Bringing Value Back to Value Engineering

Bringing the Value Back to Value Engineering title card, featuring Vice President Jeremy Bartolovitch in a grey jacket

Value Engineering is a term that has become so pervasive in the construction industry that the meaning of the phrase has been diluted down to the simple concept of saving money on a construction project, regardless of means and methods.  A few years ago, I heard an architect say that most instances of contractor-initiated value engineering lack both value and engineering.  At the time, I took offense to his statement, but I now find myself triggered when I hear the term value engineering used so flippantly within the industry. 

While I acknowledge that true value engineering efforts often result in lowered construction costs, cost-saving initiatives like scope reductions or scope omissions are often mislabeled as “value engineering”.  However, true value engineering attacks the project in ways which reduced costs and/or time to construct while still achieving the objectives of the intended use of the property and those of our clients.  So...

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Value Engineering or Contingency??

Inflation, fuel prices, material escalation, and material shortages are pushing construction prices to record highs. Already tight project budgets are being value engineered, tabled in hopes that pricing will come back to earth in the future, or just abandoned. Like everything else these days, the typical value engineering process is not as effective as it once was. When project pricing comes in over budget, we have historically provided a list of suggested alternate materials, methods, and/or systems to help bring the cost back closer to budget if needed. 

Currently, inflation is working against project teams trying to value engineer projects. On several recent projects, material escalation has negated any value engineering efforts. Meaning…during the time it takes to price VE alternates, and get the accepted changes into the design documents, the pricing of the other trades and materials has increased an equal or larger amount of the costs saved from the approved value...

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