Value Engineering Is Not Just Cost Cutting
Value engineering (VE) is a systematic analysis of a project's functions and costs aimed at achieving required functions at the lowest total cost consistent with the owner's requirements. That definition distinguishes true VE from the misuse of the term to describe simple budget cuts. Eliminating a feature to save money is cost reduction. VE asks whether the same function can be achieved differently - or whether the function is necessary at all - then substitutes a lower-cost approach without sacrificing performance. The ARE tests both the VE process and the ethical nuances of when VE is appropriate.
How the Value Engineering Process Works
Formal VE studies follow a structured methodology developed by SAVE International (Society of American Value Engineers). While architects rarely conduct full formal VE studies, the PjM exam expects knowledge of the VE framework:
- Information Phase: Gather complete information about the project - functions, costs, and constraints.
- Function Analysis Phase: Define the function of each element (using verb-noun pairs like "support weight," "transmit light") and identify which functions are basic (essential) versus secondary.
- Creative Phase: Generate alternative ways to achieve each function without constraints - brainstorm widely.
- Evaluation Phase: Screen alternatives against technical feasibility, cost impact, schedule impact, and quality.
- Development Phase: Develop promising alternatives with detailed cost analysis and implementation recommendations.
- Presentation Phase: Present VE proposals to the owner and design team for review and acceptance.
When VE Is Performed
VE is most effective and least disruptive when performed at Design Development, before construction documents are fully developed. VE conducted on completed CDs is expensive - it requires redesign, specification changes, and potentially re-permitting. Some projects conduct a pre-bid VE review to identify potential savings before awarding the construction contract, though this is more disruptive. VE by contractors during construction (value engineering proposals or VECPs) can be advantageous and often includes a shared savings incentive.
The Difference Between VE and Design Compromise
When budget pressure triggers VE, there is a risk that the owner will view it as an opportunity to simply reduce quality. The architect's professional role is to protect design intent while finding cost-effective alternatives. Substituting a cheaper material that meets the same performance standard is good VE. Substituting a cheaper material that will require more maintenance or fails to meet durability requirements is a design compromise that the architect should document as such - with the owner making an informed decision.
VE Items Commonly Considered
- Structural system: steel moment frame vs. concrete shear wall vs. CMU
- Exterior cladding: precast concrete vs. metal panels vs. brick
- Roofing: membrane type and insulation assembly
- MEP system: chilled beam vs. VAV vs. fan coil unit
- Finishes: polished concrete vs. terrazzo vs. vinyl composite tile
- Window-to-wall ratio and glazing performance specifications
Key Exam Points
- VE = achieving required function at lowest cost - not simply cutting scope.
- Most effective at Design Development; late VE is expensive.
- Architect must distinguish VE from quality reduction and document the distinction for the owner.
- Contractor VECPs during construction may include shared savings provisions.
Study PjM on AREprep
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