01 24 00 Value Analysis

Log Out | Topics | Search Moderators | Register | Edit Profile

Author Message George A. Everding, AIA, CSI, CCS, CCCA Senior Member Username: geverding Post Number: 758 Registered: 11-2004 Posted on Wednesday, July 30, 2014 - 01:20 pm:    I'm putting together a Division 01 presentation for my chapter, and noticed that MF 2014 has a "01 24 00 Value Analysis" section that's new to me. I assume this is to set the rules of the game for VE efforts that typically happen during and after procurement. It sounds like a great idea to be proactive and have some control over what is often an onerous and CM-driven activity, instead of being reactive and having to scramble to keep up with changes and substitutions. Since I have been on the sidelines for a few years, I was wondering how many of my still active colleagues have been using this section, and any opinions about it that you might be willing to share. Thanks. Mark Gilligan SE, Senior Member Username: mark_gilligan Post Number: 676 Registered: 10-2007 Posted on Wednesday, July 30, 2014 - 04:06 pm:    If the Owner has adopted an IPD/Lean Construction approach such a section would not be needed or appropriate. The time for VE is early in the design process. I would not use such a section unless the Owner raised the issue. Based on history such VE changes not only often result in a loss of value but are not well coordinated. J. Peter Jordan Senior Member Username: jpjordan Post Number: 747 Registered: 05-2004 Posted on Thursday, July 31, 2014 - 07:37 am:    I think the purpose of the proposed section is to set some ground rules for this process. Because this is not addressed in the construction documents, contractors have usually driven the process. I urge my clients to view VE proposals as substitution requests and treat them as such in terms of contractor proposals and documentation. This is not always the case but is particularly appropriate when the proposal involves building products and systems. I would like to see a parallel document in Division 00 to address this as part of the procurement process. I sometimes see contractors submit VE proposals, bid qualifications, or voluntary alternate proposals with their pricing. All of these are methods to modify some aspect of the project requirements, and the architect usually winds up incurring additional costs to evaluate these proposals and incorporate them into the construction documents. While I would agree with Mr. Gilligan's view of this process, it does frequently happen and specifier's should probably attempt to establish more control over it. Margaret G. Chewning FCSI CCS Senior Member Username: presbspec Post Number: 257 Registered: 01-2003 Posted on Thursday, July 31, 2014 - 09:31 am:    One of the sections I include on my projects and encourage my clients to use is 01 25 00 - Substitution Requirements. As Peter noted above it sets the ground rules for any changes in the scope and materials used. I include a Substitution Request form at the end of the section that is required to be used. The form comes straight out of the CA Forms that CSI developed quite a while ago and provides with copies of the Practice Guides. ken hercenberg Senior Member Username: khercenberg Post Number: 804 Registered: 12-2006 Posted on Thursday, July 31, 2014 - 10:05 am:    When allowed by clients I include a requirement in Division 00 to include voluntary bid alternates, with a space on the Bid Form to include them, utilizing the Bidders substitution request form as an attachment. I include clear instructions that bids not based on the Bidding Documents will be excluded from the selection process. Most owners understand that this should force Bidders to bid 'drawings and specs' and identify those items that are not compliant, including difference in cost. Bidding instructions include requirements to identify cascade effects of proposed substitutions and voluntary alternates, including added design fees. We rarely get paid those design fees, but it's fun to pretend. Chris Grimm, CSI, CCS, SCIP, LEED AP BD+C, MAI Senior Member Username: chris_grimm_ccs_scip Post Number: 268 Registered: 02-2014 Posted on Thursday, July 31, 2014 - 10:37 am:    If you are writing a spec section for it, then it is too late for value engineering to have optimal results. If the construction team has not been selected yet (e.g. design-bid-build) the Owner could hire a value engineering professional (e.g. a SAVE Certified Value Specialist) during SD and DD. Or for delivery methods that include the Contractor or CM during design, they could begin VE as part of their preconstruction services, if trained and experienced as value engineering professionals. Ideally, you don't need any of this in the CD phase. DESIGN during Design Development phase! DOCUMENT during Construction Documents phase! After DD, it becomes a "disruptive" process according to our PRM -> practice guides, that decreases value to the Owner, though yes it may slash costs. If that is going to be the case, I am with the posts above, VE activities should proceed as substitution requests. However, I naively still hope for VE to happen the way it was intended. And every now and then, it does! Chris Grimm, CSI, CCS, SCIP, LEED AP BD+C, MAI Senior Member Username: chris_grimm_ccs_scip Post Number: 269 Registered: 02-2014 Posted on Saturday, August 02, 2014 - 06:58 am:    The voluntary alternates idea does sound good as a way of at least saying that they need to point out their VE plans no later than bid date. Maybe not as ideal as SD and DD value engineering, but still way better than after the contract is signed deviations are made where they perhaps planned on noncompliance all along, and keeping the savings. One drawback is that the other bidders do not get to competitively price voluntary alternates, which may be why as Ken says some clients do not allow it. When I worked in the southeast market there was much emphasis on bidding apples to apples and any substitutions were submitted no later than 10 days prior to bid, after that, no substitutions except "for cause". (product no longer made, etc.) This way all the bidders have the opportunity to price competitively when the addendum comes out if such suggestion was approved. Especially on public projects and some private. I've seen in the mid-Atlantic quite the opposite, it is surprisingly hard to even get any clarity on the matter for a lot of projects. An unusual scenario I ran across was on a private project where innovative solutions were encouraged by allowing bidders to submit confidential VE suggestions. J. Peter Jordan Senior Member Username: jpjordan Post Number: 749 Registered: 05-2004 Posted on Saturday, August 02, 2014 - 09:39 am:    A key issue here is how much the architect is responsible for cost control. Architects themselves dislike being held accountable for cost control. I believe Owners and contractors perceive that architects are unable to responsibly meet project budgets. Architects are sometimes able to "sell" a design despite disclosing the possibility that the design would cost more than the published project budget. The architect tries through the mechanism of specified alternates). For some Owners, alternates generated by a low bidder and submitted without documentation or design investigation may have more validity than those devised by. The Architect. spiper (Unregistered Guest) Unregistered guest Posted on Monday, August 04, 2014 - 09:28 am:    I agree with the multiple comments on the importance of doing VE early in the design process and not after bid however we need to collectively admit that often the desire (or need) to do VE is because the project has come in way over budget. We as architects need to do a better job of establishing project budgets that are realistic and obtainable. All to often an owner presents a desired scope of work and a targeted budget that are not realistic and we as architects plod along with our documents only to have the bids blow the budget completely. While I fully realize that budget analysis is not in the typical architects scope of work it is often in our best interest. Repeat business is crucial to most firms and it is hard to get repeat business if your last project blew the budget (regardless of whose fault that might be). J. Peter Jordan Senior Member Username: jpjordan Post Number: 751 Registered: 05-2004 Posted on Monday, August 04, 2014 - 11:02 am:    To complicate the process, additional funds may become available (in addition to any disclosed contingency amount) when the project comes in over the budget. This is uncommon in public work (although not unheard of), but most often happens in churches where donors step in to fund items which can be "memorialized." This can happen in private corporate work where funding is a bit more flexible. In most cases, whether or not the project proceeds, the architect is left with a certain amount of egg on his/her face and may incur additional costs which may not be recovered.