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Value Engineering

FY 2008 Value Engineering Accomplishment Report

Best Practices

The following summarizes and highlights best practices that were provided by the States with the FY 2008 Accomplishment Report.

Scheduling, Coordinating and Conducting VE Studies

Given the increasing demands placed on resources, it is important to exercise creativity and flexibility when accomplishing VE studies.  One technique proven successful by the Caltrans is splitting the VE workshop into two 3 day sessions (e.g., Tuesday through Thursday) with a gap of typically one week in between sessions.  This allows team members to exercise better time management, creates time to conduct a technical review of the study deliverables, and allows time to gather necessary information between sessions.  Team members involved with this scheduling format favor this approach.

The Missouri DOT has developed a method for conducting streamlined studies entitled   VE/Practical Design Reviews (VE/PDR's).  Those abbreviated studies (between 2 hours and 2 days) are typically conducted during final design to ensure value is optimized.

Because of the rural nature of the state of New Mexico, many of the transportation projects are technically uncomplicated in nature, and the New Mexico DOT has also developed a compressed Value Engineering Study known as Value Engineering Design Optimization Workshop (VEDOW). This VE effort is typically conducted in one day while following the VE Job Plan as defined by industry.

The Michigan DOT has established a sponsor check (typically done by the Project Manager) midway through the study to review the recommendation based on project constraints.

Composition of VE Study Teams

Since consultants are frequently used to conduct VE studies (approximately 60% of the studies conducted in 2008 utilized consultants), the Idaho Transportation Department noted that their studies have benefited by the experiences their consultants have gained while working in other states.

Several states continue to note that a more functionally diverse VE team leads to a more successful VE study. The New Jersey DOT invites local authorities to participate in many of their studies, thereby providing the municipalities the opportunity to voice their project needs and priorities alongside those of the department. The Delaware DOT explained that their most successful practice involves selecting the best available team members for a particular study, regardless of their State, Federal or private sector affiliation.

The "Notable Studies and Recommendations" web page provides further details on the composition of VE Study Teams for specific projects.

Timing of VE Studies for Design-Bid-Build Projects

Although 23 CFR 627 has no currently mandated schedule for when a VE study should be conducted during design, the trend with an increasing number of states is to complete the study prior to completion of preliminary design (less than 30% design completed).  The responses from several states directly connected the preferred timing of the VE studies to the environmental compliance process:

  • The Wisconsin DOT's goal is to have VE studies conducted before publishing the draft environmental document.
  • The Texas DOT encourages VE Studies to be conducted when the Draft Environmental Document is available with viable alternatives and the Project Team has a preferred alternative.
  • To maximize the implementation rates and cost savings of the study, Caltrans encourages the VE study be performed before the signing of the environmental document.
  • The Massachusetts DOT typically conducts the studies immediately after the 25% Design Stage, after the design public hearing is held.

The Ohio DOT described their approach for scheduling studies as follows: For projects with multiple feasible alternatives, the VE study might be conducted during the NEPA phase when 0-30% of design is completed. For projects with fewer feasible alternatives, the VE study might be conducted post-NEPA when 30-70% of design is completed.

Application of VE in Design-Build Projects

As the use of design-build continues to grow nationwide, so does the information available about the application of VE in these projects. In their accomplishment report, the Georgia DOT explained that VE studies conducted for design build projects occur at the 30% stage and are conducted in the same manner as other VE Studies. The VE study report and implementation letter are made available to all shortlisted firms. If the VE Study is done earlier in the process, then the approved recommendations are incorporated into the costing plans and/or specifications. Several other states including Delaware, Oregon, Pennsylvania, and Utah noted the 30% stage for the VE milestone with design-build projects and the similarities with VE studies for design-bid-build projects.

It should be noted that 30% design was not the only project milestone noted regarding the application of VE for design-build projects. The Nevada DOT indicated studies for design-build projects occurring at the planning stage of project development, while the Indiana DOT indicated 15% development as their milestone.

Other states commented on the specific focus of the studies: The North Carolina DOT indicated that the studies consist primarily of a review of the project scope of work included in the proposal, as well as a review of the Request for Proposal, and the South Carolina DOT's studies similarly consist of reviewing the project criteria and design elements prior to the issuance of the RFP.

Application of VE in Major Projects

The benefits and goals achievable by conducting a VE study will vary based on the timing of the study; likewise, if the VE technique is employed multiple times during the development of a project each study would occur in a different context. In the example of Major Projects costing more than $500 million, a handful of states described the typical milestones for conducting the multiple studies, and what each study would focus upon.

For instance, the Pennsylvania DOT would conduct three VE studies at the 30%, 60% and 90% stages. The Nevada DOT noted that the first VE analysis would generally be done early in the development phase to help minimize project impacts, develop an EIS or ROD, decide the best type of facility to build, and pinpoint its location. The second study would generally be performed during the intermediate design phase to address design issues (geometrics, drainage, construction staging, traffic control, signalization, roadbed design, structure details, etc.) and fine-tune the project before setting final right-of-way.

Other Applications for VE

The VE technique need not be applied exclusively to the design of a transportation project. The 2008 Accomplishment Report provides examples from a several states that demonstrated the successful application of VE to a variety of to programs, processes and standards. Each of these applications also can have a broader positive influence on the successful delivery of the Federal Aid Program.

The Montana DOT utilized the classic value engineering process to develop recommendations for their Interstate Rehabilitation process for areas of the system where the existing surface has been overlain multiple times and is 12 inches or greater in depth. Other issues addressed with this VE Study included disposal of the millings from Interstate projects and approaches to prevent raising the pavement grade and therefore eliminate the need for shoulder grading.

The Wisconsin DOT performed a Freeway Maintainability Review using an accelerated VE format. The purpose of the study was to identify existing and future maintenance issues and suggest potential solutions, including design suggestions to address maintenance concerns. Cost savings were not calculated as a part of this study since several required VE studies were conducted prior to this review.

In 2008 the Georgia DOT commenced one policy review VE Study while completing another. The finalized review compared three of the Department's bridge width policies with data collected from 15 other states and the AASHTO policies. The Georgia DOT anticipates that their policy changes will result in future cost savings without sacrificing any design integrity.

The New York State DOT conducted several VE Studies dedicated primarily to Work Zone Safety. These studies varied considerably from more traditional VE studies in that savings were not measured in dollars, but rather safety consideration/enhancements. Team membership included representation from NYS DOT, the construction industry, State Police, and the FHWA.

Training and Education

As reported in FY 2008, a total of 531 professionals received training in Value Engineering - 405 State DOT representatives; 11 FHWA representatives; and 115 professionals from other organizations. The most commonly described approach to conducting training was either through the National Highway Institute's VE workshop, or through another Module 1 workshop as certified by SAVE International. Several states indicated that these workshops are regularly scheduled (annually or biennially) to maintain a substantial list of trained VE participants.

Other states mentioned different approaches for continuing the education of staff in the VE techniques. The Washington DOT holds a "Design Academy" annually which includes VE training according to the SAVE International Module 1 format, with prospective study Team Leaders receiving more specialized training. Meanwhile, the Florida DOT is currently developing a web-based introductory training for VE while the Missouri DOT has developed a 2-hour training course targeted both to agency leadership and potential study team members. Additionally, the Utah DOT is developing training that will enable technical subject experts to be more successful members of the VE team.

Value Engineering Change Proposals

In concert with sharing nationwide best practices and success in implementing VE during design, the States were asked this year to also share information regarding their successful practices that encourage effective implementation of Value Engineering Change Proposals (VECP) after award of the construction contracts.

The Montana DOT uses a two-step VECP review process. The preliminary review screens the value engineering change proposals to determine the need for a detailed investigation. Preliminary review costs are not captured while the detailed review costs are. The detailed review costs are then deducted from the potential savings before the 50/50 split is determined.

Several states are seeking ways to increase industry awareness of the VECP process. The Iowa DOT's construction plans include a standard note on the cover sheet that directs contractors to the Iowa DOT general specification covering Value Engineering.

VECP's are a standing agenda topic on the Florida DOT's Pre-construction meeting and Quarterly Contractor Meeting. Contractors are encouraged to float their idea by the resident engineer prior to spending a lot on development costs. Similarly, the Nebraska DOT meets with their industry partners on a quarterly basis to discuss topics that are of mutual interest. Commonly, new strategies are discussed, and requests are made to incorporated good ideas into current projects. The VECP process is generally recommended as the appropriate procedure to accomplish this. The Wisconsin DOT also presents information regarding VECP at various industry forums.

States that support and encourage VECPs typically share the project savings with the construction contractor on a 50/50 basis. The Missouri DOT has developed a 2 tiered approach that includes the regular VECP with the traditional 50/50 split, plus a new VE/Practical Design Underrun (VE/PDU) that utilizes a 75% MoDOT/ 25% Contractor split. The VECP is considered a functional enhancement, while the VE/PDU's typically consist of an existing feature that could remain a part of the final project, such as existing pavement or an existing pipe.

Understanding of the VECP review and approval process is useful to not only foster the innovation from the construction industry, but to ensure effective implementation by the DOTs. Several years ago, feedback from the contracting community indicated that the New York State DOT's specifications regarding VECP were vague. In an effort to clarify the approval process, the department rewrote and substantially expanded the specifications. Now, after a few years of using the new specifications, the department believes that the new specifications may in fact have discouraged the submission of VECPs. Recent feedback suggests that the expanded specifications give the illusion that the VECP process is more daunting than before and, therefore, contractors have been reluctant to submit proposals. As a result, the NYS DOT is considering streamlining the specifications and providing educational seminars at technical conferences which contractor attend, a technique described earlier by other DOTs.

More Information

Contact

Ken Leuderalbert
Office of Program Administration
317-226-5351
E-mail Ken

 
 
Updated: 04/07/2011
 

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United States Department of Transportation - Federal Highway Administration