If you have been in the commercial construction industry any length of time, you most certainly have heard the term “Value Engineering.” It is a subject often misunderstood and misapplied in practice, between the process taken, and the timing of that process. Many mistakenly associate Value Engineering with “cutting corners” to stay on budget either using cheaper materials or scope reduction and other means. However, responsible Value Engineering begins at project inception and is an important tool in ensuring the client gets optimal value for their investment without compromising quality or the completion date.
What is Value Engineering?
According to the National Institute of Building Sciences (NIBS), Value Engineering is:
“A conscious and explicit set of disciplined procedures designed to seek out optimum value for both initial and long-term investment. First utilized in the manufacturing industry during World War II, it has been widely used in the construction industry for many years.
Value Engineering (VE) is not a design/peer review or a cost-cutting exercise. VE is a creative, organized effort, which analyzes the requirements of a project for the purpose of achieving the essential functions at the lowest total costs (capital, staffing, energy, maintenance) over the life of the project. Through a group investigation, using experienced, multi-disciplinary teams, value and economy are improved through the study of alternate design concepts, materials, and methods without compromising the functional and value objectives of the client.”
Why Does VE Sometimes Have a Bad Rap?
When ideally and appropriately implemented, VE can be a significant asset to a project. In practice, however, it is frequently misused resulting in a less than ideal experience and outcomes. All too often, this happens when VE is implemented later in the project as a way to reign in the spending, making the bottom line the only beneficiary. It is a knee-jerk reaction to going over budget, versus a tool to ensure quality and value. This can lead to diminished designs and using materials of lesser quality. While VE can be applied at any stage of the project— even during construction, the later it is implemented, the greater the opportunity loss to implement changes that may have otherwise reduced costs and/or completion time. Conversely, the sooner VE is implemented, the greater your deployable options will be that may feasibly be implemented. VE optimally starts at the conceptual phase of a project, with the client, its architect, and contractor at the table; with that Team meeting regularly as the plans progress along their way to being ready to submit to the City for permit. The success, costs, and time to complete a project is mostly predicated on the quality of efforts and the quality of the plans as submitted for permit. If VE best practice with the right Team is not implemented prior to plans being submitted to the City, the project will risk higher costs, time, and frustrations that would have otherwise been mitigated.
What are the Advantages of VE?
Within the constructs of a multi-disciplined team, the goal of VE is to identify areas where planning for ease of construction will keep the project on schedule and reduce costs while increasing function, quality, performance, and safety. It may seem like an impossible task, but with the right team of knowledgeable individuals all dedicated to a positive outcome, VE can help you achieve all of your project goals. In addition to keeping projects “on budget”, VE has some other advantages.
- Helps clients identify, solidify, and prioritize objectives
- Provides the opportunity to explore all possible alternatives and solutions within a project
- Helps address value and function
- Encourages timeliness
- Assures the best value will be obtained over the life of the building
- Assures the use of quality materials throughout the project.
- Cost estimates and scope statements are checked thoroughly, assuring that nothing has been omitted or underestimated
- Increases project transparency
Sierra Group Commercial Construction 1-888-880-4949
Sierra Group’s Construction Division provides general contracting to Commercial, Industrial, and Retail industries, along with a specialty in Bank and Credit Union Branch construction. From minor special projects to complex major tenant improvements, we deliver by established best practices to save you time, money, and avert distracting frustrations.
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