CVE 4070 Construction Engineering Value Engineering Prof. Ralph V. Locurcio, PE.

CVE 4070

Construction EngineeringValue EngineeringProf. Ralph V. Locurcio, PE

Assignments due… Change Order Estimate due 11/13/2007 Ethics paper due 11/27/2007 Test #3 – 11/29/07 Notebook turn in – 11/29/07

Ethics Paper due Nov 27 NSPE Rules of Professional Conduct

Read all of the rules Summarize each of the obligations in one

paragraph Pick a case study: 1,7,58,58,60

Write a 2-page paper applying the NSPE rules to the situation in the case

What errors were made How should the engineer behave in the

case

What is VE… really?

VE is a “systematic” analysis of a project design to obtain the most value for every dollar of project cost…

The elimination of any part of the project that adds to cost without adding to functionality…

Not only design & construction, but life cycle costs as well…

A second look at the design…

Major cost items Materials cost & availability Construction methods Shipping costs Organizing & project admin

But…

Most productive in construction…

Advantage of contractor’s expertise in purchasing, construction methods, organizing, techniques and quality control…

Generally requires an incentive clause in the contract…

But there’s are risks…

VE analyst may not fully understand the design basis…

VE generates changes that could delay project completion…

VE may not recognize field conditions that might outweigh cost savings…

VE could result in lower quality components…

Role of the owner’s representative...

Be the advocate for the owner & the project…

Control the risks… Keep the overall value of the project

in perspective…

VE in the design phase…

VE analyst should consider costs related to: Materials Labor Equipment Overhead & supervision

Costs related to materials…

Transportation or shipping Testing cycles Complex inspections Tolerances Fabrication process

Costs related to labor…

Quality of workmanship needed Excavation Forming or finishing Fitting Availability of new materials, methods

that reduce labor Construction timing

Costs related to equipment… Design should not prevent use of high

production equipment or construction phasing

Design should reduce need for special equipment like cranes, loaders, etc.

Design should minimize haul distances

Design should not force use of special equipment

Costs related to overhead…

Special security requirements Limited site access or laydown areas Complex supervision or inspection

Cost saving design features… Duplicate members Use modular components Simplified structural components Eliminate special forming or finishing Siting to reduce excavation Specify local materials Use simple, clear or standard specs Use prebid conferences

VE in construction phase… Study physical features such as

topography, geology, climate… Construction phasing to minimize use of

high cost equipment or labor Modify construction methods to reduce

forming or finishing Increase use of new or high production

equipment Substitute materials or components that

reduce cost

The VE process…

1. Information or study 2. Brainstorming3. Analysis4. Development of alternatives5. Presentation6. Follow-up

Brainstorming techniques Set time limits Record all ideas; quantity vs. quality Avoid judgment, detail or analysis Neutral controller Light free flowing atmosphere Non-competitive; all contribute Review and categorize at end

Presentation

Describe the process & alternatives Pros & cons of alternatives Compare costs of original & VE Compare quality & functionality Present an implementation plan Show cost savings to owner

Contractor incentives…

Generally 45% of any real savings Must share with sub-contractors Important to include in contract VE suggestions are proprietary

Case Study A chemical facility was to be redesigned. A key requirement was that the

new design should operate at a higher efficiency than the existing facility.

The plant operator had completed conceptual engineering and simulation to finalize the process flow scheme.

There was considerable skepticism that value engineering might improve the design. However, the client was open-minded and the engineering team persuasive and it was agreed that the exercise would proceed.

The value engineering facilitator prepared functional flow diagrams. A representative of the operator and several contractor engineers from different disciplines met for 2 sessions, each of which lasted for 4 hours.

During these well-planned and carefully facilitated sessions, 12 ideas were generated, of which 6 were deemed practical. The most significant idea that emerged from these focused brainstorming sessions was to change a column configuration from parallel to series, thereby saving significant condenser costs and improving the energy efficiency tremendously.

The idea was refined and implemented. Overall, the capital cost saving was about $1 million (5% of total capital), with an operating cost saving of about $4 million/year.

Role of the owner’s rep

Be the advocate for the owner & the project…

Control the risks… Keep the overall value of the project

in perspective…