepts, materials, and metho ds witho ut co mpro mising the functio nal and value o bjectives o f the client.

Cost Impact of the ISC Security Criteria Distributed Energy Resources (DER) Earned Value Analysis VIEW ALL RELAT ED (15) VIEW RESO URCE PAG E INDEX

The So ciety o f American Value Engineers (SAVE) was fo rmed in 19 59 as a pro fessio nal so ciety dedicated to the advancement o f VE thro ugh a better understanding o f the principles, metho ds, and co ncepts invo lved. No w kno wn as SAVE Internatio nal, SAVE has gro wn to o ver 1,50 0 members and currently has o ver 350 active Certified Value Specialists (CVS) in the U.S. Requirements fo r registratio n as a CVS were develo ped by SAVE at the request o f the U.S. General Services Administratio n in the early 19 70 's.

VE can be applied at any po int in a pro ject, even in co nstructio n. Ho wever, typically the earlier it is applied the higher the return o n the time and effo rt invested. The three main stages o f a pro ject and VE's applicatio n are described belo w.

Planning PDFmyURL.com

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At the Planning stage o f develo pment, there are additio nal benefits to be derived fro m a Value Engineering Wo rksho p. An independent team can: Review the pro gram Perfo rm a functio nal analysis o f the facility Obtain the o wner/users definitio n o f value Define the key criteria and o bjectives fo r the pro ject Verify/validate the pro po sed pro gram Review master plan utility o ptio ns (e.g. Central Utility Plant versus individual systems) Offer alternative so lutio ns (square fo o tage needs per functio n, adjacency so lutio ns, etc.)

Verify if the budget is adequate fo r the develo ped pro gram The benefits are tremendo us.

Any changes to the pro gram at this stage have very little if any impact o n schedule and A/E time and redesign co sts.

The pro ject will be develo ped with fewer changes, redesigns, and a greater understanding by all parties o f what the final functio n and space allo catio ns will be.

An independent team can bring a fresh o utside view o f alternate so lutio ns fro m o ther similar pro jects.

Design This is the stage that mo st VE participants are used to beco ming invo lved, when the design has at least made it to the schematic stage. Mo st go vernment agencies require at least o ne VE sessio n at the design stage o n pro jects o ver a certain $ size. The primary to o l available to the VE team is the Wo rksho p—typically a 40 -ho ur sessio n (o r less fo r smaller o r less co mplex PDFmyURL.com

pro jects).

The Wo rksho p is an o ppo rtunity to bring the design team and client to gether to review the pro po sed design so lutio ns, the co st estimate, and pro po sed implementatio n schedule and appro ach, with a view to implementing the best value fo r the mo ney. The definitio n o f what is go o d value o n any particular pro ject will change fro m client to client and pro ject to pro ject.

Met hodology and Approach During the actual Wo rksho p po rtio n o f the VE study, the five-step Jo b Plan is fo llo wed, as prescribed by SAVE Internatio nal: The VE Jo b Plan fo llo ws five key steps: 1.

2.

3.

4.

5.

Info rmatio n Phase Speculatio n (Creative) Phase Evaluatio n (Analysis) Phase Develo pment Phase (Value Management Pro po sals) Presentatio n Phase (Repo rt/Oral Presentatio n)

These five key steps are described as fo llo ws: 1. Information Phase: At the beginning o f the VE Study, it is impo rtant to : Understand the backgro und and decisio ns that have influenced the develo pment o f the design thro ugh a fo rmal design presentatio n by the design A/E. Analyze the key functio nal issues go verning the pro ject. The functio ns o f any facility o r system are the co ntro lling elements in the o verall VE appro ach. This pro cedure fo rces the participants to think in terms o f functio n, and the co st and impacts asso ciated with that functio n.

Define Owner's o bjectives and key criteria go verning the pro ject.

Determine Owner's definitio n o f Value.

2. Speculation (Creative) Phase: This step in the VE study invo lves the listing o f creative ideas.

The VE Team thinks o f as many ways as po ssible to pro vide the necessary functio n within the pro ject areas at a lesser initial o r Life-Cycle Co st which represent impro ved value to the client.

Judgment o f the ideas is pro hibited.

The VE Team is lo o king fo r quantity and asso ciatio n o f ideas, which will be screened in the next phase o f the study.

Many o f the ideas bro ught fo rth in the creative phase are a result o f wo rk do ne in the functio n analysis. This list may include ideas that can be further evaluated and used in the design.

3. Evaluation (Analysis) Phase: In this phase o f the Pro ject, the VE Team, to gether with the Client and/o r Users, PDFmyURL.com

Defines the criteria to be used fo r evaluatio n.

Analyses and judges the ideas resulting fro m the creative sessio n. Ideas fo und to be impractical o r no t wo rthy o f additio nal study are discarded. Tho se ideas that represent the greatest po tential fo r co st savings and value impro vement are develo ped further. A weighted evaluatio n is applied in so me cases to acco unt fo r impacts o ther than co sts (such as schedule impacts, aesthetics, etc.).

4. Development Phase: During the develo pment phase o f the VE study, many o f the ideas are expanded into wo rkable so lutio ns. The develo pment co nsists o f: Descriptio n o f the reco mmended design change.

Descriptive evaluatio n o f the advantages and disadvantages o f the pro po sed reco mmendatio n.

Co st co mpariso n and LCC calculatio ns.

Each reco mmendatio n is presented with a brief narrative to co mpare the o riginal design metho d to the pro po sed change.

Sketches and design calculatio ns, where appro priate, are also included in this part o f the study.

5. Presentation Phase: The last phase o f the VE Study is the presentatio n o f the reco mmendatio ns in the fo rm o f a written repo rt. A briefing/o ral presentatio n o f results is made to the Client and Users, as well as the Design Team representatives. The reco mmendatio ns, the ratio nale that went into the develo pment o f each pro po sal, and a summary o f key co st impacts are presented at that time so that a decisio n can be made as to which Value Management pro po sals will be accepted fo r implementatio n and inco rpo ratio n into the design do cuments.

In additio n to the mo netary benefits, a VE Wo rksho p pro vides a valuable o ppo rtunity fo r key pro ject participants to co me to gether, then step aside and view the pro ject fro m a different perspective. The VE pro cess therefo re pro duces the fo llo wing benefits: Oppo rtunity to explo re all po ssible alternatives Fo rces pro ject participants to address "value" and "functio n" Helps clarify pro ject o bjectives Identifies and prio ritizes Client's value o bjectives Implements accepted pro po sals into design Pro vides feedback o n results o f the study

Const ruct ion During this phase value engineering is still po ssible thro ugh the use o f Value Engineering Change Pro po sals (VECP). Co ntracto rs can be pro vided mo netary incentives to pro po se so lutio ns that o ffer enhanced value to the o wner, and share in the financial benefits realized.

Clearly the o wner must co nsider co ntracto r-generated pro po sals very carefully, fro m a life-cycle perspective and a liability perspective. The A/E team must be bro ught in to the decisio n-making PDFmyURL.com

pro cess to agree to the pro po sed change as no t having any negative impact o n the o verall design and building functio n. The evaluatio n o f a VECP is treated similarly to any change o rder during co nstructio n, with issues such as schedule and pro ductivity impacts being co nsidered alo ng with the perceived co st savings generated.

Conclusion In the final analysis, Value Engineering is no t o nly beneficial, but essential because: The functio nality o f the pro ject is o ften impro ved as well as pro ducing tremendo us savings, bo th initial and Life-Cycle Co st.

A "seco nd lo o k" at the design pro duced by the architect and engineers gives the assurance that all reaso nable alternatives have been explo red.

Co st estimates and sco pe statements are checked tho ro ughly assuring that no thing has been o mitted o r underestimated.

Assures that the best value will be o btained o ver the life o f the building.

BACK TO TO P

MAJOR RESOURCES Techniques of Value Analysis and Engineering , 3rd ed. by L.D. Miles. New Yo rk, NY: McGrawHill, 19 72.

"The Dread of VE: Understanding Why It's Not Used More" McClinto ck. Vo l. 11, No . 4, Jan./Feb./Mar. 19 8 9 , pp. 12-14.

in Value World by Sco t

Value Engineering: Practical Applications for Design, Construction, Maintenance, & Operations by Alpho nse J. Dell'Iso la. Kingsto n, MA: R.S. Means Co mpany, Inc., 19 9 9 .

Value Engineering Theory, Revised Edition by Do nald E. Parker. Washingto n, DC: The Lawrence D. Miles Value Fo undatio n, 19 9 5.

Value: Its Measurement, Design, and Management by M. Larry Shillito and David J. De Marle.

New Yo rk, NY: Jo hn Wiley & So ns, Inc., 19 9 2.

Value Management Practice by Michel Thiry. Sylva, NC: Pro ject Management Institute, 19 9 7.

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