Boosting the Value in Value Engineering
This week's blog post is authored by Paul Schreyer, the Director of JOC Operations for the Northeast region.
Having a knowledgeable and experienced person perform value engineering on a proposed construction project is a great benefit and can save time and money for the facility owner. The traditional design-bid-build construction procurement method seldom provides the opportunity for contractors to provide such input. Once the bid documents are finalized and advertised, contractors must submit a bid based on those documents. Submitting a bid with suggested changes, or alternative means, methods or products not called for, will generally render the bid nonresponsive.
The Job Order Contracting construction procurement method, however, opens the door wide for input, suggestions and clarifications from JOC contractors prior to finalizing the design or scope of the project. It all starts with the Joint Scope Meeting.
Once a project is identified, the facility owner, JOC contractor and others involved in the project, meet at the project site to discuss the proposed work. The owner explains the work and the JOC contractor is encouraged to make suggestions that will save time and money, but still deliver the required results.
The two examples below are actual projects where the JOC contractor was able to offer alternatives that allowed the owners to save money.
The Town of North Haven, Connecticut planned to build new fire equipment garages at four locations. The original design was for stick-built buildings. The first two buildings were designed and completed using a Construction Manager at Risk delivery method. The Town was not convinced that they received the best price for the work. The Town then decided to explore the possibility of completing the next two buildings in JOC. At the Joint Scope Meeting, the JOC contractor was able to provide value engineering suggestions to cut costs and save time. The contractor suggested that the Town consider a pre-engineered metal building with the same exterior and interior finishes, and made several other changes which saved the Town over 15% of the project value. The work is currently underway.
Similarly, the Ohio Department of Natural Resources planned extensive restroom renovations at South Bass Island. The original scope of work included replacing the roof, all restroom fixtures, all lights, the furnace, widening the doorways, removing and replacing the floor tile, and more. The JOC contractor realized that the proposed renovation work would end up being more expensive than demolishing the restroom and building a new one. The contractor began working on the plans for a new restroom. The new design and the lower price were submitted to ODNR just a few weeks after the Joint Scope Meeting. The end result: better project, lower cost.
In both cases, the JOC process and the experienced JOC contractors were able to help the owners cut costs by value engineering. JOC is known as a flexible procurement process, significantly reducing procurement times and enabling owners to complete more projects faster. The benefits of JOC extend beyond streamlining projects, though. With JOC, contractors are engaged in the scope development process and are able to provide value added suggestions.
Most of the time, experienced contractors have great ideas about how to save time and money. It’s what they do for a living. The traditional design-bid-build procurement process does not always afford contractors the opportunity to make those suggestions. JOC does, and as a result, everyone benefits.
