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Hackitt: ‘Drive value engineering out of construction’

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  1. 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.

  2. 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?

  3. 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.

  4. 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.

  5. 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.

  6. ‘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.

  7. 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

  8. 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.

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

  10. 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.

  11. 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.”

  12. 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).

  13. 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.

  14. 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

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