How to Remove Value Engineering From Your Projects

In traditional design-bid-build, we typically go through what is known as “value engineering”. First, no one really likes this whole thing. It’s a pain, it’s typically late in the design phase and it’s just a cheapening of the solutions provided.

For those in the biz, at least the design side, here is what we hear when the words “value engineering” come up.

·?????? Provide something cheaper

·?????? Oh, good, I get to rework everything

·?????? And they want to do this at the last minute

·?????? Is the GC even going to give us alternatives that they’ve priced or do we have to guess??

Because in traditional design-bid-build the design team designs and the GC prices. We are separated. The design team doesn’t price and the GC doesn’t design. Because the design team doesn’t know what things cost. And the GC isn’t living in every code of every discipline every day.

So, the way that I see it, there are two solutions to this problem of “value engineering”. If you want to remove it. Really, if you want to remove the pain late in the project. Because in any case, you’ll be value engineering, you’re just going to make those choices early in the project so it’s not a complete pain in the ass to fix.

First, the design team gets better at pricing. They have or figure out a way to be more in touch with what things cost. And to a point, I agree with this. Engineers should be more price aware. The problem also becomes their own bias with their own money creeps into these decisions.

However, as mentioned above, in the traditional design-bid-build scenario, where the GC is part of the design process or on board the project early, it is their responsibility to provide pricing and feedback at milestones to the design team. In my experience, and from my perspective, what the design team gets is pretty minimal. Because it depends on who is on the GC side and what their expertise is in. If it’s steel and concrete, that’s where the biggest items come from. If it’s MEP then we see it there. It all depends on their experience, not the whole package.

Now, in fairness to the GC, could the Design Document level drawings be better, yes, but they are DD-level drawings. This is where the experience of the GC comes into play. To fill in the gaps that the design team hasn’t gotten to yet because we are only 50% of the way through design. It’s not a CD set.

This division right here is why there will always be “value engineering” in traditional design-bid-build projects. The GC isn’t going to take a risk. The design team doesn’t know any better. Therefore we have this back-and-forth that wastes a ton of time.

This leaves us with the only true way to fix “value engineering”, which let’s just call this what it really is. Late-stage project re-design and cheapening for budgetary reasons.

So the only way to avoid this is to go the design-build route. Where the teams are actually fully integrated. Where each discipline is pricing the project as we go. Making design and price choices simultaneously. See, either way, a price choice is made, here it just happens without pain and without schedule extension. This is one of the big benefits of design-build.

Rather than going to RS means and finding a price as an engineer, which isn’t real. It’s not the actual street price. This means design-build where the teams are actually integrated is the only way to remove “value engineering” and the pain associated with it from the project.