Integrate VE into project planning

Renne Hoekstra. "Value engineering is not about cutting corners, but about adding benefits and values to every construction project. For this to happen, VE should be integrated into project planning, says Renne Hoekstra. Excerpts from an exclusive interview given to Pranitha Elizabeth Joseph.--"

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Isn’t every Engineer concerned about deriving optimum value from a project? Then how can we differentiate between the calling of an ordinary engineer and a value engineer?

Most of the time, what happens when an Engineer’s design contract is negotiated is that there will not be any room for him to optimize the design. Or, they are told by the owner “This is what I want”. When that happens, that is what they give them even if it is not (the) optimal project. When we come in with our subject experts to conduct a value engineering workshop, we are not put in the same box that the design engineer is put since the owner asks the designer to stay within the scope of the project he/she sees it. In value engineering, we don’t have to be in that scope box. We get to say, “Why are you doing that?” or “Have you considered this?” or “How else can we achieve the functions?” or “Why are you even doing that function?” So, we have the opportunity to get out of the box.

At which stage of a project should we adopt VE?

There is a wonderful opportunity if you do a value planning study. Value planning would help you decide the scope of a project, so that you can establish an appropriate scope and budget and we don’t get to the end and realize that we don’t have enough money. So, if an organization wants to do value engineering later on, what we really are looking for is potential fatal flaws where there might be a bust in the design that might create a problem in construction, but we look at constructability elements. So we would look at plans and specifications and help them ensure that they are constructible. We look at different things. So the best time to do value engineering is at the 15% stage. When you get to 15%—and not more than 30% is your optimum—and if you did it at 15, you would actually have the opportunity to design value into the design.

Does VE foster creativity or curb it by merely focusing on resources and time constraints?

No, it is not just about cost, and that is our challenge. Normally what happens when you just cut cost is you negatively impact performance or function of whatever it is. Performance could be defined as quality, impactful schedule, operability, maintainability… So, there are other things that are required for a project to be successful. That is why, during a value study, it is important for us in the information phase to understand from a client as to how must this project perform and what defines success for the project. We use those in our evaluation phase because the definition of ‘value’ is performance or function over resources, which could be cost or schedule. So you don’t want to just do cost cutting because the project is going to suffer. VE helps us to not just focus on capital, but also on life cycle and how does it all relate to performance or function.

Isn’t it difficult to educate the customers when they are least bothered about VE?  

We have the same struggles throughout the United States. Although we have federal requirements for doing value engineering, that doesn’t mean that they want to do it. It has been such a struggle and I don’t understand it. I’m bringing you a process that helps to improve the value of your project, which means you may save money, time, and, in construction, time is money and you will not negatively impact how your facility performs once it’s completed. I think India is running into the same issue as they can’t see the value. So what we need to focus is on the benefits. We always want to provide a benefit.

Why is it that VE has not received the importance it deserves in our construction priorities, especially in the case of public infrastructure projects?

I wish I could answer that question. I have been trying to find an answer. Many of us in the US and many of our project managers for the government, when they get their employee evaluations, one of their evaluations is, “Did you meet schedule?” So if I make you stop at 30% and do value engineering and then if we identify some wonderful value engineering opportunities, you will have to go back and redesign, which would affect the schedule. So many of the project managers don’t like or want this. So we have several organizations that are promoting innovation and value engineering. What they ask the project managers is, “Did you do a value engineering study?” If we determine that there are really some valuable opportunities that we want to integrate, we reset the schedule from that point and not make you stick to the original schedule, so that it doesn’t negatively impact their performance.

Shouldn’t every project, be it private or public, be subjected to due diligence by a VE professional so that precious resources and time are saved?

Usually, there is not enough money in the budget. When a contract is awarded, with it comes the scope of work from the client who states their demands. So the designers often do not get a chance to go outside that box. Although they would like to think that they’re doing value engineering, I would tell you that, at least in the US, they are not, because there is no scope. Which means there is no fee associated with them looking at other ways to approach things.

For example, let us talk about a drainage project. If I’m the design engineer and you give me the parameters, say, drainage structure for a two-year storm. I design a culvert pipe that will meet your requirement.  I would spend 30% of the fee and I will take it to you and I will say ‘Okay, here is your design’ and the owner will say ‘Yeah, I don’t want a pipe. I want a box culvert!’  But this is cheaper. And you are still getting the same function if I do a pipe. But the owner says, ‘No, I want a box culvert’. That is the challenge!

Our owners are their worst enemies. They don’t understand that they are not allowing engineers to be designers. Those are some of the challenges we’ve seen in the US over the years and I don’t know if it is any different here in India.

Often clients change their mind on the design even after adopting VE. How is it going to be practical? Do we have to redesign and carry out VE again?

If you have integrated the clients into the process, then that could potentially be a part of one of the ideas instead of waiting until later. I can’t imagine that a client would spend all this money and design, do value engineering and then make a different decision. Remember that the value engineering team does not make decisions. We bring all of the ideas. We do an entire evaluation process to get to the development of what we think are viable and implementable solutions. We do not make decisions. The client would still make those decisions. They would have already spent too much money. So again, integrating and understanding what are their needs, what functions and what performance measures are important needs to be done in the beginning and not later.

Have you had similar experience before?

I have had one instance where the project was already 70% designed. It was a waste water treatment plant. And the reason they did it was that the client had not integrated a key financial partner in the beginning to pick and select the design team and they felt they needed to have an outside team look at it so they can prove to this funding partner that they had made the right decisions. Right now in our country, and I don’t know about in India, we actually have other types of delivery methods for project. We have CMGC (Construction Manager General Contractor) system, which integrates the contractor with the design and the owner. So now you’re actually getting their input during the design phase. So that is also helping. So, some of these new delivery methods are getting integrated with value engineering.

How big a role would VE play in the construction industry in the coming decades?

Well, if you are talking about my goal, I would like to actually improve the knowledge of what value engineering is and get it to be more of a household term. I would really like to see it grow. But again, we have to continue to educate and a part of that, in the US, is ensuring that the government understands the importance of VE. I think that if we continue to train organizations on the importance of VE, then they will want to do more. Then it can become more of a career for the universities to start looking at and teaching.