Build Value in Now … or Later?

Our enlightening and spirited discussion of value engineering (VE), also known as value analysis, continues. Its ardent defenders have been its practitioners, while the most vocal detractors have been consulting design engineers.

For example, Gregory Josephs, P.E., of Philadelphia, was involved with modifications to sedimentation tanks at a large sewage-treatment plant, and VE was mandated by federal-aid rules—with drawings and specs all but complete.

"The VE report recommended over 100 changes, most of which were impractical," Josephs recalls. "For instance, the VE team suggested modifying tanks with double-vee bottoms to single-vee, thus requiring only a single chain-and-flights per tank—probably never feasible, certainly not with documents 90 percent complete! Many of the changes would have substituted cheaper equipment. To my knowledge, exactly one was acted on—using plastic weir plates instead of metal."

Josephs was most disappointed with the VE firm's tabulation of the cost savings. "Most values were picked out of thin air … [and] only addressed alleged savings, not the costs required to implement [them]. The executive summary stated the total as though all 100-plus recommendations were feasible and desirable.

"That exposure to value engineering left a bad taste in my mouth," Josephs sums up. "The whole concept of major cost savings through VE would seem to suggest that mere design engineers are incompetent."

Similarly, David D. Adams, P.E., president of AMC Engineers, Anchorage, says third-party VE efforts are little more than cost-cutting that often leads to lower first costs—in exchange for higher operations and maintenance (O&M) costs.

"The systemic problem that provides the false justification for VE boils down to engineering fees," Adams believes. "When fees are being squeezed, the last thing an engineer can offer to add is life-cycle cost analysis," or LCCA.

Adams offers an example of how the "quality principle" can help solve the fee/LCCA dilemma. "Two of our public-sector clients have good access to capital funds, but are often shorted on future O&M budgets. They negotiate additional fees at the beginning of projects for engineers to perform LCCA, and they make decisions based on the long-term view," he explains.

The question is, can this approach work for others?

Adams says yes, but it could take some effort. "As a profession, we must resist fee-cutting pressures and educate clients about the benefits of building quality into designs, with LCCA, at the beginning of the design concept."