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314 Techniques of Value Analysis and Engineering

A. J. Dell'isola2 defines total costs as "construction, operation, mainte-

nance, and replacement."

18-2 W h y So Much Unfunctioning

Cost in the Construction Industry?
The industry is bound by obsolete codes and by differing codes in differ-
ing jurisdictions. Examples of codes that have remained unchanged
through twenty to thirty years despite enormously changed conditions
are far too common.
Obsolete design details are repeated from job to job.
Materials that bring no user function (either use or aesthetic) are
often used.
New functional materials are not used.
Practices from the past are followed.
Habits from the past enter the design, contracting, and construction.
Most construction jobs involve three businesses: architects and engi-
neers, contractors, and owners.

The Architects and Engineers

The objective of the architect and engineer is to produce a good com-

petitive design from available materials and skills without uncertainties
and at minimum design cost. Most of the time, using newer materials
and/or approaches means time and expense searching and testing. In
addition, there is the time, expense, and uncertainty involved in attempt-
ing to communicate with and convince the owner. Lastly, the contractor
may have problems in finding the equipment and skills needed to utilize
the new approach in the construction phase.
Changing from past practice means uncertainties in prices. Also, be-
cause the fee is usually a percentage of the project costs, the architect,
for all of his extra work and expense, ends up with a lower fee. More
work, more uncertainty, and a lower fee are the outlook for the architect.
Why should he search for, test, and promote the new, spend much effort
in getting approvals of the contractor and owner, or use valuable ener-
gies in long drawn-out processes with governing bodies to get codes
changed?
Present methods of material selection involve the architect-engineer,
2 Construction consultant, McKee-Berger-Mansueto Inc., Washington, D.C. Also,
pioneer in the use of the value engineering system in the architectural, contractor, and
construction phases of the construction industry and the source of much material and all
examples in this chapter.
 Using the System to Reduce Construction Costs 315

who selects materials that conform to the design criteria of the owner.
The architect-engineer is responsible for determining which materials are
most suitable from the point of view of economy, function, and main-
tenance. Generally the selection of the bulk of the material is done by the
architect or engineer working on a particular aspect of a design. For
example, the electrical engineer selects such items as conductors, con-
duits, and panel boxes. The architect selects the material for such items
as windows, doors, hardware, and exterior finish.
In certain major areas, economic studies are conducted, for example, in
fuel selection and structural system. However, in most instances, any
selection of material or any studies are made by an individual or group
within the same discipline. Normally no formal overall plan is followed,
no interdiscipline benefits are developed, and no full-time employee is
available to coordinate activities or follow through the development of
new ideas.

The Contractors

To the contractor, uncertainty is "poison in the soup." He relies on his

experience in quoting prices. H e knows the ease or difficulty in getting
various skills, equipment, and coordination and mutual assistance be-
tween groups in overlap areas. He also knows the probabilities of making
mistakes or incurring delays due to error or misunderstanding. He wants
to do his work in the manner that he has always done it, with the skills
that he knows he can get, with each man doing a task that he knows
"forward and backward," and with the interfaces between the various
tasks predicted and proved by the involved work groups.
Different materials mean different fabricating methods, unpredicted
problems, and perhaps costly delays and repairs. The contractor naturally
is reluctant to bid in areas of change without adding contingency costs,
which may nullify the benefits of the change on that job. Understandably,
the contractor, in general, is not the promoter of change.

The O w n e r s

The owner relies upon the architects and engineers to design for him
the building that most economically will meet his needs and wants for
use and aesthetic functions. He can and often does, in general terms, en-
comagc the use of new functional products and processes, but he must
leave the actions and responsibilities in the hands of the architects and
engineers.
316 Techniques of Value Analysis and Engineering

18-3 How the Value Engineering

System Is Being Used
EXAMPLE (FIGURE 18-1): Place the source of the hot water and
compressed air where it is needed. Reduce initial costs $46,000 and
life cycle (twenty-year) costs an additional $57,000. Eliminate a
low-water-table problem.
EXAMPLE (FIGURE 18-2): Simplify the design of door canopies.
Reduce costs from $400 to $150 each. Make unnecessary the involve-
ment of seven trades.
EXAMPLE (FIGURE18-3): Change parking-area pavement from
12-inch compacted subbase and crushed-rock base to 8 inches of lime
stabilized subgrade and 4 inches of subbase and crushed-rock base.
Secure change of government specifications. Reduce construction
cost $8,000.

Use the Functional Approach

The following six questions may be used as a guide to the work, which
sets the problems and solves them.

PLANNED WALK- THROUGH TUNNEL

d-
--

SUPPLIED BY STEAM
PRESENT
COMPRESSED AIR SUPPLIED
BY UNIT A T BUILDING

CHANGED, SIMPLIFIED TUNNEL

Fig. 18-1 Planned walk-through tunnel and simplified tunnel;

$46,000, lower initial cost; $103,000, lower life-cycle cost.
 Using the System to Reduce Construction Costs 317

5-PLY BUILT-UP ROOFING 1

': PLYWOOD SHEATHING I
I
NT PLASTER ON METAL L A T H

I
I
I

P L A N N E D DOOR CANOPIES

ALUMINUM SHEET

ALUMIN
FASCIA

CHANGED DOOR CANOPIES

Fig. 18-2 Planned and changed door canopies. Costs reduced
from $400 to $150 each.
1. What is the item, project, or service?
2. What does it do (define the function)?
3. What is the (dollar) value of the function?
4. What does the item, project, or service cost?
5. What else will perform the function?
6. What will that cost?

COMPACTED SUBGRADE
MIX-SUBGRADE

BEFORE. $ 2 . 2 0 SO YD A F T E R : t 1.80 SO YD
Fig. 18-3 Parking-area pavement.

Name and Evaluate Functions-

Compare with Present or Planned
Costs and Proceed with the J o b Plan

Figure 18-4 shows the naming of the functions, the assigning of planned
costs, and the meaningful comparisons that are at once made visible.
 Techniques of Value Analysis and Engineering

COMPONENTS

Fig. 18-4 Functional analysis of power distribution system.

Transformers performing a secondary function-change voltage,
cost twice as much as conductors performing a basic function
-transmit power. Conduit cost twice as much for a secondary
function-provide protection. A different type of distribution sys-
tem was recommended, which made it possible to eliminate some
transformers, and it was recommended to use lower-cost plastic
conduit encased in concrete.

The following examples are illustrative of conductors that perform the

basic function and their protection, a secondary function.
EXAMPLE (FIGURE 18-5)3 Embedded conductors
In the planned design the armoured shield, which performs only a
secondary function (protects conductors), costs more than three
times as much as the conductor itself. The problem-solving plan with
its disciplined thinking brought forth two good alternatives, as shown
in Figure 18-5.
 Using the System to Reduce Construction Costs 319

Considering the function required and the function-producing capa-

bility of some less traditional materials brought forth the potential of
lower costs for equivalent performance, in the examples of Figure 18-6.
Lower costs were obtained using newer functional materials.

18-4 How to Locate Areas Having

Potential for Cost Zmprovement
The following guidelines are often helpful:
Bulk of costs area or item.
Repetitive item.
( A 1 BEFORE

FOUR-CONDUCTOR COPPER ARMORED CABLE

8 . 8 0 PER FT

( B ) AFTER
ALTERNATIVE 1

4 ONE-CONDUCTOR ALUMINUM WIRES,

DIRECT- B U R I A L TYPE
$ 2.23 PER FT
COSTS LOWERED $ 67,987 ( 7 0 % )
IC1

Fig. 18-5 Buried conductors

and their protection.

FOUR-CONDUCTOR ALUMINUM ARMORED CABLE

$ 2.90 PER FT
COSTS L O W E W D $ 56,173 ( 5 8 % )
320 Techniques of Value Analysis and Engineering

I" THICK RIGID INSULATION ";1 THICK FLEXIBLE INSULATION

WITH 2 ; MIL THICK WITH FACING OF LAMINATED
ALUMINUM FOIL ALUMINUM FOIL AND KRAFT PAPER
I AND GLASS YARN FILLER
\

'SEALED
JOINTS
BEFORE AFTER

VE C H A N G E SAVINGS

SUBSTITUTE 1;" THICK FLEXIBLE DUCT

INSULATION WlTH FACING OF LAMINATED
ALUMINUM FOlL AND K R A F T PAPER AND
GLASS YARN FOR SPECIFIED 1" THICK
RIGID INSULATION WlTH 2 ; " MIL THICK
ALUMINUM FOlL FOR DUCTS I N CRAWL SPACE

( A I CRAWL SPACE DUCTS

SUBSTITUTE POLYVlNYl
CONDUIT FOR STEEL
CONDUIT,

VE CHANGE SAVINGS

SUBSTITUTE 4" RIGID POLYVINYL CHLORIDE 6 5,000

CONDUIT FOR STEEL CONDUIT

CHANGE OF GOVERNMENT CRITERIA WAS REQUIRED

( B I CONDUIT

Fig. 18-6 Lower costs using newer functional materials.

Item is an expensive component.

Materials are critical.
h4aintenance costs are high.
Operation costs are high.
.Total cost appears out of line by experience.
Other similar items are lower cost.
Previous value engineering study areas.
Outdated criteria or standards.
 Using t h e System t o Reduce Construction Costs 321

These guidelines brought forth the following examples.

EXAMPLE (FIGURE 18-7): Aircraft parking apron
A value engineering functional study resulted in the recommenda-
tion to use vibroflotation instead of removing underlying material.
As a result, unsuitable subgrade was properly compacted and did
not have to be removed. Costs on the job were lowered $54,000.
EXAMPLE (FIGURE 18-8): Foundation plun
Understanding the function, knowing the technology, and creatively
applying the job plan saved another $40,000.
EXAMPLE (FIGURE 18-9): Area fur value work determined by cost/
value ratio
In this example, the use of a wooden deck was temporarily assumed,
which resulted in an estimated value of $2,500 for each basic func-
tion. After the costs for the original design were listed from the
estimate, the cost/value ratios were determined. They were $11,150:
$2,500 or 4 : s for the timber section and $6,160:$2,500 or 2 : s for
the concrete section. This identified the timber section as the area
most in need of work.

18-5 When in the Life Cycle Is Value

Engineering Most Productive?
The phases in the life cycle of the typical construction item may be listed
as follows:
Conceptual
Developmental
Preliminary design
Final design
Construction
Operation and maintenance
Replacement

BEFORE AFTER
COST PER SQ YD = $10.80 COST PER SO YD = $7.42
322 Techniques of Value Analysis and Engineering

4 6 0 CAST-IN -PLACE PILES $ 108,780

3 3 0 CU YD PILE CAP CONCRETE 10,347
TOTAL COST $ 119,127

(A) BEFORE

189 PRESSURE-INJECTED PILES $ 66,380

2 4 9 CU YD PILE CAP CONCRETE 12,450
312 CU FT GRADE BEAMS 31 2
TOTAL COST $ 79,142

(B) AFTER

Fig. 18-8 The foundation plan.

 Using the System to Reduce Construction Costs 323

( A ) BEFORE: t 17,550 ( 0 ) AFTER: t 11,790

METAL SHEAR
REINFORCED-CONCRETE DECK\ /CONNECTOR REINFORCED-CONCRETE DECK,

2 0 GAGE PROTECTED
STEEL DECK
PlLE 12" X 12" TIMBER
P l L E CAP
CONCRETE DECK
2 " X 6" TREATED
JOIST BEYOND
2'1X4 " N0.4 GAG, WIRE
TREATED @ 6" 0.C. WELDE TlVE REINFORCING
JOIST TO STEEL DECK
12" x 12"
GALVANIZED BOLTS ED FELT DISK

(C) RESULTS TABULATED DRIFT BOLTS

QUANTITY UNIT COMPONENT

VERB
FUNCTION
I NOUN
KIND EXPLANATION '"o'lE ORIGINA
WORTH
3,555 SQ Fr 17m8EU SgCT/DN ?U#NSM!r I LOAD P f&W/L& LOAD f 2,500 # 475L

Fig. 18-9 Pier deck. Cost/value ratio used to determine value work needed.
Earlier work was done in the construction phase because of definite re-
sults measurement, as was true in the earliest phases of value analysis
use. Here were the costs as planned and the costs as changed for un-
contestable direct comparison.

Started in Construction-Now Moving

Back
Figure 18-10 shows the higher potential earlier in the cycle and the
higher cost to change later. It shows that most early work started in
the construction phase and is now working back into the earlier phases.
324 Techniques of Value Analysis and Engineering

CONCEPT DEVEL DESIGN

+
TIME -
CONSTR.

LIFE-CYCLE COST
USE

Conceptual
costs
1
I
~evelbpment
costs
j
I
Design
costs
j
I
Construction
costs
I
I
Operation and
maintenance costs
[~eplacement
I costs

Fig. 18-10 Relation of costs and benefits to phases in cycle of construction work.

18-6 Ending Nonproductive

Nonproduction Costs
Each cost is changed into the terms of the function it provides.
Each function is classified as to basic or second degree.
The contribution of each function to the real objectives is examined.
Functions are evaluated by comparison.
Through the disciplined thinking of the job plan and the practical
knowledge of the architects and engineers, better, lower cost methods are
established. Figure 18-11 shows how $80,000 of nonproductive cost was
stopped on one construction project.

18-7 How Basic Obstacles Are

Being Overcome
Certain truths seem self-evident:
1. To effectively and continuously move out large amounts of uncon-
tributing costs, as a matter of routine operation, extensive value analysis
and engineering work will have to be done in the offices of the architects
and engineers in their work on the final design phase, the preliminary
design phase, the development phase, and sometimes the conceptual
phase.
2. Architects and engineers are in the position under traditional in-
 Using t h e System t o Reduce Construction Costs 325

( A ) BEFORE

(13)A F T E R

Fig. 18-11 Ending nonproductive costs ( handling and reproduction of drawings ) .

( A ) Before: From the functional analysis sheet it was determined that the cost of the
required number of full-size ( F-size) prints represented the greatest area of unnecessary
costs and that too much storage space for drawings was being used at the home office.
( B ) After: $80,000 reduction of costs. More microfilm and half-size (C-size) drawings
were used. The number of full-size prints was greatly reduced. Making, shipping, and
storing the half-size prints all contributed substantially to reduction of costs. Additional
equipment required was factored into costs before determining the reduction amount.
326 Techniques of Value Analysis and Engineering

dustry service and fee patterns of being required to expand their services
to save large unnecessary costs to owners. Some of this reduction of costs
must be paid to cover the cost of the new service and the proper profit
on the service. As illustrated in this chapter, the lowered costs are a
"something for something" matter. Extra people were given extra training
and worked extra time to "dig out" the unobvious, which normally saves
the owner from five to twenty-five times this extra cost. Business ar-
rangements are being developed that properly pay for this essential
added work.
3. Because this extra contribution has not and could not be made in
the offices of the architect and engineer in the past, large amounts of un-
necessary costs are mandated by the final drawings and specifications.
Some of these costs can be retrieved in the construction stage if the extra
talent, how-how, and cost are provided. Again, the return is often from
five to twenty-five or more times the cost. Therefore, means must be and
are being provided to deduct from savings the proper expense and profit
for this extra contribution.
4. Taking steps to change outmoded building codes and standards
takes effort, time, and money, but the use of today's materials and prac-
tices yields so much benefit to builders, owners, and society that we will
see better programs reaching essential objectives sooner.

18-8 Where Eaective Work

M,ust Be Done
Work must be done in the decision-making area, which is responsible for
the choice of shapes, materials, methods, and processes used in construc-
tion.
Figure 18-12 shows the breakdown of costs under the life-cycle cost
concept and the distribution of total costs for a typical facility. Note that
only approximately 5 per cent goes for engineering yet the decisions
made in engineering will either cause or prevent large expenditures made
later in the construction work (expenditures much greater than the total
5 per cent fee).

18-9 Some Factors That Require

Search, Inputs, and Investigation
In regard to factors needing further study, Professional Engineer Al-
phonse J. Dell'isola has stated:
Using VE methods, this optimization of costs is attempted by the sys-
tematic development of alternate proposals covering isolated high cost
 Using the System t o Reduce Construction Costs 327

- f COSTS-LIFE CYCLE -A

(A1 TOTAL COST CONCEPT

TOTAL COSTS 1

OPERATES
8.
MAINTAINS

( 8 1 TOTAL COST DISTRIBUTION

Fig. 18-12 Total cost concept and total cost distribution of a typical facility.
( A ) Total cost concept: Typical cost breakdown for a facilities construction.
( B ) Typical cost distribution for a facilities construction.

areas. During these efforts a number of factors are involved. A listing of

some of the principal factors indicates the complexity of the problem and
the amount of effort required to arrive at meaningful decision. Each factor
requires investigation and evaluation, and input from various sources.
1. Availability of required design data.
2. Initial and installation costs.
3. Maintenance requirements.
4. Source of required material and availability.
5. Prime and/or sub-contractors' reaction and know-how.
6. Conformance to a standard.
7. If standards are not applicable, existence of sufficient data to develop
standards.
8. Impact on design. For example, marginal subgrade conditions requir-
ing special treatment.
9. Impact on other necessary requirements, e.g., safety, land use, etc.
. . . Teams seek to arrive at decisions by using creative problem solving
techniques on a formal, organized basis. A group of multi-disciplined
trained, personnel are gathered together, and an organized effort made to
bring out their latent creative ability. Various high cost areas of a design
are challenged by the group and many ideas are generated for alternate
solutions. More and better ideas are generated by this approach than by
any single individual or by a group not trained in creative problem solving
techniques. In addition, one of the principal causes of unnecessary costs,
lack of communication amongst specialists, is overcome. The use of a multi-
disciplined team approach to decision making is the real core of the VE
approach.
Lastly, incentive contracting principles are being used to inspire better,
328 Techniques of Value Analysis and Engineering
more economical decisions by designers a n d to enlist the support of con-
tractors-and, t o reward them with extra profit for worthwhile proposals."
18.10 Some Typical Changes
Component Original concept
Structural system Concrete beam and girder
foundation and with 4 in. concrete floor
1st floor slab poured in place
Mechanical system Specified 5-multizone air
(heating, venti- handling units, with 47
lating, and air- mixing boxes
conditioning) Hot and cold over and un-
der ducts same size
Use 800 fm for design air
velocity in ducts
Rounded off air exhaust
requirements to high
side of each room
Roofing system Use of an elastomeric sys-
tem over metal deck
with insulation slope 1
in. to the foot (no guar-
antee available)
Total.. . . .
3Roads and Streets, January, 1970.
Estimated
Proposed change savings
1. Use composite steel deck
forms-thicken slab to
635 in.; eliminate every
other beam
2. Use reinforced CMU
foundation walls around
crawl space
3. Use 50 Zone Fan coil
units with F A and steam
coils
4. Redesign ducts in ac-
cordance with actual
loads approx. ratio 4 to 1
5. Changed design to use
1,200 fm max. velocity
of design criteria
6. Used exact calculation
to determine air-condi-
tioning load (7 tons less)
7. Use of conventional 26,300
built-up roofing with
nailers as required by
initial criteria
8. Request waiver on use 3,500
of nailers-new revised
criteria do not require
nailers for 1 in. slope.
(Use steep slope asphalt)
 Using the System to Reduce Construction Costs 329

18-11 Typical Summary Sheet-

Work Based upon Final Design
The initial cost estimate of the total project was $3,300,000.

Potential contract Additional

savings based life-cycle
on team cost
Description recommendations savings
Architectural, civil, and structural:
Foundations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Precast stone, fixed glass filler wall. . . . . . . . . . . . . . . .
Concrete strength and column sizes. . . . . . . . . . . . . . .
Floorsystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vibration isolation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mechanical:
Utility tunnel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Heating, ventilating, and air-conditioning systems. . .
Mechanical room relocation. . . . . . . . . . . . . . . . . . . . . .
Plumbing and domestic water supply. . . . . . . . . . . . . .
Vertical transportation (elevators) . . . . . . . . . . . . . . . .
Electrical:
Feeder cables.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Branch circuit wiring and elimination of separate
neutral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underfloor duct and related cost.. . . . . . . . . . . . . . . . .
Total. . . . . . . . . . .