Understanding the value in Value Engineering

Alistair Davis of Black & White Engineering clears up some misconceptions using MEP plant rooms as an example

Since the commercial and financial challenges of 2008, the words ‘value engineering’ have been bandied about frequently, without due regard for what they actually mean. Value engineering should not just be about cost-cutting but should focus on optimising a design which results in the end product being more beneficial to the stakeholders than the original proposed. This effective engineering approach needs to be considered in the light of whole lifecycle costing, not just initial build costs, especially when your stakeholders are owner-operators, etc.

Through value engineering, it is possible to provide a higher quality design with greater resilience and flexibility for the same monetary value as initially proposed. This is still considered value engineering, but the value has been added to the project rather than monetary savings achieved.

Of course, there is an important need to ensure projects are built within budget, and without this due consideration projects would very likely fail.

The best time to implement value engineering is at the very outset of a project. This should be carried out by the base design team and not observed at the end by an outsider. If optimised designs can be considered from the beginning, then all supporting systems can be considered collaboratively, resulting in a more efficient and successful project.

A good example of this is the sizing of MEP plant rooms. If equipment is oversized then there are usually penalties to be paid, which include inefficiencies, additional installed electrical infrastructures or the need for larger rooms, which in return reduces NLA and increases initial build and running costs.

Value engineering works best when the value engineering team is brought in alongside the base design team and the exercise is undertaken in a collaborative environment. This ensures that efforts are made to discuss ideas, which promotes greater synergies to the project as a whole.

The standard approach to any form of value engineering exercise is based on the following steps:

  1. Information Gathering – Understand the project and the stakeholder requirements.
  2. System Analysis – Analyse the project’s systems and associated components in order to understand and clarify the required functions.
  3. Optioneering – Review the possible design options in order to achieve the required design intent and identify specific value improvements.
  4. Development – Develop the selected alternatives that provide the best stakeholder value improvement.
  5. Presentation – Present the value engineering recommendation to the project stakeholders.
  6. Implementation – Incorporate agreed value engineering into the design.

The key team players in any value engineering exercise are the stakeholders. Whenever Black & White Engineering is brought in to undertake a value engineering review, this starts by understanding every single stakeholder’s needs. Without a clear understanding of the requirements of the client, the operator, the user or indeed any key stakeholder (including the cost consultant), there is no way of successfully optimising the systems.

Along with fully understanding the stakeholder’s needs, it is also the consultant’s responsibility to inform the stakeholder of the decision process by providing the necessary technical expertise and project experience.

A simple but effective example of this is undertaking the cooling calculations for a building. Firstly, it is essential to use software that can dynamically model the peak coincidental cooling load, so that an accurate base load is obtained; secondly, an in-depth review of system profiling and diversities needs to be undertaken.

Once this is completed, a review of fresh air controls is typically undertaken. At this point the stakeholder’s input is massively beneficial to the project, to verify the implemented assumptions and identify any further areas of modification, especially where benchmarking data is available.

B&W Engineering has had the good fortune to undertake many value engineering exercises where the stakeholder has also been the end user. This has led to the project greatly benefiting from accurate benchmarking data used to verify the optimisations proposed.

Value engineering is a process typically inherent to all design phases, and primarily undertaken during the concept design stage. This process can suffer for many reasons, typically due to a lack of stakeholder input, aggressive design programmes and insufficient knowledge of local authority requirements.

The incorporation of value engineering into the design process from the initial stage of a project provides the following substantial benefits:

  1. The functionality of the project is often improved, as well as producing savings for both initial and lifecycle cost.
  2. Concept stage option reviews give the assurance that all reasonable alternatives have been explored.
  3. Design documentation reviewed by the quantity surveyor to provide accurate cost estimates, which are checked thoroughly and signed off by all stakeholders, assure that nothing has been omitted or underestimated.
  4. Assurance that the best value will be obtained over the life of the building.
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