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True Value Engineering in an Era of Rising Insurance Costs

After serving in World War II, my grandfather spent four decades as a structural engineer in Washington, D.C. He knew his highest value to architects and owners was simple: design the most cost-effective structure that met the loads and the architect’s dimensional constraints. Night after night in his basement office, he hand-calculated structural steel members to achieve the lowest total weight. That is what true value engineering looks like: meeting the program and performance criteria while minimizing total cost.

Florida’s insurance landscape has shifted. Builder’s risk and commercial property premiums, especially for combustible wood-frame projects, have risen sharply. That reality is forcing owners and developers to reassess not only how they build, but what they build with. The question is no longer “What’s the cheapest structure today?” it’s “What’s the best value over the full life of my project?”

In addition, most municipalities are increasing their regulations over the means, methods, scheduling, and sequencing of construction.  Long gone are the days of walking into a building department, pulling a permit, and starting construction.  New regulations enforced by municipalities require operational site fire protection systems, and fully accessible access points, prior to combustible materials being allowed on site.  Right or wrong, these regulations can greatly impact the schedule and sequencing of the construction project.  Rather than running the vertical and horizontal work concurrently, contractors must run the work sequentially.  This limits the amount of work being performed effectively onsite and increasing the overall construction duration, often by months.   

What Actually Drives the Structure Choice

Every site, structure, and program demands its own study. Key drivers include:

  • Design & code parameters: Local municipality requirements, wind speeds/pressures, fire ratings, acoustics, spans, floor-to-floor heights, MEP distribution, seismic or snow loads, and geotechnical capacity.
  • Program constraints: Desired SF, unit mix, amenities, support spaces, and acoustic performance.
  • Insurance effects: Builder’s risk during construction and permanent property coverage—rates, requirements, deductibles, and exclusions.
  • Schedule & logistics: Lead times, site logistics, erection sequencing, dry-in milestones, labor availability, and prefabrication options.
  • Lifecycle factors: Durability, maintenance, and exit cap sensitivities tied to perceived resilience.

A Practical Cost–Benefit Analysis

When clients ask, “What’s the best structure?” we use a disciplined and thorough, apples-to-apples approach:

  1. Determine performance criteria: Loads, spans, fire/sound ratings, systems, etc.
  2. Identify viable systems: Type III/V wood, cold-formed steel panelized, podium hybrids, structural steel, masonry, or concrete.
  3. Apply real time pricing: Complete takeoffs, obtain quotes, compare similar projects, structures, equipment, components, etc.
  4. Model schedule impacts: Identify general conditions, project requirements, as well as debt interest savings.
  5. Price insurance: Both construction and permanent phases, including deductibles and policy requirements.

Partnerships That De-Risk Decisions

Partnerships with manufacturers, vendors, and specialty subcontractors matter. Recently, The Douglas Company collaborated with IntelliSteel to provide non-combustible alternatives using pre-manufactured cold-formed steel structures. Across multiple projects, IntelliSteel produced engineered options while our team assessed downstream effects: impacts to other trades, inspection and code requirements, sequence and schedule adjustments, and alterations to building envelopes, MEP systems/equipment/components, or firestopping details. The outcome wasn’t just a different structure—it was a clearer picture of total project value.

The Bottom Line

Value engineering isn’t just cutting scope; it’s optimizing value under real-world constraints. Two buildings on the same street may arrive at different solutions, and that’s okay. The only mistake is choosing without analyzing the true overall project cost.

Planning your next project and ready to start true value engineering? The Douglas Company is here for you, so you can move forward with confidence.

 

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