Value Engineering Overview

VDOT

What is Value Engineering?

� Methodology used in:• Project development

• Process improvement

• Problem solving

VDOT VE Mission

� Improve Project Quality

� Eliminate Unnecessary Costs

� Reduce Overall Life Cycle Costs

• Legislated by General Assembly in 1990

• Over 2,200 VDOT employees trained to date

• $647,000,000 savings/cost avoidance to date

VDOT VE

Value Engineering:

� Emphasizes function

� Step by step process

� Multi-discipline team approach

� Life-cycle cost oriented

� Free of any restrictions

� Uses creative thinking techniques

� Uses teamwork

Value Engineering:

� Breaks project components into functions

� Uses team of experts identifying solutions thatsatisfy functions

Value Engineering:

� Focuses on “big picture”

� Ensures required functions are addressed

� Enhances understanding of total project

� Challenges paradigms (out of the box thinking)

� Identifies and removes unnecessary costs

� Encourages cross-discipline communication

Value Engineering is not:

� A Design Review

• Not intended to correct design omissions

� A Cost Cutting Process

• Not a cost cutting drill by sacrificing quality, reliability, or performance

� Virginia General Assembly House Bill 423,Section 33.1-190.1 to the Code of Virginia:

• Requires VE Studies on any VDOT highwayconstruction and maintenance projects costing $5 million or more.

� Federal Government Intermodal SurfaceTransportation Efficiency Act:

• Requires VE Studies on all Federal Aid projects withestimated total cost of $50 million or more.

VDOT & Federal Requirements

Criteria for Project Selection

• VDOT - Project cost greater than $5 M

• Complex project

• Recommended by Districts, Central Office, Project Manager or Localities.

• 2-3 Months Notification needed to schedule study

Accumulated Cost Avoidance

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

FY91 FY95 FY99 FY03 FY07

As of 2014 the Cost Avoidance is over $647M!

Value Engineering Team

Add partners from outside VDOT (cities, counties, other agencies, outside funding sources, permitting agencies)

A small group of experts in

required disciplines (design,

bridge, construction,

environmental, maintenance,

traffic)

• Tailored to Fit Study

• 3 to 5 Days depending on complexity and Condensed one day studies

Value Engineering Studies

When to Perform a VE Study

� Concept stage (scoping)

� 20-30 % development stage

� IPM Schedule Activity 32

Opportunity Curve

High

Low

Preliminary Concepts

Design

Construction

Maintenance

Potential For Cost Avoidance / Improvements

� Selection Phase

� Information Phase

� Speculation Phase

� Evaluation Phase

� Development Phase

� Presentation Phase

� Audit Phase

Value Engineering Job Plan

VE Job Plan (cont’d)

� Selection Phase

• Select project or process for

study

� Information Phase

• Investigates background

information, conducts function

analysis, and focuses the

team on study objectives.

VE Job Plan (cont’d)

� Speculation Phase

• Brainstorm alternative proposals and solutions.

� Evaluation phase

Analyze design alternatives,

technical processes,

life cycle costs,

documentation of logic,

and rationale.

VE Job Plan (cont’d)(Evaluation Phase)

� Cost Avoidance/Savings

� Functional Quality

� Acceptance

VDOT Evaluation Measures:

VDOT Scoring Criteria SummaryA. Cost Avoidance/ Savings

0 = Increases cost1 = $0 to $100K2 = $100K to $200K3 = $200K or greater

B. Functional Quality2 = Significantly Improved 1 = Minor Improvement 0 = No Change-1 = Minor Degrade-2 = Significantly Degraded

C. Acceptance0 = No Chance1 = Chance2 = Good Chance 3 = Very Likely Accepted

� Development Phase

• Develop technical and economic feasibility of alternative concepts.

• Develop team recommendations.

� Presentation Phase

• Present VE team recommendations in an oral presentation to the Design Team and in written report and workbook.

VE Job Plan (cont’d)

� Implementation Phase

• Design Team evaluates VE Team’s recommendations and implements those that are acceptable.

� Audit Phase

• Performance measures of recommendations are

compiled.

VE Job Plan (cont’d)

Value = Function

Cost

Roadblocks to Value

� Lack of information

� Wrong beliefs

� Habitual thinking

� Risk of personal loss

� Negative attitudes

� Over-specifying

� Reluctance to make a decision etc.

Areas for Value Improvement

� High cost items

• 80% of cost in 20% of the items (Pareto’s Law)

� Repetitive activities

� Unnecessary secondary functions

Sample of Recommendations

Reduce borrow material and improve roadway grades by lowering the profile along relocated Southgate Drive. $178K (Near VA Tech)

Coordinate the Design and Construction at the terminus of the Onville Project to match the cross-section of the Garrisonville Road Project $140K.

Save borrow and construction cost by constructing the new bridge closer to the existing bridge$1.5 million (Slate River Bridge).

Value Engineering Job Plan(Audit Phase)

• Track Implementations of Approved Recommendations

• Value Engineering Database

• Annual Report to FHWA

� Promotes VE Profession (www.value-eng.org)

� Annual Conferences

� VE Certifications• Certified Value Specialist (CVS)• Associate Value Specialist (AVS)• Value Methodology Practitioner (VMP)

SAVE- International(Society of American Value Engineers)

•

SAVE- National Chapter

http://value-eng.org/

AASHTO Technical CommitteeOn Value Engineering

� Establish and maintain policy to assist states in development of individual VE programs

� Ensure integrity and uniformity of VE practices

� Promote VE within all areas of state and federal Transportation programs.

� Plan and deliver a biennial transportation VE conference

AASHTO VE Web Site http://design.transportation.org/Pages/ValueEngineering.aspx

Questions/Comments?