As you and your organization begin exploring the first steps toward your commercial construction project, you’ll encounter a few terms and methods that may be new to you. One such reference or term is value engineering. You might presume the term means, as it describes, applying value to your engineering process. But there’s more to know.
If this is your very first commercial construction project journey, you might wonder what it means to leverage value engineering as part of your planning and construction process. It’s a systematic method worth considering, and yes, it does add value. Here’s what you and your key stakeholders need to know about how it can improve your new-build or renovation experience. And you’ll want to make sure you only partner with contractors and professionals who can collaborate and contribute to the value engineering method.
How the GSA Defines Value Engineering
According to the GSA, or the U.S. General Services Administration, value engineering can be defined as the analysis of commercial building features, equipment, systems, and material selections in the quest to achieve the “lowest life cycle cost” without compromising quality, performance, or safety. The concept of value engineering prioritizes the substitution of methods or materials with more affordable alternatives, again, without sacrificing quality or function. Consider value engineering to be the ratio of cost to function. It’s about developing your project’s scope and plan and then re-evaluating to identify better, more cost-efficient solutions.
Why It’s a Trusted Process
When you engage in value engineering methods, you’re essentially making your commercial construction project a team effort. Your decision-makers, along with contractors, engineers, estimators, designers, and architects, all weigh in with their recommendations and expertise. Everything from over-arching and big-picture designs to the minutiae of the details can be considered for improved solutions. The outcome is usually the best version of a plan for both short and long-term objectives.
Value engineering, as the Society of American Value Engineers International describes, is a “function-oriented” group approach to finding the “value in a product, system, or service.” And while all participants may have varying goals, the process or method behind value engineering has remained relatively the same for the last 70 years. It’s why value engineering is still a widely practiced method of design and construction planning today.
What Value Engineering Is Used for in Commercial Construction
While it’s intended to identify more affordable costs for your commercial construction project, value engineering is also used to solve problems. This analysis allows managers to identify overspending or unwanted costs that can sometimes sneak into a project. It can be the broad overview that ensures every aspect of the project is optimized for both upfront costs and over long-term investment.
Understanding the Phases of Value Engineering
Value engineering is worth adding to your commercial construction planning and project for obvious value-proposition reasons. And these are the six phases for implementing your strategy with your partners and collaborators.
Phase 1: Gathering Project Information
In this first phase of value engineering, the process involves a complete identification of the scope of the project. Here, you’ll collect data regarding materials, schedules, drawings, and costs. All datasets are reviewed and studied so that all key stakeholders have a complete understanding of project expectations. Essentially, this is the list of needs required to complete your project or necessary components.
Phase 2: Function Analysis
After you’ve successfully outlined all the “what” components in your project, you can then move to phase two, where you’ll review the functionality of each. There are two distinct forms of “functionality” – primary and secondary functions. Here, you’ll gauge how important each function is to the final product and identify any areas of improvement that may require additional solutions. You can begin by reviewing each component’s value in the primary function. Then you can explore further to create another layer of secondary function benefits.
Phase 3: Creative Speculation
In phase three of value engineering, you’ll get creative about substituting more cost-effective solutions for each of those commercial materials and their functions. Here, you’ll brainstorm with the engineering team to review and suggest new ideas, fresh designs, and more value-driven substitutes that achieve the same results. Start with the larger components of your commercial project and work your way down to more precise, detailed aspects of the build. This is where you’ll trim the fat off of your project and make more strategic moves for increased value.
Phase 4: Overall Evaluation
With your list of alternative solutions, phase four allows for deliberation and evaluation. Here’s where you’ll involve experts to weigh in on your new solutions, material substitutes, and ideas. Key stakeholders should all be part of this discussion, willing to ask questions and pose new potential obstacles. You’ll consider everything from big-picture solutions to minute details, allowing each collaborator to point out advantages, disadvantages, and professional opinions. And each proposed change should be agreed upon before moving forward.
Phase 5: The Cost Analysis
If everyone agrees with the proposed alternative solutions, phase five allows you to begin assigning costs and expenses. Ideally, you’ll want to evaluate how much each solution will cost not only right now but also how much it will cost over the new facility’s life cycle. Use historical pricing to help with rough projections of known or agreed-to materials and methods. These cost estimates should be very detailed, however, to gauge the alternatives’ viability for your project. A proposed alternative might sound good in theory, but during this phase, assigning costs could prove it to be more costly than intended, allowing you to make additional changes.
Phase 6: Development
During this final phase of value engineering, you’ll officially develop the alternative solutions that make the most sense to your goals and budgets. Here, you’ll lay out your timeline, available resources, and action steps. There might be sketches, estimates, and models to help assemble everyone’s ideas. Once a complete playbook is assembled, and the pros and cons outlined, project owners and stakeholders can make final decisions.
Value Engineering During Design
Your team might embark on these six phases of value engineering early during the design stages of your commercial construction project. In doing so, you can evaluate initial and final designs using the value engineering method for a more thorough approach to cost-effective value. It can be helpful in reallocating budgets ahead of time, too, when you’re making changes throughout your design process.
Value Engineering During Construction
It’s also common to leverage value engineering methods during construction. And because your various contracting partners will have practical knowledge in the field, there can often be generous savings discovered. Changes might help reduce costs, improve safety, or preserve the longevity of the structure.
How to Choose a Commercial Construction Partner Who Uses Value Engineering
Before partnering with any commercial construction company, you’ll want to talk to company representatives about their process involving value engineering. You’ll want to ask about implementing changes in the design phase and during construction. Inquire directly about the company’s experience with value engineering over past projects to compare those goals and scopes with yours.
Jerdon Construction always employs value engineering methods for commercial construction clients. We help you to uncover and identify alternative, less expensive solutions to all aspects of your build-out, and we do so through a lens of quality and design commitment. We’ll help you find the most valuable equipment, processes, materials, and systems for every aspect of your build, so you can rest assured knowing you’re getting the greatest value for your construction budget.
Now that you’re comfortable understanding more about value engineering give Jerdon Construction a call to start your process!
