1. Value Engineering

2. Definition Value Engineering (VE) is defined as a systematic process of review and analysis of a project, during the concept and design phases, by a multidiscipline team of persons not involved in the project, that is conducted to provide recommendations for: 1.providing the needed functions safely, reliably, efficiently, and at the lowest overall cost; 2.improving the value and quality of the project; and 3.reducing the time to complete the project. http://www.fhwa.dot.gov/VE/

3. More Discussion Value engineering promotes the substitution of materials and methods with less expensive alternatives, without sacrificing functionality or performance. (Cost centric viewpoint) In addition to cost reduction, value can be added to a project by improving performance, safety, and reducing construction time without significantly increasing cost.

4. VE on Transportation Highway Projects This Final Rule modifies Federal regulation, Title 23 Code of Federal Regulation (CFR) part 627, to reflect the revisions made in Federal law (Section 1503(a)(3) of Moving Ahead for Progress in the 21st Century Act, MAP-21). The changes to the regulation are: Increases the project thresholds for required VE analyses to; Projects on the National Highway System (NHS) receiving Federal assistance with an estimated total cost of $50,000,000 or more; and Bridge projects on the NHS receiving Federal assistance with an estimated total cost of $40,000,000 or more; Removes the VE analysis requirement for projects delivered using the design/build method of construction; and Provides VE analysis guidance for projects delivered using the construction manager/general contractor (CM/GC) method of project delivery.

5. Value Engineering – Return on Investment

6. Aug. 22, 2007Americas CF&S Kick Off Meeting6 What a “Formal” VE study might entail This first phase requires an assembling a package to distribute information to invitees. Plus oral presentation at beginning of study.

7. Aug. 22, 2007Americas CF&S Kick Off Meeting7 The fun part Function Analysis Phase- The purpose of this phase is to clearly identify the function of the project and to formulate a concept from which new direction can be taken. Speculation Phase – The study team embarks on a brainstorming session. Quantity and free wheeling are the goal…Criticism is not allowed. The product is ideas. Analysis Phase – The analysis phase reduces the speculation list by evaluating each idea A reasonable timeframe would be a few days to complete this. Attendance by project members, engineers and scientists from other similar type projects and folks from industry. Strongly suggest getting an outsider to proctor the process

8. Aug. 22, 2007Americas CF&S Kick Off Meeting8 Fun’s over Development Phase -Those feasible ideas that survive the analysis phase are then developed into proposals. Alternate designs are made, depiction of “Before” and “After” is generated. Presentation Phase – A presentation is made to those who have interest. Real engineering, real work, is required in this phase, no more hand waiving. Impacts on stakeholders, impacts on costs, performance, science all need to be studied. Informally presentations can be made to management, formally would be submittal to change control

9. More on Cost

10. Life Cycle Cost Analysis Life-cycle cost analysis (LCCA) is a tool to determine the most cost-effective option among different competing alternatives to purchase, own, operate, maintain and, finally, dispose of an object or process, when each is equally appropriate to be implemented on technical grounds. For example, for a highway pavement, in addition to the initial construction cost, LCCA takes into account all the user costs, (e.g., reduced capacity at work zones), and agency costs related to future activities, including future periodic maintenance and rehabilitation. All the costs are usually discounted and total to a present day value known as net present value (NPV). This example can be generalized on any type of material, product, or system. http://en.wikipedia.org/wiki/Life- cycle_cost_analysis

11. VE Example - UTA Light Rail Embankments West Valley Line UTA –Light Rail – Salt Lake City, Utah

12. Light Rail Embankments UTA –Light Rail – Salt Lake City, Utah

13. Cost and Schedule Information – UTA Trax Project Salt Lake City, Ut Geofoam for Rapid Construction

14. Cost and Schedule Information – UTA Trax Project Salt Lake City, Ut Geofoam for Rapid Construction

15. Cost and Schedule Information – UTA Trax Project Salt Lake City, Ut Geofoam for Rapid Construction

16. Cost and Schedule Information – UTA Trax Project Salt Lake City, Ut Cost for Rapid Construction

17. Cost and Schedule Information – UTA Trax Project Salt Lake City, Ut Schedul for Rapid Construction

18. Discussion How might the principles of Value Engineering be applied to the feasibility / alternative study?