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Section 6: Value Engineering

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Overview

A Value Engineering (VE) study is a systematic process to evaluate a project concept and design by a multidiscipline team of individuals not directly involved in the project. The outcome of the study is to provide recommendations, which could potentially reduce the time to complete the project, improve the value and quality of the project, and provide a project which functions safely and efficiently at lowest cost. For maximum benefit, the VE analysis should be conducted as early as possible during the planning or preliminary design phase.

This section discusses the following, listed in approximate chronological order.

20600. Conduct Value Engineering (VE) study

20610. Revise design based on Value Engineering Study findings

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20600: Conduct Value Engineering (VE) study

Description. A Value Engineering (VE) study has the potential to optimize value and quality of a project.

A VE study by a multidisciplinary team evaluates the constructability, safety, rights of way, economic, environmental, and operational benefits of alternative designs.

VE studies must include and document the following seven phases:

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  1. Information Phase: Gather project information, commitments, and restraints (may be done prior to the actual study).
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  2. Function Analysis Phase: Analyze the project to understand required functions.
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  3. Creative Phase: Generate ideas to accomplish required functions which improve the project's performance, enhance its quality, and lower project costs.
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  4. Evaluation Phase: Evaluate and select feasible ideas for development.
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  5. Development Phase: Develop the selected alternatives into fully supported recommendations.
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  6. Presentation Phase: Present the VE recommendation to the project stakeholders.
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  7. Resolution Phase: Evaluate, resolve, document and implement all approved recommendations.

Upon completion of the VE study:

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  • Final Report is prepared by the facilitator and sent to TxDOT.
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  • Recommendation approval/rejection process: Executive Decision Summary, Form 2502, should be completed by the district and sent to Design Division Value Engineering State Coordinator along with the final report for coordination with FHWA.

Pertinent Project Types.

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  • A VE study is required for all projects on the National Highway System (NHS) that utilize Federal-Aid Highway Program (FAHP) funding with an estimated total project cost of $50 million or more. Total cost threshold considers all project related costs, not just construction cost.
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  • A VE study is required for all bridge projects on the NHS utilizing FAHP funding with an estimated total project cost of $40 million or more.
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  • Any major project located on or off of the NHS that utilizes FAHP funding in any contract or phase comprising the major project.
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  • FHWA encourages conducting an additional VE analysis if a major project is split into individual contracts and their costs meet or exceed the threshold values.
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  • Any project FHWA considers appropriate and uses FAHP funding.
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  • A VE Study is not required on design/build projects. If the Project Manager chooses to conduct a study, this should be performed prior to the release of the Request for Proposal (RFP).
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  • No exceptions to federal VE requirement will be granted by FHWA.

Responsible Parties. Project manager

Subtasks.

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  • Contact the Design Division VE State Coordinator for current VE requirements and processes.
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  • Conduct pre-study conference call with VE facilitator and Design Division.
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  • Identify team members and the team leader.
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  • Extend invitation to FHWA to participate in VE study.
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  • Schedule study and collect resources.
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  • Conduct the VE study, coordinate report preparation, and make recommendations to the district.
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  • District Engineer or District Executive Decision Team determines which recommendations to implement.

Helpful Suggestions.

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  • Consider a VE study when total cost is approximately $10 million less than required threshold to account for project scope creep in the estimate. Total cost threshold considers all project related costs, not just construction cost.
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  • A VE study should be performed on high cost and complex projects (regardless of threshold cost).
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  • If the team leader is a TxDOT employee, provide sufficient uninterrupted time for the leader to prepare for the VE study and to coordinate production of the final report.
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  • Consider inviting representatives from local public agencies, utilities, commercial interests, and special event facilities to participate in VE studies on projects in highly urbanized areas that will impact these stakeholders.
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  • Consider any environmental commitments that will be required to obtain environmental clearance of the project.

Critical Sequencing.

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  • Perform the study after a schematic is available so the study can focus on practical design alternatives and so enough resource information has been generated during preliminary design.
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  • Reevaluate project scope and cost as it nears construction letting to determine if a VE study would be required or beneficial.

Authority.

Resource Material.

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20610: Revise design based on Value Engineering Study findings

Description. Depending on results of the Value Engineering Study, the project's design may need to be modified. Corresponding schematic revisions may be needed as well. See Task 20600: Conduct Value Engineering (VE) study.

Pertinent Project Types. Projects for which VE studies lead to design changes

Responsible Party. Project manager

Subtasks. Make necessary design changes to implement VE recommendations selected by the District Engineer or the Executive Decision Committee for implementation.

Document design changes resulting from VE recommendations on Executive Summary Form.

Helpful Suggestions.

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  • Sometimes recommendations seem viable at first, but result in offsetting disadvantages when studied in detail and should be re-examined before implementation.
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