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Keeping the Value in Value Engineering

We haven’t found a project with an unlimited budget yet! As Architects, Engineers, Designers, Owners, or Contractors, your projects are undoubtedly also controlled by the almighty dollar; and as such, you’ve probably been through the value engineering (VE) process at least a time or two. Though it may be called by other names and sometimes the process itself may vary, the concept is straightforward – reduce a project’s construction costs to meet the project’s budget. Once in “VE mode”, the design team must work collectively to compile a list of finishes, systems, materials, etc. that can be modified, substituted, or even eliminated without substantially sacrificing the overall quality of the project. Regardless of what items are proposed for cost reductions, there are some important considerations to keep in mind when going through the VE process.

One of the most common challenges is making informed decisions in a very short amount of time. Most projects are priced (or bid) when the design is complete, or very close to completion. While the design process may have taken months or even years to finish, the VE efforts are usually compressed into a much shorter timeframe. Within that period, it can be very difficult to recreate and reevaluate all of the critical decisions that were made throughout the design process. There is a great deal of coordination that takes place throughout a project’s design. Team members coordinate with one another, manufacturer’s representatives, vendors, and utility companies. Building code studies are performed, and team members consult with Authorities Having Jurisdiction (AHJs) on code clarifications or official interpretations. The VE process must remain cognizant of all these previous coordination efforts and resulting decisions.

“Clear, open communication among all parties is another key component to a successful VE process.”

Clear, open communication among all parties is another key component to a successful VE process. Changes made to one building component or system may have “ripple effects” that impact other components or systems. For example, changing out a piece of mechanical equipment could require physical space changes and/or electrical system changes. Further, changes in equipment or systems may have long-term effects on energy usage, utility costs, routine maintenance, or life-cycle costs. It’s therefore critical that these items be discussed, and the Owner made fully aware, of the ramifications associated with all final VE decisions.

To help keep the “value” in the value engineering process and avoid some of the common pitfalls, remember the following:

Include the entire design team in the VE efforts.

  • Communicate. Make sure that Owners understand the long-term benefits (or shortcomings) of the decisions that are made.
  • Review project documentation, such as meeting minutes, that highlight critical design decisions that were made. Make sure that VE decisions don’t “undo” decisions that were made for specific reasons.
  • Reevaluate building codes. Confirm that accepted decisions will not have code implications. If there are code implications, ensure that they are accommodated accordingly.
  • Beware of untested products and systems. Do not accept substitutions that are unfamiliar, unless there is ample evidence to prove that they will function as expected.

Although the term sometimes carries negative connotations, Value Engineering is a critical and often necessary step for many projects. By focusing on the original intent of the design efforts and clearly communicating any changes and their impacts to all parties involved, the VE process can be a useful tool in achieving a project’s goals.

– Mark D. Layfield, PE, LEED AP

Mark is a Principal, Licensed Electrical Engineer, Lighting Designer, and LEED Accredited Professional. Please feel free to contact Mark for further details regarding the above information.