Amin Terouhid, Ph.D., CVS
Maryam Mirhadi, Ph.D., VMA
Executive takeaway. A value engineering (VE) workshop produces VE alternatives or design suggestions, but value remains unrealized until the project team acts. Owners should make timely decisions, assign responsibility, incorporate accepted VE alternatives or design suggestions into the design, and verify the work. Structured follow-through connects VE workshop to project delivery.
The workshop is a decision point, not the finish line
Value engineering (VE) is a structured, multidisciplinary process that uses function analysis to improve the relationship between required performance and the resources needed to achieve the intended functions and enhance the value of a project, process, or organization. SAVE International describes value as the relationship between function performance and resources. [1]
A VE recommendation is a developed proposal supported by assumptions, advantages, disadvantages, cost and schedule effects, risks, and implementation steps. Acceptance is the owner’s documented decision to proceed. However, implementation occurs when the VE alternative or design suggestion is, in fact, incorporated into design, approvals, procurement, construction, and operating requirements. Because these are separate stages, a VE workshop is not considered an achieved saving or enhanced value.
Create an accountable path from recommendation to completion
Before the VE workshop closes, the facilitator and project manager typically establish a VE action register, which is a register that tracks each VE alternative or design suggestion through closeout. Each entry should identify the affected function, required performance, cost and schedule basis, reviews, documents, decision authority, action owner, due date, dependencies, and final disposition. The decision authority may accept or reject the proposal; the action owner completes the assigned follow-up. A deferred item should state what remains necessary and when it will be reconsidered.
The VE report should provide enough technical, cost, and schedule information for a decision. FHWA’s VE process includes developing VE alternatives or design suggestions, presenting recommendations, and preparing an implementation plan. Its Job Plan supports both the study and implementation. FHWA also cautions against overstating or double-counting estimated savings. [2]
Convert an accepted VE alternative or design suggestion into controlled changes
Change control is the formal process for reviewing, approving, recording, and communicating a change to the project baseline. The baseline is the approved scope, cost, and schedule used to measure change. After accepting a recommendation, the project manager should identify affected drawings, specifications, calculations, estimates, schedules, risk records, permits, procurement packages, contracts, commissioning plans, and operating information. Commissioning verifies that systems are installed, tested, and operating as required. The designer must confirm continued compliance with owner requirements, codes, permits, and professional responsibilities.
If the established change management requirements are properly followed, an accepted VE alternative or design suggestion should be formally incorporated into the change management process. The proposed change should be appropriately reviewed, approved, documented, and incorporated into the design in accordance with the applicable change control procedures. This is what is meant by converting an accepted VE alternative or design suggestion into a “controlled change”: the recommendation does not simply become part of the design informally but is implemented through the established change management process to ensure proper authorization, documentation, coordination, and traceability.
Verify value and retain the lesson
Verification determines whether the completed VE alternative or design suggestion preserved the required functions, met the performance criteria, used the expected resources, and improved life-cycle value. Supporting evidence may include approved design revisions, procurement records, inspection and test results, commissioning data, schedule updates, cost records, maintenance requirements, and user feedback. For applicable Federal-aid highway projects, current federal rules require State transportation agencies to incorporate approved VE recommendations into the plans, specifications, and estimates before construction authorization and to monitor and report implementation. [3]
Although those requirements apply only within the regulation’s scope, the management practice is useful: distinguish among proposed, accepted, incorporated, completed, and verified recommendations. Close an item only when evidence is available. Record rejected VE alternatives or design suggestions, and reasons so later teams can understand the decision and avoid repeating the analysis.
Recommended owner actions
It is recommended that owners identify decision authority and action owners before the VE workshop; align response dates with design and procurement milestones; maintain one action register linked to change control; perform technical, cost, schedule, risk, permit, and operational reviews in proportion to the change; update affected baselines and contract documents; verify function and performance; and report achieved results separately from the VE workshop. The facilitator may support tracking, but project leadership remains responsible for decisions and implementation. Owners should make timely decisions, assign responsibility, incorporate accepted VE alternatives or design suggestions into the design, and verify the work. Structured follow-through connects VE workshop to project delivery.
References
[1] SAVE International. About the Value Methodology.
[2] Federal Highway Administration. The Value Engineering Process and Job Plan.
[3] Electronic Code of Federal Regulations. 23 CFR 627.7, VE Programs.