Value Engineering

Value Engineering is the process of trying to reduce the cost of a project, but without compromising the building's operational efficiency, aesthetics, or long-term durability.

If you simply remove something from your project or make it out of a cheaper material to save cost, that is called scope reduction, not value engineering. The difference is nuanced, and can get grey, but if you are making the building worse in order to save money, that is not value engineering.

Examples of value engineering verses scope reduction:

Concrete

Opt for stamped and stained concrete instead of pavers.
Consider less expensive asphalt paving over concrete paving.

Fencing

Minimize or eliminate fencing where possible.
Seek less expensive fencing types: lower in height, less ornate, less gates.

Steel

Instruct your structural engineer to develop a cost efficient design to minimize steel and lumber usage. It is easy to design a structurally sound building if you throw a ton of lumber and steel at it. But that drives up construction costs. Your structural engineer is typically going to design what he is going to design. But your mere comment to him that you want him to do the hard work of creating a smart and efficient design that is mindful of construction costs may influence him to put forth the extra effort to help achieve this goal.
Have the steel subcontractor provide early feedback on the structural design to see if he has recommendations on how to reduce the steel tonnage, or knows of other ways to save costs. Many steel contractors have in-house licensed structural engineers on their staff, and they usually know of ways to achieve the objectives and requirements of the project's structural engineer, but at a cheaper cost.
Consider using wood (usually less expensive) as an alternative to steel - if allowed by code
Remove grand staircases in the lobby and opt for simpler designs.
Replace cantilevering canopies with post-supported covers. A cantilevering structure looks cool, but is usually expensive because of all the structural support needed to achieve the cantilever.
Choose prefabricated canopies, like Avadek, over custom steel canopies.

Wood Framing

Have the framing subcontractor give input to the structural engineer about using standard truss depths and standard stud lengths to minimize cutting and customization.
Tell architect and structural engineer to make floor heights that can use standard, off-the-shelf, stud lengths. For example, don't let the architect specify 11' ceilings, which would require the framing sub to buy 12' studs, and have to cut them all to 11'. This extra cutting would increase labor costs, and create a lot of wasted material.

Drywall

Lower ceiling (and wall) heights to save on drywall sheathing (and paint) costs.
Have the GC make a recommendation on a comparable, but less expensive ceiling tile, than the one the architect selected.

Millwork

Use FF&E cabinets instead of built in millwork where possible, if it is less expensive. This also gives the space more flexibility.
Eliminate crown molding.
Decrease size of base molding (e.g, from 8" to 6")
Select less expensive countertop material. The price variation on countertop material is significant, and you can usually find a material that is similar to the one the architect or interior designer specified, for a less expensive cost. When you multiply this by all of the units in a senior living facility, the savings can add up to a big total dollar amount.

Doors/Frames/Hardware

Select cheaper hardware. Many times another hardware manufacturer can offer similar looking hardware for less cost.
Convert glass doors to wood doors with a glass insert.
Change pocket doors to swing doors.

Flooring

Select a comparable, but less expensive flooring material.

Electrical

Instruct your electrical engineer to try to place the transformer as close to the electrical room as possible to reduce the secondary service line run.
Consider downsizing or removing backup generators
Use aluminum feeder wires instead of copper.
For electrical wires inside of the building, instead of wires in expensive metal conduit, use MC cable (if allowed per code).
Open spec on electrical equipment/gear so that different manufactures can competitively price.
Open spec on light fixture package
Use Wi-Fi wireless access points to get internet to users instead of running CAT6 cable to data ports in offices.

Landscaping

Reduce landscape lighting (conduit and light fixtures).
Reduce hardscape.
Use smaller and less trees, bushes, and plants.
Reduce/delete water features.

Exterior Walls

Tilt up concrete wall panels could be cheaper if you have the space to construct them and you have a local contractor with experience in tilt up walls.
Reduce or eliminate decorative stone water tables around building exteriors.

Masonry

Reduce wall heights by one or two courses of brick.
Reduce or eliminate decorative stone water tables around building exteriors.
Use a single brick color type. Having multiple bricks on the exterior might look better, but only having one type of brick is simple to install (less labor) and there is less material waste.
Instead of doing a full brick wall, just do a 3 - 4 ft wainscoting of brick to for durability and aesthetics, then go with a less expensive wall skin above.
Concrete masonry units (CMU) has a lower material and installation cost than traditional bricks. It does not make the best looking masonry wall, but split face CMU actually looks pretty good.

Fire Sprinkler

Change expensive concealed fire sprinklers to less expensive semi-recessed.
If allowed by code, use CPVC piping instead of steel black pipe.

Plumbing

Switch from copper water lines to PEX or CPVC.
Switch from cast iron drain and vent lines to PVC.
Instead of interior roof drains, use scuppers and downspouts.

Glazing

Reduce the amount of glass on a building
Use large storefront glass instead of curtainwall glass

Mechanical (HVAC)

Package rooftop units with DX cooling and gas fired furnaces tend to be the cheapest type of HVAC system in most commercial buildings.
Use duct-board instead of metal ducting.
Have the mechanical system design-build by the mechanical subs, but have mechanical engineer provide design guidance and review and approve submittals
Open spec on electrical equipment/gear so that different manufactures can competitively price.
Reduce the amount of VAV zones. This will give less temperature controllability of different parts of the interior space, but it could save a lot of money. Fewer VAVs also means fewer electric reheats and fewer thermostats.

General

Shrink the floor to deck height to reduce the quantity of exterior finishes
Use surface laid storm water conveyance (e.g. swales, sheet flow across paving) instead of underground pipes.

Caution on Value Engineering

When you consider value engineering suggestions from the General Contractor (GC) just before finalizing a construction contract, be prepared for potential redesign costs. The design team will need to integrate these value engineering (VE) alternatives into the project plans. These redesign costs can negatively offset some of the savings you hope to gain from the VE options.

Failing to adjust the plans to reflect and accommodate VE changes can lead to complications down the road. From my experience, after implementing numerous VE suggestions on projects, there have been instances where we had to give back sixty cents on the dollar saved due to unforeseen challenges that arose from these VE modifications.

Be sure to put in your contract with your designers that they will likely have to do some value engineering substitution request review and evaluation as part of their base service offering. If the designers have to do a lot of redesign to accommodate the VE changes, then they are justifiably entitled to an add-service.

Next Page: Overseeing the Design Process