Big Project ME September 2018

Page 44

Value Engineering

Tom Gilmartin

Understanding the difference between cUtting costs and ValUe engineering Tom Gilmartin of ALEC Fitout outlines the challenge of educating the local construction market about value engineering, and explains the benefits of a structured approach What’s the difference between cost cutting and value engineering? To the various stakeholders on a project, they can mean the same thing! Clients want to save money, and designers push back as they want to protect the integrity and intent of their design. Contractors can be caught in the middle – how can we maintain design and achieve target budget? In the UAE construction and fit-out market, the two very different concepts of cost saving and value for money have over time intertwined into a solution labelled value engineering. Clients 42 September 2018

and developers expect to reduce their budget, thus increase the value of their expenditure. However, what happens when a client demands impossible target budgets, or the contractor introduces cheap and inferior products and materials that destroy the design intent and vision of the architect or interior design team? Cost cutting is very prevalent in today’s construction and fit-out industry, and is slowly destroying any value in the market. Contractors struggling to achieve a target budget are unable to resource the project properly, leading to inevitable delays in delivery. Materials used

to achieve unrealistic budgets are inferior and result in a poorly executed fit-out. The client’s asset opens late and requires additional maintenance and rework. Arguments regarding extension of time and final payment ensue and all parties lose considerable time, energy and resources in an attempt to fight their corner. Do we really want to continue working like this? Thankfully, cost cutting and value engineering are not the same thing. In our experience, successful application of value engineering results in the client

realising the target budget while achieving a high quality of finish and maintaining the original design intent. Easier said than done! At ALEC Fitout, we have various levels of value engineering that apply, depending on how aggressive the client target budget is and how high the baseline specifications are. Essentially, we price a project based on design and specification, and identify the major value packages and items to see how and where to save the client money. The first level of value engineering is to provide an alternative product or material to the specified one. For example,