Value engineering

Value engineering analyzes designed building features, systems, equipment, and material selections to achieve essential functions and enhance results while reducing the life-cycle cost.

Value engineering practices are formally structured in the design phase and depend on contractor initiative in the construction phase. Value engineering goals for individual projects are often addressed in partnering agreements.

Design phase

In the design phase of federal buildings, value engineering considers alternative designs to optimize the expected cost/worth ratio while maintaining required performance, quality, reliability, and safety.

We generally contract for two value engineering studies: one at the completion of the concept design and one at the completion of the design development. In each, a value engineering consultant evaluates changes that may increase functional value (including customer satisfaction) while reducing construction, operation, or maintenance costs. The value engineering effort is scaled to the project size, complexity, and status.

Value engineering efforts in the early stages of project design afford greater savings and allow a change of direction, if appropriate, without affecting deadlines. Money saved through these efforts can be reallocated for features that would lend greater life-cycle value to the building.

Construction phase

In the construction phase, our contractors are encouraged through shared savings to propose changes that cut costs while maintaining or enhancing design quality, value, functional performance, safety, appearance, or ease of upkeep.

Value engineering continues during construction because a contractor’s practical experience and purchase options can often generate substantial savings. When a contractor proposes a change to construction requirements, materials, or methods, the contractor shares in the savings. If we approve the changes, we will modify the contract and make an incentive payment to the contractor. The contractor’s share of construction cost savings is 55 percent for fixed-price contracts, but can be different for incentive-based contracts.