Value Engineering
Concerns are often raised that many commercial building projects exceed their original budget. What can you do to ensure that money is well spent and not paid out on unnecessary items?
One solution can be ‘Value Engineering’ (VE).
VE is often discussed when talking about reducing building costs.
But what is it?
Value Engineering is a conscious and explicit set of disciplined procedures designed to seek out optimum value for both initial and long-term investment. – Whole Building Design Guide (Wbdg.org)
This definition is interesting as it does not mention saving money, it sets out through VE to find optimum value. This is maximising current value and value going forward. This is quite a concept and based on a much wider set of features than just cost. VE looks at quality and longevity – how well is something made and how much maintenance will it take to remain working effectively.
Examples of VE in action.
If two door handles meet national hardware standards and function as well as each other in the operation of opening a door, do you select the cheaper fitting?
After consideration you may feel, the more expensive fitting sets a better tone and in the longer term, as it is of a higher quality and will not need replacement as soon, the overall value is better. Perhaps this is not the case and you go for function and accept the quality of the cheaper fitting is appropriate.
What material do you select to cover a flat roof not visible from any external area?
You could select a metal sheet finish say, lead or copper. This finish has a predicted life of 50 - years plus and performs well as a method of keeping rainfall from entering the building. As its not visible the aesthetic value is not an issue just it’s function.
A felt roof may be 50% cheaper with a predicted lifespan of 25-years. Are you right to reduce the budget knowing you may have to address a renewal cost in 25-years’ time as opposed to 50 years?
How many hinges does a door need?
If the specification calls for 4 hinges for each door but the engineer says the door can function perfectly well with 3 hinges – is this acceptable? Yes, as the function remains the same but the purchase cost of hinges is reduced by 25%.
These are questions raised by VE.
We all want value for money. No one wants to pay more than they should but is this the same as paying more than you need to?
Value Engineering (VE) versus Cheaper Engineering (CE).
CE is where you make changes to reduce budgets. This is fair enough as we must all accept boundaries of what is affordable and without budgets we shall end up with unsustainable debt.
VE should improve or at least maintain the specified level of function. If it does not then it’s veering into CE. But what if as above, you reduce the performance requirement and state a 25-year lifespan is acceptable for a roof ?
The VE selection may then well be different.
If it’s VE and you want to review decisions made but maintain value in the broadest sense, then all well and good. If the intention is to reduce cost even if it means a corresponding reduction in value then it’s CE.
By being transparent you can effectively deliver what it is you are trying to achieve.
Fitzpatrick Team like to build well and stick to a budget. Why not give Mark a call to discuss your project?
