Implementing Value Engineering
GSA applies value engineering to new construction and major modernization projects. Value engineering practices are formally structured in the design phase and depend on contractor initiative in the construction phase.
GSA generally contracts for two value engineering studies - one at completion of concept design and the second at completion of design development. In each, GSA asks a value engineering consultant to identify and evaluate changes that could result in increased functional value (including customer satisfaction) in the completed facility while reducing construction or operation and maintenance costs. The value engineering effort is scaled to the project size, complexity, and status.
GSA concentrates value engineering efforts in the early stages of project design because early review affords greater savings and allows a change of direction, if appropriate, without affecting project delivery schedules. Emphasis is on obtaining maximum life cycle value for 'first-cost' dollars- the dollars budgeted for the project. If savings are identified, the project budget may be reduced, or the money may be reallocated, if justifiable, for features that would lend greater life cycle value to the building.
GSA continues value engineering during construction because a contractor's practical experience and purchase options can often generate substantial savings. When a construction contractor proposes a value engineering change to construction requirements, materials, or methods, the contractor shares in the savings. The change may reduce the cost of construction or the life cycle cost of the building, but must not lessen building performance, design quality, safety, appearance, or ease of upkeep. GSA evaluates proposed changes and, if approved, modifies the contract and makes an incentive payment to the contractor. The contractor's share of construction cost savings is 55 percent for fixed price contracts, but can be different for incentive-based contracts.
Value engineering goals for individual projects are often addressed in partnering agreements among GSA, the various consultants, the construction contractors, and the end users.