One of the main benefits of construction management at-risk projects is that the contractor is involved – not only in the construction phase but also the design phase. This benefit is particularly advantageous when the project’s construction budget has limitations. In addition, with the early engagement of the CMAR firm during the design phase, a value engineering (VE) process can be employed to save valuable owner resources.
As an example, in order to meet the budgetary requirements and constraints on water and wastewater projects, Haskell engages in the use of value engineering to examine options available to reduce unnecessary costs. In some instances, these VE efforts have saved projects from cancellation due to preliminary budget numbers greatly exceeding the allocated funding. True value engineering, however, is not simply a matter of cutting costs or reducing scope. A well-planned and well-executed VE process can improve a project without sacrificing its essential integrity. To ensure that maximum value is created through the VE process, the following are critical components of success:
- Early contractor involvement selection of the CMAR firm can occur in parallel with the design services
- Willingness of all parties to listen to new ideas
- Giving careful consideration of all options, always with the project’s goals in mind
- Having design flexibility to incorporate suggested VE items
Case Study of a Value Engineering Process on a CMAR Project
City of St. Petersburg SWWRF Biosolids Facility
The City of St. Petersburg selected Haskell as its construction manager at-risk firm for its biosolids project. At the outset, Haskell participated in pre-construction services, working alongside the city’s design engineers to provide construction cost estimating, constructability reviews, value engineering analysis, and ultimately establishing a GMP for construction services.
However, at the 60% milestone estimate of the design, when the project costs exceeded the city’s budget and changes needed to be made if the project was to move forward, Haskell then pursued additional site investigations and engaged other consultants in a value engineering process. This process successfully determined what viable alternatives were available to reduce the overall costs and allow the project to move forward while maintaining the same level of quality and scope without impacting its overall functionality.
The value engineering concepts identified by the Haskell team included the selection of alternative foundation systems and modifications to the site layout for the primary clarifiers and digesters, which resulted in economic savings for both labor and materials. Other modifications to the site layout resulted in savings for piping material and labor while removing costly large diameter fittings.
Overall, the Haskell team was able to eliminate more than $10 million of cost prior to construction starting without sacrificing quality and functionality. By having the CMAR firm engaged early in the development of the project’s design, these value engineering concepts were identified before construction began, and the owner was assured a competitive procurement of all VE alternates.
Effective Value Engineering Preserves Project Integrity
The key to success of a value engineering analysis is developing a more precise and appropriate definition of value. Through a group investigation, comprised of experienced, multi-disciplinary teams, value and economy for a project are improved through the study of alternative design concepts, materials, and methods, without compromising the functional and value objectives of the client.