Value Engineering is a term that has become so pervasive in the construction industry that the meaning of the phrase has been diluted down to the simple concept of saving money on a construction project, regardless of means and methods. A few years ago, I heard an architect say that most instances of contractor-initiated value engineering lack both value and engineering. At the time, I took offense to his statement, but I now find myself triggered when I hear the term value engineering used so flippantly within the industry.
While I acknowledge that true value engineering efforts often result in lowered construction costs, cost-saving initiatives like scope reductions or scope omissions are often mislabeled as “value engineering”. However, true value engineering attacks the project in ways which reduced costs and/or time to construct while still achieving the objectives of the intended use of the property and those of our clients. So what are some examples of what I consider to be true value engineering?
Getting Involved Early
As a General Contractor who generally gets involved in construction projects very early in the process, it is our role on the project team to ensure the plans get developed into the finest set of construction documents possible given the design consultants’ abilities and the time allotted to do the design. Over and over we have proven that when the construction documents are crafted and refined to a high level, the project receives better pricing from subcontractors, vendors, and suppliers. As the General Contractor, it is our job to communicate to both the owners and the design team of gaps, conflicts, inconsistencies, and over specifications that will inevitably cause contingencies and “CYA’s” to be included in subcontractor bids. Having the best set of documents not only delivers value on bid day but throughout the entire project by limiting the amount of delays caused by conflicts, RFI’s, and dealing with the change orders that tend to come along with those distractions. A great set of plans carries no cost premiums to our clients and carries no collateral concessions for any stakeholder, the classic win-win scenario.
An Accurate Spec-Book
Another honey-hole often wrought with value engineering opportunity is the spec book. When done properly, an accurate and applicable spec book can help bring clarity to the General Contractor, subcontractors, and vendors on what the intent of the project is. The problems come when the spec book is filled with boiler plate or copy and pasted information from other projects which brings conflict and confusion into what needs to be priced and included. The more information that is included with the spec book that is at variance with the plans, will again result in higher bids on bid day and delays during procurement and submittal review. An owner should demand a well-prepared spec book from the design team and a thorough audit from their General Contractor prior to releasing the documents into the marketplace for pricing.
I highlight the two examples above because they have been proven many times over of reducing costs to our clients while not sacrificing, reducing, or omitting any of the project’s scope. There will always be the options of using a shingle roof in lieu of a tile roof, or a thinner LVT product, or less expensive light fixtures. Those options have their place when trying to hit aggressive budgets. But creativity, experience, and thoughtfulness from the GC must be leveraged from the start of preconstruction to best capitalize on “free VE”. Do it right and you might just bring value back to value engineering.
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Jeremy Bartolovitch |
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