THE SYNERGY BETWEEN VALUE ENGINEERING AND SUSTAINABLE CONSTRUCTION

1. THE SYNERGY BETWEEN VALUE ENGINEERING AND
SUSTAINABLE CONSTRCUTION
Ankit Singhai
Student, Department of Civil Engineering
University of Illinois, Urbana-Champaign
Submitted to,
PROF. NORA EL-GOHARY
Department of Civil Engineering
University of Illinois, Urbana-Champaign
CEE 422
Construction Cost Analysis
Spring 2016
4th Credit Paper
Submitted on 18th
April, 2016

2. Abstract
Sustainability of a project is playing a crucial role nowadays. More and more efforts are made to
make a project more sustainable – satisfying the needs of today while considering its future impact.
Value engineering (VE) is a systematic and structured approach for improving projects, products,
and processes. VE is used to analyze and improve manufacturing products and processes, design
and construction projects, and business and administrative processes. It helps achieve an optimum
balance between function, performance, quality, safety, and cost. The proper balance results in the
maximum value for the project. Value Engineering studies are now considered as mandatory
requirements for various government and private projects throughout the world. Traditionally, the
initial investment i.e. design, engineering and construction cost are the major things that are taken
into consideration while undertaking a project. But, the hidden cost factors like the operational
cost, maintenance cost, occupancy cost, energy cost, etc. that come in to play after the completion
of a project is often not considered. For the overall sustainability of a project, these hidden costs
are also required to be taken into consideration. This process of analysis the hidden costs in known
as Life Cycle Cost Analysis. Value Engineering takes into account the life cycle cost of the project.
Understanding these factors in the initial phases of a project can provide a useful tool for analyzing
the overall sustainability of a project and thus make a project cleaner and greener.
Keywords: Value Engineering, Sustainable Construction, Life Cycle Cost, VE Workshop, VE Job
Plan, Sustainable Development

3. Introduction
The indicators of development of a nation are its infrastructure. Buildings, roads, highways, trains,
high-rises, etc. contribute as a significant factor in projecting the development that has taken up in
a place and thus, can also be taken as an indication of prosperity. The development of infrastructure
depends heavily on the construction industry, as the construction industry is what converts
resources like a brick, cement, sand, mortar, asphalt, steel, etc. into a structure like office building,
residential building, roadways, railways and more which indeed are prime components and
indicators of a developed infrastructure. Everything comes with a cost, so does the input of
construction industry to the development of infrastructure. The impact on the development of
infrastructure can be considered as a positive impact, but construction industry also has a
significant impact on the environment, which is many times a negative impact. Sustainable
development and sustainable construction is an integral part of reducing the negative impact of the
construction industry on the environment as it accounts for a significant portion of greenhouse gas
emissions causing air pollution, global warming, depletion of natural resources, energy
consumption and creation of wastes. Value Engineering has globally proved its potential in
improving how a particular work is done, and it also plays a vital role in reinforcing sustainable
development and sustainable construction through its various merits.
Building Sustainably – Sustainable Development and Sustainable Construction
The World Commission on Environment and Development defines Sustainable Development as
"Development that meets the needs of the present without compromising the ability of future
generations to meet their own needs."

4. Sustainable Construction, thus, can be defined on the same premise. So, Sustainable Construction
means aiming to fulfill present day needs of infrastructure requirements by not compromising the
ability of future generations to meet their own needs and necessities in the time ahead. The
construction industry has the capability to make a substantial impact to shape a more sustainable
future for planet Earth.
Figure 1 - Sustainable Development
Environmental considerations advocating the need to create a viable natural environment, social
factors that require shaping a nurturing community, and economic factors which sponsor the
formation of a sufficient economy are the three key constituents of sustainable development.
Sustainable development is a development which fosters the creation of sustainable natural built
environment at the same time promoting economic development and an equitable social
environment.

5. Figure 2 - Principles of SD
Sustainable construction is the termed used for application of the principle of sustainable
development in the construction industry. The five principles of sustainable development (as
shown in Figure 2) are:
 Living within Environmental Limits
 Achieving sustainable economy
 Promoting good governance
 Using sound science responsibly
 Ensuring strong, healthy and just society
Thus, we can say that if construction industry has to work as per the principles of sustainability,
then it has to either limit or slow down its growth, or use alternative ways to do the same things if
it has to continue growing at the same or higher pace. Thus, we can further say that sustainable
construction is the creation and responsible management of healthy build environment in an
ecologically beneficial and resource efficient manner. It takes into account that both developmental
growth and environmental protection are vital our survival in future.

6. Value Engineering
Many of the construction projects face the problem of cost overrun, delayed schedule, etc.
Healthcare and hospitality projects are facing these problems the most. Value Engineering is
gaining considerable attention throughput the construction industry. In the construction industry,
value analysis, value management and value engineering are used to describe a systematic
approach to improving the functions of a project which results in the delivery of the project in the
most effective and efficient manner. Website-gsa.gov defines value engineering as follows,
"Value engineering can be defined as an organized effort directed at analyzing designed building
features, systems, equipment, and material selections for the purpose of achieving essential
functions at the lowest life-cycle cost consistent with required performance, quality, reliability,
and safety."
Value Engineering concept was devised by Mr. Lawrence D. Miles in 1940's. During World War
II, there was an acute shortage of materials, and thus, Mr. Miles was appointed by General Electric
Company (GEC) to come up with solutions for this problem. He was expected to make changes
that would improve the manufacturing techniques or design by using alternative materials and also
lead to substantial cost reduction at the same time. He called it Value Analysis, and later, US Navy
applied the value analysis technique to the design of ships to improve cost performance. As US
Navy used VA to design and engineering principles and practices - it was called Value Engineering
(VE). VA or VE was eventually applied to various projects in varied industries throughout the
world. It is an organized approach to improving value and quality and is backed by impressive
success in different projects throughout the history of construction, production and manufacturing

7. alike. VE can also be defined as a practical and innovative team approach to problem-solving in
construction tasks to achieve the best value for money.
Following points summarize value engineering approach: -
 It is a proven management technique which has proven history to back its merit in
various projects
 It helps develop the work-process such that it improves value and performance by
enhancing quality, safety, operability, reliability, and optimizing the life-cycle-cost of
the project in long run.
 It is a function-oriented analysis incorporating creative thinking, practical approach and
innovative techniques to satisfy customer desires, requirements, needs and expectations
in an efficient and effective way
Value Concept in Civil Engineering and Construction Management
An owner has some demands and expectations that he needs in his upcoming project. Keeping the
owner's perspective in mind, a team of architects and design engineers, by using their expertise in
engineering and design, come up with a product. The expertise and competencies of design team
play an important role in creating the final product. Thus, the final product is driven by engineer's
and designer's ability rather than owner's requirements. The Value Engineering approach considers
that owner's requirement should be the primary deciding factor governing the final product and
team of engineers and designers should be selected such that their proficiency and skills are in line
with the owner's vision. This decision-making methodology permits for a more holistic
understanding of the project by all the stakeholders involved. This requires a creation of a
multidisciplinary team which has representations from all parties concerned including the owner,

8. project users, operation and maintenance staff, architects, engineers, general contractor and
representatives from specialized trades, etc. Such a team is also called as an Integrative Project
Delivery Team (IPD), and it is considered wise to have representatives from all trades which will
affect the project during its predesign, construction, operation, and maintenance – this will allow
for inputs from all phases of the project and thus, various alternatives can be explored which will
affect the overall lifecycle of the project. In cases where representatives from some trade cannot
be included in the team, then it is viable to role-play those who are missing. The owner or the
owner representative plays a crucial role in the success of this team, and thus, he/she should always
be included in the team. The owner or the owner representative define the expectations and
requirements from the project and will help to set priorities based on them. Having a
multidisciplinary team from the beginning of the project can assist in making decisions that are
reached after considering the needs and constraints of all the stakeholders involved.
Value Engineering facilitates the overall effectiveness and efficiency of a project by setting the
functional requirements; and owner's goals, objectives, and needs in a multidisciplinary-team
environment – which eventually leads to decisions relating to the quality, quantity and cost features
to make the final product more practical and feasible.

9. Figure 3 - Value Concept in Civil Engineering and Construction Management
Life Cycle Cost is one of the prime factors that govern the efforts of value engineering in
construction projects. It helps explore alternatives that are not directly cost effective or feasible in
the short run but provide value addition to project in a long term considering the construction
aspects as well as the operational and maintenance aspect of the project life cycle.
Figure 4 – Target performance from VE application

10. Value Engineering can also be defined a balance between Function (F), Quality (Q) and Cost (C)
of a project,
𝑉𝑎𝑙𝑢𝑒 𝐸𝑛𝑔𝑖𝑛𝑒𝑒𝑟𝑖𝑛𝑔 (𝑉𝐸) = 𝑓(𝐹, 𝑄, 𝐶)
where,
- Function (F): functional requirements from a project i.e. it should serve the purpose it is
being built for
- Quality (Q): the project should be in confirmation with the needs requirements and
expectations of the owner and the user.
- Cost (C): it is the Life Cycle Cost (LCC) which includes initial cost of construction as well
as costs linked to running the facility. The running cost includes cost for energy
requirements; cost related to repair, maintenance and replacement during operation;
payment given O&M staff, general staff etc.
o It also considers the fact that, anything that does not add value is a waste.
So, Overall Cost/Expense = Real Cost/Expense + Waste, thus, VE also aims at
reducing wastes to maximize value and minimize cost.
Value is directly proportional to function and inversely proportional to cost. So, a more efficient
functioning accompanied by a lower cost means higher value addition.
Value =
𝐹𝑢𝑐𝑡𝑖𝑜𝑛 (𝐹)
𝐶𝑜𝑠𝑡 (𝐶)

11. Application of Value Engineering in Construction Industry
Value Engineering aims at reducing costs and wastes while maximizing the quality and functioning
of a product. As discussed earlier, VE in construction industry involves the formation of a
multidisciplinary team also called aa an Integrated Project Delivery Team. Thus, though VE can
be incorporated at any stage during a project development cycle, for extracting maximum benefits
at minimum additional costs it is imperative to include VE as early as possible. Most ideal time
for it being conceptual and predesign phase of a project development. Here, basis information
relating to the expectation and project requirements are known, and this can also be used with VE
to benefit the project as a whole.
Also, VE is not just a one-time process. It can be applied multiple times throughout the projects
life cycle whether be it predesign, planning, construction or operation, and maintenance. One thing
that should be kept in mind is that it is always beneficial to do value engineering as early as
possible, VE if done at later stages leads to more cost input while providing comparative lesser
value output.
Ideal way to apply VE would be to apply it during following three stages of a project development:-
 VE-1 – The 1st VE study should be done during planning and design phase. The aim of
VE-1 is to set the functional requirements; and owner's goals, objectives, and needs in a
multidisciplinary-team environment. After the VE-1 study is done, a Value Engineering
Proposal should be formulated which identifies the above factors and makes proposals to
achieve them.
 VE-2 – The 2nd VE study is done after completion of 15% to 30% of the design phase.
Here, detailed proposals of VE are made, and alternatives in design to improve

12. constructability, operability and maintainability of the project are discussed and recorded.
This is where a preliminary consideration for Life Cycle Cost of the project are focused
upon.
 VE-3 – The 3rd VE study is done when the design phase of the project is nearing its
completion (80% to 85% project design is complete). Now, the compliance of various VE
alternatives (from VE-2) in agreement with codes, standards, and specifications are
checked. Often the construction has already begun during this phase of the project, and
thus, making VE changes require more effort.
Figure 5 explains the relation between cost implication and cost savings when VE is applied in
various phases of a project. During the VE-1 and VE-2 phase, the project is in its initial design
phase, and thus, a small effort in value engineering has the potential of producing a significant
impact on the project life cycle. As the project progresses, VE implementation cost increase while
its acceptance level and cost savings decrease.
Figure 5 - Applying VE at different stages of a project
Figure 6 further explains the potential savings that can be achieved by application of VE approach
during various stages of a project. It clearly shows that potential savings from VE decrease as time

13. increases. There is a net gain in project value when VE is applied during design and pre-
construction phases while the application is VE during construction and post-construction phases
often result in further cost and schedule overrun as changes require a lot of time and effort.
Figure 6 - Potential Savings from Application of VE
Methodology used for Value Engineering and Value Management
The Value Engineering Methodology is defined by SAVE-International Job Plan and American
Society for Testing and Materials (ASTM) standard E1699-14. Value Methodology is utilized for
recognizing new ideas for improvements and develop these ideas into viable proposals which result
in being beneficial for the project by increasing its value. As a part of value methodology, value
studies are conducted in following three stages: -
1. Pre-Study Stage: - In this stage, a team for implementing the value engineering
methodology is selected, and coordination meetings are held so that all stakeholders
understand each other and a foundation for working together as a team is set up. Owner's
requirements are assessed and based on the owner's requirements; data is gathered which
further aids in the design and modeling of projects.

14. Figure 7 - VE Phases
2. Value Engineering Workshop: - This stage involved information collection and idea
generation. Functional Analysis of the project is done, in which different function of the
project under study are recognized, observed and recorded. A project function's cost,
function's worth and function's performance are identified and validated. After functional
viability of these ideas is evaluated, further development of ideas and information takes
place. Different ideas are evaluated, and the ideas with the greatest potential of increasing
the projects value are selected and developed into alternatives to the original concept. All
this data, information, ideas, and alternatives are also recorded for future reference.
•Coordination
•Data Presentation
•Team Formation
•Modeling
Pre Study
•Infomation Exchange
•Functional Analysis
•Idea Generation
•Evaluation and Development
•Presentation
VE Workshop
•VE Study Report
•Creaing Implementation
Strategy
•Followup with different trades
Post Study

15. Figure 8 - VE Phases & 7 Step Process
3. Post Study: - Here, Value Engineering Report based on the inputs from Stage 1 & Stage 2
is formed, and implementation plan is created to use these VE techniques on the project.
Implementation of these techniques on the project increases the project value.
The Value Engineering Job Plan
Value Engineering is applied in a logical process known as Value Engineering Job Plan. The VE
job plan helps the VE team to identify and focus on project functions that have the potential to
enhance the project value in a systematic way. This systematic approach of VE job plan helps in
creating new ideas and come up with alternative strategies for project value improvement. Value
Engineering Exercise, as defined by SAVE-International Job Plan and American Society for
Testing and Materials (ASTM) standard E1699-14, the value engineering job plan comprises of
seven successive phases which are as follows: -
1. Information Phase
2. Functional Analysis Phase

16. 3. Creative Phase
4. Evaluation Phase
5. Development Phase
6. Presentation Phase
7. Implementation Phase
Figure 9 - The Seven Phases of the VE Job Plan – SAVE International
Synergy of Value Engineering and Sustainable Construction
All seven phase of value engineering job plan are performed in sequential order, though the
activities performed may differ to fit the context of study concerning the topic at hand or due to
time constraints. The result obtained from VE job plan are aimed at achieving a reliable and viable
value engineering performance of the project. The connection between Value Engineering and
Sustainable Construction (VE-SC) could be realized during the phases of Information, Creativity,
and Evaluation as described in SAVE International VE Job Plan shown in Figure 10.

17. Following is the general sequence followed in the preparation of Value Engineering Job Plan: -
1. Brief Description: Each phase of VE Job plan is described in brief to set a foundation for
steps which follow.
2. Preparing General Outline: Outline of VE activities to be followed in each phase is created.
3. Summarize Related Issues: A summary of issues related to the application of Sustainable
Construction methods and techniques identified in VE outline are discussed and recorded.
4. Defining VE-SC Synergy: After discussing the VE activities and SC issues, the approach
to be followed for combining them to obtain a synergy between them is defined.
Pre- Value Management Workshop Study Phase
In this phase, planning for the Value Engineering workshop is done. The Owner/ Owner
Representative/ Senior Management of the company plays a crucial role in this phase. For
successful implementation of VE Workshop, it is vital to have full support from them. Once the
support from the higher management is obtained, it is time to create a VE team and define the roles
and responsibilities of the different stakeholders involved in the VE team. Project Requirements
are established, Scope of Work is defined, and related data and the information is collected.
Various key documents like drawings and specifications, projects report, executive summary, and
project estimates, etc. are prepared. Then follows the identification and prioritization of various
strategic issues of concern; determining the objectives and scope of the study, and preparing study
schedule; Life Cycle Cost of project estimation, etc. All the information gathered in the pre-study
are shared with the management and all the stakeholders for review. Pre-Study helps in
establishing the needs of owner/higher management; strategic priorities; potential increase in
organizational value by improvements etc. This is the phase which defines Go or Not to Go

18. parameters for taking VE approach by making clear the potential benefits and increase in value
which may result in its adoption.
Information Phase
Knowing the background and various decisions that lead to the project are an important factor that
provides a basis for the development of project design. Thus, the owner/owner representative and
the design present an overview of the project to all the stakeholders involved like the general
contractor, landscape architects, cost estimators, sub-contractors, etc. This project description or
presentation includes elements like: -
 History and background of the project and the project site
 Basis of design
 Constraints
 Site Conditions
 Factors influencing the decision-making
 Criteria for selection of various equipments, materials and systems for the projects etc.
 Project Cost and Schedule
The aim of this is to familiarize the team members with the project and foster a better
understanding of the project. In this phase, the selection of VE activities is made, and also, its
impact on the project is assessed. The issues relating to Sustainability of the construction process
are also discussed in detail. These are as follows: -
 Minimizing resource consumption and maximizing resource reuse by designing for
minimum waste and maximum reuse
 Promoting use of renewable and recyclable materials aiming at environmental protection

19.  Incorporate Lean construction practices
 Designing project to offer flexibility so as to allow to cater for use changes in future
Informational phase brings all the team members and stallholders to a common and basis level of
understanding of the project and includes various tactics, strategies and specifics.
Functional Analysis Phase
This phase is critical as it requires VE team to think and act while considering the functions and
the costs related issues. Ideas and thoughts generated in this phase often result in recommendations
for the project improvement and cost savings. Various functions that the project has to deliver are
identified and analyzed. The effects of these functions on the project cost, project time and
schedule, construction safety, and quality, energy use, aesthetic requirements, environmental
impact, etc. are assessed, and their impact on the overall sustainability and value addition is also
evaluated.
Creativity Phase
This phase involves brainstorming which encourages ideas to flow freely and involves generation
of ideas and recording these ideas as the process continues. The ideas that are presented in this
phase also included in VE Workshop report. Judgment for the ideas is suspended until the team
has no ideas to add further. It is a good practice to perform brainstorming session in separate teams
(comprising of individual from similar trade). Sustainability issues like minimization of project's
energy usage; pollution prevention; conservation of natural resources; efficient use of available
resources; renewable energy alternatives etc. are of prime focus here. A broad range of ideas that
come up during brainstorming sessions provides more for possible alternatives to perform the
required function as well add value and promote sustainable construction.

20. Evaluation Phase
In this phase, the feasibility analysis of brainstormed ideas is done, and evaluation of various
alternatives is done. Each idea is listed, and its advantages and disadvantages are noted down.
Doing this helps understand the ideas and select the best among them for the following steps.
Based on the benefits and cons, these ideas are ranked, and top ranking ideas are eventually chosen
as best alternatives.
Development Phase
The best alternatives are selected, and feasibility analysis of these alternatives is done. The analysis
includes studying and realizing cost estimates of using the alternatives; its life cycle cost,
constructability of these alternatives; and its impact on schedule, quality, safety, sustainability,
reliability, risk, availability, and convenience, etc.
Presentation Phase
This is Phase 6 of the VE Job Plan. The ideas that are refined in the Development Phase are
presented to the owner/ senior management and the design professionals so that they can fully
understand the importance and significance of using the alternatives before they are finally
implemented in the project. For this purpose, a written proposal is also prepared which highlights
how the various alternatives will beneficial to the project and what will be the value addition to
the project, both concerning VE and Sustainable Construction if they are used.
Implementation Phase
After getting a green signal (acceptance to move forward) from owner/ senior management and
designers to use the alternatives in the project, it is time to prepare the implementation plan and

21. schedule to ensure that implementation of these alternatives can be carried out in an effective and
efficient manner. Before VE workshop, there was an original design of the project which proposed
the use of some materials and resources. Now after the implementation of VE workshop, various
alternatives to the original design are introduced in the project. As such, implementation phase
also provides the opportunity to check how the original design has been affected by the use of VE
Job Plan, and what advantages it has offered. These advantages can be measured in terms of
improved schedule and cost; better quality and safety; and enhanced sustainability of the project
etc.
Post VM Study Phase
This stage includes the finalization of VE report to incorporate the VE proposals developed in the
seven stages of VE workshop. The designer incorporates these changes into the project's design,
or he might also reject them and ask for more improvements to some alternatives if he deems them
unfit for implementation in design. The advantages in cost savings, improved sustainability, etc.
are also documented.
Conclusion
Good teamwork and understanding of the VE principles forms the basis for successful
implementation of Value Engineering to aid in better and more sustainable construction. The main
aim is to avoid unnecessary costs while increasing the performance and quality levels of the project
which meet the owner’s needs. Like every improvement method, VE methodology also has some
weakness or limits which might cause obstruction in accomplishing the desired sustainability goals
for the project and they are discussed are follows: -

22.  Conventional VE methodology is usually cost-driven and thus, many a times VE is taken
as a tool to reduce cost, and the facet of improving performance and quality is sidetracked.
 VE uses advantages vs disadvantages approach to select the best alternatives for project,
and it ranks the alternatives on its basis. Thus, it ignores the fact that advantages to one
alternative may sometime be disadvantageous to other alternatives and reverse also holds
true. This can sometimes introduce additional problems and alternatives have to be re-
analyzed and re-ranked to strike a balance.
 Sustainability oriented construction is a new approach, and brainstorming technique used
in VE methodology cannot cater to the creativity requirements for improving sustainable
outcomes. Team members should have an understanding of both the VE methodology as
well as Sustainable Construction for achieving desired results.
 VE requires additional time and resources. If there is no support from higher management
and owner, then VE cannot be undertaken. Owners who do not understand its benefits will
often ignore VE on their project.
United States Green Building Council had created Leadership in Energy and Environmental
Design (LEED) rating s to access the sustainability of construction projects. The LEED assessment
of sustainability is based on factors like sustainable site selection, efficient use of water and energy,
use of renewable materials and energy etc. We have seen that there are certain limitations to the
application of VE to SC. Following steps can be taken to improve VE methodology to better fit
the Sustainable Construction criteria: -
 Appointing experienced VE professional to facilitate VE Study and VE Workshops.
 While cost reduction is important, improved performance and quality should be the prime
focus for VE studies. This approach aids in reducing the overall Life Cycle Cost of the

23. project. The success of value engineering approach is higher when it is aimed at increasing
performance rather than just reducing cost.
 Sustainable construction is a new trend as such knowledge of sustainable construction
practices is also limited, so professionals must be encouraged to explore the field and be
creative while applying value engineering.
 Owner’s create demand and thus, owners/senior management of projects must encourage
their teams to take steps to include value engineering and sustainable construction practices
while building a new project.
Value Engineering and Sustainable Construction have a long way to go, and together they have a
huge potential to increase the value of a project by improving the performance and quality of the
project at the same time reducing the overall cost. There are some difficulties in their application,
but once these minor hurdles are overcome, the project can benefit a lot from the combined
approach of VE-SC.

24. References
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http://www.worldbank.org/depweb/english/sd.html
"Principles of Sustainable Development." - Sustainable Northern Ireland. Web.
http://www.sustainableni.org/sustainable-development/sustainability-principles/index.php
"Value Engineering." Value Engineering. Web. http://www.gsa.gov/portal/category/21589
Al-Yami, A. "Exploring Conceptual Linkages between VE and Sustainable Construction."
Southborough University, Leicestershire, UK (2005).
Al-Yousefi, Abdulaziz S., and F. S. A. V. E. CVS-Life. "The Synergy between Value Engineering
and Sustainable Construction." CTBUH 8th World Congress, Dubai.
Mahadik, Urmila A., and Anil B. Mahadik. "Value Engineering Tool for Sustainability in
Construction Projects."
Wao, Joel, and S. MQSI. "A Review of the Value Engineering Methodology: Limitations and
Solutions for Sustainable Construction."