Difference between revisions of "Category:130 Value Engineering"

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==130.1 Discussion==
 
==130.1 Discussion==
  
Value Engineering (VE) is a systematic method of examining performance to improve the value of projects or processes.  Value is defined as the ratio of performance to cost and thus capable of being increased by either lowering the cost or improving the performance. MoDOT’s values and tangible results place increased importance on value-based, practical design. While VE, in the classic sense, tends to be somewhat more structured, VE and [[:Category:143 Practical Design|Practical Design]] are truly one and the same. The goal of VE is to build the right project at the right time, achieving delivery of project purpose and need with proper project scope.
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Value Engineering (VE) is a systematic method of examining performance to improve the value of projects or processes.  Value is defined as the ratio of performance to cost and thus capable of being increased by either lowering the cost or improving the performance. MoDOT’s values and tangible results place increased importance on value-based, practical design. While VE, in the classic sense, tends to be somewhat more structured, VE and [[:Category:143 Practical Design|Practical Design]] are intended to achieve the same goal. The goal of VE is to build the right project at the right time, achieving delivery of project purpose and need with proper project scope.
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|'''Practical Design'''
 
|'''Practical Design'''
 
|-
 
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|[http://library.modot.mo.gov/RDT/reports/Ri07003/ss07005.pdf Summary 2007]
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|[https://spexternal.modot.mo.gov/sites/cm/CORDT/ss07005.pdf Summary 2007]
 
|-
 
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|'''See also:''' [http://www.modot.gov/services/OR/byDate.htm Innovation Library]
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|'''See also:''' [https://www.modot.org/research-publications Research Publications]
 
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|[[media:130.1 VE Training Evaluation Form.doc|VE Training Evaluation Form]]
 
|[[media:130.1 VE Training Evaluation Form.doc|VE Training Evaluation Form]]
 
|-
 
|-
|[[media:C-104.doc|Construction Value Engineering Change Proposal (C-104)]]
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|[http://epg.modot.org/forms/CM/Value_Engineering_Proposal_C_104.pdf Construction Value Engineering Change Proposal (C-104)]
 
|-
 
|-
 
|[[104.13 Construction Inspection Guidance for Sec 104#104.13.1 Guidance for Sec 104.6|Evaluation Procedures for Construction Value Engineering Change Proposals]]
 
|[[104.13 Construction Inspection Guidance for Sec 104#104.13.1 Guidance for Sec 104.6|Evaluation Procedures for Construction Value Engineering Change Proposals]]
 
|-
 
|-
|[http://www.modot.mo.gov/ValueEngineering/VEContacts.htm MoDOT Value Engineering Contacts]
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|[http://spexternalsignin/sites/de/vep/_layouts/15/start.aspx#/SitePages/VE_Contact.aspx MoDOT Value Engineering Contacts]
 
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MoDOT uses VE to ensure that the public receives full value for every tax dollar invested in Missouri’s transportation system. VE techniques are used to improve productivity in nearly every aspect of MoDOT’s operation, including practices, processes, and procedures. In highway construction, VE encourages contractors to submit proposals for modifying the plans, specifications or other requirements of the contract to deliver improved projects of the best possible value.
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MoDOT uses VE to ensure that the public receives full value for every tax dollar invested in Missouri’s transportation system. VE techniques are used to improve productivity in nearly every aspect of MoDOT’s operation, including practices, processes, and procedures. In highway construction, VE encourages contractors to submit proposals for modifying the plans, specifications or other requirements of the contract to deliver improved projects of the best possible value.
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MoDOT’s goal is to have some form of Value Analysis on every project.
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 +
The FHWA's ''Value Engineering for Highways'' provides further details on the VE technique and its applicability to highway projects and functions.  AASHTO’s ''Guidelines for Value Engineering, 2nd Edition'' provides an excellent description of VE and the process steps.  
  
 
===130.1.1 Study Timing===
 
===130.1.1 Study Timing===
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VE studies are performed to add value to a project, not to simply reduce costs. VE studies should challenge project scoped that exceed the minimum necessary to deliver the project’s purpose and need. As stated in the law, VE studies are conducted "to provide suggestions for reducing the total cost of the project and providing a project of equal or better quality."
  
Although only a single study is generally required for a project’s design, VE studies can be performed any time prior to letting. It is even possible to perform multiple studies on an individual project. A study can be done at any stage during the design life of the project, however, priority is given to performing the study as early as feasible to maximize the opportunity to implement developed alternatives.  During the study, all aspects of the project may be considered including, but not limited to, location, geometrics, final vertical and horizontal alignments, drainage, construction staging, traffic control, and signalization, pavement and structure details.  In addition, studies in the later phase should consider what additional flexibility can be added and adjustments can be made to "fine tune" before the project letting.
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Although only a single study during preliminary design is generally required for a project, VE studies can be performed any time prior to letting  or after award, and even multiple times on an individual project. A study can be conducted at any stage during the design life of the project; however, priority is given to performing the study as early as feasible to maximize the opportunity to implement developed alternatives.  During the study, all aspects of the project may be considered including, but not limited to, location, geometrics, final vertical and horizontal alignments, drainage, construction staging, traffic impacts, TSMO strategies, traffic control, and signalization, pavement and structure details.  In addition, studies in the later phase should consider what additional flexibility can be added and what adjustments can be made to "fine tune" the project prior to letting.
  
VE studies are performed to add value to a project, not to simply reduce costs. VE studies should challenge project scoped that exceed the minimum necessary to deliver the project’s purpose and need. As stated in the law, VE studies are made "to provide suggestions for reducing the total cost of the project and providing a project of equal or better quality."
+
Additional VE analysis should be considered if, during a project’s design, the scope of work is changed significantly from that which was studied previously. In addition, consideration should be given to an additional study if the previous study will have been conducted more than 10 years prior to the projects letting.
  
 
===130.1.2 VE Organization===
 
===130.1.2 VE Organization===
Value Engineering is a critical program and requires participation to accomplish program goals. The Innovations Engineer (IE) manages the overall operation of MoDOT’s VE program. The IE is responsible for tracking the VE program and reporting its progress to both management and the FHWA. The IE leads studies and may assist with the initial selection of teams for district VE studies, and provides training guidelines and facilitation.  
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Value Engineering is a critical program and requires statewide participation in order to accomplish the program goals. The Policy and Innovations Engineer manages the overall operation of MoDOT’s VE program. The Policy and Innovations Engineer is responsible for tracking the VE program and reporting its progress to both management and the FHWA. The Policy and Innovations Engineer leads studies and may assist with the initial selection of teams for district VE studies, and provides training guidelines and facilitation.  
Each District Engineer selects a district value engineering coordinator (DVEC) to coordinate VE activities in that district. The [[media:130 District Value Engineering Contact.doc|DVEC is responsible]] for the district's VE program. The DVEC should be at a level consistent with the supervision and management responsibilities of the VE effort. The DVEC is responsible for scheduling the study and making appropriate accommodations for the participants. The DVEC serves as a team member on the VE study to become familiar with the process and leads VE studies as required to meet the demands of the program.  The DVEC is also responsible for tracking the District led value engineering studies and ensuring the study results are forwarded to the IE and entered into the SIMS database for each specific project.   
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Each District Engineer selects a district value engineering coordinator (DVEC) to coordinate VE activities in that district. The [[media:130 District Value Engineering Contact.doc|DVEC is responsible]] for the district's VE program. The DVEC should be at a level consistent with the supervision and management responsibilities of the VE effort. The DVEC is responsible for scheduling the study and making appropriate accommodations for the participants. The DVEC serves as a team member on the VE study to become familiar with the process and leads VE studies, as required, to meet the demands of the program.  The DVEC is also responsible for tracking the district led value engineering studies and ensuring the study results are forwarded to the Policy and Innovations Engineer and entered into the SIMS database for each studied project. 
 +
 
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In any case, the facilitator of the study compiles recommendations from the VE study and submits them in a VE report, for approval as follows:
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 +
:* The lowest level decision maker within the project hierarchy can approve and implement VE recommendations that do not change policy, standards, or scope of the original project. A copy of the VE study and the Project Manager’s, District Design Engineer's or District Engineer's approval is retained by the district and the Policy and Innovations Engineer. The Policy and Innovations Engineer notifies the team members of the study results and tracks results of each study.
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:* The approval of a District Engineer or division engineer is required to approve and implement VE recommendations that change the scope of the original project.  A copy of the VE study and the District Engineer or division engineers’ approval is retained by the district and the Policy and Innovations Engineer.  The Policy and Innovations Engineer tracks results of each study.
  
In any case, the facilitator of the study compiles recommendations from the VE study and submits them in VE report, for approval as follows:
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:* The approval of the Chief Engineer, or his representative, is required to approve and implement VE recommendations that affect more than one division/district or change policy or standards. The Policy and Innovations Engineer notifies affected divisions, districts and the team members and tracks results of each study.
  
:* The lowest level decision maker as approved by the district can approve and implement VE recommendations that do not change policy, standards or the scope of the original project. A copy of the VE study and the Project Manager’s, District Design Engineer or District Engineers approval is retained by the district and the IE. The IE notifies the team members of the study results and tracks results of each study.  
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Approved recommendations are incorporated in the project design. If an approved recommendation cannot be included, the Project Manager must document the justification for eliminating the recommendation. This documentation should be submitted with the PS&E and a copy is sent to the Policy and Innovations Engineer.
  
:* The approval of a District Engineer or division engineer is required to approve and implement VE recommendations that change the scope of the original project. A copy of the VE study and the District Engineer or division engineers’ approval is retained by the district and the IE.  The IE tracks results of each study.
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===130.1.3 Consultant Led VE Studies===
  
:* The approval of the Chief Engineer, or his representative, is required to approve and implement VE recommendations that affect more than one division/district or that change policy or standards. The IE notifies affected divisions, districts and the team members and tracks results of each study.  
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When consideration is given to using a consultant for conducting a VE study, the Policy and Innovations Engineer should be contacted. If the State Design Engineer approves the use of consultant services for a VE study, the Policy and Innovations Engineer will work with the district to ensure that the selected consultant is qualified and has no conflict of interest for the proposed work.
  
===130.1.3 VE Workplan/Project Selection===
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==130.2 Design Phase Value Engineering==
  
Each year, a value engineering work plan for the federally required Value Engineering Studies is completed after approval of the MoDOT highway right of way and construction program. The federal requirements are:
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Design phase VE studies can be conducted during any phase of the project design process but prior to PS&E submittal. These studies can also be traditional or non-traditional, depending on the project.  District should work with the Policy and Innovations Engineer to determine their VE needs.
* a project with an estimated total cost of $25 million or more
 
* a bridge project with an estimated total cost of $20 million or more
 
* any other project designated by the Secretary of Transportation
 
  
Projects which meet the minimum criteria for requirement are identified and submitted to FHWA for their concurrence, identifying those projects for which value analysis has been previously conducted and the date of that study. The DVECs will assist the IE in identifying the appropriate projects.  
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===130.2.1 Design Phase Project Selection and VE Workplan===
  
A district value engineering workplan will be created by each DVEC to identify the district’s projects which will be the priority on which to conduct a Value Engineering effort.  The DVEC may use the [[media:130 VE Project Selection Criteria.doc|VE project selection criteria]] to aid in determine which projects have the greatest potential for study. The DVEC sends the district’s annual study schedule to the IE for retention and to supplement the MoDOT VE work plan.  
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Each year, a value engineering work plan for the federally required Value Engineering Studies is completed after approval of the MoDOT highway right of way and construction program.  
  
Divisions or districts may also request VE studies at any point throughout the year. Project VE studies are generally done at the district level. VE studies on procedures, processes, specifications, standard plans and details of statewide impact are generally done at the division level.
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The federal requirements are:
  
The VE study report and recommendations are conveyed to the appropriate staff upon completion of the study. Affected districts and divisions will receive copies of the study as soon as practical after its completion. The DVEC works with project managers to evaluate the recommendations of the VE team. The project managers submit responses to the study recommendations to the IE.
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:* Projects on the National Highway System (NHS) receiving federal assistance with an estimated total cost of $50,000,000 or more.
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:* Bridge project on the NHS receiving federal assistance with an estimated total cost of $40,000,000 or more. (A bridge project is defined as any project where the primary purpose is to construct, reconstruct, rehabilitate, resurface or restore a bridge).  
 +
:* Any other project designated by the Secretary of Transportation.
 +
:* Design/Build projects do not require a VE study.
  
===130.1.4 VE Study Process===
+
Please note, total cost is defined as the cost of all phases of a project including environmental, design, right of way, utilities and construction.  
  
The formal VE process entails a systematic process of review and analysis of a project during its design/project development phase, resulting in recommendations to improve value while addressing the project’s purpose and need.  A VE study has 3 distinct phases outlined below:
+
Projects meeting the minimum federal requirement are identified and submitted to FHWA for their concurrence in the form of a VE work plan.  The VE work plan will identify all of the  projects requiring a study and the anticipated date of those studies (if known). In addition, the work plan will identify each of projects for which a VE study is required  for which value analysis has already been conducted along with the date of that study.  The DVECs will assist the Policy and Innovations Engineer in identifying the appropriate projects.  
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A district value engineering workplan will be created by each DVEC to identify the district’s projects which will be the priority on which to conduct a VE effort.  The DVEC may use the [[media:130 VE Project Selection Criteria.doc|VE project selection criteria]] to aid in determining which projects have the greatest potential for study. The DVEC sends the district’s annual study schedule to the Policy and Innovations Engineer for retention and to supplement the MoDOT VE work plan.
  
* '''Pre-Study Phase:''' The IE works with the TPM and DVEC to set up the study (see the [[130.3 Project Manager’s Guide|Project Manager's Guide]] for additional information).
+
Divisions or districts may also request VE studies at any point throughout the year. These design phase VE studies are generally done at the district level. VE studies on procedures, processes, specifications, standard plans and details of statewide impact are generally done at the division level.  
  
* '''Study Phase:''' A multidisciplinary team conducts the VE review by investigating and analyzing the planning, design, and constructability of a project;
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The VE study report and recommendations are conveyed to the appropriate staff upon completion of the study. Affected districts and divisions will receive copies of the study as soon as practical after its completion. The DVEC works with project managers to evaluate the recommendations of the VE team. The project managers submit responses to the study recommendations to the Policy and Innovations Engineer.
:*identifying project functions and costs and worth;
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===130.2.2 Design Phase VE Study Process===
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The formal VE process entails a systematic process of review and analysis of a project during its design/project development phase, resulting in recommendations to improve value while addressing the project’s purpose and need.  The study consists of the following, which is also known as the job plan:
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 +
* '''Pre-Study Phase:''' The Policy and Innovations Engineer works with the project manager and DVEC to set up the study (see the [[130.3 Project Manager’s Guide|Project Manager's Guide]] for additional information).
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* '''Study Phase:''' A multidisciplinary team not directly involved in the planning or design of the project, conducts the VE review by: investigating and analyzing the planning, design, and constructability of a project
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:* Informative Phase - identifying project functions and costs and worth;
 
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|[[media:130.1.6 LifeCycle.wmv|'''Life Cycle of a Highway''']]
 
|[[media:130.1.6 LifeCycle.wmv|'''Life Cycle of a Highway''']]
 
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:*creatively speculating on alternate ways to perform the various functions;
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:* Creative Phase - creatively speculating on alternate ways to perform the various functions;
:*evaluating the best and/or least life-cycle alternatives;
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:* Evaluation Phase - evaluating the best and/or least life-cycle alternatives;
:*developing acceptable alternatives into supported recommendations; and
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:* Development Phase - developing acceptable alternatives into supported recommendations; and
:*presenting the team’s recommendations to the appropriate staff.
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:* Presentation Phase - presenting the team’s recommendations to the appropriate staff.
  
* '''Post Study Phase:''' Approval and implementation of VE recommendations and finalizes the VE Report. The VE Report should consist of:
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* '''Post Study Phase (or Resolution Phase):''' Approval and implementation of VE recommendations and finalizing the VE Report. The VE Report should consist of:
 
:* The names and contact information for the participants
 
:* The names and contact information for the participants
 
:* A description of the project
 
:* A description of the project
 
:* A summary of the functional determination or consideration given for the project.
 
:* A summary of the functional determination or consideration given for the project.
 
:* A listing of the generated alternative solutions
 
:* A listing of the generated alternative solutions
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:* The traffic impacts of each alternative
 
:* The anticipated savings costs associated with each alternative
 
:* The anticipated savings costs associated with each alternative
 
:* A copy of the district’s or division’s response indicating accepted alternatives and anticipated savings.
 
:* A copy of the district’s or division’s response indicating accepted alternatives and anticipated savings.
 
:* Any additional pertinent information associated with the study.
 
:* Any additional pertinent information associated with the study.
  
===130.1.5 VE Study Types===
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In addition, required VE studies for bridge projects should include the following:
  
There are several types of VE studies:
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:* A review of the bridge substructure and superstructure requirements with consideration for alternative construction materials.
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:* An engineering and economic assessment with consideration of acceptable designs.
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:* A life-cycle cost analysis and consideration of construction duration.
  
====130.1.5.1 Traditional Studies====
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===130.2.3 Design Phase VE Study Types===
'''Concept Stage VE (CSVE).'''  The focus is on coming up with many alternates, the goal being to choose the best alternate to accomplish project P&N.  It works best for the CSVE to be conducted prior to signing DEIS or before conceptual submittal if a CE. (3 to 5 day study).  A full VE report is prepared.
 
  
'''Preliminary Stage VE (PSVE).''' The traditional VE study conducted prior to preliminary plan submittal.  The focus here is usually on improving the existing design, often, by this stage, the footprint is usually set and it may be too late for major functional enhancements. (3 to 5 day study). Afull VE report is prepared.
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There are several types of studies:
  
'''Final Design Stage VE (FDVE).''' A traditional VE study conducted near the end of the design process.  The focus here is on improving the design, providing flexibility and considering alternatives that meet the purpose and need.  This is likely the least effective phase to conduct the study as most of design features will have been committed to and significant changes may be required to implement new alternatives, however project improvement is still possible. A full VE report is prepared.
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====130.2.3.1 Traditional VE Studies====
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A traditional study is typically used on required studies, however as each project is unique, each phase of the study can be scaled to meet the needs of the individual project.  
  
====130.1.5.2 Non-Traditional Studies====
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* '''Concept Stage VE (CSVE).'''  The focus is on coming up with many alternates, the goal being to choose the best alternate to accomplish project P&N. It works best for the CSVE to be conducted prior to signing DEIS or before conceptual submittal if a CE. (3- to 5-day study).  A full VE report is prepared.
  
Because of the value of minimizing unnecessary effort being spent on design work which would be later changed, there is a real benefit to conducting Concept Stage VE studies which help develop multiple alternates to best identify the right solution. However, often the VE/Practical Design Review’s conducted during the final design build consensus through collaboration and ensures the most practical solution, reducing last minute scrutiny of projects. Project managers can use VE as a proven problem-solving system and can realize secondary benefits including better project scope definition and increased value by optimizing the ratio of project performance and project cost.  
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* '''Preliminary Stage VE (PSVE).''' The traditional VE study conducted prior to preliminary plan submittal.  The focus here is usually on improving the existing design, often, by this stage, the footprint is usually set and it may be too late for major functional enhancements. (3- to 5-day study). A full VE report is prepared.
  
'''Compressed Value Engineering Study.''' An abbreviated, yet thorough, analysis which follows the standard VE Job Plan but is conducted in a compressed time frame using techniques designed to reduce the required time frame to fully consider the project and alternatives.  It may take anywhere from 4 hours to 3 days and is commensurate with the complexity of the project.  The study may be conducted at any stage from conceptual to final plans.
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* '''Final Design Stage VE (FDVE).''' A traditional VE study conducted near the end of the design process.  The focus here is on improving the design, providing flexibility and considering alternatives that meet the purpose and need.  This is likely the least effective phase to conduct the study as most of design features will have been committed to and significant changes may be required to implement new alternatives, however project improvement is still possible. A full VE report is prepared.
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====130.2.3.2 Non-Traditional Studies====
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A non-traditional study is typically used on projects that do not formally require a VE study.  Although these are not the formal, traditional study, there should still be an emphasis on the Job Plan and giving consideration to each phase of the process, even if some of the phases are truncated or eliminated as appropriate.   
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* '''Compressed Value Engineering Study.''' An abbreviated, yet thorough, analysis which follows the standard VE Job Plan but is conducted in a compressed time frame using techniques designed to reduce the required time frame to fully consider the project and alternatives.  It may take anywhere from 4 hours to 3 days and is commensurate with the complexity of the project.  The study may be conducted at any stage from conceptual to final plans.
  
 
:* Use technology to maximize time for functional analysis and solution development.
 
:* Use technology to maximize time for functional analysis and solution development.
 
:* May use a Pre-Develop functional analysis, which is expanded in study to meet any unique project features.
 
:* May use a Pre-Develop functional analysis, which is expanded in study to meet any unique project features.
 
:* After ranking, the alternative solutions are developed just far enough to validate and generate costs. Additional design effort necessary to address acceptance and implementation decisions questions or concerns and the full design is accomplished by the project design staff.
 
:* After ranking, the alternative solutions are developed just far enough to validate and generate costs. Additional design effort necessary to address acceptance and implementation decisions questions or concerns and the full design is accomplished by the project design staff.
 
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<div id="Alternative Value Analysis (AVA)"></div>
'''Alternative Value Analysis (AVA) (A Practical Design Review with functional analysis).''' An abbreviated, yet thorough, analysis conducted quickly (anywhere from 2 hours to 3 days, commensurate with the complexity of the project) at any stage from conceptual to final plans, which is led by the PM, the Design Liaison Engineer or the DVEC. An abbreviated VE report is prepared.  The report should contain at a minimum, the participants, all identified alternatives, the accepted alternatives and an estimate of any cost savings associated with the alternatives.  
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* '''Alternative Value Analysis (AVA).''' An abbreviated, yet thorough, analysis conducted quickly (anywhere from 2 hours to 3 days, commensurate with the complexity of the project) at any stage from conceptual to final plans, which is led by the PM, the Design Liaison Engineer or the DVEC. An abbreviated VE report is prepared.  The report should contain at a minimum, the participants, all identified alternatives, the accepted alternatives and an estimate of any cost savings associated with the alternatives.  
 
:* Team composition- Consists of Central Office and district staff. Teams may be small, only 3 to 5 persons, or large, mirroring project core teams.
 
:* Team composition- Consists of Central Office and district staff. Teams may be small, only 3 to 5 persons, or large, mirroring project core teams.
:* May follow either the traditional or compressed Value Engineering study process.
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:* May follow either the traditional or compressed Value Engineering study process. Findings may be reported  in a simple letter format.
:* Findings may be reported  in a simple letter format
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:* A [http://sharepoint/sites/de/Innovations/_layouts/WordViewer.aspx?id=/sites/de/Innovations/Lead/CD/Practical_Value_Analysis.docx&Source=http%3A%2F%2Fsharepoint%2Fsites%2Fde%2FInnovations%2FLead%2FForms%2FAllItems%2Easpx%3FRootFolder%3D%252Fsites%252Fde%252FInnovations%252FLead%252FCD%26FolderCTID%3D0x01200040529586DDA445459FBDE05CAAE182DA%26View%3D%7BFF3B22CF-E8F2-4A04-9F68-7C65ACD3E8DF%7D&DefaultItemOpen=1 pre-established workbook is available] for a district-led Accelerated Value Analysis – Practical Review. This workbook is intended to lead the review team through the process by identifying typical opportunities for alternative approaches on routine work elements.
  
'''Combined Project Type Value Studies.'''
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* '''Combined Project Type Value Studies.'''
 
:* Multiple projects of the similar scope and size are grouped together for the study.  A composite analysis is conducted with unique features of each project discussed and considered accordingly, however the focus should remain on the individual project traits and not on the program guidelines.
 
:* Multiple projects of the similar scope and size are grouped together for the study.  A composite analysis is conducted with unique features of each project discussed and considered accordingly, however the focus should remain on the individual project traits and not on the program guidelines.
  
 
:* The compressed study process may also be used.
 
:* The compressed study process may also be used.
  
'''Constructability Review.''' This type of VE study that concentrates on constructability, traffic management, "bidability", innovative contracting, etc. Can be done at any stage from conceptual to final plans. The study length can be anywhere from 2 hours to 5 days.   
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* '''Constructability Review.''' This type of study concentrates on constructability, traffic management, "bidability", innovative contracting, etc. It can be done at any stage from conceptual to final plans. The study length can be anywhere from 2 hours to 5 days.   
  
 
:* It generally consists of or coincides with a meeting of MoDOT personnel and interested contractors to discuss their perspective on construction aspects associated with the draft plans.  
 
:* It generally consists of or coincides with a meeting of MoDOT personnel and interested contractors to discuss their perspective on construction aspects associated with the draft plans.  
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:* The meeting should not be mandatory, to avoid unnecessary impacts to the bidding environment for the project.
 
:* The meeting should not be mandatory, to avoid unnecessary impacts to the bidding environment for the project.
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<div id="Value Focused Risk Assessment"></div>
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* '''Value Focused Risk Assessment.''' Risk assessments approached from the perspective of identifying opportunities to improve the value of the project are an acceptable form of value analysis.  After determining the functions of the project, the project risks are considered and documented in accordance with [[:Category:149 Project Delivery Determination and Initial Risk Assessment#149.5 Initial Risk Assessment|EPG 149.5 Initial Risk Assessment]]. When developing strategies to avoid, minimize or mitigate the project risks, consideration should be given to alternative approaches which will meet the functions of the project while decreasing or eliminating areas of risk.  A risk assessment report should be generated and properly documented.
 +
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* '''Programmatic Value Studies.'''  This programmatic study type is used when studying entire programs for consideration of process and program value improvement.  The functional perspective and associated alternatives are considered in the development or review of the guidelines in order to have projects within the program that are of the greatest value.  The emphasis is placed on the improving the guidance that will be subsequently used for project development.  The high level study should focus on the function of the program more than the individual projects.  The study could be conducted in a traditional manner or based upon the compressed study type. The study length will likely be less than 1 day.
 +
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* '''Process Value Analysis.''' This type of study concentrates on process improvement. The goal is to take an innovative and practical look at any process. Subjects could include anything, for example, maintenance operations, construction standards or purchasing specifications. The study length can be 2 to 5 days.
 +
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Because of the value of minimizing unnecessary design work there is a benefit to conducting Concept Stage VE studies in order to develop multiple alternates when trying to identify the right solution. However this is not always possible nor is it always the right time for a specific project.  The later staged VE study or the non-traditional studies can often be the correct approach to help build consensus through collaboration and to ensure that the most practical solution is found.  The later stage VE studies can also help reduce last minute scrutiny of the project. Project managers can use VE as a proven problem-solving system and can realize secondary benefits including better project scope definition and increased value by optimizing the ratio of project performance and project cost.
 +
 +
===130.2.4 Documenting Value Analyses in SIMS===
 +
 +
In order to properly track all value analysis efforts, each study, review or other VE undertaking must be recorded in the Bike/Ped VE Project Data Entry Area of SIMS.
  
'''Programmatic Value Engineering Studies.'''  This programmatic study type is used when studying entire programs for consideration of process and program value improvement. The functional perspective and associated alternatives are considered in the development or review of the guidelines in order to have projects within the program that are of the greatest value. The emphasis is placed on the improving the guidance that will be subsequently used for project development. The high level study should focus on the function of the program more than the individual projects.  The study could be conducted in a traditional manner or based upon the compressed study type. The study length will likely be less than 1 day.
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====130.2.4.1 Value Analyses Numbering Convention====
 +
A numbering convention for tracking both Central Office and District Value Analysis efforts is provided to aid in tracking all VE efforts. Please note in this area, a VE Number is automatically entered by SIMS upon a user entering data. This is not an officially VE number but is instead an individual number key used by the SIMS database. It does not replace the District or Central Office generated numbering convention and should be ignored for these purposes.  
  
'''Process Value Analysis.''' This type of VE study concentrates on process improvement. The goal is to take an innovative and practical look at any process. Subjects could include anything, for example, maintenance operations, construction standards or purchasing specifications. The study length can be 2 to 5 days.
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=====130.2.4.1.1 District Value Analysis Efforts=====
 +
The DVEC shall ensure that each value analysis effort performed by the district is properly documented under the appropriate VE number. The district value engineering number will consist of the District Designation followed by the year followed by the study number to three digits, starting with one. For example, Central District's first district led value engineering effort of 2012 would be numbered CD 2012-001.  
  
===130.1.6 [[127.14 National Environmental Policy Act (NEPA) Classification and Documents|NEPA]] Considerations===
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=====130.2.4.1.2 Central Office Value Analysis Efforts=====
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The Policy and Innovations Engineer shall ensure that each value analysis effort performed by the Central Office is properly documented under the appropriate VE number. The Central Office value engineering number will consist of the year followed by the study number to three digits, starting with one. For example, the first Central Office-led value engineering effort of 2012 would be numbered VE-2012-001.
  
Given the potential for impacts to resources outside the [[127.14 National Environmental Policy Act (NEPA) Classification and Documents|NEPA]] study area or changes to previously approved designs, the environmental and historic preservation sections will have a stake in most VE studies; however, decisions and/or agreements from environmental studies and public hearings can be questioned.  Members from one or both sections can provide the team with needed information to help in the process.
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==130.3 Post-Award Value Engineering (PAVE)==
  
When VE studies are conducted post-NEPA, caution '''must''' be exercised to ensure when VE decisions contradict any commitments that are made in a standing, approved NEPA document. This would also apply to assumptions made for post-NEPA approvals, such as Section 404 permits, approvals from the U.S. Fish and Wildlife Service, as well as others. Although VE decisions may negatively impact environmental or public hearing agreements, these decisions may be made provided the time, cost and effort for the supplemental studies or hearings should be consideredAll valid suggestions should be included in the study report for management’s consideration.
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Post-award value engineering (PAVE) workshops are conducted during the construction phase of a project. The purpose of the PAVE workshop is to increase the number of approved value engineering change proposals (VECP) and practical design value engineering change proposals (PDVECP), improve contractor partnering, streamline VECP/PDVECP approval process, and improve core team constructability knowledge.   
  
===130.1.7 Value Engineering Study Numbering Convention===
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===130.3.1 Project Selection and PAVE Workplan===
In order to properly track all value engineering effort, a numbering convention for tracking both Central Office and district Value Engineering efforts is provided.
 
  
====130.1.7.1 District Value Engineering Efforts====
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There is no federal requirement for identifying projects for PAVE workshopsEach district should identify projects for PAVE workshops early in the scoping and design processes based on the following criteria:
The DVEC shall ensure that each value engineering effort performed by the district is properly documented under the appropriate VE numberThe district value engineering number will consist of the District Designation followed by the year followed by the study number to three digits, starting with one.  For example, Central District's first district led value engineering effort of 2012 would be numbered CD 2012-001.
 
  
====130.1.7.2 Central Office Value Engineering Efforts====
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:* Projects estimated over $20 Million
The IE shall ensure that each value engineering effort performed by the Central Office is properly documented under the appropriate VE number.  The Central Office value engineering number will consist of the year followed by the study number to three digits, starting with one.  For example, the first Central Office-led value engineering effort of 2012 would be numbered 2012-001.
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:* Interchange projects
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:* Projects with stage construction
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:* Projects with potential construction risks
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:* Major bridge projects
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:* Projects identified by the District Engineer or Chief Engineer
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:* PAVEs are not conducted on Design/Build projects
  
===130.1.8 Additional Information===
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When a project has been identified for a PAVE workshop, the job special provision Post-Award Value Engineering Change Proposal Workshop (JSP-16-01) shall be included in the contract documents.
  
The FHWA's ''Value Engineering for Highways'' provides further details on the VE technique and its applicability to highway projects and functions.  Copies may be obtained from the FHWA VE coordinatorin addition, AASHTO’s ''Guidelines for Value Engineering, 2nd Edition'' provides an excellent description of VE and the process steps.
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If the JSP is not included in the contract, a project may still be identified by District leadership, Division Engineers, or Chief Engineer for a PAVE workshop after the contract has been letThe Policy and Innovations Engineer will work with District staff and the contractor to select dates and locations for the PAVE.
  
MoDOT’s [[130.4 Value Engineering Team Leader Guide|Value Engineering Team Leader Guide]] and [[130.3 Project Manager’s Guide|Project Manager’s Guide]] offer specific, in-depth information for those involved in these respective capacities.
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===130.3.2 PAVE Study Process===
  
==130.2 Contractor initiated VECPs==
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Typically a one day workshop is held 1-3 weeks after the contract is awarded but before the contract notice to proceed. The PAVE facilitator (Policy and Innovations Engineer or consultant), District Design and Construction staff, core team members, and other project development experts should participate in the PAVE workshop.  Design consultants may also be invited to the PAVE workshop. 
  
Contractor initiated [[media:C-104.doc|Value Engineering Change Proposals]] (VECPs) and Practical Design Value Engineering Change Proposals (PDVECPs) are handled in accordance with [http://www.modot.mo.gov/business/standards_and_specs/Sec0104.pdf Sec 104.6 of the Missouri Standard Specifications for Highway Construction]The process used to evaluate the change proposal is presented in [[104.13 Construction Inspection Guidance for Sec 104#104.13.2 Value Engineering Proposals (Sec 104.6)|EPG 104.13 Construction Inspection Guidance for Sec 104]]. 
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The PAVE workshop report and recommendations are conveyed to the district and Central Office staff in a timely manner after the workshop to ensure adequate time for design changes.   The district and/or contractor should respond to the PAVE workshop recommendations within 15 business days. All routine internal costs incurred by MoDOT to review and implement approved VECPs and PDVECPs will be at the Commission’s expenseMajor redesign costs, and design/review costs of any amount charged by a consultant to the Commission, will be deducted from the gross savings. Approved and rejected VECPs and PDVECPs are tracked by Construction and Materials Division.
  
VECPs provide a product of equal or improved quality by reducing the project’s total cost, improving the project’s safety, or decreasing the time required to complete the projectThis proposal is initiated by the contractor (using the VE Change Proposal) who receives 50% of the savings associated with the proposal should it be approved by MoDOT. 
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==130.4 Value Engineering Change Proposals==
  
A PDVECP may provide a product of lesser value; use an existing item in place or underrun contract items. The PDVECP shall not adversely affect safety or function of the final productThis proposal is initiated by the contractor, using the [[104.13 Construction Inspection Guidance for Sec 104#104.13.1 Guidance for Sec 104.6|VE change proposal]] who receives 25% of the savings associated with the proposal should it be approved by MoDOT.  
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[http://epg.modot.org/forms/CM/Value_Engineering_Proposal_C_104.pdf Value Engineering Change Proposals] (VECPs) and Practical Design Value Engineering Change Proposals (PDVECPs) are submitted by the contractor and approved or rejected by the Engineer in accordance with [http://www.modot.org/business/standards_and_specs/SpecbookEPG.pdf#page=4 Sec 104.6 of the Missouri Standard Specifications for Highway Construction]. When approved, contractors will receive 50 percent of VECP and 25 percent of PDVECP net savingsThe process used to evaluate value engineering change proposals is presented in [[104.13 Construction Inspection Guidance for Sec 104|EPG 104.13 Construction Inspection Guidance for Sec 104]].
  
All reasonable documented engineering costs incurred by the contractor to design and develop a value engineering proposal shall be reimbursed and subtracted from the savings of the construction costs. All costs incurred by MoDOT to review and implement the VECP will be at the Commission’s expense.
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==130.5 [http://epg.modot.org/index.php/Category:130_Value_Engineering NEPA Considerations]==
  
For example, a contractor submits a VECP with a reduction in construction costs of $100,000.  The documented engineering costs for the proposal total $20,000.  The actual net savings are determined by subtracting the engineering costs ($20,000) from the reduced construction cost ($100,000). In this example, the net savings is $80,000 that is split between MoDOT and the contractor using either the 50/50 or 75/25 ratio dependent upon the type of VE approved.
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Given the potential for impacts to resources outside the NEPA study area or changes to previously approved designs, the environmental and historic preservation sections will have a stake in most VE studies; however, decisions and/or agreements from environmental studies and public hearings can be questioned. Members from one or both sections can provide the team with needed information to help in the process.  
  
Examples of Value Engineering Proposals can be found on the [http://www.modot.mo.gov/ValueEngineering/index.htm Value Engineering Web Page].
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When VE studies are conducted post-NEPA, the Environmental Section shall  be contacted to ensure VE decisions do not contradict any commitments that are made in a standing, approved NEPA document. This would also apply to assumptions made for post-NEPA approvals, such as Section 404 permits, approvals from the U.S. Fish and Wildlife Service, as well as others. Although VE decisions may negatively impact environmental or public hearing agreements, these decisions may be made provided the time, cost and effort for the supplemental studies or hearings should be considered. All valid suggestions should be included in the study report for management’s consideration.

Latest revision as of 10:53, 26 January 2022

Continually Searching for Value


130.1 Discussion

Value Engineering (VE) is a systematic method of examining performance to improve the value of projects or processes. Value is defined as the ratio of performance to cost and thus capable of being increased by either lowering the cost or improving the performance. MoDOT’s values and tangible results place increased importance on value-based, practical design. While VE, in the classic sense, tends to be somewhat more structured, VE and Practical Design are intended to achieve the same goal. The goal of VE is to build the right project at the right time, achieving delivery of project purpose and need with proper project scope.

Practical Design
Summary 2007
See also: Research Publications
Additional Information
District Value Engineering Coordinator's Responsibilities
Project Manager's Guide
Value Engineering Team Leader Guide
VE Training Evaluation Form
Construction Value Engineering Change Proposal (C-104)
Evaluation Procedures for Construction Value Engineering Change Proposals
MoDOT Value Engineering Contacts

MoDOT uses VE to ensure that the public receives full value for every tax dollar invested in Missouri’s transportation system. VE techniques are used to improve productivity in nearly every aspect of MoDOT’s operation, including practices, processes, and procedures. In highway construction, VE encourages contractors to submit proposals for modifying the plans, specifications or other requirements of the contract to deliver improved projects of the best possible value.

MoDOT’s goal is to have some form of Value Analysis on every project.

The FHWA's Value Engineering for Highways provides further details on the VE technique and its applicability to highway projects and functions. AASHTO’s Guidelines for Value Engineering, 2nd Edition provides an excellent description of VE and the process steps.

130.1.1 Study Timing

VE studies are performed to add value to a project, not to simply reduce costs. VE studies should challenge project scoped that exceed the minimum necessary to deliver the project’s purpose and need. As stated in the law, VE studies are conducted "to provide suggestions for reducing the total cost of the project and providing a project of equal or better quality."

Although only a single study during preliminary design is generally required for a project, VE studies can be performed any time prior to letting or after award, and even multiple times on an individual project. A study can be conducted at any stage during the design life of the project; however, priority is given to performing the study as early as feasible to maximize the opportunity to implement developed alternatives. During the study, all aspects of the project may be considered including, but not limited to, location, geometrics, final vertical and horizontal alignments, drainage, construction staging, traffic impacts, TSMO strategies, traffic control, and signalization, pavement and structure details. In addition, studies in the later phase should consider what additional flexibility can be added and what adjustments can be made to "fine tune" the project prior to letting.

Additional VE analysis should be considered if, during a project’s design, the scope of work is changed significantly from that which was studied previously. In addition, consideration should be given to an additional study if the previous study will have been conducted more than 10 years prior to the projects letting.

130.1.2 VE Organization

Value Engineering is a critical program and requires statewide participation in order to accomplish the program goals. The Policy and Innovations Engineer manages the overall operation of MoDOT’s VE program. The Policy and Innovations Engineer is responsible for tracking the VE program and reporting its progress to both management and the FHWA. The Policy and Innovations Engineer leads studies and may assist with the initial selection of teams for district VE studies, and provides training guidelines and facilitation.

Each District Engineer selects a district value engineering coordinator (DVEC) to coordinate VE activities in that district. The DVEC is responsible for the district's VE program. The DVEC should be at a level consistent with the supervision and management responsibilities of the VE effort. The DVEC is responsible for scheduling the study and making appropriate accommodations for the participants. The DVEC serves as a team member on the VE study to become familiar with the process and leads VE studies, as required, to meet the demands of the program. The DVEC is also responsible for tracking the district led value engineering studies and ensuring the study results are forwarded to the Policy and Innovations Engineer and entered into the SIMS database for each studied project.

In any case, the facilitator of the study compiles recommendations from the VE study and submits them in a VE report, for approval as follows:

  • The lowest level decision maker within the project hierarchy can approve and implement VE recommendations that do not change policy, standards, or scope of the original project. A copy of the VE study and the Project Manager’s, District Design Engineer's or District Engineer's approval is retained by the district and the Policy and Innovations Engineer. The Policy and Innovations Engineer notifies the team members of the study results and tracks results of each study.
  • The approval of a District Engineer or division engineer is required to approve and implement VE recommendations that change the scope of the original project. A copy of the VE study and the District Engineer or division engineers’ approval is retained by the district and the Policy and Innovations Engineer. The Policy and Innovations Engineer tracks results of each study.
  • The approval of the Chief Engineer, or his representative, is required to approve and implement VE recommendations that affect more than one division/district or change policy or standards. The Policy and Innovations Engineer notifies affected divisions, districts and the team members and tracks results of each study.

Approved recommendations are incorporated in the project design. If an approved recommendation cannot be included, the Project Manager must document the justification for eliminating the recommendation. This documentation should be submitted with the PS&E and a copy is sent to the Policy and Innovations Engineer.

130.1.3 Consultant Led VE Studies

When consideration is given to using a consultant for conducting a VE study, the Policy and Innovations Engineer should be contacted. If the State Design Engineer approves the use of consultant services for a VE study, the Policy and Innovations Engineer will work with the district to ensure that the selected consultant is qualified and has no conflict of interest for the proposed work.

130.2 Design Phase Value Engineering

Design phase VE studies can be conducted during any phase of the project design process but prior to PS&E submittal. These studies can also be traditional or non-traditional, depending on the project. District should work with the Policy and Innovations Engineer to determine their VE needs.

130.2.1 Design Phase Project Selection and VE Workplan

Each year, a value engineering work plan for the federally required Value Engineering Studies is completed after approval of the MoDOT highway right of way and construction program.

The federal requirements are:

  • Projects on the National Highway System (NHS) receiving federal assistance with an estimated total cost of $50,000,000 or more.
  • Bridge project on the NHS receiving federal assistance with an estimated total cost of $40,000,000 or more. (A bridge project is defined as any project where the primary purpose is to construct, reconstruct, rehabilitate, resurface or restore a bridge).
  • Any other project designated by the Secretary of Transportation.
  • Design/Build projects do not require a VE study.

Please note, total cost is defined as the cost of all phases of a project including environmental, design, right of way, utilities and construction.

Projects meeting the minimum federal requirement are identified and submitted to FHWA for their concurrence in the form of a VE work plan. The VE work plan will identify all of the projects requiring a study and the anticipated date of those studies (if known). In addition, the work plan will identify each of projects for which a VE study is required for which value analysis has already been conducted along with the date of that study. The DVECs will assist the Policy and Innovations Engineer in identifying the appropriate projects.

A district value engineering workplan will be created by each DVEC to identify the district’s projects which will be the priority on which to conduct a VE effort. The DVEC may use the VE project selection criteria to aid in determining which projects have the greatest potential for study. The DVEC sends the district’s annual study schedule to the Policy and Innovations Engineer for retention and to supplement the MoDOT VE work plan.

Divisions or districts may also request VE studies at any point throughout the year. These design phase VE studies are generally done at the district level. VE studies on procedures, processes, specifications, standard plans and details of statewide impact are generally done at the division level.

The VE study report and recommendations are conveyed to the appropriate staff upon completion of the study. Affected districts and divisions will receive copies of the study as soon as practical after its completion. The DVEC works with project managers to evaluate the recommendations of the VE team. The project managers submit responses to the study recommendations to the Policy and Innovations Engineer.

130.2.2 Design Phase VE Study Process

The formal VE process entails a systematic process of review and analysis of a project during its design/project development phase, resulting in recommendations to improve value while addressing the project’s purpose and need. The study consists of the following, which is also known as the job plan:

  • Pre-Study Phase: The Policy and Innovations Engineer works with the project manager and DVEC to set up the study (see the Project Manager's Guide for additional information).
  • Study Phase: A multidisciplinary team not directly involved in the planning or design of the project, conducts the VE review by: investigating and analyzing the planning, design, and constructability of a project.
  • Informative Phase - identifying project functions and costs and worth;
Related Information Video
Life Cycle of a Highway
  • Creative Phase - creatively speculating on alternate ways to perform the various functions;
  • Evaluation Phase - evaluating the best and/or least life-cycle alternatives;
  • Development Phase - developing acceptable alternatives into supported recommendations; and
  • Presentation Phase - presenting the team’s recommendations to the appropriate staff.
  • Post Study Phase (or Resolution Phase): Approval and implementation of VE recommendations and finalizing the VE Report. The VE Report should consist of:
  • The names and contact information for the participants
  • A description of the project
  • A summary of the functional determination or consideration given for the project.
  • A listing of the generated alternative solutions
  • The traffic impacts of each alternative
  • The anticipated savings costs associated with each alternative
  • A copy of the district’s or division’s response indicating accepted alternatives and anticipated savings.
  • Any additional pertinent information associated with the study.

In addition, required VE studies for bridge projects should include the following:

  • A review of the bridge substructure and superstructure requirements with consideration for alternative construction materials.
  • An engineering and economic assessment with consideration of acceptable designs.
  • A life-cycle cost analysis and consideration of construction duration.

130.2.3 Design Phase VE Study Types

There are several types of studies:

130.2.3.1 Traditional VE Studies

A traditional study is typically used on required studies, however as each project is unique, each phase of the study can be scaled to meet the needs of the individual project.

  • Concept Stage VE (CSVE). The focus is on coming up with many alternates, the goal being to choose the best alternate to accomplish project P&N. It works best for the CSVE to be conducted prior to signing DEIS or before conceptual submittal if a CE. (3- to 5-day study). A full VE report is prepared.
  • Preliminary Stage VE (PSVE). The traditional VE study conducted prior to preliminary plan submittal. The focus here is usually on improving the existing design, often, by this stage, the footprint is usually set and it may be too late for major functional enhancements. (3- to 5-day study). A full VE report is prepared.
  • Final Design Stage VE (FDVE). A traditional VE study conducted near the end of the design process. The focus here is on improving the design, providing flexibility and considering alternatives that meet the purpose and need. This is likely the least effective phase to conduct the study as most of design features will have been committed to and significant changes may be required to implement new alternatives, however project improvement is still possible. A full VE report is prepared.

130.2.3.2 Non-Traditional Studies

A non-traditional study is typically used on projects that do not formally require a VE study. Although these are not the formal, traditional study, there should still be an emphasis on the Job Plan and giving consideration to each phase of the process, even if some of the phases are truncated or eliminated as appropriate.

  • Compressed Value Engineering Study. An abbreviated, yet thorough, analysis which follows the standard VE Job Plan but is conducted in a compressed time frame using techniques designed to reduce the required time frame to fully consider the project and alternatives. It may take anywhere from 4 hours to 3 days and is commensurate with the complexity of the project. The study may be conducted at any stage from conceptual to final plans.
  • Use technology to maximize time for functional analysis and solution development.
  • May use a Pre-Develop functional analysis, which is expanded in study to meet any unique project features.
  • After ranking, the alternative solutions are developed just far enough to validate and generate costs. Additional design effort necessary to address acceptance and implementation decisions questions or concerns and the full design is accomplished by the project design staff.
  • Alternative Value Analysis (AVA). An abbreviated, yet thorough, analysis conducted quickly (anywhere from 2 hours to 3 days, commensurate with the complexity of the project) at any stage from conceptual to final plans, which is led by the PM, the Design Liaison Engineer or the DVEC. An abbreviated VE report is prepared. The report should contain at a minimum, the participants, all identified alternatives, the accepted alternatives and an estimate of any cost savings associated with the alternatives.
  • Team composition- Consists of Central Office and district staff. Teams may be small, only 3 to 5 persons, or large, mirroring project core teams.
  • May follow either the traditional or compressed Value Engineering study process. Findings may be reported in a simple letter format.
  • A pre-established workbook is available for a district-led Accelerated Value Analysis – Practical Review. This workbook is intended to lead the review team through the process by identifying typical opportunities for alternative approaches on routine work elements.
  • Combined Project Type Value Studies.
  • Multiple projects of the similar scope and size are grouped together for the study. A composite analysis is conducted with unique features of each project discussed and considered accordingly, however the focus should remain on the individual project traits and not on the program guidelines.
  • The compressed study process may also be used.
  • Constructability Review. This type of study concentrates on constructability, traffic management, "bidability", innovative contracting, etc. It can be done at any stage from conceptual to final plans. The study length can be anywhere from 2 hours to 5 days.
  • It generally consists of or coincides with a meeting of MoDOT personnel and interested contractors to discuss their perspective on construction aspects associated with the draft plans.
  • If a meeting with the industry is conducted during this process, the preliminary plans should be posted with the meeting notice at least one week prior to provide opportunity to schedule attendance and review the proposed plans.
  • The meeting should not be mandatory, to avoid unnecessary impacts to the bidding environment for the project.
  • Value Focused Risk Assessment. Risk assessments approached from the perspective of identifying opportunities to improve the value of the project are an acceptable form of value analysis. After determining the functions of the project, the project risks are considered and documented in accordance with EPG 149.5 Initial Risk Assessment. When developing strategies to avoid, minimize or mitigate the project risks, consideration should be given to alternative approaches which will meet the functions of the project while decreasing or eliminating areas of risk. A risk assessment report should be generated and properly documented.
  • Programmatic Value Studies. This programmatic study type is used when studying entire programs for consideration of process and program value improvement. The functional perspective and associated alternatives are considered in the development or review of the guidelines in order to have projects within the program that are of the greatest value. The emphasis is placed on the improving the guidance that will be subsequently used for project development. The high level study should focus on the function of the program more than the individual projects. The study could be conducted in a traditional manner or based upon the compressed study type. The study length will likely be less than 1 day.
  • Process Value Analysis. This type of study concentrates on process improvement. The goal is to take an innovative and practical look at any process. Subjects could include anything, for example, maintenance operations, construction standards or purchasing specifications. The study length can be 2 to 5 days.

Because of the value of minimizing unnecessary design work there is a benefit to conducting Concept Stage VE studies in order to develop multiple alternates when trying to identify the right solution. However this is not always possible nor is it always the right time for a specific project. The later staged VE study or the non-traditional studies can often be the correct approach to help build consensus through collaboration and to ensure that the most practical solution is found. The later stage VE studies can also help reduce last minute scrutiny of the project. Project managers can use VE as a proven problem-solving system and can realize secondary benefits including better project scope definition and increased value by optimizing the ratio of project performance and project cost.

130.2.4 Documenting Value Analyses in SIMS

In order to properly track all value analysis efforts, each study, review or other VE undertaking must be recorded in the Bike/Ped VE Project Data Entry Area of SIMS.

130.2.4.1 Value Analyses Numbering Convention

A numbering convention for tracking both Central Office and District Value Analysis efforts is provided to aid in tracking all VE efforts. Please note in this area, a VE Number is automatically entered by SIMS upon a user entering data. This is not an officially VE number but is instead an individual number key used by the SIMS database. It does not replace the District or Central Office generated numbering convention and should be ignored for these purposes.

130.2.4.1.1 District Value Analysis Efforts

The DVEC shall ensure that each value analysis effort performed by the district is properly documented under the appropriate VE number. The district value engineering number will consist of the District Designation followed by the year followed by the study number to three digits, starting with one. For example, Central District's first district led value engineering effort of 2012 would be numbered CD 2012-001.

130.2.4.1.2 Central Office Value Analysis Efforts

The Policy and Innovations Engineer shall ensure that each value analysis effort performed by the Central Office is properly documented under the appropriate VE number. The Central Office value engineering number will consist of the year followed by the study number to three digits, starting with one. For example, the first Central Office-led value engineering effort of 2012 would be numbered VE-2012-001.

130.3 Post-Award Value Engineering (PAVE)

Post-award value engineering (PAVE) workshops are conducted during the construction phase of a project. The purpose of the PAVE workshop is to increase the number of approved value engineering change proposals (VECP) and practical design value engineering change proposals (PDVECP), improve contractor partnering, streamline VECP/PDVECP approval process, and improve core team constructability knowledge.

130.3.1 Project Selection and PAVE Workplan

There is no federal requirement for identifying projects for PAVE workshops. Each district should identify projects for PAVE workshops early in the scoping and design processes based on the following criteria:

  • Projects estimated over $20 Million
  • Interchange projects
  • Projects with stage construction
  • Projects with potential construction risks
  • Major bridge projects
  • Projects identified by the District Engineer or Chief Engineer
  • PAVEs are not conducted on Design/Build projects

When a project has been identified for a PAVE workshop, the job special provision Post-Award Value Engineering Change Proposal Workshop (JSP-16-01) shall be included in the contract documents.

If the JSP is not included in the contract, a project may still be identified by District leadership, Division Engineers, or Chief Engineer for a PAVE workshop after the contract has been let. The Policy and Innovations Engineer will work with District staff and the contractor to select dates and locations for the PAVE.

130.3.2 PAVE Study Process

Typically a one day workshop is held 1-3 weeks after the contract is awarded but before the contract notice to proceed. The PAVE facilitator (Policy and Innovations Engineer or consultant), District Design and Construction staff, core team members, and other project development experts should participate in the PAVE workshop. Design consultants may also be invited to the PAVE workshop.

The PAVE workshop report and recommendations are conveyed to the district and Central Office staff in a timely manner after the workshop to ensure adequate time for design changes. The district and/or contractor should respond to the PAVE workshop recommendations within 15 business days. All routine internal costs incurred by MoDOT to review and implement approved VECPs and PDVECPs will be at the Commission’s expense. Major redesign costs, and design/review costs of any amount charged by a consultant to the Commission, will be deducted from the gross savings. Approved and rejected VECPs and PDVECPs are tracked by Construction and Materials Division.

130.4 Value Engineering Change Proposals

Value Engineering Change Proposals (VECPs) and Practical Design Value Engineering Change Proposals (PDVECPs) are submitted by the contractor and approved or rejected by the Engineer in accordance with Sec 104.6 of the Missouri Standard Specifications for Highway Construction. When approved, contractors will receive 50 percent of VECP and 25 percent of PDVECP net savings. The process used to evaluate value engineering change proposals is presented in EPG 104.13 Construction Inspection Guidance for Sec 104.

130.5 NEPA Considerations

Given the potential for impacts to resources outside the NEPA study area or changes to previously approved designs, the environmental and historic preservation sections will have a stake in most VE studies; however, decisions and/or agreements from environmental studies and public hearings can be questioned. Members from one or both sections can provide the team with needed information to help in the process.

When VE studies are conducted post-NEPA, the Environmental Section shall be contacted to ensure VE decisions do not contradict any commitments that are made in a standing, approved NEPA document. This would also apply to assumptions made for post-NEPA approvals, such as Section 404 permits, approvals from the U.S. Fish and Wildlife Service, as well as others. Although VE decisions may negatively impact environmental or public hearing agreements, these decisions may be made provided the time, cost and effort for the supplemental studies or hearings should be considered. All valid suggestions should be included in the study report for management’s consideration.

Articles in "130 Value Engineering"

The following 2 pages are in this category, out of 2 total.