How value engineering can add value

How value engineering can add value

Sullivan, Terry

An effective strategy looks for cost-effective alternatives in processes, schedules and purchasing as well as materials

WITH ANY RENOVATION PROJECT, there are opportunities to keep budgets in check through value engineering. By taking a hard look at individual project components, project managers can zero in on more cost-effective alternatives. Typically, value engineering produces economies through different materials, changes in the design or more efficient construction methods, the cumulative effect of which can have a dramatic impact on the bottom line.

Value engineering can even mean the difference between whether a project gets built or languishes on the drawing board. A case in point is the facade renovation to update the look of the country’s main Social Security Administration processing center, the 1.3 million-square-foot Metro West Building in Baltimore. On that project, a value engineering package representing nearly $30 million in savings enabled the U.S. General Services Administration (GSA) to complete its facade renovation within its budget of $32.8 million versus original bids of $60 million.

From Scaffolding to Screws

How were such substantial savings achieved? Costs were shaved from every conceivable project element where the owner and others on the team were comfortable with what was being done. The largest single savings – some $10 million – was in the use of a state-of-the-art motorized scaffolding system – essentially like an outdoor elevator – that was purchased outright instead of being rented.

The footprint of the six-story Social Security Administration building is two city blocks – a lot of climbing up and down for construction personnel. Not only did the purchase eliminate $2 million in rental fees, but use of the scaffolding knocked off another estimated $8 million in labor costs. With the scaffolding, workers are on another floor at the push of a button.

Another $6 million in savings came through compressing the schedule from 36 to 30 months and performing the bulk of the work during regular daytime hours. Alternate materials saved another $4 million. For instance, taking advantage of a network of national suppliers created value engineered savings right down to the screws utilized on the exterior metal stud framing. The project realized a savings of eight cents per screw, which on 1,000,000 screws adds up to $80,000.

Add to that $8 million worth of savings realized on a combination of smaller items, from a more efficient occupant protection program to downsizing the canopies at the building entrances to road closures negotiated with the City of Baltimore that created more space to complete the demolition and better access to remove demolition material directly.

Gettinq a Consensus

In any value engineering package there are going to be tradeoffs – particularly in a package worth nearly $30 million in savings, half the price of contractors’ bids. Some savings, such as the move to motorized scaffolding, were easily realized. Other areas proved to be more challenging to accomplish.

In a high-tech facade for the Social Security Administration’s prime national facility, materials could have been difficult to value engineer. But the alternative was a metal panel system the same color as and similar to the architect’s specification for less cost. Instead of granite and stone for the facade, monumental concrete masonry units with precast concrete accent pieces were used. A 15-feet-by-20-feet mock-up was prepared for each of three different granite alternatives.

While a small degree of quality was clearly lost by using a granite substitute, the price savings and aesthetics of the substitute material were enough to justify the tradeoff. Throughout the project, the GSA and Social Security Administration were presented with a shopping list of alternative, less costly materials. After reviewing the samples, the respective agencies either accepted or rejected the alternative material and were satisfied with the cost.

Does that mean the architects went overboard on the materials? Not at all. The designers were doing what the owner requested in looking to utilize quality materials for a distinctive finish. The key to realizing the ultimate savings was to bring to the table lower cost options that would not compromise the quality and aesthetics of the design intent.

Managing Construction Sequencing

More give and take came in connection with both the switch of work activity from night to daytime hours and the occupant protection program to safeguard the building’s 3,000-member workforce during construction. One issue the Social Security Administration didn’t budge on was daytime work in its mission critical telecom floor – all work in or near that facility is conducted after business hours.

The Social Security Administration lost some control by making the night-to– day switch in space other than that telecom floor – their people might be affected a little more, but they also saved several million dollars. To mitigate the situation, temporary walls were erected around demolition sites, and shields were installed to screen construction activity from view.

The occupant protection plan – representing $3 million in savings – was developed with the help of an independent industrial hygiene and safety specialist. Essentially, the scaled-down version of the plan guided the Social Security Administration toward measuring not the whole gamut of air quality parameters, but just what the construction operation was putting into the air with its equipment and materials that could potentially bother office workers in terms of dust, paint and solvent vapors from the specified high-performance coating system. And rather than measure those parameters every five feet, regular samples are taken at specified points by a specialized industrial hygienist consultant.

To verify the plan, a demolition area was staged for the Social Security Administration prior to the project award. The contractor brought in equipment and showed the owner what to realistically expect over the next two years in terms of noise, dust and other factors. So even before work commenced, the Social Security Administration knew what it was committing to.

Saving nearly $30 million took more than nine months of meetings. But all the contentious issues were settled up front to the satisfaction of the GSA, the Social Security Administration and the architect. The result is a project that is proceeding on time and within budget. Without the extensive value engineering efforts, it’s doubtful the renovation would have ever gone ahead.

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Terry Sullivan is project manager for Dick Corporation in Pittsburgh.

E-mail comments and questions to edward.sullivan@tradepress.com.

Copyright Trade Press Publishing Company Sep 2001

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