Value Engineering Procedures

Document Type: Procedure
Version: 1.0
Last Updated: February 2026
Distribute To: Estimators, Project Managers, Preconstruction

Purpose

Establish procedures for identifying and implementing value engineering opportunities to reduce costs without sacrificing function or quality.

What is Value Engineering?

Value Engineering (VE) analyzes functions to identify ways to:

Reduce cost
Maintain or improve function
Maintain quality requirements
Meet owner objectives

Value Engineering vs. Cost Cutting:

Value Engineering	Cost Cutting
Maintains function	May reduce function
Thoughtful analysis	Quick reductions
Owner benefits	May benefit contractor only
Often improves design	May reduce quality
Collaborative	May be adversarial

When to Apply VE

Timing Opportunities:

Phase	Opportunity	Savings Potential
Design (early)	Highest	10-30%
Design (late)	Good	5-15%
Bidding	Moderate	3-10%
Construction	Limited	1-5%

Earlier = Better: More freedom to change, lower redesign costs.

Value Engineering Process

Step 1: Information Gathering

Understand:

Project requirements
Owner priorities
Budget constraints
Code requirements
Schedule needs

Analyze:

High-cost items
Complex systems
Over-specified items
Constructability issues

Step 2: Function Analysis

For Each Element, Ask:

What is its function?
Is that function necessary?
What else could provide that function?
What is the cost of the function?

Function Categories:

Basic: Primary purpose (must have)
Secondary: Supporting purpose (nice to have)

Step 3: Creative Phase

Generate Alternatives:

Different materials
Different systems
Different methods
Eliminate unnecessary items
Simplify complexity

Brainstorming Rules:

No criticism during ideation
Quantity over quality initially
Build on others' ideas
Wild ideas welcome

Step 4: Evaluation

For Each Alternative, Evaluate:

Cost savings
Impact on function
Impact on quality
Impact on schedule
Risk/feasibility
Owner acceptance likelihood

Step 5: Development

For Promising Ideas:

Detailed cost analysis
Technical feasibility
Drawings/specifications
Risk assessment
Recommendation

Step 6: Presentation

VE Proposal Should Include:

Current condition/cost
Proposed alternative
Cost comparison
Function comparison
Quality impact
Schedule impact
Recommendation

VE Proposal Format

================================================================
        VALUE ENGINEERING PROPOSAL
================================================================

VE Item #: ____________  Date: ____________

Project: ___________________________________________________

Prepared By: _______________________________________________

================================================================

DESCRIPTION:

Current Design:
___________________________________________________________
___________________________________________________________

Proposed Alternative:
___________________________________________________________
___________________________________________________________

================================================================

COST COMPARISON:

Current Design Cost:              $____________________
Proposed Alternative Cost:        $____________________
                                  ────────────────────
SAVINGS:                          $____________________

Design/Coordination Cost:         $____________________
NET SAVINGS:                      $____________________

================================================================

FUNCTION ANALYSIS:

☐ Maintains required function
☐ Improves function
☐ Reduces function (explain): ______________________________

Quality Impact:
☐ No impact  ☐ Improved  ☐ Reduced (explain): ______________

Schedule Impact:
☐ No impact  ☐ Faster  ☐ Slower: ______ days

================================================================

FEASIBILITY:

Technical: ☐ High  ☐ Medium  ☐ Low
Owner acceptance: ☐ Likely  ☐ Possible  ☐ Unlikely

Risks/Concerns:
___________________________________________________________

================================================================

RECOMMENDATION:

☐ Recommend adoption
☐ Further study needed
☐ Not recommended (explain): _______________________________

================================================================

APPROVALS:

Owner: _____________________________  Date: ________________
Architect: _________________________  Date: ________________
Contractor: ________________________  Date: ________________

================================================================

Common VE Opportunities

Structural:

Current	Alternative	Consideration
Steel frame	Concrete	Market conditions
Cast-in-place	Precast	Schedule, quality
Deep foundations	Shallow	Soil conditions
Over-design	Right-size	Engineering

Mechanical:

Current	Alternative	Consideration
Central plant	Distributed	First cost vs. operating
VAV	VRF	Space, efficiency
Copper pipe	PEX	Application, code
Complex BMS	Simple controls	Owner capability

Electrical:

Current	Alternative	Consideration
Copper wire	Aluminum (feeders)	Size, application
Custom lighting	Standard	Lead time, cost
Over-designed	Right-size	Load analysis

Architectural:

Current	Alternative	Consideration
Curtain wall	Storefront	Performance needs
Natural stone	Manufactured	Appearance, durability
Custom millwork	Standard	Design intent
High-end finishes	Value alternatives	Owner priorities

VE Program Management

Tracking VE Items:

ID	Description	Savings	Status
VE-001			Proposed/Accepted/Rejected
VE-002
VE-003

Per contract terms
Typical: 50/50 owner/contractor
May vary by delivery method

Constructability Review

Constructability = Can we build it efficiently?

Review For:

Sequence issues
Access limitations
Tolerance coordination
Material availability
Labor skill requirements
Schedule impacts

Constructability VE:

Simpler connections
Standardized elements
Prefabrication opportunities
Sequence optimization

Owner Considerations

When Presenting VE:

Do:

Focus on owner benefit
Maintain quality/function
Present professional proposals
Be honest about trade-offs
Support design team

Don't:

Criticize design team
Propose quality reductions
Hide trade-offs
Push inappropriate ideas
Make it adversarial

Estimating Standards
Preconstruction Services
Change Order Management
Submittal Process

Template provided by support.construction. Value engineering benefits everyone.

Purpose​

What is Value Engineering?​

Value Engineering vs. Cost Cutting:​

When to Apply VE​

Timing Opportunities:​

Value Engineering Process​

Step 1: Information Gathering​

Step 2: Function Analysis​

Step 3: Creative Phase​

Step 4: Evaluation​

Step 5: Development​

Step 6: Presentation​

VE Proposal Format​

Common VE Opportunities​

Structural:​

Mechanical:​

Electrical:​

Architectural:​

VE Program Management​

Tracking VE Items:​

Sharing Savings:​

Constructability Review​

Related to VE:​

Owner Considerations​

When Presenting VE:​

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