HomeMy WebLinkAboutAgenda - 03-31-1999 - 1c-14•
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Memorandum
TO: County Commissioners
From: John M. Link, Jr. County Manager
Date: March 20,1999
RE: Project Management
The Board has historically expressed concern about the high cost of construction
for County funded projects. Both Board members and County staff have
explored ways to address this challenge through various means of project
management. I attended a session at a recent City /County manager conference
that dealt with value engineering. Based on what I learned during this session, I
believe value engineering can fill the gap that we have recognized and allow us
to use the County's construction dollars more effectively and efficiently.
What is Value Engineering?
Value Engineering offers a way to stretch construction dollars and to obtain a
much needed second opinion based on a reliable and measurable approach.
Value engineering systematically searches out high cost areas in a design and
arrives at the best balance between cost, performance and reliability. Value
engineering is not a design review. In summary value engineering offers the
following benefits:
• it follows a Value Engineering job plan that analyzes the project from a
variety of angles in order to obtain the best answers for the specific project;
• it uses a multi disciplined approach to "see" the project from as many
different points of view as possible;
• it questions everything. There are no "sacred cows" with value engineering.
• it separates "needs" from "desires"
• it employs life cycle cost analysis of critical components
• it maintains a sensitivity to the design and the designer's point of view when
creating
• it also, however, analyzes the project from the owner /operator's points of
view. -
As a general rule of thumb, it is suggested that any project whose estimated
construction cost exceeds $5 million will benefit significantly from the value
engineering process.
As indicated earlier, Value Engineering is not review of a final design in an effort
to cut a project such that it falls within budget. In fact, the continuum of value
engineering effectiveness shows it to be most effective if begun during the
design concept phase.
r *.
County Commissioners
Project Management
Page 2
Savings opportunities
Preliminary Final design
Design design
concept
Implementation Costs
As listed below, it is a process that shows greatest benefit if employed at several
points in the design /construct process:
• Early in the schematic design phase;
• Concurrently with the engineering review;
• When cost data becomes available;
• During the working drawings phase (design is approximately 95% complete);
and
• Throughout construction.
A system of checks and balances is maintained by carrying out the process
during each of these phases. Mid - stream adjustments are thereby effected with
minimal, if any, cost or time impact and a more successful projects are realized.
The Process
The job plan, which is critical to the successful Value Engineering process
encompasses six distinctive phases as follows:
1. Information gathering.
• This phase familiarizes the Value Engineering team with the contract
plans and specifications. It involves a functional analysis of the
project that looks at the total system first and then each of the
component parts. Energy utilization models as well as cost models
are prepared in advance of this stage and are shared with the Value
Engineering team.
2. Speculative /creative phases.
• This phase of the job plan is used to generate many ideas for the
project in an effort to remove barriers to a free flow of ideas.
3. Evaluation /analytical phase.
• The Value Engineering team will analyze the ideas resulting from the
creative session and will select the best ideas for further
development.
4. Development/recommendation phase.
• The Value Engineering team members prepare alternative designs for
consideration with life cycle cost comparisons of the original designs
and proposed alternatives. All recommendations are documented
with sketches, basic concept and recommendation of alternatives.
5. Report phase.
• The Value Engineering team presents the results of their work to the
designer and owners.
County Commissioners
Project Management
Page 3
6. Implementation phase.
• The project designer will provide responses on the alternatives
identified and will incorporate them into the design, upon agreement
with the owner.
The Managers who have seen Value Engineering work for their projects indicate
that possibly the most critical element of this process is that it be carried out by a
certified value specialist (CVS) who has experience in construction. There are
firms who provide this service and I would recommend that this step be
incorporated into all County funded projects.
The Value Engineering process would ensure that County funded projects are
designed and built to the most efficient standards available.
County Proiect Management
As you know, currently the management for County projects is provided by a
team of County staff members who:
• ensure that the projects stay on track as it respects schedule and budget;
• serve as the County's representative for construction /contract related issues;
• work in tandem with the designer to provide inspections to assure that the
quality of work is as specified.
• ensure the project is properly closed out upon completion and that
documentation and warranty information is obtained;
• follows up with contractor and /or designer regarding warranty issues as they
may arise during warranty period, which extends for one year from
completion.
Recommendation
With this in mind, I would propose to the Board that the County routinely employ
Value Engineering strategies for all projects in excess of $5 million, and that the
Board recommend the same approach to the School Boards for School Capital
Projects. I would further recommend that we review all projects for Value
Engineering potential and include any project below that threshold if we
determine it would benefit from Value Engineering. _
The Value Engineering process would broaden this partnership among County
and /or School staff, the designer and the contractor(s) to bring a project to
fruition in the best way possible.
In an effort to give you insight regarding the Value Engineering process, I am
attaching information from a firm that provides this service who attended the
recent City /County Manager's conference. I would propose that this subject be
discussed as part of the work session agenda with the School Boards on March
31, 1999. Should you have questions or comments in advance of that work
session, please feel free to call me.
CONDUCTING A VE STUDY
CONDUCTING A VALUE ENGINEERING STUDY
As indicated on the following diagram, all of our VE studies follow a definite task
flow. This strict application of proven management principles assures that the results
will be well developed, easily understood recommendations with optimizzed cost savings.
On the pages following the diagram are the steps that we take during each phase of the
study and the input that we expect from the Design Architect/Engineering firm. We have
used the following approach on our past studies with great success:
• Prestudy Preparation Phase
• Project Study Workshop Phase
• Post Value Engineering Study Phase
The organized approach that we use both in preparation for the workshop and
during the value engineering workshop, allows us to maintain a quick turn around time
for the project study and the submittal of the Preliminary Value Engineering Reports.
This approach also allows us to maintain the proper coordination among the Designer,
the Owner and the value engineering consultant.
a
Prestudy Preparation Phase
The preparation and organization for a value engineering study are vital to its
success. This phase of the project is used to bring the VE team up to speed on the
project and to remain abreast of the progress of the project. The prestudy phase is also
used to orient the Owner and the Designer in the work that the VE team will be doing.
The Owner and Designer are an integral part of the value engineering effort and it is the
coordinator's responsibility to ensure that they are informed as to what the VE team is
doing.
• Arrange a value engineering coordination/orientation meeting with
the Owner and Designer to review the organization and
management of the study approximately three weeks prior to the
workshop. This meeting will also explain the principles of value
engineering and the proposed project approach.
VALUE ENGINEERING PROJECT STUDIES
TASK FLOW DIAGRAM
PRESTUDY PHASE
pro9ect
coordiination
. Verity Schedule
prestudy
preparation
• Collect Design Data
construction cost
(CC) model
• Distribute by Process
annual cost
(ACC) model
• Include Energy
life c cle cost
(LCCy) model
• Include CC
' Outline Format
for Cost Data
• Distribute to Team
• Distribute by Trade
• Include Labor
a Include AC
• Format for
Members
Construct Graphic Model
: Include aS�pplies/
. Distribute Cosh
Degsrnde Presentation
• Cost Data
• Define High CC Areas
• Distribute Costs
•Compare to Previous
Cost Models
' Orientation
Meeting
• =9 RojecT
Constraints
• Compare to CC Model
• Define High LCC Areas
orientation
• Introduction by Program
Coordinator
• Project Description and
Presentation by Designer
• Site Visit or Familiarization
• Define Owner Require-
ments
PROJECT STUDY PHASE
information phase
• Analyze Project Costs
creative phase
• Introduction to Creative
• Function Analysis
Thinking.
• Fast Diagram
•Creative Idea listing
• Identify H�ah Cost Areas,
f • Quantity of Idea
LCC and CC
2• Association or ideas
• Identify High Energy Areas
3' �n �I e
• Develop Cost/Worth Rallos
4. Man Hkkg Effect
•
Check Comotitertzed kiwi Brainstorming
Bank From Previous Studies
judgement phase
• Eliminate Impractical
Ideas
• Maintain Quality
• Improve Efficiency
• List Advantages and
Disadvantages
• Select Ideas for
Development
IMPLEMENTATION PHASE
(POST STUDY PROCEDURES)
ve study report
final acceptance
• prepare VE Preliminary • Submittal of Redesign
Report Estimate to Owner
• Conduct Post Workshop • SubmlHal of VE Reports
Meeting with Owner and to RegWatory Agencies
Designer • Approval and Incorpora-
• Designer Prepares Final Lion Into Final Design
Report
I development I
phase
• Develop Preliminary
Design of Ideas
• Prepare ABemate
Design Sketches
• Prepare Estimate
.' CCo �rree on Ufe Cycle
Use Computerized Cost
Estimating and Design
Criterla Databases
presentation
phase
• Summarize Findings
• Present VE Ideas to
Owner - Designer
•Determine Acceptance
of Ideas
Iff PACIFIC ENVIRONMENTAL SERVICES, INC.
• Value Engineering Program Coordinator arranges for the collection
of project study material. Informative design- data should be
distributed to team participants at least two weeks prior to the
workshop to prepare the study team for the project. This would
include design reports and preliminary plans, if available. The
Designer would distribute this data to the appropriate people.
Design drawings, cost data, specifications, design calculations,
reports and pertinent regulations are required during the project.
• Develop a Cost Model
• Develop a project Energy Model. This model indicates where
energy is consumed in the project. It is an indication of high
energy usage areas that will require further investigation by the VE
team.
• Arrange for the logistics of the VE study.
• The Designer should prepare a brief outline of the background and
rationale for the project. Any constraints or areas in the design
that are not to be analyzed should be clearly outlined.
• Analyze and validate original cost data prior to the workshop
study.
The primary concern in the prestudy preparation phase is that all parties are well
coordinated regarding the progress of the project and the changes occurring during the
design and that there is ample information available for the VE team.
Project Study Workshop Phase
Value engineering is a systemized approach for searching out high cost areas in
a design and arriving at the best balance between cost, performance and reliability. It
is not a design review. This basic VE Job Plan is followed in all value engineering
studies. Value engineering requires the proper positive attitude and removal of
roadblocks that thwart creative thinking.
w
Our experience has indicated that a project orientation by the program coordinator
sets the stage for the study. A presentation by the Designer, giving the rationale for
design, is also required. A brief presentation on the concept for each discipline in the
design will benefit the value engineering study. We would expect to utilize this
procedure and propose to establish a format for the study based on the following agenda.
WORKSHOP AGENDA
Introduction
Project Orientation
Project Description and Presentation by the Designer
Information Phase y
Familiarization by team members with the contract plans and specifications.
Continue familiarization with project and begin the Functional Analysis of the project.
Prepare a graphical presentation of the Cost Model, which is prepared prior to the study.
Look at the total system first and then at the component parts. Review energy utilization
of the system design using the Energy Model prepared in the prestudy phase.
Creative Phase
Begin creative idea listing. The aim is to obtain quantity and association of ideas,
to eliminate roadblocks and to allow free flow of ideas.
Judgement Phase
The value engineering team analyzes the ideas listed in the creative session and
selects the best ideas for further development.
Development Phase
Value engineering team members prepare alternate designs for consideration with
life cycle cost comparisons of the original designs and proposed alternatives. All
recommendations will be backed up with sketches, basic concept and recommendation
of alternatives.
Presentation Phase
Pacific Environmental Services, Inc. will provide all VE worksheets to be used
during the study. The results of the team efforts will be summarized in an oral
presentation at the end of the study. Our experience has shown that representatives of
the Design Architect/Engineer's firm and the Owner's staff who will review the VE team
recommendations should attend the oral presentation. All work prepared at the end of
the 40 -hour study will be complete with the back -up data, rationale, references, design
calculations, sketches, etc. that will be included in the preliminary VE study report. A
copy of this data will be given to the Designer at the conclusion of the oral presentation
so their personnel may begin working on responses while the preliminary VE report is
being prepared.
Post Value Engineering Study Phase
Upon completion of each value engineering workshop, the value engineering
consultant will prepare the Preliminary Value Engineering Report for submittal to the
Owner. The value engineering report will include the following:
• Project Description and Design Concept of Project.
• Original Design and Proposed Alternatives, showing sketches,
design calculations and a comparison of the cost of owning and
operating the facility.
• Life Cycle Cost Comparison.
• Potential Contract Savings.
A
■
DESIGNER'S INPUT
The Design Architect/Engineering firm provides written material for the VE team
members to review in advance of the VE workshop. The Designer's staff may also
provide a verbal presentation of this material to the VE team as one of the first items of
the 40-'hour workshop to accelerate the orientation of the team into the potential
alternatives. After the project study workshop, the Designer evaluates the recommen-
dations of the VE team and drafts a report on implementation of the VE recommenda-
tions.
This section is intended as assistance to the Designer's staff in accomplishing
their vital input into the VE effort for their project.
Information Required from Designer
One of the key elements in a value engineering study is the information and
background on the project. Effectively relating this information to the VE team will
make their efforts more productive. Our experience has shown that if the teams are well
informed about the background of the study, their efforts will not overlap comparisons
already made by the Designer's staff.
The following is a listing of data, generally in descending order of importance,
that is needed to conduct the VE studies. This material will be discussed and refined if
necessary during the orientation meeting conducted with the Designer prior to the first
VE effort:
• 35 % Plans
• 35 % Specifications
• Project Engineering Documentation (PED)
• 35 % Cost Estimate
• Other Pertinent Background Information Affecting Current Design
b
Presentation by Designer
The Design Architect/Engineering firm for a project has spent much time and
effort in the analysis of design alternatives, process selection, building layout, equipment
operating systems, building structure, and other areas of the design. Value engineering
is not intended to be a review of previous design effort, but a process of developing new
combinations for review and acceptance by the Designer and the Owner. Within the 40-
hours of a VE study, the team members must become familiar with the project, must
zero in on high cost areas, and develop alternative concepts. Being cognizant of the
Designer's knowledge of the project helps to bridge the gap and to get a better feel for
the rationale used in the development of the project.
The following outline is given to assist the Designer in developing his orientation
w
presentation to the VE team, usually given on Monday morning of the study week:
1. Rationale and history of development of the project.
2. Statement of the problem - What is the Project?
3. Reason for selected sites or site layout.
4. Constraints imposed upon you as the Designer by the Owner, regulatory
agencies, etc.
5. Options and /or ideas you would like the VE team to look at.
6. Site characteristics (power, soil conditions, traffic patterns, existing
conditions).
7. Public participation for the project ancr areas of public concern.
8. Description of project design.
a.
Layout/Civil
b.
Mechanical
c.
Electrical
d.
Architectural
e.
Structural
f.
Operations
9. What comparisons were made in developing the design?
10. Factors influencing the development of the design.
11. Description of Capital Cost and O &M Costs for the project.
Key Questions to Remember Are:
• What did the Designer select?
• Why was this selection made?
• What alternatives were explored?
After the Designer's staff make their presentation, the VE team members will be
asking more specific questions about the detailed aspects of the project. The intent is to
get a free flow of information in an informal atmosphere. It is anticipated the
presentation by the Designer's staff should take approximately 1 I - 2 hours. Therefore,
in -depth details are not needed for the presentation.
U: \SHARED\ABE\VEQUAL%CONDVESf.UDy
VALUE ENGINEERING EXPERIENCE
MISCELLANEOUS BUILDING PROJECTS
1982-1998
RESULTS OF STUDIES
TOTAL CONSTRUCTION COST OF $1,510,110,000
49 PROJECTS
TOTAL BUILDING SQUARE FEET 3,904,000
SUMMARY OF KNOWN RESULTS
NUMBER OF PROJECTS . 47
KNOWN CONSTRUCTION COST $1,401,310,000
PRESENT WORTH OF IMPLEMENTED $163,702,000
SAVINGS
RETURN ON INVESTMENT 95:1
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MISCELLANEOUS BUILDING PROJECTS
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P.W. IMP
PROJECT
DATE
LOCATION
CONST. COST
SAVINGS*
RETURN ON
($11000)
(511000)
INVESTMENT
49. Vaccine Research Center
1998
National Institutes of Health
23,400
1,627
179:1
1 -5 Story, 83,500 SF
Bethesda, MD
48. Embassy Building in Uzbekistan
1998
Department of State, FBO
12,162
1,668
56:1
1 -2 Story, 40,400 SF, Renovation /Addition
Washington, D.C.
47. Moderization Building 37
1998
National Institutes of Health
85,400
4,420
152:1
1 -6 Story, 100,000 SF Lab
Bethesda, MD
46. Performing Arts Center
1998
CNU
35,419
2,850
31:1
1 -2 Story, 173,000 SF Concert Hail
Newport News, VA
45. SR 826 Improvements -Road Reconstruction
1998
Miami, FL
43,000
1,465
31:1
1.5 mile, Palmetto Expressway
44. Sports Wellness Facility
1998
CNU
15,900
2,130
85:1
1- 2Story, 115,200SF, Indoor Track
Newport News, VA
43. Thomas Nelson Community College
1998
Hampton, VA
6,120
480
20:1
1 -3 Story 49;100 SF, Classroom
42. NOVA Community College Parking Garage
1998
Alexandria, VA
11,000
600
24:1
2 level, 500 Spaces
41. Residence Hall II
1998
Christopher Newport Univ. ICNU)
11,074
283
13:1
1 -4 Story, 117,000SF
Newport News, VA
40. 1-4 Improvements -Road Reconstruction
1998
Orlando, FL
165,000
18,000
360:1
6.2 KM, 2 Interchanges
39. Family Housing Repairs
1997
Sabana Seca, PR
24,610
14,568
388:1
144 Units, 227,000 SF
38. NOVA Community College
1997
Leesburg, VA
7,127
740
23:1
1- 3Story, 49,000 SF, Lab /classroom
37. Fairfax Community College
1996
Fauquier County, VA
8,290
950
29:1
1 -2 Story, 57,400 SF, Academic Building
36. Air Cargo and Air Passenger Terminals
1996
Naples, Italy
13,900
687
17:1
1 -3 -Story, 1 -2 Story, 105,000 SF
35. Water Treatment Plant
1996
Public Works Department
28,500
1,171
47:1
30 mgd
St. Joseph, MO
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34. Intercoastal Waterway Bridge Replacement
1996
Corps of Engineers
16,000
1,200
60:1
5 Lane, Bascule Bridge
Chesapeake, VA
33. Phase II Academic Building CISAT Campus
1995
James Madison University
25,189
2,517
93:1
1 -4 Story 214,600 SF
Harrisonburg, VA
32. MSO Office Building, Dhahran, Saudi Arabia
1994
Khatib and Alami Assoc.
39,200
1,450
50:1
196,000 SF, 4 -Story Bldg.
31. Camp Le Jeuns, NC
1993
Atlantic Division, NAVFAC
7,800
224
14:1
250 t pd Landfill
30. Water Supply Dams; Rehabilitation of 3 Dams;
1993
City of Norfolk, VA
19,750
3,800
130:1
Earthen Type
29. Police/Fire /Rescue Bldg.
1992
Port Authority of New York and
11,000
2,700
54:1
JFK Airport, Renovation/New; 2 -Story, 26,000 SF
New Jersey
28. Medical Research Lab & Vivarium, 1 -9 Story
1991
University of Virginia
25,663
1,800
51:1
152,200 SF Addition
27. International Airport, 2 -2 &3 Story Bldgs Additions
1991
Bangor, Maine
10,323
1,050
47:1
and Renovation; 150,000 SF
26. Juvenile Detention Center, 2 -2 Story Bldgs; 200
1990
City of New York DGS
57,804
4,150
136:1
Inhabitants, 168,000 SF
25. Carpenter'slCrafts Storage Bldg.; 1 -1 Story,
1990
Nevada Test Site, DOE
1,285
200
10:1
17,000 SF Bldg.; Prefab. Metal
24. Infrastructure and Power Plant; 1 -1 St., 56,350 SF
1990
Kuwait University, Kuwait
38,500
4,150
83:1
Utility Systems
23. Signalization System for Subway System
1990
DORTS, Taipei, Taiwan
120,000
24,250
255:1
22. Renovation 1241,000 SF) and Addition
1990
Kuwait University, Kuwait
37,000
3,010
60:1
1244,200 SF) College of Social Sciences
21. Advanced Photon Source Facility, 7 -1 Story
1990
Argonne Labs, Chicago, DOE
140,354
17,000
113:1
Bldgs. High Tech Complex, 781,000 SF,
Research Lab
20. Highway Beautification Landscaping 5 Mile Stretch
1989.
Henderson, Nevada
7,260
950
34:1
Urban Highway
19. Employment Security Office, 2.2 Story Bldg.
1989
Salt Lake City, Utah - GSA
5,956
407
16:1
& Parking Garage, 74,900 SF
18. Old Birdhouse Conversion, Bronx Zoo
1989
City of New York DGS
8,600
186
5:1
30,200 SF Historic Renovation
17. Bong Peak Mine • Iran Ore Conveyor
1989
Liberia, Africa
19,600
4,850
84:1
(7km) and lifting (80 m) 17 Million Tons/Year
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16. Subway Station and Approach Terminals
(8,800 ft. Twin Bore 5.4 m Diameter)
1989
DORTS, Taipei, Taiwan
160,000
7,773
91 :1
15. Police Precinct
2 -2 Story Bldgs., 55,000 SF
1988
City of New York DGS
13,214
380
24:1
14. Queens Museum Reconstruction, 74,000 SF
Historic Rehabilitation
1988
City of New York. DGS
11,808
2,300
61:1
13. Administration Building
Area 6 - 31,500 SF 1 Story Building
1988
Nevada Test Site, DOE
2,487
700
35:1
12. NAK Waste Disposal Facility
1,988
Oak Ridge, TN DOE
1,066
210
30:1
11. Hospital, 124 Bed, 2 -Story Skilled Nursing
Facility, 63,400 SF
1988
Santa Clarita Health Care Assn.
Valencia, CA
6,862
243
13:1
10. DOT /DEP Standards and 5 Projects
(Reconstruction/Rehab.)
1987
City of New York OMB
72,300
5,100
110:1
9. Fire House Standards Design
1987
City of New York OMB
2,174
310
9:1
8. Flushing Meadows Zoo
Rehabilitation - 13 Acre Zoo and Children's Farm
1987
City of New York OMB
8,970
1,610
32:1
7. Library Addition 22,000 SF Second Floor Addition
1986
City of New York DGS
4,807
633
30:1
6. Parking Garage - 517 Spaces, 4 Level Underground,
190,000 SF
1986
City of Chapel Hill, North Carolina
4,937
510
21:1
5. Standard Road and Bridge Specifications
Nationwide
1984
U.S. Forest Service
500,000 per yr.
19,000 per year
655:1
4. Region X Hazardous Waste Site Clean -Up
1984
U.S. EPA
9,270
1,510
42:1
3. Arizona DOT, 1010 Lighting Desigrf, 15 Mile
Segment
1983
Arizona DOT Phoenix, AZ
5,500
2,487
104:1
2. Orange Grove Road
1982
Pima County Arizona
4,855
820
30:1
1. Kino Boulevard Interchange
1982
City of Tucson Arizona
5,200
630
25:1
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