Value Engineering
Value Engineering
��������� �������������������
Volume 1 Introduction and Overview �
Volume 2A GeoHazard Assessment Table 2-1 Worldwide Development of Value Methodology ..................................................................................... 2-1
Table 2-2 Examples of VE Study Outcomes (FHWA3)................................................................................................. 2-4
Volume 2B Engineering Surveys
Table 2-3 Weighting Evaluation ......................................................................................................................................... 2-10
Volume 2C Geological and Geotechnical Investigations
Table 2-4 Ranking Ideas ........................................................................................................................................................ 2-11
Volume 3 Water Engineering Projects Table 2-5 Example Using a Weighting Matrix .............................................................................................................. 2-27
Volume 4 Highway Design Table 2-6 Evaluation Scorecard.......................................................................................................................................... 2-28
��������
�
A Examples of Value Engineering � �
B Examples of Functions and Modifiers
C Examples of FAST Diagrams
D Discounted Cash Flows and Recurring Cost
E Checklist
F Creative Blocks
G Reason for Unsatisfactory Result
H Terms of Reference for Hiring Value Engineering Consultants
�
�
��� ����
��������������������������� ���������������������������
�������������� ���������
Abbreviation� Definition� Acronym Definition
������������������������� ��������������������������������������������������������������������������������������������������
���� ���������������������������������������������������������������������� ����������������� �����������������������������������������������������������������������������������
������� ������������������������������������������������� ���������������� ����������������������������������������������������������������������������������������������������
���� ���������������������������������� ������������������������������������������������������������������������������������������
���������������������������������������������
���� ����������������������������������
������������������ ������������������������������������������������������������������������������������������������
���� �������������������������������� �����������������.�
��������� ��������������������������������������������������–����������
����� ���������������������������������������� �
����� ������������������������������������
��� ���������������
��� ������������������
��� ��������������������������������������
�
��� ��
��������������������������� ���������������������������
This Guide draws on the content of the NEDA Value Engineering Handbook Products were examined and options to replace materials in shortage with
(NEDA, 2009) and maintains consistency with the requirements of that different materials were developed. This soon led to real VA and the concept of
handbook, whilst focusing on activities relevant to DPWH and other agencies value:
involved in infrastructure and building works. The GOAL Value Methodology Value = Function/Cost
Pocket Book (GOAL, 2008) has also been drawn on in drafting this Guide.
From this simple equation we can see that value can be increased by:
VE is the most effective technique known to improve value, and eliminate
unnecessary costs in product design, testing, manufacturing, construction, a)� removing any part or activity which does not contribute to the intended
operations, maintenance, data, and processes and practices. While its application function
to processes and practices is less well known, effectiveness in this area has been b)� providing the same functionality for less cost
highly successful.
c)� improving the functionality for the same cost
Saving money and, at the same time, providing better value is a concept that
From VA the ideas of VE were developed and have become fully institutionalized
everyone can support. The benefits of optimizing infrastructure expenditures,
in the United States in the subsequent decades. Elsewhere in the world the term
constructing more with less money, increasing efficiency and reducing the
VE was considered less suitable to encourage adoption and the use of Value
amount of resource use must be recognized today and pursued in the future.
Management or VM has become more common. American practice is now to refer
In the constant battle to find a better way to fight inflation, validate cost estimates, to VA/VE, and also more broadly to Value Methodology or VM. This Guide adopts
and assure all stakeholders that the solutions being proposed are cost effective, SAVE terminology and the use of the term VE.
the application of VE comes to the forefront, for both government and private
VE, as defined by the Society of American VE International, is "the systematic
decision-makers. VE is a proven technique used to combat runaway costs and is
application of recognized techniques by multi-disciplined team (s) that identifies
a process proven by countless owners, manufacturers and government entities.
the function of a product or service; establishes a worth for that function;
More specifically, VE is defined by an international certification body (SAVE
generates alternatives through the use of creative thinking; and provides the
International) as: "the systematic application of recognized techniques by multi-
needed functions, reliably, at the lowest overall cost".
disciplinary team(s) that identifies the function of a product or service;
establishes a worth for that function; generates alternatives through the use of VE may be defined in other ways, as long as the definition contains the following
creative thinking; and provides the needed functions, reliably, at the lowest three basic precepts:
overall cost". � An organized review to improve value by using multi-disciplined teams of
Section 1 of this Guide provides an introduction to VE and Section 2 provides a specialists knowing various aspects of the problem under study.
discussion on fundamentals of VE including history, benefits, techniques, and a � A function-oriented approach to identify the essential functions of the system,
complete procedure for conducting a Value Study. Section 3 describes the phases product, process or service being studied and costs associated with those
of a project and how VE can be applied in each phase. Section 4 deals with the functions.
selection of projects for VE. Section 5 provides a procedure for hiring and � Creative thinking, which uses recognized techniques to explore alternate
managing of VE Consultants. ways of performing the functions at a lower overall cost or otherwise improve
the design, process, service, or product effectiveness.
The Guide provides specific guidance for analyzing VE studies to assure that the
studies have been accomplished in accordance with internationally accepted VE is predicated on the proposition that people spend their money on
standards and practices. Most importantly, the information included in these accomplishing functions rather than simply obtain ownership. Concern for our
chapters provides basic guidance in certifying that the study was accomplished environment, energy and rising costs, requires that the functional needs of safe
under the direction of a qualified expert, was accomplished by a multi- and efficient project implementation be carefully analyzed to obtain these
disciplinary and certified team of bona fide experts, and was performed following functions in the most economical manner, with minimal disturbance to the
the Job Plan. The Job Plan is an internationally defined and accepted analytical environment.
process for VE. VE is often considered a management tool for cost control. In practice, however,
it really is a step-by-step process used in problem solving or in improving a
product or process.
���� ����
���������������������������
then tasked with developing the alternative ideas and costing them. Whole Life
Costing approach is incorporated into the VE system.
The details of the workshop, the involvement and background of the facilitator,
the scope of the VE and other detail varies both by country and by individual
project. However the fundamental requirement is a facilitated structured
engineering by an appropriate knowledge group, adequately briefed on the
project, with clear goals and identified outcomes.
In order to deliver VE successfully there needs to be a culture within the
organization and its consultants of “no blame”. It must be understood before the
VE process starts that the benefits of VE outputs come from the combined efforts
of the whole team, and that the original concept or detailed designs will change
during the VM process. If the original designer is considered blameworthy for
failing to identify the potential improvements, then the system will be resisted
and its success will be compromised.
Where external consultants are involved in the design process, they must under
their contract:
� Be required to take part in value workshops.
� Be required to undertake assessments, redesigns and costing of the
alternatives identified during the VM process.
� Accept responsibility for the revised design.
� Be recompensed for the additional work they undertake.
If the outcome of the VE process identifies that the original design was below a
reasonable standard then that issue should be dealt with completely separately
and subsequently, so as not to damage the positive approach required in the VE
process.
����
���������������������������
Table 21 Worldwide Development of Value Methodology
Country Year
�������������� 1940’s�
������� 1950’s�
������ �����
��������������� �����
������ �����
���������� �����
���������� �����
��������� �����
������������ �����
���������� �����
����
���������������������������
reduce non-essential features and lessen the life cycle costs of the projects
without sacrificing the quality and integrity of the structure, while maintaining
its essential function, performance, and safety.
����
���������������������������
� The system of defining a function in two words, a verb and a noun, is known
as two-word abridgment. This abridgment represents a skeletal presentation
of relative completeness. Advantages of this system are that it forces
conciseness and avoids combining functions or attempting to define more
than one simple function at a time.
����
��������������������������� ���������������������������
conditions versus lower costs, but increased safety over the minimum Prepare a scoring matrix as shown on Table 2-3.
required safety versus cost.
� Cost may be a criterion, but it is not recommended since all proposals must Table 23 Weighting Evaluation
also pass a business case evaluation.
2.� Define the criteria so all team members understand them. SCORING MATRIX
� The more elements of criteria that are compared to each other, the better. This
reduces the chance that one or two elements will receive such weight that they
swing or govern the decision regardless of how the other elements score. B C D E F G H
3.� List all the criteria on the evaluation form, assigning each a letter of the A A-2 A/C A-2 A-3
alphabet as shown in the Table 2-3.
B B/C B-3 B/E
4.� Use a paired comparison to determine the weight to be used for each criterion.
Paired comparison is a technique based on the understanding that any person C C-3 C/E
or group of people can select between any two items or, if they cannot choose,
can call them equal in importance. D E-3
� Compare each criterion to another in turn. First, ask which is more important,
E
A or B. In the example of initial cost versus maintenance, the answer is A.
� Next, ask how much more important that answer is, rating it major, medium,
F
or minor - that is, giving it three, two, or one points. Again, in the example,
initial cost A is medium in being more important than maintenance and is thus G
recorded in the scoring matrix as A-2.
� Continue to compare A with C, then A with D, and so on, until all criteria are
compared with each other and recorded in terms of their importance. Note
that, in the example, when B is compared with C, a choice cannot be made DETERMINATION OF WEIGHTS
between them, so the selection is recorded in the scoring matrix as B/C.
��������������� �����������
All judgments of the relative importance of criteria are between minimum and ���������������������������
maximum performance levels, or between needs and desires, with the intent � � �
to determine the relative importance of each in order to optimize them later ������� �����
�������������������������
or make tradeoffs.
� � �
5.� Add the total number of each letter of the alphabet recorded in the scoring
��������������������������������������������� ���������� ����������������
matrix. This is the raw score of the weight for each of the criteria selected. For
������������������� �� ���
example, on the first row of scoring matrix, criteria A have scored 2, 1, 2 and ������������������� �� ��
������������������� �� ��
3 giving a total of 8. So the number 8 is transferred to the Weighting ����������������� 1 ��
Evaluation Table under column ‘Raw Score’ against the row ‘A Initial Cost’. ������������������������������ �� ��
�� �
If one criterion receives a zero score, it means that the attribute is not �� �
��
important to the team in evaluating the idea, and it can be dropped from
further consideration. If, however, the team disagrees with this automatic
conclusion, giving it a raw score of one can save the evaluation criteria. This is
demonstrated in Table 2-3. Notice the Raw Score for criterion D “Aesthetics”
has a value of “1” even though “D” does not appear in the scoring matrix.
6.� Reviewing the raw score, determine the weight of importance of each of the
criteria on a scale of one to ten, with ten being the highest and one being the
lowest. Remember that not all criteria are created equal.
���� �����
���������������������������
Construction cost is simply the cost to construct the item. Identify this during the
investigation phase of a VE study, usually from the construction estimate. If an
item is purchased rather than constructed, use the purchase cost of the item.
Operation and Maintenance (O&M) costs are the costs associated with owning,
maintaining, operating, and using an item, or system. There are two types of O&M
costs, recurring and non-recurring. Recurring O&M costs are ordinary, routine,
repetitive maintenance expenses. On a highway, they include grass-cutting,
replacing traffic markings, and the cost of electricity for lights, drainage
maintenance, and guardrail maintenance. Consider these costs as a lump sum,
annual payment. Non-recurring O&M costs include replacement or irregular
activities, such as resurfacing a highway, re-decking a bridge, and crack and joint
sealing. Consider these costs individually.
Salvage Value is the value of selling or re-using items and material at the end of
the life cycle. For example, some items with salvage value are guardrail, recycled
pavement, bridge beams, rails, etc.
Another type of salvage value occurs when a highway’s life cycle is completed, and
a major reconstruction is undertaken. The salvage value of the old road would be
the right of way, grading, sub-base, etc., that will not have to be purchased or
performed for the reconstruction.
Perhaps the most difficult part of life cycle cost engineering to understand is the
time value of money. Put simply, money in the future is not as valuable as money
today. This has nothing to do with inflation, but with the flexibility of having the
money now, and the opportunity costs of not having the money now. The adopted
discount rates vary considerably from country to country; NEDA uses 15%. That
means that the value of a peso decreases by 15% for every year in the future. For
example, one peso in one year is worth PHP0.85 today.
Over the life cycle of different items or systems, costs are incurred at different
times. Because of the time value of money, it is not fair or consistent to compare
these costs at face value. For a fair comparison, refigure costs to today's pesos, by
applying a discount rate to bring future costs back to their value today.
To find the Life Cycle Cost of an item or system, the following steps are generally
followed:
� Identify the expected life of the project element. This can be based on
background information, experience, policy, or by arbitrarily selecting an
expected life.
� Identify construction costs of all alternatives. In most cases, this information
will be provided. If not, find it during the investigation phase of the VE study.
� Identify recurring maintenance costs by year. This information is available
from maintenance staff, repair records, material usage, or accounting records.
� Identify non-recurring maintenance costs by year. This information is also
available from maintenance staff, repair records, material usage, or
accounting records.
� Identify salvage values, if any. For items such as right of way, grading, etc., the
initial cost can be used for the salvage value. Other items may require an
estimate on the part of the VE study team.
�����
���������������������������
when. They keep their finger on the pulse and know when to move on or bring
closure. Most important, facilitators help members define and reach his/her
goals.
When someone takes up the challenge of facilitating, they’re stepping into a very
clearly defined set of roles and responsibilities. These roles are:
� To help the group define its overall goal, as well as its specific objectives.
� To provide processes that help members use their time efficiently to make
high quality decisions.
� To guide group discussion to keep it on track.
� To help the group understand its own processes in order to work more
effectively.
� To make sure that assumptions are surfaced and tested.
� To provide feedback to the group so that they can assess their progress and
make adjustments.
� To manage conflict using a collaborative approach.
� To help the group access resources from inside and outside the group.
�����
���������������������������
actual arrangement of the room may be flexible based on the type of study, table
shape and size, and room shape. Generally, however, tables arranged at a forty-
five degree angle to the front of the room are useful because the team members
can easily see information projected on a screen or wall and face each other. In
all cases, it is useful to have natural lighting/ windows, computer Internet access,
and temperature control. It is the facilitator's responsibility to arrange the room
prior to the workshop to accommodate the group and visitors.
�����
���������������������������
The basic function of a design element satisfies the user's need for having an
action performed. The secondary function may or may not support the basic
function. An aesthetic or esteem function fulfills a desire to form something more
than what is needed.
These functions are not mutually exclusive and are frequently present in designs.
Good value occurs when the user is provided with the essential functions, and
the unessential ones he desires, at a reasonable cost.
An outline of the Information Phase is given in Checklist 1 and further checklists
on information gathering, general information, engineering and design, methods
and processes, material and procurement and function and worth are given in
Checklist 2 to 8 in Annex E.
�����
��������������������������� ���������������������������
A set of design objectives and a statement of requirements may be all that is essential to good value. Value engineers look beyond initial cost. The costs of
available early in a project cycle. For an older, standard design, such useful data operation, maintenance, and disposal or replacement must also be considered.
as performance under use, maintenance characteristics, failure rates, and
A complete life cycle cost model should include an engineering of the following
operational costs may be available. In addition to specific knowledge of the
items calculated in terms of present value:
project, it is essential for the team to have all relevant available information
concerning the technologies involved, and to be aware of the latest applicable � Capital cost - initial cost of construction, design, land, legal fees, other related
technical developments. The more that factual information is brought to bear on costs.
the problem, the higher the possibility of a substantial cost reduction. � Maintenance cost - the cost of regular maintenance patrol, repair, salaries of
maintenance personnel, and maintenance contracts.
Get the Facts. Get specific information about the item. Avoid generalities, which
� Rehabilitation / replacement cost - the cost of replacing materials,
serve only to protect the status quo. Work on each function individually before
equipment or other elements during the life cycle of the entire facility.
attempting to combine them into a single multi-functioning project. The danger in
a generalized statement is that if one exception can be found, the statement is Refer to Checklist 8, Annex E for detailed requirements of the Information on
proven wrong. If the proposal depends upon a generalized statement, the validity Function and Worth.
of the entire study could be compromised.
2.4.5.5 Phase 3: Creativity Phase
Get all Available Costs. To make a complete analysis of any project, the total cost
of the item, the cost of each component and a breakdown of the cost of each design The objective of the creativity phase of the VE job plan is to "brainstorm" the
component that are needed. functions of design elements identified in the Information Phase, and develop a
number of alternatives to each. An outline for the Creativity Phase is:
The team should obtain accurate and itemized cost estimates for each proposed
design to determine the alternative offering the greatest cost reduction. � Understand and control the positive and negative factors in creative
thinking.
� Plan for creative sessions.
2.4.5.4 Phase 2: Function Analysis Phase
� Select the creative techniques to be used.
����� �����
��������������������������� ���������������������������
� Challenge the present method of performing a function. Technology is Refer to Checklist 9, Annex E for detailed requirements of the creative phase.
changing so rapidly that the rules of a few years ago are probably obsolete.
Create new ways (alternatives) for performing the necessary function(s) 2.4.5.6 Phase 4: Evaluation Phase
more efficiently (lower total cost) or effectively. Take advantage of new The objective of the evaluation phase of the VE job plan is to analyze the results
products, processes, and materials. of the creativity phase and, through review of the various alternatives, select the
� Use Creative Techniques. Use as many creativity techniques as necessary to best ideas for further expansion.
get a fresh point of view. Adopt a positive mental approach to any problem. In
developing ideas, do not allow negative thoughts or judicial thinking. Evaluation Phase Outline:
Concentrate on creating as many ideas as possible on how the function can be � Perform preliminary screening to separate the best ideas.
performed. After writing down all ideas, consider all possible combinations to � Evaluate the alternatives to aid development of solutions.
determine the best method of performing the function. � Determine criteria and objectives.
� Make every attempt during this phase to depart from the ordinary patterns, � Weight the alternatives.
typical solutions, and habitual methods. Experience indicates that it is often � Weight the criteria and objectives of the project.
the new, fresh, and radically different approach that uncovers the best value � Compute the numerical rating.
solution(s). � Rank the alternatives.
� Select the best alternates for development.
2.4.5.5.3 Creative Thinking Techniques During creativity, the group makes a conscious effort to prohibit any judicial
Several techniques are available for use to the value engineer during the creativity thinking so as not to inhibit the creative process. Now the ideas produced must
phase. Use them singularly or in combination, depending on the project under be critically evaluated for acceptance.
study and the preferences of the team leader. Some of the more widely known and
Use the key questions listed below as the basis for a set of evaluation criteria to
used techniques are outlined below:
judge the ideas:
Free Association Techniques. Free association of ideas is the fruit of both the
� How might the idea work?
conscious and subconscious mind. In fact, the subconscious mind is the most
� Can it be made to work?
creative portion of the brain, but the conscious portion forms the input.
� What is the cost?
Brainstorming. This creative approach is an uninhibited, conference type, group � Will each idea perform the basic function?
approach, based upon the stimulation of one person's mind by another's. A typical � Which is the least expensive?
brainstorming session consists of a group of four to eight people spontaneously � Can it be modified or combined with another?
producing ideas designed to solve a specific problem. The objective is to produce � What are the chances for implementation?
the greatest possible number of alternative ideas for later exaltation and � Will it be relatively difficult or easy to make the change?
development. Observe these rules during brainstorming: � Will the users' needs be satisfied?
Critical critiquing must be withheld. This means controlling the natural tendency � What is the savings potential, including life cycle costs?
to evaluate ideas instantaneously:
2.4.5.6.1 Preliminary Screening Techniques
� Criticizing by word of mouth, tone of voice, shrug of shoulders, or other form
of body language that indicates rejection is not permitted. Come and Several techniques are available to evaluate alternate ideas. Examples are as
encourage "free-wheeling". The wilder the idea, the better; it is easier to tame follows:
down than to think up. � Comparison Technique. This technique is a method of comparing the
� Applying the technique of "hitchhiking" or "piggybacking" to expand on the various features of all of the alternatives under consideration.
ideas of others by offering many variations (synergism). � Advantages Versus Disadvantages Technique. In this technique, list the
� Combining and improve ideas. advantages and disadvantages of each alternative. Then sort the ideas based
� Setting a goal in number of ideas, or time, to force hard thinking. on the number of advantages and disadvantages of each. Choose those ideas
The brainstorming process involves holding a freewheeling group discussion, with the greatest total advantage for further evaluation.
with the group leader questioning, guiding, and occasionally supplying problem- � Ranking Technique. The ranking technique allows the evaluators to assign
related information. All ideas are listed so that all members of the group can see a numerical rating to the alternates. Start this process by judging an excellent
as well as hear the ideas. The use of a flip chart and crayons, or felt tip pens, is idea to be worth 5 points; a good idea, 4 points; a fair idea, 3 points; a poor
preferable. The filled sheets can be taped to the walls so that they are constantly idea, 2 points; a very poor idea, 1 point. Group all 5-point ideas and evaluate
in view.
����� �����
��������������������������� ���������������������������
further. Use the same method on all 4-point ideas, and, if necessary, on the 3- determine the best value of three automobiles being considered. In order to
point ideas. accomplish this, the individual identifies the criteria he/she wishes to consider
� Probabilities Technique. In this technique, assign subjective probabilities of and records them on the matrix sheet. For this example the criteria are: cost,
success to the implementation of acceptable ideas. A probability close to one appearance, comfort, performance, and safety.
means that the idea has a good chance of being implemented. A probability Next, the individual weighs each criterion against the other. In this example the
close to zero means the idea has little, if any, chance of being adopted. decision is that cost is better than appearance by a factor of "2" same for cost
� Estimating Alternatives. Rank the remaining alternatives according to an versus comfort; and cost is better than performance by a number of "1". This
estimate of their relative cost-avoidance potential. Base the ranking on process is continued until each criterion is compared to all other criteria.
relative estimates comparing each of the alternatives against the original
design method for providing the function. Develop the surviving alternative Next, each of the Letter scores is added and the sum recorded below as a "Raw
further to obtain more detailed cost estimates. Proceed to more detailed cost Score" and then weighted as described above. Finally it is shown that Automobile
estimates only if the preceding step indicates that the alternative is still a good A is favored by a score of 86 over B (80) and C (77).
candidate. The example of a Weighing Matrix uses information to illustrate the method. The
actual information for a project should be used in the Weighting Matrix.
2.4.5.6.2 Weighting Criteria and Objectives
The method most commonly used for the evaluation process is the criteria scoring
matrix. By comparing each criterion against the other and assigning a measure of
importance.
Table 2-5 shows an example of a "weighting matrix" used in this method.
Measures of importance may be as follows:
4 = Very Major Preference
3 = Major Preference
2 = Minor Preference
1 = Slight Preference
In the case of ties, each criterion is assigned 1 point.
It is seldom that "objectives" or "criteria" will be of equal importance; some should
have greater influence on the final decision than others. A weight factor or weight
of importance can then be introduced. Weights from 1 to 10 are often used with
the highest number given to the criteria with the most importance and the other
raw scores are adjusted in proportion (rounded off).
Following the development of "Weights of Importance", an analysis matrix is used
to analyze each alternative option being considered is initially judged on a 1
(Poor) to 5 (Excellent) basis and that score is recorded in the lower portion of the
square. This number is then multiplied by the "Weight of Importance" number
and recorded in the upper quartile of the square. Finally the sum of these numbers
is recorded as a "Total".
Do not arbitrarily discard any idea; give a preliminary evaluation, as objectively
as possible, of each idea to determine whether or not there is some way the idea
can be made to work. These totals are then used as a tool to aid the team in
arriving at the "Best" alternative but should not be considered as totally
conclusive.
In this example an individual is considering the purchase of an automobile and
wishes to utilize the "Matrix-Weighted Evaluation" process to objectively
����� �����
��������������������������� ���������������������������
����� �����
��������������������������� ���������������������������
2.4.5.8 Phase 6: Presentation Phase toward two audiences. The first audience, which is technical, requires
The objective of the presentation phase of the VE job plan is to put the sufficient detail to demonstrate the feasibility of the proposed change. The
recommendations before the decision-makers with sufficient information that the second audience, which is administrative, is one for whom the technical
decision-makers will accept the proposals. The checklist requirements for the details can be summarized, while the financial implications are emphasized.
presentation Phase (Checklist 11) are referenced in Annex E. Long-range effects on policies are usually more significant to the manager
than to the engineer.
Presentation Phase Outline:
� Prepare progress reports. The manager who makes an investment in a VE
� Anticipate roadblocks to be overcome study expects to receive periodic reports with estimates of potential
� Prepare written proposal outcomes. These reports assure top management awareness, support, and
� Summarize study participation in the VE program. Managers are seldom motivated to act by a
� Identify expected benefits / disadvantages one-time exposure at the final presentation, no matter how just the cause.
� Make recommendation of specific action � Warn the value engineering team of objections early on. Early disclosure
� Suggest an implementation plan of action of potential changes can serve to warn the VE team of any objections to the
A VE recommendation is a challenge to the status quo in any organization. It is a proposal. This early warning will give them an opportunity to incorporate
proposal for improving value and providing a beneficial change. The success of a modifications to overcome objections. lf management has been kept
VE team is measured by the cost avoidance and value improvement achieved from informed of progress; the VE presentation may be only a concise summary
implemented recommendations. Regardless of the merits of the recommendation, of final estimates, pro- and-con discussion, and perhaps formal management
the net benefit is zero if they are not accepted and implemented. Presenting a approval.
recommendation, and subsequently guiding it to implementation, often requires � Relate benefits to organizational objectives. VE recommendations that
a greater effort than the proposal's actual generation. represent advancement toward an objective are most likely to receive
favorable consideration from management. Therefore, ensure that the
The initial presentation of a recommendation must be concise, factual, accurate, presentation exploits all of the advantages that a VE recommendation may
and conducted in such a manner that it creates management's desire to accept and offer toward fulfilling organizational objectives and goals. The objective may
implement the change. Selling a recommendation depends to a large extent on the not only include cost avoidance but also the attainment of some other
use of good human relations. Present the recommendation in such a way as to mission-related goal of the manager.
avoid any personal loss or embarrassment to those related to the study item. Give � Support the decision-maker. The cost avoidance of the recommendations
proper credit to those who contributed and to those responsible for is likely to be improved if the proposal is promptly implemented. Prompt
implementation. The information contained in the VE recommendation will implementation, in turn, depends upon the expeditious approval by the
determine whether the proposal will be accepted or rejected. Although sufficient individuals responsible for a decision in each organizational component
information may be available to the team, this information must be documented affected by the proposal. Identify these individuals and conduct the entire VE
in the proposal. effort under their sponsorship. Like any other well-prepared staff report,
Since management must base its judgment on the documentation submitted with each VE report should:
a proposal, sufficient data must be provided to the reviewer to reach an informed -� Satisfy questions the decision-maker is likely to ask.
decision. -� Permit him/her to preserve his professional integrity and authority.
-� Imply assurance that approval would enhance management’s Image.
2.4.5.8.1 Written Proposal -� Include sufficient documentation to warrant a favorable decision with
Always complete the VE study with a written report detailing the VE reasonable risk factors (both technical and economic).
recommendations. Supplement the written report with an oral presentation of � Adequate Return. To gain serious consideration of VE proposals by
study results. The systematic approach of the VE job plan includes the careful management, include adequate evidence of satisfactory return on the
preparation of a written report, from which a more concise oral presentation will investment. Often, current contract savings alone will assure an adequate
evolve. return. In other cases, life cycle or total program savings must be considered.
Either way, evidence of substantial benefits will improve the acceptability of
a proposal.
2.4.5.8.2 Gaining Value Engineering Acceptance
� Show Collateral Benefits. VE proposals often offer greater value benefits
Several hints that appear to be most successful in improving the probability of
than the immediate cost improvements specifically identified.
acceptance are discussed in the following paragraphs:
Some of the benefits are collateral in nature, and difficult to equate in monetary
� Consider the reviewer's needs. Use appropriate terminology to the
terms. To increase the likelihood of acceptance of VE recommendations clearly
organization and position of the reviewer. Each proposal is usually directed
����� �����
��������������������������� ���������������������������
identify and completely describe all collateral benefits. Some typical collateral � Write within your reader's experience.
benefits are reduced maintenance, energy conservation, improved aesthetics, � Use variety in expressions.
better environmental quality, lower replacement cost. � Write to express; not impress.
����� �����
��������������������������� ���������������������������
����� ����
��������������������������� ���������������������������
���� ����
��������������������������� ����������������������������
Since no local companies are believed to have CVS qualified persons in the Certification Examination Study Guide, SAVE International, September 2011.
Philippines, procurement of consultants will need to be undertaken Dallas M, Innovations in the Management of Value, APM Group Ltd.
internationally. A list of appropriate companies is provided on the SAVE website.
Department of Defense Instruction Number 4245.14: DoD Value Engineering (VE)
Program, October 26, 2012.
FHWA Value Engineering Policy, Order 1311.1A, 11pp, May 25, 2010.
Fisk E R and Reynolds W D, Construction Project Administration: Chapter 16 Value
Engineering, 9th Edition, Jul 24, 2009
Government Circular on Value Management.
Guidebook for VE Activities – A Basic VE Manual, (VE Katsudo No Tebiki, Society of
Japanese Value Engineering, August 1971) English translation 1981.
Guidelines for Value Engineering, AASHTO, March 2010.
Handbook for Logical Framework Engineering, Economic Planning Unit, Prime
Minister’s Department, Malaysia, 2010.
http://www.neda.gov.ph/progs_prj/Handbook/Value%20Engineering%20Han
dbook%20-%20June%202009.pdf.
Implementing Lean in Construction: Overview of CIRIA’s Guides and a Brief
Introduction to Lean, RP978, and CIRIA London, 2013.
Invitation to first Philippine Association of Value Engineers Conference.
Life-cycle Cost Engineering Procedures Manual, California Department of
Transportation, 150pp, November 2007 (updated August 2010).
Male S, Kelly J, Gronqvist M and Graham D, Reappraising Value Methodologies In
Construction For Achieving Best Value, Value Solutions, 2005.
Male S, Kelly J, Gronqvist M and Graham D, Managing Value as a Management Style
for Projects, Value Solutions, 2006.
���� ����
��������������������������� ����������������������������
M.Saifulnizam, V.Coffey and C.N. Preece, Value Management: An Extension of Value Management Guideline, TAM04-14, New South Wales Treasury, 26pp,
Quantity Surveying Services in Malaysia, International Construction Business and September 2004.
Management Symposium (ICBMS2011), 2011.
Value Methodology Standard and Body of Knowledge, SAVE International, June
NDD Value Management Strategy, Network Delivery and Development 2007.
Directorate, Highways Agency, UK, 2012.
Project Development Procedures Manual, Chapter 19 Value Engineering,
California Department of Transportation, June 2013
http://www.dot.ca.gov/hq/oppd/pdpm/pdpmn.htm.
Proposed Revision to OMB Circular A-131 Value Engineering, Office of Management
and Budget, USA, 2012.
Rains J A, Creating and Maintaining an Effective and Successful Value Management
Program, Advanced Value Group, LLC
Saifulnizam M and Coffey V, Implementing Value Management as a Decision-
making Tool in the Design Stages of Design and Build Construction Projects: A
Methodology for Improved Cost Optimization. �
�
USACE Value Engineering Manual of Practice Draft, US Army Corps of Engineers, �
�
2012.
Value Engineering Guidelines, Idaho Transportation Department, July 2010.
Value Engineering in the Federal-aid Highway Program, Report MH-2007-040,
Federal Highway Administration, March 2007.
Value Engineering Handbook, National Economic and Development Authority,
Philippines, 219pp, June 2009.
Value Engineering Manual, West Virginia Department of Transportation, Division
of Highways, 187pp, January 2004
Value Engineering, Philippine Institute of Civil Engineers, October 2008.
Value Engineering Program Administration Manual, Virginia Department of
Transportation, 12pp, November 2012.
Value Engineering Report Guide, California Department of Transportation, 1999.
Value Engineering Team Guide, 3rd ed, California Department of Transportation,
180pp, 2003.
Value Engineering Team Member Guide, California Department of Transportation,
2013.
Value Engineering and Value Management – Is there any Difference, KPK Research
Digest, July 2012.
Value Management, Australian Standard AS4183-2007.
Value Management, European Committee for Standardization, 2000.
Value Management (VM) Concept and Implementation, Unit Perancang Ekonomi
Malaysia, 2011 (presentation).
Value Management In The Government Projects (Part I), Cawangan Kontrak and
Ukur Bahan JKR, June 2011.
���� ����
� ���������������������������
�������������������������������
�
The two examples provided are from Value Analysis prepared by the group of DPWH staff members who participated in
the training and workshops conducted in the year 2006. The particular examples were provided by Engr Yacob N
Mambuay, Head of Technical Division of UPMO.
VALUE ANALYSIS EXAMPLE 1
Rent, operate, and maintain two service and four utility vehicles.
�������� Examples of Value Engineering � B.� ALTERNATIVE DESIGN:
�
�
� Buy six used vehicles (less than 3 year old models) to be operated and maintained during the
� execution of the project. Immediately following completion the vehicles will be turned over to
�
�
the government to be bid out with a minimum asking price of 50% of the purchasing price.
�
�
�
C.� SAVINGS DUE TO:
�
� Change from rental to purchase.
D.� ADVANTAGE:
E.� DISADVANTAGE:
Since the vehicles are to be sold at the end of the project, there will be no future maintenance
costs for the government as required by the Department of Budget and Management.
The vehicles could be purchased in urban environments to guarantee a less harsh treatment and
better condition of the unit.
�
� ����
��������������������������� ���������������������������
ITEM A(5)b - Provide, operate and maintain 4 units utility vehicles PHP 14,230,149.21 2.� VA Alternative
at PHP 98,820.48/per month for 144 months
________________ Item A(5)a PHP 3,682,800.00
Total Cost of Original Plan - PHP 21,266,594.00 Item A(5)b PHP 8,035,200.00
_______________
ALTERNATIVE PLAN (Value Engineering) Total PHP 11,718,00.00
ITEM A(5)a - Purchase 6 slightly used Frontier 4x2 used PHP 2,700,000.00 INITIAL SAVINGS PHP 21,266,594.00
(3 year old) Double cab pick-up (Year model Direct (-) 11,718,000.00
2003) at PHP 450,000.00/per vehicle Cost _______________
Sub-total PHP 9,548,594.00
24% of 4% overhead expenses/4% Contingencies of direct cost PHP 648,000.00
Direct Cost 4% miscellaneous expense, 12% contractors profit
Mark-up 6.74% PHP 643,575.00
10% VAT (Direct Cost to Mark up) (3.348M) PHP 334,800.00 Total PHP 10,898,594.00
________________
Sub-total of A(5)a PHP 3,682,800.00
FINAL SAVINGS AFTER PHP 9,548,594.00
ITEM A(5)b - Operate and maintain 6 slightly used frontier 4x2 PHP 6,480,000.00 6 VEHICLES WERE SOLD AT 1,350,000.00_
Direct Double Cab pick-up (year model 2003) at (PHP 1,350,000.00) PHP 10,898,594.00
Cost PHP 30,000.00/month for 216 months
COST SHEET
ITEM REFERENCE
1.� Original Design
���� ����
���������������������������
VALUE ANALYSIS EXAMPLE 2
�
FUNCTION: House Engineers’ Office/Quarters
TITLE: Construct, operate, and maintain one building to serve as Office, Laboratory, and Living
Quarters inside the nearest Public School.
A.� ORIGINAL DESIGN:
Construct, operate and maintain two separate buildings, one building for office and laboratory
and one building for quarters inside a lot to be purchased and secured.
Construct, operate and maintain one single building, longer than the original, to serve as office,
laboratory and quarters inside the nearest Public School.
D.� ADVANTAGES:
E.� DISADVANTAGES:
The idea to use land provided by a school for their future use, or as in other projects, land from
the local town to provide the structure for a future clinic is a win-win situation both for the local
government and DPWH. DPWH has plenty of office space and does not need to accumulate any
more, while the local governments may be in need of new structures such as schools for the
growing population.
����
���������������������������
����
���������������������������
COST SHEET
ITEM REFERENCE
1. Original Design
2. VA Alternative
����
���������������������������
� �
Verbs Nouns
Allocate identify alternative material
Allow improve awareness option
analyze increase concept order
Audit Inform control part
authorize maintain coordination performance
certify measure criteria personnel
compile monitor data plan
confirm obtain decision priority
copy organize design process
create procure deviation record
decrease protect direction regulation
develop provide documentation request
�������� Examples of Functions and Modifiers � distribute receive facility resource
enter reconcile funds schedule
establish record goal shipment
evaluate report history source
facilitate set information staff
forecast specify instruction standard
generate test inventory status
guide transmit limit trend
Projects
Verbs Nouns
absorb heat air material
alter illuminate appearance objects
amplify impede balance oxidation
change improve beauty parking
circulate increase color people
collect induce communication power
condition insulate compression preparation
conduct interrupt convenience prestige
connect modulate current protection
contain prevent ego radiation
control protect enclosure sheer
convey provide energy sound
cool rectify environment space
create reduce features structure
distribute reflect feeling style
emit repel fire symmetry
enclose resist flow temperature
enjoy separate fluids tension
establish shield force texture
exclude smell form one
extinguish support heat torque
feel taste image utilities
filter think landscape view
finish transmit light voltage
generate ventilate load weight
� ����
�
�
�
�
���������������������������
�
���������������������������������������������������������
�
FUNCTION ANALYSIS
BASIC FUNCTION: PROVIDE SHELTER � � �
No COMPONENT VERB+NOUN TYPE
COST
�� ����������������������������� ��������� ��������� �� ���������
��� ��������������������� ������� ����������� �� �����
��� ������������������ ����������� ����������� �� �����
��� ������������������ ��������� ������ �� �����
��� Engineer’s Quarters� ���������� ��������� ��� �����
��� ����������������������� �������� ������ �� �����
��� Engineer’s Communication � ������������� �������������� �� �����
��� ���������������������� ��������� ����������� �� �����
� � � � � �
� � TOTAL � 56.87
BASIC FUNCTION: IMPROVE COMMUNICATIONS � � �
No COMPONENT VERB+NOUN TYPE
COST
�� ���������������������������� ��������� ������� �� �����
���� ������������������ ��������� ������� �� �����
��� ��������������������������������� ��������������� �������� �� �����
��� ������������������������� ��������� �������� �� �����
� � ������� ��������� �� �
���� �������� ��������� ������������ ���� � ����������� �� �����
��������������������������
� � ������� ���������������� �� �
��� � ��������� ����������� �� �����
� � � � � �
� � � TOTAL� � 19.20
BASIC FUNCTION: CLEARING GROUND � �
No COMPONENT VERB+NOUN TYPE
COST
�� ����������� ������� ����������� �� ������
� � ����������� ������������ �� �
��� ��������������������������� �������� ����������� �� �����
���� ������������ ������������� ����������� �� �����
��� ��������������������������������� ��������� ������������ �� �����
��� ��������������������� �������� ����������� �� �����
��� ����������������������� ������� ����� �� �����
� � � � � �
� � TOTAL � 25.43
BASIC FUNCTION: TRANSPORT GOODS � � �
No COMPONENT VERB+NOUN TYPE
COST
�� �������������������������� ��������� ���������� �� �����
��� ��������������������������� ��������� ������������� �� �����
��� ����������������������� ��������� ���������� �� �����
��� ������������������� ������������ �������������� �� �����
� � � � � �
� � � TOTAL� � ������
BASIC FUNCTION: SPAN OPENING � �
No COMPONENT VERB+NOUN TYPE
COST
�� ��������������������� �������� ���������������� �� ������
� � ��������� ���������� �� �
� � ���������� ���������� �� �
��� ���������������� ��������� ����������� �� ������
��� ������������������� ����������� ���������� �� �����
� � ������������ ���������� �� �
��� ���������������������������� ������������ ���������� �� �����
� � � � � �
� � TOTAL � 51.80
� � �
� � �
� � �
� ����
���������������������������
�
BASIC FUNCTION: SUPPORT VEHICLES � � �
No COMPONENT VERB+NOUN TYPE
COST
�� ���������������� �������� ��������� �� ������
���� ����������������������������� ��������� ���������������� �� ������
��� ����������������������� ������ ������ ��� �����
��� ���������������������� ��������� ��������� �� �����
� � � � � �
� � � TOTAL� � 27.00
BASIC FUNCTION: DRAIN WATER � � �
No COMPONENT VERB+NOUN TYPE
COST
�� ������������������������������� ��������� ��������� �� �������
��� ��������������� ��������� ������� �� ������
���� ���������������������� ������� ������� �� ������
���� �������������������������������� ��������� ������� �� ������
���� ��������������������� ��������� ������� �� ������
��� ��������������� ��������� ������� �� �����
��� ��������� ��������� ������� �� �����
��� ���������������� ��������� ������� �� �����
��� ����������������������
���� �������������
���������
���������
�������
�������
��
��
�����
�����
�������� Discounted Cash Flows and Recurring
���
���
�������������������������
��������������������������������
���������
���������
�������
�����������
��
��
�����
�����
Cost (Example)�
��� ���������������������������������� ������� ������� �� �����
� � � � � �
� � TOTAL � 328.83
BASIC FUNCTION: PROVIDE SAFETY � � �
No COMPONENT VERB+NOUN TYPE
COST
�� �������������������������� ��������� ���������� �� �����
��� ���������������������� ��������� �������� �� �����
��� ����������������������� ��������� ������� �� �����
� � ��������� ��������� �� �
���� �������������� �������������� ������� ���������� �� �����
����������
���� ��������� ������������ ������� �� �����
��� �������������������������� ��������� ������ �� �����
��� ������������ ��������� �������� �� �����
����� ���������������������������� ��������� ������������� �� ������
� � � � �
� � � TOTAL � 14.56
�������������������
�����������������������
����
�
���������������������������
�
����
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�
�������� Checklists�
�
�
�
�
��������������������������� ���������������������������
������������� ��������������������������
Checklists Project Project ID
Checklist 1 Information Phase Outline
Checklist 1. Information Phase Outline ................................................................................................ 1
• Understand the item, system, or operation under study� � � ���
Checklist 2. Information Gathering ....................................................................................................... 2 • Gather all types of information from the best sources� � � ���
• Obtain complete, pertinent information� � � ���
Checklist 3. General Information........................................................................................................... 3
• Get the facts� � � ���
Checklist 4. Information on Engineering and Design .......................................................................... 4 • Get all available costs� � � ���
• ���������������������������������������������� � � ���
Checklist 5. Information on Methods and Processes ........................................................................... 5
• Identify and define functions� � � ���
Checklist 6. Information on Materials and Procurement .................................................................... 6 • Develop a Function Engineering System Technique � �
�������� ���
Checklist 7. Information on Maintenance ............................................................................................. 7 �����������
• Classify functions� � � ���
Checklist 8. Information on Function and Worth ................................................................................ 8
• Determine function relationships� � � ���
Checklist 9. Creative Phase .................................................................................................................... 9 • �������������������������������������������� � � ���
Checklist 10. Design Development Phase ........................................................................................... 10 • Determine cost of each function and overall project� � � ���
• Identify high���������������� � � ���
Checklist 11. Presentation Phase......................................................................................................... 11
• Determine the function worth and overall project worth� � � ���
Checklist 12. Value Engineering Workbook ....................................................................................... 12 • Determine function value� � � ���
• Determine value opportunity index for each function� � � ���
Checklist 13. Selection Phase ............................................................................................................... 13
• Determine overall value opportunity index� � � ���
• Identify areas of poor value� � � ���
Prepared By: Date: �
These checklists provide general guidance on requirements. They are available
in Excel format for direct entry of checks.
�
As DPWH develops the VE process and capabilities some of these checklists
may be replaced with separate versions to suit specific project types or stages.
���� ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
��������������������������� ���������������������������
����������������� � ��� ������������� � ��� • Does the team completely understand the functional requirements?� � ���
������ � ��� �������� � ��� • Has the team reviewed the specifications and requirements?� � ���
������� � ��� ��������� � ��� • Are the specifications realistic? (That is, are all ������������������������������� �
���
���������������������������
�������� � ��� � �
• ��������������������������������������������������������������� � ���
����������������� � ��� � � ��������������
������������������� � ��� Restrictions �
• Will a modification of the specification simplify design and construction?� � ���
����������������� � ��� (on detailed specifications) �
• Are the ������������������������������������������������������ � ���
���������������������� � ��� ��������� � ���
• Does the report state that all performance and environmental requirements �
���������������������� � ��� ������������ � ��� ������������������������������ ���
�������������������� � ��� ������������ � ��� • Has the planner and the designer interpreted the specifications correctly?� � ���
� � ������������ � ��� • Does the report identify what special performance or operating characteristics �
���
��������������
� � ���������� � ���
Prepared By: Date: �
Methods data – How it is: � ������ � ���
���������� � ��� � �
������������ � ��� � � �
����������� � ��� Cost data �
����������� � ��� (detailed breakdown) �
������������ � ��� ������� � ���
� � �������� � ���
� � � �
� � � �
� � Quantity Data �
� � ��������������������� � ���
Prepared By: Date:
���� ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
��������������������������� ���������������������������
• How long is it designed to last with normal use (design life)?� � ���
• What is the measure of life (time, traffic volume, and cycles)?� � ���
Prepared By: Date: �
���� ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
��������������������������� ���������������������������
Prepared By: Date : �
���� ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
��������������������������� ���������������������������
• Has the team ��������������������������������������� � � ��� • Has the team provided an ����������� ����� ����������� ���� ��������� ���� �
������� ���
• Has the team d������������������������������������������ � � ���
• Has there been cross�������������� � � ���
• Are designs requirements established which do not require any function to be �
���
����������� • Have all members of the team participated?� � � ���
• Are functional requirements exceeded?� � � ��� • Did you set an output goal?� � � ���
• Are unnecessary features called for?� � � ��� • Has the team recorded all the ideas?� � � ���
• Is there a better way to perform the function?� � � ��� • Has the ������������������������������������� � � ���
• Can any function be eliminated?� � � • Has the team reached for a large quantity of ideas?� � � ���
���
• Can we do without it entirely?� � � ��� • Has the team generated ideas without all the constraints of specifications and �
���
���������������������
• Does it cost more than it is worth?� � � ���
• Has the team made a thorough search���������������������������������������������� �
• Has the ���������������������������������������������������������������������� � ��� ���
��������������������������������������������������
��������������������
• Has the team identified all basic functions for this � � � ���
• Do the potential cost savings appear sufficient to make further value engineering � ���
������������������������������������������������� • Has the team mad e a separate creativity phase worksheet available to be filled �
���
�����������������������������������������
Prepared By: Date: �
• Has the team dismissed from your thoughts the present way/method of �
���
����������������������������������
� • Has the team explained the techniques, method of ����������������������������� �
���
�������������������������������������������
• Has the team provided for a sufficient incubation period to permit later addition �
���
���������������
• Has the team made provisions for a follow��������������������������������������� �
������� ���
• Has the team ���������������������������������������������������������������������
������������������
Prepared By: Date: �
�
���� ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
��������������������������� ���������������������������
• Has the team considered all available solutions?� � � ��� • Are there pictures or sketches of before����������������������� � ���
• Has the team considered locally available materials?� � � ��� • Has the �������������������������������������� � � ���
• Has the team developed the estimated net savings?� � � ��� • Has the recommendation been presented to the most appropriate responsible �
���
���������������������������
• Has the team examined the alternates for environmental impact?� � ���
• Has the implementation plan been developed?� � � ���
• Has the tea m consulted �������������������������������������������������� � ���
• Have the recommendations been extended to all areas of possible � ���
• Has the team made all the other organizational functions a part of the team and� �
��� �������������
����������������
• Has the improved value design been considered for a standard or preferred � ���
• Does the re����������������������������������������� � � ���
����������
• Has the team reviewed the ���� ������� ��� ������� ����� ���� ������ ���������� ��� �
��� • Has credit been given to all participants?� � � ���
�������������
• If you ��������������������������������������������������������������������� � ���
• Has the team made a strong attempt to overcome roadblocks?� � ���
����������
• Did the team require any additional information?� � � ���
Prepared By: Date:
• Has the team consulted all the best reference ����������� � � ���
Prepared By: Date: �
����� ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
��������������������������� ���������������������������
• ����������������������������������������������������������������������� � • High degree of time compression in the ������� ������� �� �������� ������� ��� �
��� ���
���������������������������������������������������������������������
• ������������������������������������������������� � � ���
• ����������������������������������������������������������������������������� � ���
• ��� ������������ ��� ���� �������� ����������� �������������� ����� �������� ���� ����� �
��������������������������� ��� • ������������������������������������������������������������������������� � ���
• Technical data supporting the idea(s) selected, with other factual information � • ���������������������������������������������������� � � ���
�������������������������������������������������������� ���
• �������������������������������������������;����������������� � ���
• ��������������������������������������������������������������������������� � • ����������������������� � �
��� ���
������������������������������������������
• ���������������������� � � ���
• ������������������������������������������������������������ � ���
• ������������������������ � � ���
• ������������������������������������������������������������������������������� � ���
• ��������������������� � � ���
• ��������������������������������������������������� � � ���
• ���������������������������� � � ���
Prepared By: Date: �
• Record seeking designs (Longest span, highest piers, deepest cut, etc.)� � ���
• ��������������������� � � ���
� • ����������������������������������� � � ���
• ���������������������������������������������������������������������������� �
���
������������
• ���������������������������������������������������������������������������� � ���
• ����������������������������������� � � ���
• ���������������������������������������������������������������������������� � ���
• ���������������������������������������� � � ���
• ��������������������������������������������������������� � ���
• ���������������������������������������������� � � ���
•������������������������������������������������������������������ � ���
Prepared By: Date:
����� ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
���������������������������
�
Creative Blocks
1.� Habitual Blocks
a)� Continuing to use or approve "tried and true" procedures when new
and better ones are available
b)� Lacking a positive outlook; lacking determined effort; conforming to
custom, and relying on authority
2.� Perceptual Blocks
� ����
�
���������������������������
�
� ����
�
���������������������������
�
especially if the change directly affects their plan or design. The same is
true when value teams feel they always provide the best value in their
approach, even when only a few of the VE techniques and procedures were
used in their studies.
� Changing Technology. When a Value Team fails to recognize and consider
rapid strides in the development of processes, products, and materials, it
limits the potential for uncovering higher-value adding alternatives. The
team must remain cognizant of the constantly changing, and many times
more inexpensive, ways of performing necessary functions.
� Strict Adherence to Requirements. Requirements and published
standards are often unrealistically specific regarding performance,
materials, safety or procedures. Sometimes the planner or designer
assumes requirements are specified when they are not. Traditionally,
designers have concentrated on developing designs that exceed all known �������� Terms of Reference for Hiring Value
and assumed requirements. The net result is over-design, with attendant
waste of taxpayer funds. The VE team must challenge the requirements to Engineering Consultants�
determine if they best meet a need of the project, or just satisfy the
published standards.
�
�
� Performance At Any Cost. When a problem is identified, the natural �
reaction is to develop a design that will solve it completely. However, this �
�
may lead to a solution with a cost that far exceeds its value. The cost of �
�
solving 95% of the problem may be within reason, but solving the �
remainder can unreasonably increase the cost. Solving 95% of the �
�
problem, and using the remaining funds to solve other critical problems �
may be a more prudent approach. �
�
�
� Poor Human Relations. If the various specialists on complex projects do �
not work together, they are likely to work at cross-purposes, wasting a �
�
great deal of effort, with a final product that lacks value. Lack of good �
communications, misunderstanding, jealousy and normal friction between �
�
human beings is a frequent source of unnecessary costs. Infrastructure �
�
projects require the talents of many people, and good human relations are �
especially critical. �
�
�
�
�
����
��������������������������� ���������������������������
���������
1.0 INTRODUCTION.................................................................................................................................. 1
List of Exhibits
���� �����
��������������������������� ���������������������������
1. INTRODUCTION iv.� Conduct a validation of the estimated project, product, system or study object
Insert Name of Client (“the Client”) is seeking a qualified value engineering consultant costs.
to provide value analysis, value engineering, value enhancement, value management 4.� Workshop(s) i s/ are to be conducted using a job plan consistent with SAVE
(SELECT ONE) services related to Insert name of project, product, system or study object. International guidelines for value studies. The workshop(s) will be conducted in
Describe project, product, system or study object. The objectives of the value engineering the location identified in this Request for Proposal. The facility in which the
consulting assignment are: workshop(s) will be conducted will be provided and paid for by the Client or
Consultant (INSERT ONE). Each value engineering workshop will consist of the
1.� To identify potential changes to the project, product, system or study object
following six phases conducted over a period of Insert Number consecutive days:
design that would satisfy the essential functions of the project, product, system
or study object at a lower (capital or life cycle) cost. i.� Information Phase
2.� To identify potential changes to the project, product, system or study object design ii.� Function Analysis Phase
that would better accomplish the essential functions of the project, product, system
iii.� Creativity Phase
or study object while providing better overall value.
iv.� Evaluation Phase
3. To improve confidence in the effectiveness of the design (if applicable).
v.� Design Development Phase
4.� To provide additional input into selected project, product, system or study object
vi.� Presentation Phase
decisions (if applicable).
5.� (Other objectives as appropriate). 5.� Following each value engineering workshop, conduct the following activities:
i.� Submit a preliminary value engineering report in electronic and hard copy
2. SCOPE OF WORK format, consisting of the workshop work products within fourteen (14) days
of the completion of the value engineering workshop.
It is intended that the selected value engineering consultant will conduct Insert Number
value workshop(s) to be conducted in Insert Location over a period of Insert Number ii.� Review the design team written responses to the preliminary value
month(s). engineering report.
The work will consist of the following individual tasks: (or as detailed in Exhibit “A” Scope
iii.� Consult with the Value Team members as necessary, and prepare for a
of Work:)
decision-making meeting.
1.� Communicating with the Client’s project manager either in person or by iv.� Attend the decision-making meeting and provide information to the
telephone, and reaching a decision about the details of the value study including decision-makers at the meeting relative to the pros and cons of each value
the duration of each proposed workshop. recommendation. Respond to the concerns raised by the design team and
others, and assist the designer, design project manager and the Client project
2.� Communicating with the Client’s project manager either in person or by telephone manager in reaching decisions about whether to incorporate each value
to review the project, product, system or study object and the project, product,
engineering recommendation into the project design.
system or study object issues and reach an agreement regarding the date for the
value workshop (s) and the team members to be provided by the Client, if any, v.� Prepare a draft final report within fourteen (14) days following the decision-
and by the Value Engineering Consultant, if any. making meeting that documents the entire VE study, including the decisions
made.
3.� Prior to the value workshop accomplish the following activities:
vi.� Make appropriate revisions to the draft final report based on comments
i.� Coordinate workshop logistics. from the Client project manager, and provide an electronic and Insert
ii.� Review the design documents and other documents about the project, Number hard copies within fourteen (14) days following receipt of
product, system or study object provided by the Client with the Value Team comments from the Client project manager.
members.
iii.� Using information provided by the Client and by the design team, prepare
cost, energy, life-cycle cost, space and/or other models as appropriate.
���� ����
��������������������������� ���������������������������
3. REQUIRED QUALIFICATIONS Electronic copies may be transmitted by e-Mail to: Insert e-Mail Address
The value engineering consultant shall provide the following team members: Proposals received after the date and time specified will not be considered.
1.� A value team leader who is certified by SAVE International as a Certified Value
Specialist (CVS). Inquiries During the Proposal Preparation Period
2.� An assistant team leader who, at minimum, is certified by SAVE International as an Inquiries during the proposal preparation period may be addressed to:
Associate Value Specialist (AVS). Insert Name
3.� Technical specialists with appropriate qualifications (List Required Specialists Insert Title
including quantity surveyors if required).
Address Line 1
4.� Supporting clerical and administrative staff to participate in the workshops and
assist with the study documentation. Address Line 2
The value engineering consultant shall demonstrate corporate experience pertinent to Any City, Any Country
the subject matter of the value engineering study. Insert Telephone and Facsimile Numbers
Insert e-Mail Address
Answers provided to proposer questions are intended to improve the proposer’s
4. SPECIAL REQUIREMENTS understanding of the requirements of the request for proposal and the project
The selected value engineering consultant will be invited to enter into a contract in the requirements. No verbal information provided to proposers will in any way change
standard SAVE International Form of Contract for Value Consulting Services and to begin the requirements or provisions of this request for proposals. Any changes to the
work within fourteen (14) days of notification to proceed. Request for Proposal will be made in writing in the form of an addendum that will be
sent to all holders of record of the Request for Proposal.
Insert special conditions of contract, if any, including expectations of the Value Engineering
Consultant related to venue, equipment and related matters.
Evaluation and Selection Procedures
5. PROPOSAL FORMAT All proposals will be evaluated on the basis of the following technical criteria:
���� ����
��������������������������� ���������������������������
__________/Cost Estimator
The workshop will be held at , in .
The Client will provide all other team members, at no cost to the Value Eng i nee ri ng The cost of providing the workshop refreshments and all other costs associated with the
Consultant. The Value Engineering Consultant will communicate directly with all study meeting facilities, including telephone, photocopying, and sending fax will be borne by
team members as needed relative to scheduling, pre-workshop, workshop and post ___________.
workshop activities.
To ensure that the study team has complete information about the project criteria, the
Client will provide at a minimum, the Client Assigned Manager and appropriate key
PRE-WORKSHOP ACTIVITIES members of the design team for the first day and last day presentations as well as the mid-
point review meeting.
The Value Engineering Consultant will perform pre-workshop activities to include those
tasks that must be accomplished in order for the study team to be able to efficiently and
effectively perform in the workshop. POST WORKSHOP
These activities will consist of: The Value Engineering Consultant will conduct a four-hour post-workshop study Decision/
Implementation Meeting at ____________ location in the _______ area following receipt by the
1.� Scheduling study tasks.
study leader of the written designer responses to the Preliminary Report. The purpose of
2.� Scheduling and coordination with study team members. this Decision/Implementation Meeting is to assist the Client in making decisions regarding
3.� Assisting the Client with scheduling study participants. acceptance or rejection of the individual value proposals. Attendees will consist of key
4.� Coordinating necessary project documentation on the project for distribution by Client staff, key designer staff and the study team leader.
the Client to the study team members document review by Value Engineering
Consultant-supplied team members.
5.� Preparing cost, energy, life cycle cost, space models, etc. contingent on supply by
Client of the information needed for their preparation.
���� ����
���������������������������
SCHEDULE
DELIVERABLES
This value study effort will include the following deliverables, all of which are related to
the results of the workshop. These deliverables are:
1.� Study Team Presentation Handout
2.� Preliminary Value Study Report
3.� Draft of the Final Value Study Report
4.� Final Value Study Report
The Preliminary Report will be prepared in the Value Engineering Consultant report
format, and will be a compilation of the handwritten products developed in the workshop.
The draft Value Study Report will be prepared in the Value Engineering Consultant report
format. The purpose of this draft report is to give the Client and other appropriate
reviewers the opportunity to check the final Value Study Report prior to its final issuance.
The final Value Study Report is the final documentation of the VE study. The report is a
finalized version of the Draft Report including the incorporation of the Client’s comments.
The submittal of the final report concludes the Assignment.
THE CONSULTANT will provide the Client with the following number of copies of each
report:
1.� Preliminary VE Study Report (fill in # of copies desired)
2.� Draft of Final VE Study Report (fill in # of copies desired)
3.� Final VE Study Report (fill in # of copies desired)
����