Value Engineering Can Work

As design team on potentially the first LEED-certified convention center in the country, none of us were quite sure what the results of our "green" bid packages would be. But when the 45 bid packages began to roll in, it quickly became apparent that we were going to have to deal with a budget problem before the project could continue.

08/01/2004


As design team on potentially the first LEED-certified convention center in the country, none of us were quite sure what the results of our "green" bid packages would be. But when the 45 bid packages began to roll in, it quickly became apparent that we were going to have to deal with a budget problem before the project could continue.

The A/E team of Rafael Viñoly Architects and BHKR cringed as the construction manager suggested "value engineering." Typically, when a project goes through such an exercise, there is rarely any value added or engineering done. Instead, we like to call it "bald cost cutting."

Fortunately, several factors were on our side: First, the convention center was not a typical project. Second, it was designed and constructed by a team of professionals committed to developing a world-class and LEED gold-certified facility. Third, it had an owner—the Sports and Exhibition Authority (SEA)—who was willing to make considerations beyond pure cost.

In order to achieve true value engineering, the team, including the construction manager and SEA, worked together to evaluate each building component to determine if each element under scrutiny was the most cost-effective design option.

For example, take the exterior aluminum panels that were originally slated to sheath the exterior walls. The value engineering alternative was painted steel panels. This option was evaluated by the team as a whole to determine whether the suggested subsitute could still meet the project's requirements. The architect objected, questioning the life-cycle cost of steel vs. aluminum. Ultimately, this value engineering candidate did not withstand the challenge, and steel was selected as a viable cost-saving measure.

Moving forward, each value engineering item was evaluated for functionality, life-cycle costs and LEED certification requirements. SEA was committed to a gold rating, but was also committed to maintaining a budget, so there were no givens; every item required justification.

In an effort to try to understand the actual costs of each major LEED system, a payback analysis was prepared with the following results:

  • Water reclamation system: 24 years.

  • Natural daylighting: 94 years.

  • Natural ventilation: 5.2 years (includes evaluation for the additional ductwork and control costs for a traditional system).

  • Low-temperature air: zero years (low-temperature air saved $250,000 in installation costs and $396,000 in operating costs per year).

  • Aquifer (for cooling tower make-up water): 15 years (includes costs for drilling, testing and installation).

Overall payback analysis for the above-mentioned elements totaled approximately 12 years. Reconciling these numbers was an interesting collaboration between the team, the Green Building Alliance, the project's locally based "Green Navigator" ( CSE 02/04 p. 47 ), and SEA.

A true understanding of actual costs for each item required an understanding of what should be included in the analysis. For example, the water reclamation system included interpolated costs of what the group believed water would cost over the next 20 years. Water costs in Pittsburgh are presently $1.05 per 1,000 gallons. The team questioned whether this element should be excluded from the payback analysis, as the element could be considered as a demonstration project. In the end, however, it was included.

The natural daylighting costs included all costs associated with blacking out all of the glazing in the exhibit halls, including access platforms and controls. When analyzed, it was shown that the daylighting light fixture controls had a six-month payback, saving $75,000 per year in electricity. The skylights and clerestory windows were considered a major design element by the design team, and it was argued that these items should be excluded from the value engineering calculations. But in an effort to be consistent, we included them.

In the end, the payback analysis was not a convincing point, but SEA decided not to nix these features because of the overall effect they would have on the environment.

These decisions illustrate SEA's commitment to LEED gold certification, as the average owner certainly would not have considered spending money on a building component that did not offer a six- to eight-year payback. SEA, however, understood the overall value of these debated LEED elements as integral to the convention center's chances of receiving the desired gold rating.

So with a lot of bonafide arguments from the design team, the main project elements withstood the scrutiny of the entire team's value engineering efforts.

And thanks to an owner willing to hear such arguments fairly, it was proven that the value engineering process can work without sacrificing essential elements. The bottom line: Money was saved where appropriate and value was added to the project.





No comments
Consulting-Specifying Engineer's Product of the Year (POY) contest is the premier award for new products in the HVAC, fire, electrical, and...
Consulting-Specifying Engineer magazine is dedicated to encouraging and recognizing the most talented young individuals...
The MEP Giants program lists the top mechanical, electrical, plumbing, and fire protection engineering firms in the United States.
Combined heat and power; Assessing replacement of electrical systems; Energy codes and lighting; Salary Survey; Fan efficiency
Commissioning lighting control systems; 2016 Commissioning Giants; Design high-efficiency hot water systems for hospitals; Evaluating condensation and condensate
Solving HVAC challenges; Thermal comfort criteria; Liquid-immersion cooling; Specifying VRF systems; 2016 Product of the Year winners
Driving motor efficiency; Preventing Arc Flash in mission critical facilities; Integrating alternative power and existing electrical systems
Putting COPS into context; Designing medium-voltage electrical systems; Planning and designing resilient, efficient data centers; The nine steps of designing generator fuel systems
Designing generator systems; Using online commissioning tools; Selective coordination best practices
As brand protection manager for Eaton’s Electrical Sector, Tom Grace oversees counterfeit awareness...
Amara Rozgus is chief editor and content manager of Consulting-Specifier Engineer magazine.
IEEE power industry experts bring their combined experience in the electrical power industry...
Michael Heinsdorf, P.E., LEED AP, CDT is an Engineering Specification Writer at ARCOM MasterSpec.
click me