Value engineering in government and private sector construction

Abstract

Value engineering enjoys widespread use throughout the Federal Government and in the private sector. The many billions of dollars saved over the years is a tribute to the effectiveness of applying value engineering methodology to construction projects. The Federal Axquisition Regulations require the use of value engineering in all Federal construction contracts with working estimates of $100,000.00 or more. Many private construction management firms offer value engineering as a part of their pre-construction package of services. This report looks at the similarities and differences of value management programs practiced in the construction management industry today through a comparative look at three major Federal Government acquisition agencies with construction management responsibilities and three large scale private construction firms in the southeastern United States offering Construction Management (CM) services to their clients. The Federal Government has very stringent regulation and guidelines for executing their value management programs. The private firms in this study, on the other hand, appear to do a great job in the area of value management but do not rely as much on regulations and guidelines and more on practical experience and lessons learned. One area in which the Navy is utilizing value management methodology in a unique way is with the Functional Analysis Concept Development (FACD) workshops. These workshops use VE techniques to better define the scope of a proposed project prior to any design efforts. The FACD team consist of representatives of the owner, A&E firm, end user, and the construction management agency. The workshops can be used in conjuction with any acquisition strategy including design-build and have produced award winning designs and completed projects for the clients and customers of Naval Facilities Engineering Command (NAVFACENGCOM). Value engineering propsal databases are capturing a tremendous amount of value added construction materials and methods that can be used on projects of similar scope. With this information at the designers' fingertips, the result should be higher quality designs leaving the drafting tables. This could be especially useful in projects of smaller dollar value that do not justify a full-blown VE study. Value Engineering has been around, in America. since the 1940s and it is still evolving and being improved upon, which should not be surprising since process improvement is at the heart of any value management philosophy.