# Value Engineering

## VE Overview

### Definition
Value Engineering (VE) is a systematic method to improve the "value" of a project by examining function and reducing cost while maintaining or improving quality, performance, and reliability.

### Value Formula
```
Value = Function / Cost

Where:
- Function = What the item does (primary purpose)
- Cost = Total lifecycle cost
- Higher value = Better function for lower cost
```

### VE Timing
| Phase | VE Opportunity | Savings Potential |
|-------|----------------|-------------------|
| Programming | Highest | 10-25% |
| Schematic Design | High | 5-15% |
| Design Development | Medium | 3-10% |
| Construction Documents | Lower | 1-5% |
| Construction | Lowest | < 3% |

---

## VE Process (SAVE Methodology)

### Phase 1: Information
| Activity | Purpose |
|----------|---------|
| Gather data | Drawings, specs, costs |
| Define scope | Project boundaries |
| Identify constraints | Non-negotiables |
| Establish costs | Current estimate |
| Understand requirements | Owner's goals |

### Phase 2: Function Analysis
| Step | Description |
|------|-------------|
| Identify functions | What does each element do? |
| Classify functions | Basic vs secondary |
| Establish relationships | FAST diagram |
| Assign costs | Cost per function |
| Find high-cost functions | Target for VE |

### Phase 3: Creative
| Technique | Description |
|-----------|-------------|
| Brainstorming | Generate alternatives |
| No criticism | Accept all ideas |
| Quantity focus | Volume over quality initially |
| Combine ideas | Build on suggestions |
| Document all | Record every option |

### Phase 4: Evaluation
| Criterion | Weight |
|-----------|--------|
| Cost savings | High |
| Quality impact | High |
| Schedule impact | Medium |
| Risk level | Medium |
| Owner acceptance | High |

### Phase 5: Development
| Activity | Deliverable |
|----------|-------------|
| Develop selected ideas | Detailed proposals |
| Cost analysis | Savings quantified |
| Risk assessment | Implementation risks |
| Implementation plan | How to execute |
| Recommendation | Go/no-go decision |

### Phase 6: Presentation
| Element | Include |
|---------|---------|
| Summary | Key findings |
| Recommendations | Prioritized list |
| Savings summary | Cost impact |
| Implementation | Next steps |
| Approval | Owner sign-off |

---

## VE by Building System

### Structural Systems
| Current | Alternative | Savings |
|---------|-------------|---------|
| Steel moment frame | Braced frame | 5-15% |
| Deep foundations | Shallow (if possible) | 20-40% |
| Cast-in-place concrete | Precast | 10-20% |
| Conventional formwork | Post-tensioned slab | 10-15% |
| Over-designed sections | Optimized design | 5-10% |

### Building Envelope
| Current | Alternative | Savings |
|---------|-------------|---------|
| Curtain wall | Window wall | 20-40% |
| Stone veneer | Manufactured stone | 30-50% |
| Custom windows | Standard sizes | 15-30% |
| Face brick | Thin brick | 25-40% |
| Metal panels | EIFS | 20-40% |

### HVAC Systems
| Current | Alternative | Savings |
|---------|-------------|---------|
| Central plant | Packaged units | 15-30% |
| VAV all zones | VAV + CAV hybrid | 10-20% |
| Built-up AHU | Packaged AHU | 15-25% |
| Copper piping | PEX/CPVC | 20-40% |
| Complex controls | Simplified BAS | 10-20% |

### Electrical Systems
| Current | Alternative | Savings |
|---------|-------------|---------|
| Premium fixtures | Standard quality | 20-30% |
| Extensive daylighting controls | Basic controls | 15-25% |
| Oversized service | Right-sized | 10-20% |
| Custom switchgear | Standard | 15-25% |
| Copper feeders | Aluminum (where allowed) | 30-40% |

### Plumbing Systems
| Current | Alternative | Savings |
|---------|-------------|---------|
| Commercial fixtures | Residential grade | 30-50% |
| Central hot water | Point-of-use | 10-30% |
| Copper DWV | Cast iron or PVC | 20-40% |
| Excessive fixtures | Code minimum | 10-20% |

### Interior Finishes
| Current | Alternative | Savings |
|---------|-------------|---------|
| Wood flooring | LVT | 40-60% |
| Natural stone | Porcelain tile | 50-70% |
| Custom millwork | Standard casework | 30-50% |
| High-end carpet | Value carpet | 30-40% |
| Painted GWB | ACT ceiling | Varies |

---

## VE Decision Matrix

### Scoring Criteria
| Factor | Weight | Description |
|--------|--------|-------------|
| Cost savings | 30% | Initial cost reduction |
| Life cycle cost | 20% | Long-term impact |
| Quality | 20% | Maintain or improve |
| Schedule | 15% | Impact on timeline |
| Risk | 15% | Implementation risk |

### Rating Scale
| Score | Description |
|-------|-------------|
| 5 | Excellent, significant improvement |
| 4 | Good, clear benefit |
| 3 | Neutral, no impact |
| 2 | Minor negative impact |
| 1 | Significant negative impact |

### Decision Threshold
| Weighted Score | Decision |
|----------------|----------|
| 4.0+ | Strongly recommend |
| 3.5-4.0 | Recommend |
| 3.0-3.5 | Consider with review |
| < 3.0 | Not recommended |

---

## Cost Reduction Strategies

### By Category
| Strategy | Impact |
|----------|--------|
| Reduce scope | Direct savings |
| Simplify design | Labor + material |
| Standardize | Repetition savings |
| Change materials | Material cost |
| Change systems | System cost |
| Optimize sizing | Right-size equipment |
| Eliminate waste | Process improvement |

### Low-Risk Strategies
| Strategy | Risk Level |
|----------|------------|
| Material substitution | Low |
| Standard sizes | Low |
| Value products | Low |
| Eliminate unnecessary | Low |
| Simplify details | Low |

### Medium-Risk Strategies
| Strategy | Risk Level |
|----------|------------|
| System changes | Medium |
| Layout optimization | Medium |
| Reduced finishes | Medium |
| Deferred work | Medium |

### Higher-Risk Strategies
| Strategy | Risk Level |
|----------|------------|
| Reduce program | Higher |
| Reduce building area | Higher |
| Eliminate features | Higher |
| Change building type | Higher |

---

## Life Cycle Cost Analysis

### Components
| Cost Type | Description |
|-----------|-------------|
| Initial cost | Construction |
| Operating cost | Energy, water |
| Maintenance | Regular upkeep |
| Replacement | Component lifecycle |
| Disposal | End of life |
| Residual value | Remaining worth |

### Present Value Calculation
```
PV = FV / (1 + r)^n

Where:
PV = Present Value
FV = Future Value
r = Discount rate
n = Years
```

### Discount Rates
| Application | Rate |
|-------------|------|
| Federal projects | Per OMB |
| Private (typical) | 5-8% |
| Real estate | 8-12% |
| Conservative | 3-5% |

### Simple Payback
```
Payback = Additional Cost / Annual Savings

Example:
$50,000 additional / $10,000 annual = 5 year payback
```

---

## VE by Building Type

### Office Buildings
| High-Value Targets | Typical Savings |
|-------------------|-----------------|
| Facade system | 3-8% of total |
| HVAC efficiency | 2-5% of total |
| Lighting/controls | 1-3% of total |
| Floor finish simplification | 1-2% of total |

### Healthcare
| High-Value Targets | Typical Savings |
|-------------------|-----------------|
| Equipment planning | 2-5% of total |
| Room standardization | 1-3% of total |
| MEP optimization | 2-4% of total |
| Finish durability balance | 1-2% of total |

### Educational
| High-Value Targets | Typical Savings |
|-------------------|-----------------|
| Structural system | 2-5% of total |
| Building envelope | 2-4% of total |
| HVAC approach | 2-4% of total |
| Standardized classrooms | 1-2% of total |

### Residential
| High-Value Targets | Typical Savings |
|-------------------|-----------------|
| Unit layouts | 2-4% of total |
| Kitchen/bath finishes | 2-3% of total |
| Facade simplification | 1-3% of total |
| MEP efficiency | 1-2% of total |

---

## VE Documentation

### Proposal Format
| Section | Content |
|---------|---------|
| Description | Current condition, proposed change |
| Advantages | Benefits of change |
| Disadvantages | Risks, trade-offs |
| Cost comparison | Current vs proposed |
| Recommendation | Accept/reject rationale |

### VE Log
| Field | Purpose |
|-------|---------|
| Item number | Tracking |
| Description | What is proposed |
| Category | Building system |
| Savings | Dollar amount |
| Status | Pending/approved/rejected |
| Comments | Notes, reasoning |

### Implementation Tracking
| Metric | Target |
|--------|--------|
| VE ideas generated | 20-40 per study |
| Ideas implemented | 30-50% |
| Savings achieved | Per project |
| Quality maintained | Document verification |

---

## Common VE Mistakes

### To Avoid
| Mistake | Problem |
|---------|---------|
| Cut quality | Future costs |
| Ignore life cycle | Short-term thinking |
| Over-simplify | Miss function |
| Rush process | Poor analysis |
| Skip owner input | Wrong priorities |
| Ignore schedule | Hidden costs |

### Red Flags
| Warning Sign | Concern |
|--------------|---------|
| No savings quantified | Vague proposals |
| "Same but cheaper" | Not understanding function |
| Deferred work | Future liability |
| Single bid items | May not achieve savings |
| Warranty reduction | Risk transfer |

---

## VE Workshop Structure

### Typical Agenda (3-5 Days)
| Day | Focus |
|-----|-------|
| Day 1 | Information, project review |
| Day 2 | Function analysis, creative |
| Day 3 | Evaluation, selection |
| Day 4 | Development of proposals |
| Day 5 | Presentation, decisions |

### Participants
| Role | Responsibility |
|------|----------------|
| Facilitator | Guide process |
| Owner | Decision maker |
| Architect | Design input |
| Engineers | Technical input |
| Estimator | Cost validation |
| Contractor | Constructability |

### Deliverables
| Document | Content |
|----------|---------|
| VE Report | Complete study |
| VE Log | All ideas considered |
| Recommendations | Prioritized list |
| Cost Summary | Savings breakdown |
| Implementation Plan | Next steps |
