Adding ‘value’ to ‘value engineering’

It doesn’t matter if we’re working on an Army base in California, a new condo construction in Kansas City or a top-secret government installation in South Carolina—budget is always a top priority. And regardless of how much I try to estimate the cost of a project ahead of time, too many other factors are in play that can have an adverse effect on the cost. It’s no surprise I’m a big fan of value engineering.

The basic concept was first conceived during World War II at General Electric. Engineers there needed to find new materials to use because of the nationwide shortage of much of the typical raw materials. I guess necessity really is the mother of invention because they found that many of these substitutions actually performed better at a lower cost.

Today, those of us in the construction industry use the concept of value engineering (or “value analysis” as it’s sometimes known) to improve a project by coming up with alternatives to design, processes and materials. All of this hinges on understanding the needs of the owners, users and the spirit of the project. This means listening carefully, understanding priorities, and asking thoughtful questions.

Invest in the value

Too often, however, value engineering is seen as synonymous with cutting costs. It’s really about carefully considering value and how to best achieve a project’s goals. The best examples of value engineering improve the end result of the project—which might mean a more effective material or process, a lower cost, or both (just like GE discovered so many decades ago). After all, simply meeting the budget numbers doesn’t mean you’ve improved the value of the project—in fact, you might have decreased it.

The most logical and effective point in the building process to apply value engineering is, of course, the beginning—before the money is spent. Scott Cullen says it well on Whole Building Design Guide:

“VE is a creative, organized effort, which analyzes the requirements of a project for the purpose of achieving the essential functions at the lowest total costs (capital, staffing, energy, maintenance) over the life of the project … Typically the earlier it is applied, the higher the return on the time and effort invested.”

I love when we can be involved as early as possible in a project. Because IEC is both an electrical and general contractor, our team can view the project from different perspectives, which many times allows us to spot potential pitfalls and opportunities to improve the project before the budget is squeezed.

That doesn’t mean there’s not a chance for VE late in the game. I would argue it’s never too late to consider how to add value to any project. We recently worked on a SABER contract at Whiteman Air Force Base, which required retrofitting a facility from T-12 fluorescent light bulbs with T-8s. Our electrical design and construction manager, however, took the time to conduct an energy consumption audit and projected savings using kilowatt/hour captures and product information to assess the use of LEDs instead.

We were then able to use our purchasing power to install this cutting-edge technology while also saving the government money in long-term energy and maintenance costs. The base was so pleased with the result that IEC was able to secure a second delivery order and another large-scale retrofit project. This is a great example of using our industry knowledge and expertise to think beyond the project plans to find an even better solution.

Teamwork makes the project work

VE really comes down to the maxim that two heads are better than one. And if you’re able to pull together as many heads as possible – designers, consultants, construction team members, electrical engineers, building management, etc. – the chance to hit that value sweet spot is that much greater.

Plus, this type of collaboration builds an environment of teamwork and problem-solving that not only smooths the construction process but also increases the likelihood of a more satisfied customer. And the value of that is priceless.

Nilson Goes serves as the chief operations officer and general manager at IEC. How do you ensure you’re approaching each project with a value engineering mindset? Share your thoughts on our Facebook page or tweet them @IEC_KC.

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