Practice Management Member Conversations

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

Get the client's budget at the onset of the project.

Divide it by two.

Use Means Cost Estimating to determine the maximum size project that can be built for half the client's budget.

Manage the design process to prevent scope creep.

When the client receives its initial GMP they will want to expand the scope.  They will have money in their budget to pay for design revisions.

Charge them to make the changes.

Joila!

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

Oh yes.  "CM@No Risk" is the flip side term that has been tossed around.

The independent (architect's consultant) estimator seems like a popular approach.  And your clients do not push back on having them on the team?  I would guess roughly 10 to 20 percent of our work we have our own cost consultant, and its usually because the client organization requires it.  For the rest, I don't know if we are proposing this on a regular basis and its negotiated out of the fee, or if we are just not bringing one on board in the first place.  Something I may ask our PMs

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

The problem of VE is rooted in the process of design and construction as it is described in AIA documents and dictated by procurement processes.  The division of responsibility and authority between the design team, CM and Owner assures a singular progression and outcome.

The design team is motivated early on, to promise to the Owner, the fulfillment of the Owner's program and design aspirations, in order to win the project.

the Owner is motivated to push the program as the design evolves and the designer is not in a position to resist nor motivated to deliver bad news or to cheapen the design or reduce the aesthetic.

The CM typically joins late, and is motivated to create a cost buffer between the scope and the actual market cost, so typically their first estimate is sky high compared to figures the Owner and design team had anticipated.

The CM is motivated to blame the design team for over designing the project since they don't want to blame the Owner, who signs their checks.

The Owner then believes it is due a round of free design changes from the guilty design team who over designed their project.

No amount of cost consultants on the design team is going to alter this dynamic.

No amount of cost estimating, design assist, CM not at risk, partnering, teaming, nor any other band-aid approach-of-the-day is going to change this dynamic.

If you want to avoid the VE pitfall, as an architect in a CM project, your only chance is to control the part of the project you have under your influence, and that is what you put into the construction contract documents.  My suggestion is to grossly under design the project, then get paid to increase the scope instead of being expected to decrease the scope at your own expense.

Good luck!

Oh yes.  "CM@No Risk" is the flip side term that has been tossed around.

The independent (architect's consultant) estimator seems like a popular approach.  And your clients do not push back on having them on the team?  I would guess roughly 10 to 20 percent of our work we have our own cost consultant, and its usually because the client organization requires it.  For the rest, I don't know if we are proposing this on a regular basis and its negotiated out of the fee, or if we are just not bringing one on board in the first place.  Something I may ask our PMs

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

The problem of VE is rooted in the process of design and construction as it is described in AIA documents and dictated by procurement processes.  The division of responsibility and authority between the design team, CM and Owner assures a singular progression and outcome.

The design team is motivated early on, to promise to the Owner, the fulfillment of the Owner's program and design aspirations, in order to win the project.

the Owner is motivated to push the program as the design evolves and the designer is not in a position to resist nor motivated to deliver bad news or to cheapen the design or reduce the aesthetic.

The CM typically joins late, and is motivated to create a cost buffer between the scope and the actual market cost, so typically their first estimate is sky high compared to figures the Owner and design team had anticipated.

The CM is motivated to blame the design team for over designing the project since they don't want to blame the Owner, who signs their checks.

The Owner then believes it is due a round of free design changes from the guilty design team who over designed their project.

No amount of cost consultants on the design team is going to alter this dynamic.

No amount of cost estimating, design assist, CM not at risk, partnering, teaming, nor any other band-aid approach-of-the-day is going to change this dynamic.

If you want to avoid the VE pitfall, as an architect in a CM project, your only chance is to control the part of the project you have under your influence, and that is what you put into the construction contract documents.  My suggestion is to grossly under design the project, then get paid to increase the scope instead of being expected to decrease the scope at your own expense.

Good luck!

Oh yes.  "CM@No Risk" is the flip side term that has been tossed around.

The independent (architect's consultant) estimator seems like a popular approach.  And your clients do not push back on having them on the team?  I would guess roughly 10 to 20 percent of our work we have our own cost consultant, and its usually because the client organization requires it.  For the rest, I don't know if we are proposing this on a regular basis and its negotiated out of the fee, or if we are just not bringing one on board in the first place.  Something I may ask our PMs

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

The problem of VE is rooted in the process of design and construction as it is described in AIA documents and dictated by procurement processes.  The division of responsibility and authority between the design team, CM and Owner assures a singular progression and outcome.

The design team is motivated early on, to promise to the Owner, the fulfillment of the Owner's program and design aspirations, in order to win the project.

the Owner is motivated to push the program as the design evolves and the designer is not in a position to resist nor motivated to deliver bad news or to cheapen the design or reduce the aesthetic.

The CM typically joins late, and is motivated to create a cost buffer between the scope and the actual market cost, so typically their first estimate is sky high compared to figures the Owner and design team had anticipated.

The CM is motivated to blame the design team for over designing the project since they don't want to blame the Owner, who signs their checks.

The Owner then believes it is due a round of free design changes from the guilty design team who over designed their project.

No amount of cost consultants on the design team is going to alter this dynamic.

No amount of cost estimating, design assist, CM not at risk, partnering, teaming, nor any other band-aid approach-of-the-day is going to change this dynamic.

If you want to avoid the VE pitfall, as an architect in a CM project, your only chance is to control the part of the project you have under your influence, and that is what you put into the construction contract documents.  My suggestion is to grossly under design the project, then get paid to increase the scope instead of being expected to decrease the scope at your own expense.

Good luck!

Oh yes.  "CM@No Risk" is the flip side term that has been tossed around.

The independent (architect's consultant) estimator seems like a popular approach.  And your clients do not push back on having them on the team?  I would guess roughly 10 to 20 percent of our work we have our own cost consultant, and its usually because the client organization requires it.  For the rest, I don't know if we are proposing this on a regular basis and its negotiated out of the fee, or if we are just not bringing one on board in the first place.  Something I may ask our PMs

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

Understood.  In my experience VE is basically a debate on what should be valued.  Architects, of course, believe its the design quality, but that is so subjective and hard to quantify.  But even after that debate is over and we move on, we're finding cost estimates continue to increase through the rest of the design phases.  We are doing more re-work than should be necessary, even after a healthy VE process.

The problem of VE is rooted in the process of design and construction as it is described in AIA documents and dictated by procurement processes.  The division of responsibility and authority between the design team, CM and Owner assures a singular progression and outcome.

The design team is motivated early on, to promise to the Owner, the fulfillment of the Owner's program and design aspirations, in order to win the project.

the Owner is motivated to push the program as the design evolves and the designer is not in a position to resist nor motivated to deliver bad news or to cheapen the design or reduce the aesthetic.

The CM typically joins late, and is motivated to create a cost buffer between the scope and the actual market cost, so typically their first estimate is sky high compared to figures the Owner and design team had anticipated.

The CM is motivated to blame the design team for over designing the project since they don't want to blame the Owner, who signs their checks.

The Owner then believes it is due a round of free design changes from the guilty design team who over designed their project.

No amount of cost consultants on the design team is going to alter this dynamic.

No amount of cost estimating, design assist, CM not at risk, partnering, teaming, nor any other band-aid approach-of-the-day is going to change this dynamic.

If you want to avoid the VE pitfall, as an architect in a CM project, your only chance is to control the part of the project you have under your influence, and that is what you put into the construction contract documents.  My suggestion is to grossly under design the project, then get paid to increase the scope instead of being expected to decrease the scope at your own expense.

Good luck!

Oh yes.  "CM@No Risk" is the flip side term that has been tossed around.

The independent (architect's consultant) estimator seems like a popular approach.  And your clients do not push back on having them on the team?  I would guess roughly 10 to 20 percent of our work we have our own cost consultant, and its usually because the client organization requires it.  For the rest, I don't know if we are proposing this on a regular basis and its negotiated out of the fee, or if we are just not bringing one on board in the first place.  Something I may ask our PMs

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

One last thought.  Recognizing that architecture is always an expression of the circumstances and processes in which it is created, one tactic I have used, I will call "defensive design".  I would design the project in such a way as to include elements of low hanging fruit for VE targeting. I would incorporate into the design documents, definitions of scope that could be easily removed without a great deal of drawing revision.  I would anticipate the elements that the Owner and CM may target as well, but found I could influence their choices when I presented them with these easy targets.  This is different than including alternatives or unit prices. It may include simple downgrades in finishes or completely removing a patient wing, grand lobby or sculptural element.  The design was definitely influenced by this method, but again, architecture is the expression and embodiment of the circumstances and processes in which it is created.  Fight the process and it will also show in the result.

Understood.  In my experience VE is basically a debate on what should be valued.  Architects, of course, believe its the design quality, but that is so subjective and hard to quantify.  But even after that debate is over and we move on, we're finding cost estimates continue to increase through the rest of the design phases.  We are doing more re-work than should be necessary, even after a healthy VE process.

The problem of VE is rooted in the process of design and construction as it is described in AIA documents and dictated by procurement processes.  The division of responsibility and authority between the design team, CM and Owner assures a singular progression and outcome.

The design team is motivated early on, to promise to the Owner, the fulfillment of the Owner's program and design aspirations, in order to win the project.

the Owner is motivated to push the program as the design evolves and the designer is not in a position to resist nor motivated to deliver bad news or to cheapen the design or reduce the aesthetic.

The CM typically joins late, and is motivated to create a cost buffer between the scope and the actual market cost, so typically their first estimate is sky high compared to figures the Owner and design team had anticipated.

The CM is motivated to blame the design team for over designing the project since they don't want to blame the Owner, who signs their checks.

The Owner then believes it is due a round of free design changes from the guilty design team who over designed their project.

No amount of cost consultants on the design team is going to alter this dynamic.

No amount of cost estimating, design assist, CM not at risk, partnering, teaming, nor any other band-aid approach-of-the-day is going to change this dynamic.

If you want to avoid the VE pitfall, as an architect in a CM project, your only chance is to control the part of the project you have under your influence, and that is what you put into the construction contract documents.  My suggestion is to grossly under design the project, then get paid to increase the scope instead of being expected to decrease the scope at your own expense.

Good luck!

Oh yes.  "CM@No Risk" is the flip side term that has been tossed around.

The independent (architect's consultant) estimator seems like a popular approach.  And your clients do not push back on having them on the team?  I would guess roughly 10 to 20 percent of our work we have our own cost consultant, and its usually because the client organization requires it.  For the rest, I don't know if we are proposing this on a regular basis and its negotiated out of the fee, or if we are just not bringing one on board in the first place.  Something I may ask our PMs

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

In response to Alan Burcope's strategy: in the 1990's, the strategy of designing in sacrificial elements with the intention of removing them during VE, as needed, was referred to as "gilding" in some circles, and it was frowned upon. Clients considered it unreasonable to deliberately add design elements or overwrought specs that exceeded the program requirements. Contractors and other architects considered it inflationary because it had the effect of artificially increasing what the market would tolerate paying for the building type in question and what the local expectations were for amenities, materials and design elements associated with that building type. Some accused architects of fee-padding. It turned out to be more fruitful to work with owners during the needs assessment, programming, and design processes to determine which building features had less value to them and which were non-negotiable, setting the stage for VE.

One last thought.  Recognizing that architecture is always an expression of the circumstances and processes in which it is created, one tactic I have used, I will call "defensive design".  I would design the project in such a way as to include elements of low hanging fruit for VE targeting. I would incorporate into the design documents, definitions of scope that could be easily removed without a great deal of drawing revision.  I would anticipate the elements that the Owner and CM may target as well, but found I could influence their choices when I presented them with these easy targets.  This is different than including alternatives or unit prices. It may include simple downgrades in finishes or completely removing a patient wing, grand lobby or sculptural element.  The design was definitely influenced by this method, but again, architecture is the expression and embodiment of the circumstances and processes in which it is created.  Fight the process and it will also show in the result.

Understood.  In my experience VE is basically a debate on what should be valued.  Architects, of course, believe its the design quality, but that is so subjective and hard to quantify.  But even after that debate is over and we move on, we're finding cost estimates continue to increase through the rest of the design phases.  We are doing more re-work than should be necessary, even after a healthy VE process.

The problem of VE is rooted in the process of design and construction as it is described in AIA documents and dictated by procurement processes.  The division of responsibility and authority between the design team, CM and Owner assures a singular progression and outcome.

The design team is motivated early on, to promise to the Owner, the fulfillment of the Owner's program and design aspirations, in order to win the project.

the Owner is motivated to push the program as the design evolves and the designer is not in a position to resist nor motivated to deliver bad news or to cheapen the design or reduce the aesthetic.

The CM typically joins late, and is motivated to create a cost buffer between the scope and the actual market cost, so typically their first estimate is sky high compared to figures the Owner and design team had anticipated.

The CM is motivated to blame the design team for over designing the project since they don't want to blame the Owner, who signs their checks.

The Owner then believes it is due a round of free design changes from the guilty design team who over designed their project.

No amount of cost consultants on the design team is going to alter this dynamic.

No amount of cost estimating, design assist, CM not at risk, partnering, teaming, nor any other band-aid approach-of-the-day is going to change this dynamic.

If you want to avoid the VE pitfall, as an architect in a CM project, your only chance is to control the part of the project you have under your influence, and that is what you put into the construction contract documents.  My suggestion is to grossly under design the project, then get paid to increase the scope instead of being expected to decrease the scope at your own expense.

Good luck!

Oh yes.  "CM@No Risk" is the flip side term that has been tossed around.

The independent (architect's consultant) estimator seems like a popular approach.  And your clients do not push back on having them on the team?  I would guess roughly 10 to 20 percent of our work we have our own cost consultant, and its usually because the client organization requires it.  For the rest, I don't know if we are proposing this on a regular basis and its negotiated out of the fee, or if we are just not bringing one on board in the first place.  Something I may ask our PMs

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

In response to Alan Burcope's strategy: in the 1990's, the strategy of designing in sacrificial elements with the intention of removing them during VE, as needed, was referred to as "gilding" in some circles, and it was frowned upon. Clients considered it unreasonable to deliberately add design elements or overwrought specs that exceeded the program requirements. Contractors and other architects considered it inflationary because it had the effect of artificially increasing what the market would tolerate paying for the building type in question and what the local expectations were for amenities, materials and design elements associated with that building type. Some accused architects of fee-padding. It turned out to be more fruitful to work with owners during the needs assessment, programming, and design processes to determine which building features had less value to them and which were non-negotiable, setting the stage for VE.

One last thought.  Recognizing that architecture is always an expression of the circumstances and processes in which it is created, one tactic I have used, I will call "defensive design".  I would design the project in such a way as to include elements of low hanging fruit for VE targeting. I would incorporate into the design documents, definitions of scope that could be easily removed without a great deal of drawing revision.  I would anticipate the elements that the Owner and CM may target as well, but found I could influence their choices when I presented them with these easy targets.  This is different than including alternatives or unit prices. It may include simple downgrades in finishes or completely removing a patient wing, grand lobby or sculptural element.  The design was definitely influenced by this method, but again, architecture is the expression and embodiment of the circumstances and processes in which it is created.  Fight the process and it will also show in the result.

Understood.  In my experience VE is basically a debate on what should be valued.  Architects, of course, believe its the design quality, but that is so subjective and hard to quantify.  But even after that debate is over and we move on, we're finding cost estimates continue to increase through the rest of the design phases.  We are doing more re-work than should be necessary, even after a healthy VE process.

The problem of VE is rooted in the process of design and construction as it is described in AIA documents and dictated by procurement processes.  The division of responsibility and authority between the design team, CM and Owner assures a singular progression and outcome.

The design team is motivated early on, to promise to the Owner, the fulfillment of the Owner's program and design aspirations, in order to win the project.

the Owner is motivated to push the program as the design evolves and the designer is not in a position to resist nor motivated to deliver bad news or to cheapen the design or reduce the aesthetic.

The CM typically joins late, and is motivated to create a cost buffer between the scope and the actual market cost, so typically their first estimate is sky high compared to figures the Owner and design team had anticipated.

The CM is motivated to blame the design team for over designing the project since they don't want to blame the Owner, who signs their checks.

The Owner then believes it is due a round of free design changes from the guilty design team who over designed their project.

No amount of cost consultants on the design team is going to alter this dynamic.

No amount of cost estimating, design assist, CM not at risk, partnering, teaming, nor any other band-aid approach-of-the-day is going to change this dynamic.

If you want to avoid the VE pitfall, as an architect in a CM project, your only chance is to control the part of the project you have under your influence, and that is what you put into the construction contract documents.  My suggestion is to grossly under design the project, then get paid to increase the scope instead of being expected to decrease the scope at your own expense.

Good luck!

Oh yes.  "CM@No Risk" is the flip side term that has been tossed around.

The independent (architect's consultant) estimator seems like a popular approach.  And your clients do not push back on having them on the team?  I would guess roughly 10 to 20 percent of our work we have our own cost consultant, and its usually because the client organization requires it.  For the rest, I don't know if we are proposing this on a regular basis and its negotiated out of the fee, or if we are just not bringing one on board in the first place.  Something I may ask our PMs

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

Sean. Perhaps I wasn't as clear as I could have been. I wasn't suggesting "gliding", rather I was referring to the way in which you produce the construction documents, with sections, sheets, portions that can easily be removed without a great deal of rework.  This strategy can save time as well as reduce scope.  When presented to the Owner, with the limited impact on the schedule, it is compelling, and everyone can win.

------------------------------
Alan Burcope, AIA, MBA, LEED-AP
Principal Forensic Architect, V.P.
NV5, Inc.
Orlando, FL

Original Message:
Sent: 09-06-2024 08:44 PM
From: Sean Catherall
Subject: Value Engineering

In response to Alan Burcope's strategy: in the 1990's, the strategy of designing in sacrificial elements with the intention of removing them during VE, as needed, was referred to as "gilding" in some circles, and it was frowned upon. Clients considered it unreasonable to deliberately add design elements or overwrought specs that exceeded the program requirements. Contractors and other architects considered it inflationary because it had the effect of artificially increasing what the market would tolerate paying for the building type in question and what the local expectations were for amenities, materials and design elements associated with that building type. Some accused architects of fee-padding. It turned out to be more fruitful to work with owners during the needs assessment, programming, and design processes to determine which building features had less value to them and which were non-negotiable, setting the stage for VE.

------------------------------
Sean Catherall AIA
Murray UT

Original Message:
Sent: 09-05-2024 08:55 AM
From: Alan G. Burcope AIA
Subject: Value Engineering

One last thought.  Recognizing that architecture is always an expression of the circumstances and processes in which it is created, one tactic I have used, I will call "defensive design".  I would design the project in such a way as to include elements of low hanging fruit for VE targeting. I would incorporate into the design documents, definitions of scope that could be easily removed without a great deal of drawing revision.  I would anticipate the elements that the Owner and CM may target as well, but found I could influence their choices when I presented them with these easy targets.  This is different than including alternatives or unit prices. It may include simple downgrades in finishes or completely removing a patient wing, grand lobby or sculptural element.  The design was definitely influenced by this method, but again, architecture is the expression and embodiment of the circumstances and processes in which it is created.  Fight the process and it will also show in the result.

------------------------------
Alan Burcope, AIA, MBA, LEED-AP
Principal Forensic Architect, VP
NV5, Inc.
Orlando, FL

Original Message:
Sent: 09-05-2024 08:06 AM
From: Andrew Craven
Subject: Value Engineering

Understood.  In my experience VE is basically a debate on what should be valued.  Architects, of course, believe its the design quality, but that is so subjective and hard to quantify.  But even after that debate is over and we move on, we're finding cost estimates continue to increase through the rest of the design phases.  We are doing more re-work than should be necessary, even after a healthy VE process.

------------------------------
Andrew Craven AIA
Hanbury | Architecture Planning
Norfolk VA

Original Message:
Sent: 09-04-2024 06:19 PM
From: Robert C. Carlson
Subject: Value Engineering

Original Message:
Sent: 9/3/2024 3:53:00 PM
From: Alan G. Burcope AIA
Subject: RE: Value Engineering

The problem of VE is rooted in the process of design and construction as it is described in AIA documents and dictated by procurement processes.  The division of responsibility and authority between the design team, CM and Owner assures a singular progression and outcome.

The design team is motivated early on, to promise to the Owner, the fulfillment of the Owner's program and design aspirations, in order to win the project.

the Owner is motivated to push the program as the design evolves and the designer is not in a position to resist nor motivated to deliver bad news or to cheapen the design or reduce the aesthetic.

The CM typically joins late, and is motivated to create a cost buffer between the scope and the actual market cost, so typically their first estimate is sky high compared to figures the Owner and design team had anticipated.

The CM is motivated to blame the design team for over designing the project since they don't want to blame the Owner, who signs their checks.

The Owner then believes it is due a round of free design changes from the guilty design team who over designed their project.

No amount of cost consultants on the design team is going to alter this dynamic.

No amount of cost estimating, design assist, CM not at risk, partnering, teaming, nor any other band-aid approach-of-the-day is going to change this dynamic.

If you want to avoid the VE pitfall, as an architect in a CM project, your only chance is to control the part of the project you have under your influence, and that is what you put into the construction contract documents.  My suggestion is to grossly under design the project, then get paid to increase the scope instead of being expected to decrease the scope at your own expense.

Good luck!

------------------------------
Alan Burcope, AIA, MBA, LEED-AP
Principal Forensic Architect, VP
NV5, Inc.
Orlando, FL

Original Message:
Sent: 09-03-2024 01:56 PM
From: Andrew Craven
Subject: Value Engineering

Oh yes.  "CM@No Risk" is the flip side term that has been tossed around.

The independent (architect's consultant) estimator seems like a popular approach.  And your clients do not push back on having them on the team?  I would guess roughly 10 to 20 percent of our work we have our own cost consultant, and its usually because the client organization requires it.  For the rest, I don't know if we are proposing this on a regular basis and its negotiated out of the fee, or if we are just not bringing one on board in the first place.  Something I may ask our PMs

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Andrew Craven AIA
Hanbury | Architecture Planning
Norfolk VA

Original Message:
Sent: 09-01-2024 12:55 PM
From: Michael L. Katzin AIA
Subject: Value Engineering

Original Message:
Sent: 8/29/2024 4:38:00 PM
From: Andrew R. Craven AIA
Subject: Value Engineering

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

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Andrew Craven AIA
Hanbury | Architecture Planning
Norfolk VA
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Understood.  In my experience VE is basically a debate on what should be valued.  Architects, of course, believe its the design quality, but that is so subjective and hard to quantify.  But even after that debate is over and we move on, we're finding cost estimates continue to increase through the rest of the design phases.  We are doing more re-work than should be necessary, even after a healthy VE process.

The problem of VE is rooted in the process of design and construction as it is described in AIA documents and dictated by procurement processes.  The division of responsibility and authority between the design team, CM and Owner assures a singular progression and outcome.

The design team is motivated early on, to promise to the Owner, the fulfillment of the Owner's program and design aspirations, in order to win the project.

the Owner is motivated to push the program as the design evolves and the designer is not in a position to resist nor motivated to deliver bad news or to cheapen the design or reduce the aesthetic.

The CM typically joins late, and is motivated to create a cost buffer between the scope and the actual market cost, so typically their first estimate is sky high compared to figures the Owner and design team had anticipated.

The CM is motivated to blame the design team for over designing the project since they don't want to blame the Owner, who signs their checks.

The Owner then believes it is due a round of free design changes from the guilty design team who over designed their project.

No amount of cost consultants on the design team is going to alter this dynamic.

No amount of cost estimating, design assist, CM not at risk, partnering, teaming, nor any other band-aid approach-of-the-day is going to change this dynamic.

If you want to avoid the VE pitfall, as an architect in a CM project, your only chance is to control the part of the project you have under your influence, and that is what you put into the construction contract documents.  My suggestion is to grossly under design the project, then get paid to increase the scope instead of being expected to decrease the scope at your own expense.

Good luck!

Oh yes.  "CM@No Risk" is the flip side term that has been tossed around.

The independent (architect's consultant) estimator seems like a popular approach.  And your clients do not push back on having them on the team?  I would guess roughly 10 to 20 percent of our work we have our own cost consultant, and its usually because the client organization requires it.  For the rest, I don't know if we are proposing this on a regular basis and its negotiated out of the fee, or if we are just not bringing one on board in the first place.  Something I may ask our PMs

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.

Folks, I'm looking for reading material that talks about how architects can best manage value engineering.  If anyone has any suggestions on articles, blogs, books, etcetera, please post in reply.

We frequently find ourselves in a position where, despite having a CM@R contractor price the design multiple times (and we subsequently VE the project multiple times), the final is over-budget and we are doing re-work.  We've had limited success getting additional services, but for the most part, we are eating the cost of the re-work.  We've discussed a few options -- revising our contracts, getting more independent estimators, even terminating clients that have unreasonable expectations.