11 minute read
Event review
Value Engineering
Virtual Value Engineering Summit 2020
Big Project ME recaps the first-ever virtual value engineering summit, a four day event held from June 28 to July 1, 2020
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From June 28 to July 1, CPI Trade Media held its first ever Virtual Value Engineering Summit, the third edition of the annual Value
Engineering Summit, and the first to gone entirely digital due to the ongoing restrictions imposed by the COVID-19 pandemic.
The nearly week-long virtual event saw well-known industry experts participate in insightful panel discussions, as well as share ideas and approaches to
As a starting point, for all project stakeholders, especially developers, the difference between cost cutting and value engineering is important to understand and define.
True value engineering maintains the design intent whilst also providing a high quality of finish similar to the original performance specification. Cost cutting negatively impacts on quality of finish and design intent.
To achieve value for the client, and to have effective reduction in cost without impacting quality, is was agreed by all that early engagement and early definition of target budget is critical to the success of the value engineering process.
Effective value engineering takes considerable resource and time. Options, ideas and sample materials are sourced, construction through online presentations and opinion pieces and case studies. All of the content created for the Virtual VE Summit was broadcast to a combined audience of thousands, with the virtual panel discussions and presentations alone gathering more than 1,500 viewers from across the regional and international construction industry.
Centred on construction efficiency, project management,
Panel Recap: Finding New Efficiencies Tom Gilmartin, Panellist
fast-tracked projects and
shared and commented on by the project stakeholders in an iterative process to ensure the proposed samples, systems, materials are similar to original aesthetic and performance intent.
An ALEC FITOUT value engineering framework was discussed, whereby clientele can be provided with a “shopping list” of options with clearly defined savings associated with each option. To facilitate maximum value from the process, especially for buildings that will be owner operated (for example a hotel), early review of structure, façade and MEP systems is encouraged as these packages typically equate to 70% of the build costs, and contribute significantly to the life cycle operating costs.
A collaborative, aligned philosophy with early engagement is advised. However, in reality this will be very challenging to implement – developers, either through habit or through mandate insist on trusting in the traditional delivery model of design, tender, construct. However, this model is inherently flawed.
More often than not an architect will design a building without understanding the client’s real budget. The consultant team generating efficiencies in construction, the topics discussed during the Virtual VE Summit aligned with the overall theme of value engineering in a world that has been drastically impacted by the ongoing COVID-19 pandemic.
The first day of the summit saw a panel discussion beginning at 10AM and running for an hour, followed by a live presentation at 12PM. This panel – Finding New Efficiencies – was moderated by Gavin Davids, group editor of CPI Trade Media’s Construction will then prepare a cost estimate for the project and package a tender requesting “base bid” and “alternative bids” as already the budget, now disclosed to the cost consultant is at risk.
Contractors will spend considerable resource and time to prepare proposals only to be told, after months of effort, that the project is over budget and we need to re-tender based on a value engineered design.
We need to ask ourselves: X Why is the budget not clearly understood at the start of the process? X Why spend considerable time and cost preparing tenders only to have to retender / redesign to achieve a budget?
At ALEC FITOUT, we have established a successful value engineering delivery framework developed from our experience gained in direct negotiation of projects with key clientele. Engaging early in the design process, estimating and finetuning budgets in parallel with design development and also in collaboration with the design teams. This approach requires significant levels of trust and transparency – which are unfortunately lacking in Division and editor of Big Project ME. It featured Phil Branson, UK director at Omnium International. Ralf Steinhauer, director at RSP, and Tom Gilmartin, business development manager at ALEC Fitout.
The presentation for Day One was by Mouthanna Haddadin, commercial manager and acting operations manager at Innovo Constructions.
Both panel and presentation were followed by 15 minutes Q&A
sessions, where panellists and the Middle East construction and fit out market – however, the value to be gained for the client team in trusting the process is considerable.
A global target budget for the project is openly discussed and agreed by all parties upfront. The creative process is not impacted by budget constraints at concept stage; however, design optimisation and value engineering are implemented during concept in collaboration with the design team to ensure that design intent and vision is within the client agreed parameters. Schematic and Design Development as well as coordination of design and firming on budget run all in parallel.
All project stakeholders, working closely together, are aligned with the common goal of project success, and can using this value engineering negotiated delivery framework have a win – win for all.
In summary, it is our experience that an early engagement, negotiated, design to budget, value engineering approach is the most practical and effective delivery model for developers wishing for timely delivery, whilst managing cost and ensuring.
presenters answered queries posed by online viewers from across the region’s construction industry.
Day Two saw the Virtual VE Summit’s second panel discussion – A True Collaborative Approach – hosted by Nithin Thomas, senior BIM manager at Shapoorji Pallonji International. It featured Charlie Harris, branch director at Omnium International, and Rita Allen, senior associate at Pinsent Masons.
Following the panel discussion and Q&A in the morning session,
I consider being a member of a panel discussion something of an honour. Not only because I get to share in a discussion with a collection of well-respected industry colleagues, but also because it gives me an opportunity to openly discuss and comment on some of the challenges we face in our working lives.
An open panel discussion allows for the conversation to wander throughout the participants and often drift to topics even more interesting than what was initially asked.
My panellist colleagues were
Naji Atallah from Autodesk and
Stephan Degenhart from Drees and Sommer. Unfortunately,
Bahaa Ibrahim from Hard
Precast Building Systems, was unable to join us and his input was sorely missed. two presentations from Herman van Eeden, senior consultant at RIB Software, and Sorin Bularca, AEC technical sales specialist at Autodesk Middle East, were held at 12PM and 1PM respectively.
Day Three featured a panel discussion centred around the use of technology in the value engineering process. This was hosted by Craig Garett, Digital Advancement Academy manager for Bentley Systems and featured insights from Naji Atallah from Autodesk and Stephen Degenhart
The discussion, like many happening across the industry, addressed the challenges faced by all stakeholders during the COVID-19 pandemic.
But what was indeed encouraging was the general feeling from all panellists that organisations throughout the region are rising to the challenge, if not actually getting on top of the situation from an operational, collaborative, and technology adoption perspective.
Currently, the uptake of cloudbased collaboration solutions is approximately four times that of any other technology solution adoption. Therefore, confirming that we have indeed found a new status quo when it comes to sharing project data, on demand globally, in a structured and managed environment.
“We are at a turning point in the industry, our business as usual mindset needs to change. Digitalising the data by using a CDE can provide a 90% drop in the time required to look for data, be that files or drawings, etc. The real value being that engineers can then focus on their core value of providing better designs for assets,” said Naji Atallah. from Drees & Sommers
Day Four closed out the 2020 edition of the Value Engineering Summit with a special MECN. com newsletter that recapped the week and shared fresh content from Atkins, Autodesk, CDM Smith and Omnium Resolve.
Previously scheduled to be a live event on March 30 in Dubai, the outbreak of COVID-19 and safety precautions outlined by UAE authorities dictated that the event be postponed. Given
Panel Recap: Time to Heed the Call of Technology Craig Garrett, Moderator
the importance of the topic
All panellists were asked to qualify their views and understanding using case study examples that demonstrate actual experiences. The examples illustrated how best-practice advice is being adopted by delivery teams. Appreciating that certain processes are actively being adopted by key clients in the market assures others, who might otherwise have been reluctant, to realise the earned value that can be achieved.
The panel also acknowledged the role of off-site manufacturing and modular construction that will become a major influence. While understanding that it is not an overnight transformation, or that it might not be suitable for every project, this approach must be included in the digital delivery strategy from the very beginning of the concept stage. Adopting such a strategy will align the supply chain from the outset.
“Smart is good, technology is good, modular is good, but it always has to make sense. Technology just as a gimmick doesn’t help. There must be a benefit or added value for a return on investment at every however especially in light of new pressures on the construction sector, the team at Middle East Consultant and Big Project Middle East decided that the show must go on as a digital event.
The event is supported by Omnium International, Hard Precast Building Systems (HPBS), Drees & Sommer, Intertek, RIB, Redington, Autodesk, MZ Architects as well as CIOB and RICS. To view the panel discussions and presentations, please visit: https:// meconstructionnews.com/live-videos
phase to justify adoption,” added Stephan Degenhart.
Major organisations are, more than ever, starting to realise through the new wave of current common data environment adoption that these solutions are creating a foundation or platform on which to build a better user experience overall. This goes beyond creating a digital twin or a smart city. But, understanding that owning and managing the data allows for a new layer of how we consume data, not just for project design and delivery but for 20, 50 or 100 years into an asset’s operational future.
While the panel considered the pandemic, we should also be aware of the bigger concerns ahead. We must not forget the environmental challenges we already face, including a climate crisis, and realise that the construction industry has a major role to play. Here, technology can also address the selection of materials and sustainability goals. Valuable resources are used in our projects, so we must look not just to the next six months, but way beyond that to what we need to change with regard to the environment around us.
I had the privilege of moderating for the first Virtual Value Engineering Summit 2020 produced by CPI Trade Media. Attended by industry specialist Rita Allan, senior associate at Pinsent Mason and Charlie Harris, branch director at Omnium International Ltd.
The panel started off with a brief discussion about finding an accurate definition of ‘true collaboration’ within the industry. Each of the panellists reiterated
the importance of technology and how its implementation came to the aid of the industry during this pandemic period. Both panellists believed productivity has not been greatly affected during this pandemic period as the industry embraced without much disruption technologies which helped business continue as usual.
Charlie also added that he felt productivity had improved during this low season.
Both panellists felt that contracts could be better structured to complement collaboration. The influence of bespoke contracts in the region could be a deterrent for true collaboration, however. Furthermore, both Rita and Charlie agreed that individual silos within projects, adversarial culture, lack of trust, and so on act as major deterrents.
Considering how the industry has had to deal with this unexpected pandemic, both panellists focused on the importance of contractors demonstrating their readiness under the cover of insurances, etc. going forward on projects. They highlighted this as something for the industry to take note of and to be ready for.
When questioned as to whether a different approach towards procurements, such as Design and Build could pave way for better collaboration, both panellists agreed this could be one such approach for the industry. Charlie and Rita were also of the opinion that these procurement routes would not yield anticipated results if cost is the primary selection criteria.
Rita additionally added that PPP/PFI procurement routes are becoming a subject of contention for major infrastructure projects, and all panellists agreed that considering the current market situation; most employers will be looking at cost as a factor for employers and that traditional routes of procurement will be in contention in the present time.
Going forward, there will be a need for the industry to demonstrate capability in data security in order to securing projects. The new normal will include working from home, remote collaboration, and cloud data sharing, which will be a challenge for an Industry that is very traditionally rooted.
The industry is not where it was before and will not be the same going forward. With an increased reliance on technology, moving towards true collaboration does seem like the correct choice.
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