Value Engineering

Edwards Finance > General Engineering

Q. Does anybody know where the term "value engineering" originated....and when? I think it used to be called "bringing the project in budget". To me "value engineering" sounds like a military term.

A. -I had learned that "value engineering" was derived from a cost/benefit basis......not bringing the project in on budget. For example, a developer wants to build a building with a 20 year life cycle, why would you invest money in systems that are designed to last 50 years? They same thing with "payback" You spend X dollars on an item that pays itself back 30 years does not make sense if you plan on owning the building for only 20. One more example, that we run into often.......the cost difference between "instant" hot water heaters at remote coffee bars and toilet room.....with the larger water supply and electrical required, vs the standard gas fired tank with smaller lines etc. It depends on the runs and the quantify.........thus value engineering. -Two different things however value engineering can have the effect of "bringing the project in budget." The way I know it, value engineering looks at a project for alternatives that can be more efficient in terms of time and/or cost. It's not just looking for things to cut out of a project. For example, value engineering a large tilt-up usually includes considering bay sizes and their impact on framing. On a small tilt-up, you might consider the cost of masonry vs. tilt-up construction. Value engineering also takes operation and maintenance costs into consideration. This might happen for the selection of roofing and HVAC systems. While it is not unusual for value engineering to point out options of lesser quality (and this must be spelled out,) the goal is to produce the same functionality. I have no clue where it originated. If I had to guess, I'd say the U.S. Department of Defense.

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