Hazem M. Elzarka, George Suckarieh, and Robert Dorsey

University of Cincinnati

Cincinnati, Ohio

Value Engineering (VE) is a creative systematized approach whose objective is to seek the best balance among the cost, reliability, and performance of a project. It is an important link in the design/construct/maintain continuum. While value engineering in the construction industry has increased during the past few years, a challenge remains in effectively teaching the topic in academia. It is difficult to align design courses with construction courses to allow adequate interaction of the two groups of students. The University of Cincinnati has experimented with collaboration of construction management students and architectural engineering students. The keys to success are the timing of the collaboration and the selection of the collaborating team. Actual practice conditions are simulated to the degree possible. Results indicate that the concepts and techniques of VE can be successfully taught to the degree necessary to prepare students to engage in VE studies when they enter practice.

Value Engineering (VE) is a creative systematized approach whose objective is to seek out the best functional balance between the cost, reliability, and performance of a project (Dell'isola 1982, Zimmerman et al. 1982). VE utilizes a functional analysis that modifies or delete elements that add to the cost of the project without contributing to its required functions. As VE utilization continues to grow in the construction industry, more employers are requiring that construction management graduates be knowledgeable in VE techniques and methodologies.

Value engineering is a multi-faceted topic that has many requirements including knowledge of building systems, cost estimating and working in multidisciplinary teams. For a value engineering course to be effective it has to cover all those requirements. At the University of Cincinnati, Construction Management (CM) students are introduced to VE concepts and techniques in their senior year. By that time, they already have the necessary training in analyzing building systems and producing cost estimates. The biggest challenge is creating the multidisciplinary team environment for maximizing students’ understanding of VE concepts.

To improve the effectiveness of the Value Engineering course, the University of Cincinnati has experimented with an interdisciplinary approach in which students from both the Construction Management (CM) program and Architectural Engineering Technology (AET) program are grouped in teams. Each team analyzes a project designed by the AET students, simulating what happens on a real project. The AET students take the roles of practicing architects; the CM students take dual roles of construction managers and value engineers and faculty take the roles of owners.

This approach has several advantages. First, it improves project research skills (for materials and methods) of the students. Second, it improves the quality and constructability of the senior projects, and third it enhances the exchange of technical information between AET and CM students. Some difficulties however are encountered with implementing this approach, primarily the timing of the VE class within the curriculum. Several implementation scenarios have been tested to determine the best timing. Another difficulty relates to forming the most effective VE student teams. In attempting to resolve these issues, the VE process occurring in real projects was carefully studied.

To determine when a value engineering study can be applied effectively in the life of an actual facility, the life cycle process of the facility must be understood. The development of a new facility goes through several phases from the time of its inception until it has completed a useful life. The process involves five major phases: conceptual, planning, design, construction, and facility operation (Figure 1).

The conceptual phase of a project is the initial investigation that determines the program of owner’s needs, budget, feasibility, potential return on investment and capitalization. The planning phase is where conceptual ideas are further developed into one or more possible preliminary solutions on one or more possible sites. The main objective of planning is to determine the total scope of the facility being constructed, site requirements and service needs. Parameters determined during the planning phase include facility size, location, environmental impacts, and a more refined construction budget.

The design phase has sub-phases beginning with schematic design and concluding with construction documents. Information from the planning phase is developed into a set of drawings and specifications to allow the project to be built. Issues resolved during the design phase include site layout and drainage, building configuration, space utilization and comfort level, construction materials, structural, mechanical and electrical systems, and other equipment for operation of the facility. During the bidding and construction phase, the plans and specifications are disseminated to contractors to prepare their bids, then bids are awarded and the facility is constructed.

In developing a facility, VE can be applied during the planning, design, or construction phases. Decisions made during the planning phase have a major impact on the life cycle cost of a facility. For example, the size of a water plant and its processes are determined during the planning phase. If the facility is oversized, excess funds will be expended unnecessarily. Furthermore a poor selection of fundamental processes used in the plant, will have a great impact on the cost of owning and operating the facility.

When VE is applied in the design phase, actual elements of the project already identified by the designer are scrutinized and studied with specific costs placed on each item. Recommended value engineering changes are evaluated by comparing the quantities and costs of labor and materials for systems initially selected for the project to other available alternatives.

In the construction phase, VE is usually applied through contractor-incentive sharing clauses where a contractor may be allowed to share in the savings resulting from his/her recommendations for cost-reduction. For example, the contractor may recommend a different type of roofing materials that provides the same insulating properties but can be obtained at a lower cost.

As illustrated in Figure 2 (Dell'isola, 1982), the benefit from a value engineering study decreases with the progress of time on the project. The later the VE study is applied in the life cycle of the project, the less is the potential value and savings. At a late time during the construction, it is difficult to incur cost savings because of redesign costs, costs of construction change orders, and probable delay in beneficial occupancy. The break-even point varies with the project and item being reviewed (Figure 2).

Early in the design phase, however, it is difficult to determine the cost impact of a value engineering study. On the other hand, the more complete is the design, the easier it is to understand the function of various project elements and accurately price the VE alternatives.

From Figure 2, it is clear that the best time for applying value engineering is in the planning and early design stages. The major reason is that changes found at this stage will realize major cost savings to the owner without expensive change orders. Early changes have the least impact on schedule. Contractors make the most profits when they can start a job on time, follow the schedule, finish the job, and move on to other work. In many cases, the savings that results from a value engineering incentive clause (during project construction) may be diminished by having to reschedule construction events and alter the scheduling of the project.

Timing of Value Engineering Study in College Curricula

To simulate actual projects, it was initially decided that the CM students should perform value engineering studies during the planning and design stages of AET projects. The next step was to decide when to offer the VE course. This was largely dependent on the schedule of the AET senior design projects. At the University of Cincinnati, two courses are assigned to the AET senior design projects, in the fall and winter quarters. Several alternatives for scheduling the CM value engineering class were tried as illustrated in Figure 3.

In the first alternative, the VE class was offered in the winter quarter. The problem with this alternative is that by the time the CM students were introduced to VE concepts (towards the end of the quarter), the AET students had completed their preliminary design and were vigorously working on the construction documents. At this stage, there are many details to be brought together and the AET are reluctant to accept VE recommendations.

To attempt to resolve this problem, a second alternative in which the VE class is scheduled for fall quarter was tried. Another problem surfaced; meaningful information produced by AET students was unavailable until near the end of the quarter. This was a considerable problem especially for those AET projects which experienced design changes and delays because of faculty’s requirements. The CM students who were delayed during most of the quarter found themselves extremely busy towards the end.

For this reason, a third alternative was designed. This model uses the fall quarter and part of the winter quarter to teach VE concepts and perform the interdisciplinary learning effort. During the fall quarter, the CM students learn VE concepts and apply them to conduct VE analysis on actual projects where they had worked for their cooperative employment requirements. This exercise helps the CM students in comprehending VE techniques and prepares them for the winter quarter where they are asked, as part of their advanced construction management class to conduct VE analysis for the AET projects. At this time, enough information is available to perform the study without requiring considerable design changes. The VE study is performed at the beginning of the quarter before the AET students start working on their final construction documents.

A multidisciplinary team has proved to be the most effective structure for a VE study (Zimmerman et al. 1982). Successful construction projects require the combined efforts of professionals from different disciplines. A project team typically includes the owner who is responsible for financing the project, the designer who is responsible for the development of plans and specifications, the contractor who is responsible for interpreting the plans into an actual project and the value engineer who is responsible for assisting the owner and designer in achieving maximum results.

In the traditional design approach, various design disciplines attempt to focus and optimize their own areas. This approach may sacrifice the total performance of the project and result in decisions that are not the most economical for the overall function of the facility. One discipline unilaterally may cause unnecessary redundancies or overdesign of some elements related to that discipline. In the multidisciplinary approach, improved communications are developed among the disciplines resulting in more and improved ideas. Greater considerations are given to the total impact of decisions on both the facility performance and costs. In addition, when many persons share responsibility for recommending ideas, the probability of adopting the ideas is often improved (Dell'isola 1982).

The composition of the multidisciplinary team must meet the needs of the project. If for example unusual foundation problems are evident, a soils engineer should be a member of the team. Other specific expertise should be provided accordingly. The team should include representatives from the parties having the greatest cost impact on the facility. Usually, the owner of the facility has the greatest cost impact. It is the owner who programs the facility’s function, size, required quality, life expectancy and comfort levels associated with its operation. The designers also influence the project to a great extent because of the impact of design on the construction, operation and maintenance cost. The contractor impacts the initial project cost and quality of construction. Operation and maintenance personnel impact the operation and maintenance costs during the facility’s life cycle. Their maintenance skills are key factors that influence operational cost and longevity of equipment. Although their actual impact may be small, it is stretched over a long period of time. The value engineer, through his/her input into design, also influences both the initial and life cycle cost of the facility.

In the classroom, teams are formed (similar to practice) to include parties having greatest impact on the cost of the project, namely: owner, designer and contractor. The AET students take the designer role; the CM students, the contractor and value engineer role; and the faculty, the owner role.

In addition, CM students are assigned to projects where they have the greatest technical knowledge. This is done by first surveying the students about their co-op employment history. Students are asked to list types of projects they participated in (e.g. school, hospital, etc.) and tasks they have performed (e.g. estimating, scheduling, structural design, purchasing, etc.). The list is then analyzed and students are assigned to the appropriate AET projects.

Similar to an actual VE study, AET students provide CM students with as much information on the project background as possible. The information includes project program, drawings and specifications, and project constraints. AET students are assured that the intention of the VE study is not to question their design abilities but rather is a technique to improving the design by using a systematic multidisciplinary approach. The CM students then prepare a preliminary cost estimate of the project. Based on this estimate a cost model is prepared wherein cost is distributed by system (i.e. structural, mechanical, exterior walls, etc.). This helps the value engineering team to identify the location of major costs. The next step is the functional analysis which is used to identify the basic function of the project and its components and to stimulate the creative process that follows. Students may use the functional analysis system technique (FAST) if the project is complex in order to simplify and to clear up any difficulties they may have about the design. Next they move into the creative phase where they list alternatives to the original design. Promising ideas are further developed and ranked to select the most optimal alternative. A complete proposal of the recommendation is then submitted. A presentation is made and evaluated by the AET students and faculty. The purpose of the presentation is to make certain that all parties understand proposed changes and to determine all the concerns that the final VE project student report should address.

After teaching the class with the newly revised approach, students were asked for their feedback. All comments received indicated that the value engineering learning process has been improved and has become more thought provoking. Through the inter-disciplinary collaboration, construction management (CM) students were able to better understand the needs and concerns of architects. Architectural engineering students (AET), on the other hand were able to comprehend the structural feasibility and constructability of their designs. Many valuable VE proposals were produced and presented by the students. AET students have implemented some proposals and declined others which they thought might completely change the form of their designs.

Most students VE proposals can be grouped into two main categories; functional changes and systems changes. The two categories are briefly discussed in the following sections.

Functional Changes

Proposals in this category recommended changes in the building layout to achieve a better function and reduce overall cost. Examples of these proposals included:

Proposals in this category recommended changes in systems to reduce overall project cost while maintaining or improving quality. The CM students mainly evaluated three systems; the structural, exterior walls and roofing systems. Criteria used for evaluation included erection time, life cycle cost, initial cost, constructability, expandability and weather conditions. Example of these proposals included:

Potential cost savings were estimated for all VE proposals. CM students have used knowledge gained in their estimating class to perform the required cost analysis. They have also used their scheduling knowledge to determine if their proposals will affect the schedule. As part of their final report, they were asked to identify any other potential problems associated with their proposals and recommend actions needed to eliminate those problems.

The interdisciplinary approach used in teaching value engineering at the University of Cincinnati has enhanced the learning experience of construction management and architectural engineering technology students. The approach forced the students to work together to finish their projects and made them aware of the interdependence of their disciplines and the importance of teamwork and effective communication skills. For the interdisciplinary approach to be effective, some difficulties need to be resolved, primarily the timing of the VE class within the curriculum, and the composition of student teams. In attempting to resolve these issues, the VE process occurring in real projects should be simulated.

Dell'isola A. J. (1982) Value Engineering in the Construction Industry. Third Edition, Van Nostrand and Reinhold Co., N. Y.

Zimmerman, L. W. and Hart, G. D. (1982) Value Engineering: a Practical Approach for Owners, Designers and Contractors Van Nostrand and Reinhold Co. N. Y.

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Last updated: September 09, 2004.