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Hackitt: 'Drive value engineering out of construction'

5 October 2018 | By Neil Gerrard

Dame Judith Hackitt speaking at the CABE conference

The construction industry needs to embrace a culture change rather than looking for quick fixes following the Grenfell Tower tragedy, while value engineering should be made a thing of the past.

That’s according to Dame Judith Hackitt, who was addressing the annual Chartered Association of Building Engineers (CABE) conference and exhibition at Chesford Grange in Kenilworth last week.

Hackitt, author of ‘Building a Safer Future: Independent Review of Building Regulations and Fire Safety’ told CABE members about the need for a joined up regulatory process that goes hand in hand with a tougher regulatory reform regime with real penalties and sanctions for those who don’t conform.

“People are looking for quick fixes but they need to understand that root and branch reform is required. This has to be a turning point to bring about the culture change we need,” she said.

And she argued that the term ‘value engineering’ should be driven out of construction, remarking that it was a phrase she would be “happy to never hear again”.

“It is anything but value. It is cutting costs and quality,” she said. “The structure of industry has to change to make it more effective. We need to put a focus on the way in which buildings are procured. If we have a process that makes people bid at a cost they can’t afford to deliver at, we set ourselves up to fail.”

She pointed out that in the past, construction health and safety was seen as a difficult problem to crack but noted that in the past 15 years the industry has made huge improvements in this area.

It now needs to do the same again in the delivery of buildings that are fit for purpose, she added.

Meanwhile, residents and the public also need to be brought into the process as the industry changes the way in which it thinks about the design and construction of buildings and the legacy those buildings leave behind.

“Currently construction safety is focused on the workforce but we need to also consider residents and the public. We need to think about buildings not as jigsaw puzzles that magically come together, they need to be treated as a complex system – a change in one small thing can have massive changes and impact integrity of the buildings,” she said.

Hackitt also attempted to clarify the role of the approved inspector, a role key to CABE’s membership. Dame Judith said: "There is no reason why approved inspectors can't be part of the Joint Competent Authority, there just can't be a conflict of interest. You can do both roles, just not on the same project.”

The Hackitt review, published earlier this year, made 53 recommendations aimed at strengthening and simplifying the regulatory system, as well as promoting a culture change within the construction industry.

At the time of its publication, it received criticism for not recommending a ban on combustible cladding of the type found on Grenfell Tower. Nonetheless the government quickly announced that it would consider such a ban and earlier this week, housing secretary James Brokenshire confirmed that he would outlaw the use of combustible cladding on new residential buildings above 18m, as well as at schools, care homes, student accommodation and hospitals.

Comments

If there is a problem with value engineering, it is that it gets decided between project managers (who more often than not have no design background), quantity surveyors (who only know about money), and clients who know little other than what their PM and QS tell them.

The professionals affected by the decisions are often enough kept out the process until too late, and once the bad decisions are made the PM can't reverse them as they'll lose face (and possibly their client).

It isn't the VE that is the problem, it's the people doing it.

John, 7 October 2018

Its interesting that Ms Hackitt is using the term incorrectly just as the industry does!

What she wants to drive out is 'cost thuggery' which isn't in the subject of Value Management.

Value Management with its terms of Value Planning and Value Engineering is:-

a proactive, creative, problem-solving service. It uses a structured, multi-disciplinary team orientated approach to make explicit the client's value system using functional analysis to expose the relationship between time, cost, quality and environment.

Whats wrong with that?

Vaughan Burnand, 8 October 2018

Ms Hackitt is using our terminology so we won't be confused.
We call 'cost cutting' 'value engineering' a posh phrase that make us sound more intelligent, sadly we are not, the process is more often than not 'cost cutting' of the crudest form.
This fails to mention Substitution and Surreptitious Substitution part of the same issue.
Vaughan Burnard: I like your definition.
Sadly we are not that clever or that joined up.

Brian Murphy, 8 October 2018

'Value engineering' has become synonymous with cost cutting to improve the low margin at which the winning contractor bid and won.

The reality is that the industry is setting client expectations and ignoring the sustainability of the finished building. That sustainability must include consideration of its performance over the life of the asset, which includes the continued safety as a commercial/residential environment.

Perhaps if we exchanged 'value engineering' for 'sustainable performance engineering', we might change both industry practice and client expectations.

John Hesketh, 8 October 2018

It is a shame that such a high profile person is allowed to use this term. It is apparent that she does not understand the term correctly.

I come across this frequently. Value Engineering is not cost cutting. It requires a correct forum of persons involved in the project and any short comings are likely to result in subsequent problems.

Shame.

Keith N Bennett, 8 October 2018

VE is a design based discipline, with costs being a major, but not an overriding criteria in the pursuit of value. The intention of VE is to maintain Client’s expectations. A new book called VMBoK - Value Methodology Body of Knowledge is under preparation by the Society of American Value Engineers (SAVE International). Ms. Hackitt understands Value Engineering incorrectly, as many designers do. I hope "cost cutting" and "de-scoping" disappear and that VE will be mandated by Governments on projects over a certain value, where Operational Costs make the Capital Expenditure seem insignificant.

Nicky Dobreanu, 8 October 2018

In response to John's statement. Do you mean that the PM would rather NOT lose face than avoid a very expensive disaster. I would rather lose face and stop the process. The Client would thank you later

Sheila, 8 October 2018

The problem in the public sector is an inability to define value; this is true in both procurement and contract management spheres.

Anybody can define cash or cost, but a true definition of value requires far wider consideration.

Value engineering should not be written off; instead it should be included as part of our professional training. If we cannot define the value of any professional decision that we make, we are failing our clients or employers as construction professionals.

Michael Ian Watts, 8 October 2018

Its Amazing how non experts set the agenda for experts...

Grahame White, 9 October 2018

Clearly Ms Hackitt either seeks to vilify what has become an often misinterpreted buzzword or, more likely, simply does not understand the correct principles and benefit of value engineering and/or value management. Her statement that "It is anything but value. It is cutting costs and quality" is indicative of a complete lack of knowledge of an integral cost management function in the design process. To make such an ill-informed statement publicly is possibly a result of her career commencing in the O&G chemical sector before moving into HSE; none of which gives her any apparent experience in construction design, cost management and procurement.

John Hudson, 9 October 2018

Well implemented true VE could well create more money in clients’ budgets to be used for safer materials and better quality!

Now – there is regrettably a “quasi VE” out there in the market which is cost cutting but this is essentially a gross misuse of the term and the discipline. This should have been the focus of Dame Hackitt's criticism and not the well proven and extremely useful discipline of Value Engineering.

“Value Engineering (VE) is not a design/peer review or a cost-cutting exercise. VE is a creative, organized effort, which analyzes the requirements of a project for the purpose of achieving the essential functions at the lowest total costs (capital, staffing, energy, maintenance) over the life of the project. Through a group investigation, using experienced, multi-disciplinary teams, value and economy are improved through the study of alternate design concepts, materials, and methods without compromising the functional and value objectives of the client.”

C, 9 October 2018

The trouble is 'value engineering' isn't value engineering unless it is aimed at optimising VALUE which generally has quality at the top of the list of quality, cost and time (ie should never involve compromise). Also as a process it has to be just as rigorous (or maybe even more so) as the original design was around what is being 'value engineered' including being absolutely comprehensive about considering unintended consequences. So, as observed, pretty much all of what has been called 'value engineering' simply isn't - it is VANDAL ENGINEERING (usually in pursuit of profit for those with no more than a financial interest in construction as as process and/or its products).

Keith Snook, 9 October 2018

The problem on this side of the pond is that owners do not have a realistic understanding of the current cost of construction. Many are still basing project costs on 3 or 4 year old data. While wages haven’t risen much, material prices have and will rise even more as the trade tariffs start to bite.

Nicholas Kieft, 9 October 2018

Hackitt reportedly said "that the term ‘value engineering’ should be driven out of construction, remarking that it was a phrase she would be “happy to never hear again”."

This just shows how little she knows about what it is :
There is a 'Price' which is what someones offer to sell or produce something.

There is a "Cost" which includes everything that is needed to have the Product or Service installed and working.

There is a "Value" which is what the working Product or Service is worth to the Customer and other Users.

"Value Engineering" is the Art & Science of optimising the Cost to meet the Customers requirements for the Purposes of the Product or Service throughout its working life.

Invariably "Value Engineering" establishes the Optimum Price for a Product or Service but rarely is this the "Lowest Price" (also know as cost cutting) which is is what she should be arguing against rather than Value Engineering which has positive outcomes rather than negative

Pete Nowson, 12 October 2018

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