Update 12 published January 2003 Update 11 published October 2002 Update 10 published August 2002 Update 9 published December 2001 Update 8 published October 2001 Update 7 published July 2001 Update 6 published December 2000 Update 5 published October 2000 Update 4 published May 2000 Update 3 published December 1999 Update 2 published October 1999 Update 1 published April 1999
Please note: References to the masculine include, where appropriate, the feminine. Extracts from Parry’s Valuation and Conversion Tables, A W Davidson (1989), (Estates Gazette) reproduced by permission of the College of Estate Management which owns the copyright.
Appendix A, Section 2.3 is reproduced from the Building Cost Information Service publication,
Standard Form of Cost Analysis: Principles, Instructions and Definitions (1969).
Published by RICS Business Services Limited a wholly owned subsidiary of
The Royal Institution of Chartered Surveyors under the RICS Books imprint
Surveyor Court
Westwood Business Park Coventry CV4 8JE UK
No responsibility for loss occasioned to any person acting or refraining from action as a result of the material included in this publication can be accepted by the author or publisher.
ISBN 0 85406 865 1
© RICS Business Services Limited (RBS) December 2003. Copyright in all or part of this publication rests with RBS, and save by prior consent of RBS, no part or parts shall be reproduced by any means electronic, mechanical, photocopying, recording or otherwise, now known or to be devised.
1998 FOREWORD
Knowledge is of two kinds: we know a subject ourselves, or we know where we can find information upon it.
Samuel Johnson (1709–1784)
The fact that our profession serves a changing world increases the need for it to rely on well thought-out and reliable practices and procedures. Events move at an ever-increasing pace, imposing a requirement for quicker response times. Modern communication methods such as facsimile and now e-mail result in the need for information to be available almost instantly. This is made more difficult by an industry growing in complexity and which is subject to increasing customer expectations in terms of service and quality.
The RICS has published this Surveyors’ Construction Handbook to help surveyors meet these needs. It is intended to become an important source of reliable information and guidance to all Chartered Surveyors who practise in construction. Much of the excellent information produced by the divisions in the past has now been updated for inclusion. Other material not yet revised will be added. The whole will be regularly reviewed and updated as necessary. RICS practice panels are continuing to produce information for inclusion to make it a useful construction reference document.
We hope that this Handbook will become an invaluable aid to your day-to-day activities.
Christopher Powell,
FRICSPRESID ENT, QUANT IT Y SURVEYORS DIVISION, 1997 –98
Trevor Mole,
FRICSProfessor Roy Morledge, Professor of Construction Procurement at The Nottingham Trent University, for contributing the text of Part 3, Section 1. Major D.R. Bassett, Royal Engineers, for his contribution to the research underpinning the construction time charts in Part 3, Section 1; Central Unit for Procurement, HM Treasury (now Office for Government Commerce), for permission to use CUP guides extensively in the drafting of Part 1, Section 1 and Part 3, Section 1.
Alan Turner, JP FRICS ACIArb, author of Building Procurement, for permission to use a number of the diagrams from his text in Part 3, Section 1.
The Surveyors’ Construction Handbook Contents (12/03) Page 1
CONTENTS
Foreword
Acknowledgements
List of Abbreviations
Introduction
1A Aim and Scope of this Handbook 1
B Arrangement of Content 1
C Status of Content 2
D Currency of References 3
E Invitation 3
F Subscription Service 3
Part 1: The Client
Section 1.1: The Client’s Requirements and Roles 1
1.1.1 Establishing the Client’s Objectives 1
1.1.2 The Role for Independent Advice 3
1.1.3 Project Brief 3
1.1.4 The Client’s Role 4
1.1.5 The Client’s Responsibilities 6
1.1.6 Appointment of Project Manager (where appropriate) 8
1.1.7 Appointment of Consultants 8
1.1.8 Appointment of Constructors 9
Appendix A: Further Reading 1
Section 1.2: Value Engineering 1
Introduction 1
1.2.1 Why Value Engineering? 2
1.2.2 Applicability 2
1.2.3 At What Stage Should Value Engineering be Carried Out? 3
1.2.4 Who Should Carry Out Value Engineering? 4
1.2.5 How Long Should It Last? 5
1.2.6 Preparing for a Value Engineering Workshop 5
1.2.7 Functional Analysis of Design Relative to the Client’s
Requirements 5
1.2.8 Pricing the FAST Diagram 8
1.2.9 Presenting a Design Solution to a Value Engineering Workshop 8
1.2.10 The Workshop 8
1.2.11 Assessing the Value of the Workshop 9
1.2.12 Implementing the Results 10
1.2.13 Feedback from Post-Occupancy Evaluation 10
Appendix A: Health Centre Value Tree 1
Appendix B: Typical Example of a Value Engineering Process 1
Section 2.1: Pre-contract Cost Planning and Cost Management 1
Introduction 1
2.1.1 Pre-contract Cost Planning and Cost Management 2
2.1.2 Preliminary Cost Studies and Feasibility Studies 4
2.1.3 Budget 4
2.1.4 The Cost Plan at Outline Proposals Stage 8
2.1.5 The Cost Plan at Scheme Design Stage 11
2.1.6 Cost Checking 13
2.1.7 Action after Receipt of Tenders 14
Appendix A: Sources of Cost Information 1
Appendix B: Format of Budget and Cost Plans 1
Appendix C: Element Unit Quantities Generation for Hypothetical
Buildings 1
Appendix D: Further Reading 1
Section 2.2: Life Cycle Costing 1
Introduction 1
2.2.1 The Client Context 1
2.2.2 The Life Cycle Costing Calculation 5
2.2.3 Tax Allowances, Incentives and Business Rates 10
2.2.4 Data Sources 14
2.2.5 Worked Examples 15
Appendix A: Residual Values 1
Appendix B: Obsolescence 1
Appendix C: Costs And Values 1
Appendix D: Glossary of Terms for Taxation 1
Appendix E: Examples of Items of Expenditure Likely to Attract
Taxation Allowances 1
Appendix F: Further Reading 1
Section 2.3: Elements for Buildings 1
Introduction 1
2.3.1 Elements 1
2.3.2 Elemental Cost Analysis 1
2.3.3 Other Uses 2
Appendix A: BCIS Standard Elements 1
Section 2.4: Design and Build - Guidance for Employer’s Agents 1
Introduction 1
2.4.1 Background 2
2.4.2 Contract Documentation 3
2.4.3 Additional Services 3
2.4.4 Employer’s Requirements and Contractor’s Proposals
(including contract sum analysis) 5
2.4.5 Design and Build Variants 6
2.4.6 Novation 8
Appendix A: Potential Services Associated with the Role
of Employer’s Agent 1
The Surveyors’ Construction Handbook Contents (12/03) Page 3
Section 2.5: The Chartered Surveyor as Lead Consultant 1
Introduction 1
2.5.1 Definitions: The Difference Between a Project Manager and
Lead Consultant 1
2.5.2 Benefits of Appointing a Chartered Surveyor as Lead Consultant 2
2.5.3 Issues to Consider before Undertaking the Role 3
2.5.4 Schedule of Lead Consultant Duties 3
Section 2.6 Defining Sustainable Construction 1
Introduction 1
2.6.1 Technology Swaps 2
2.6.2 How Can the Environment and Sustainability be Valued? 3
2.6.3 How Does This Effect the Construction Industry? 4
2.6.4 Green Building Materials 7
2.6.5 Whole Building Sustainability 8
2.6.6 The Government Line 9
2.6.7 What Might the Future Hold 11
Appendix A: Embodied Energy Content of Building Material 1
Appendix B: Useful Addresses 1
Part 3: Construction Planning and Procurement
Section 3.1: Developing an Appropriate Building Procurement Strategy 1
Introduction 1
3.1.1 The Client’s Role 2
3.1.2 Procurement Strategy 12
3.1.3 Selection of Most Appropriate Procurement Strategy 25
3.1.4 Implementation 29
Appendix A: Procurement Options 1
Section 3.2: Building Services Procurement 1
Introduction 1
3.2.1 Appointing the Building Services Designer 3
3.2.2 Design Coordination 11
3.2.3 Appointing a Building Services Contractor 19
3.2.4 Tender Documents 34
Appendix A: Typical Example 1
Part 4: Construction Administration and Management
Section 4.1: The Problems of Practical Completion 1
Introduction 1
4.1.1 What Happens in Practice 1
4.1.2 Standard Form Approaches 3
4.1.3 Effects of Practical Completion 13
4.1.4 Methods for Dealing with Practical Completion 14
4.1.5 Definitions 16
4.1.6 Subsidiary Issues 20
Appendix A: General Objectives to be Achieved at Practical
Completion for Small to Medium-sized Building Projects 1
Appendix B: Table of Cases 1
4.2.1 General Principles 1 4.2.2 Definitions 4 4.2.3 Entitlement 4 4.2.4 Ascertainment 7 4.2.5 Admissible Items 9 4.2.6 Inadmissible Items 13
Appendix A: Ascertaining the Cost of Running a Site 1
Appendix B: Disruption 1
Appendix C: Ascertaining the Cost of Head Office Overheads 1
Appendix D: Checklist of Items for which Loss and/or Expense are
Allowed 1
Appendix E: Checklist of Steps Required when Considering
Submissions by Contractor 1
Appendix F: Further Reading 1
Section 4.3: The Management of Risk 1
Introduction 1
4.3.1 Definitions 2
4.3.2 The Rationale for Risk Management in the Construction Process 2
4.3.3 The Risk Management Process 5
4.3.4 Summary 14
Appendix A: Further Reading 1
Section 4.4: Valuations for Interim Certificates 1
Introduction 1
4.4.1 Valuations 1
4.4.2 Assumptions 2
4.4.3 Valuation Under a JCT Contract: Background 3
4.4.4 Recommended Action at the Start of a Contract 4
4.4.5 Communications 5
4.4.6 Approach 6
4.4.7 Content of a Valuation 8
4.4.8 Administration 15
4.4.9 Special Situations 16
4.4.10 Other Contract Terms (relative to valuations) 17
4.4.11 Valuations Under Other Forms of Contract 18
Appendix A: Further Reading 1
Appendix B: JCT Definition of ‘Reasonable Proof’ 1
Appendix C: Example of Priced Activity Schedule 1
Section 4.5: Extension of Time 1
Introduction 1
4.5.1 Extension of Time Clauses 2
4.5.2 Assumptions 2
4.5.3 Extension of Time Under a JCT Contract 3
4.5.4 Notice by the Contractor of Delay to Progress 4
4.5.5 The Award of an Extension of Time during the Contract
Period and Before the Completion Date 5
4.5.6 The Award of an Extension of Time after the Completion Date 6
4.5.7 Relevant Events 7
4.5.8 Concurrent Delays 12
The Surveyors’ Construction Handbook Contents (12/03) Page 5
4.5.10 Administration 13
4.5.11 Extension of Time under an ICE Contract 14
4.5.12 Extension of Time under a GC Works Contract 14
Appendix A: Further Reading 1
Part 5: Additional Guidance and Information
Section 5.1: Surveying Safely 1
Section 5.2: Construction (Design and Management) Information 1
5.2.1 Schedule of Sources of Useful CDM Information 2
Section 5.3: Built environment group roles and information 1
Section 5.4: Building Cost Information Service 1
5.4.3 BCIS Online 1
5.4.4 Other BCIS Publications and Services 2
5.4.5 Further details 4
Section 5.5: Building Occupancy Cost Information (BMI) 1
5.5.2 BMI Quarterly Cost Briefing 1
5.5.3 Building Maintenance Price Book 1
5.5.4 Special Reports for Benchmarking 2
5.5.5 News, Digests and Reports 2
Section 5.6: Electronic document storage – legal admissibility 1
Introduction 1
5.6.1 Code of Practice – DISC PD 0008: 1999 2
5.6.2 Weight of evidence and document destruction 3
5.6.3 Authenticity 3
5.6.4 Photocopies, microfilm and image processing 4
5.6.5 Document storage 4
5.6.6 Storage and access procedures 5
5.6.7 Format of the Code of Practice 6
5.6.8 Conclusion 20
Appendix A: Specimen form for recording scanning information 1
Appendix B: Specimen form for recording retrieval 1
Appendix C: References 1
ABE Association of Building Engineers
ABI Association of British Insurers
ACA Association of Consultant Architects
ACE Association of Consulting Engineers
AQL Acceptable quality level
BCIS Building Cost Information Service
BEC Building Employers’ Confederation
BMI Building Maintenance Information
BRE Building Research Establishment
BRECSU Building Research Energy Conservation Support Unit
BREEAM Building Research Establishment Environmental
Assessment Method
BSI Building Standards’ Institution
BSRIA Building Services Research and Information Association
BWIC Builder’s Work in Connection
CA Contract Administrator
CAWS Common Arrangement of Works Section for Building
Works
CDM Construction (Design and Management)
CD-R Compact disc recordable
CECA Civil Engineering Contractors’ Association
CIB Construction Industry Board
CIBSE Chartered Institution of Building Services Engineers
CIC Construction Industry Council
CIRIA Construction Industry Research and Information
Association
CITES Control in Trade of Endangered Species
CCT Compulsory Competitive Tendering
CSM Chartered Surveyors Monthly
DBFO Design Build Fund and Operate
DoE Department of the Environment (now known as the
DETR)
DETR Department of the Environment, Transport and the
Regions (formerly the DoE)
DMS Document Management System
DOM Domestic Sub-Contract
EC European Commission
EU European Union
FAST Functional Analysis Systems Technique
FCEC Federation of Civil Engineering Contractors
GNP Gross National Product
HBF House Builders’ Federation
HMSO Her Majesty’s Stationery Office (now known as
The Stationery Office)
HSE Health and Safety Executive
IChemE Institution of Chemical Engineers
ICE Institution of Civil Engineers
Page 2 Abbreviations (10/02) The Surveyors’ Construction Handbook
IFC Intermediage Form of Contract
JCT Joint Contracts Tribunal
LCC Life Cycle Costing
LQ Limiting quality
M & E Mechanical and Electrical
MERA Multiple Estimate Risk Anaylsis
MW Minor Works
NEC New Engineering Contract
NEDO National Economics Development Office
NJCC National Joint Consultative Committee for Building
NSC Nominated Sub-Contract
OMR Optical Mark Reading
PFI Private Finance Initiative
PSA Property Services Agency
RIBA Royal Institute of British Architects
RICS Royal Institution of Chartered Surveyors
VAT Value Added Tax
WCD With Contractor’s Design
WORM Write-Once-Read-Many
INTRODUCTION
A Aim and Scope of this Handbook
A1 The aim of this Handbook is to help both building and quantity surveyors to
provide construction-related professional services effectively and efficiently. It seeks to achieve this by providing guidance which reflects what is often good custom and practice, and relevant information (including references to other useful material). It should be appreciated that this Handbook does not attempt comprehensive coverage of necessary or good practice. The Handbook is addressed to surveyors providing services to clients (as defined), not surveyors undertaking the role of the client’s representative who gives instructions to surveyors on behalf of the Client.
A2 ‘Construction’ in this Handbook means new construction, conversion,
refurbishment works and alterations to the form of buildings, and also civil engineering works. The contents of this Handbook apply across the complete range of this definition unless otherwise stated. So ‘construction’ does not embrace building surveys or building maintenance.
A3 ‘Client’ in this Handbook is used to include companies and their Directors or
Officers, Trusts and their Trustees, partners, managers and employees who may instruct a surveyor.
A4 Throughout the Handbook, it is assumed that possession and necessary access
to the site are available and, in principle, the rights to construct the development and use the buildings when constructed. The Handbook does not cover project management services, obtaining planning permission and building regulation approvals, or dispute resolution.
A5 The document is drafted on the basis of UK law and practice, although much
of it is relevant to practice elsewhere.
B Arrangement of Content
B1 After sets of Definitions and Abbreviations which apply throughout, the
Handbook is arranged in five Parts. The first four Parts represent sequential phases of the construction process. The last Part, Part 5, provides Additional Guidance and Information. Each part is followed by Further Reading, to which the numbered cross references in the Parts apply.
B2 The first four Parts are as follows:
Part 1: The Client seeks to help surveyors to work with clients. It discusses the establishment of their construction objectives and constraints, leading to the
INTRODUCTION
Page 2 Introduction (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook
development of construction briefs. It defines the client’s roles during the construction process, and comments on the engagement of professionals involved in the construction process.
Part 2: Construction Design and Economics covers development of the design concept, feasibility studies, design and economics (including life-cycle costing, risk assessment, and cost-value relationships), and confirmation of the final design proposal.
Part 3 relates to Construction Planning and Procurement, i.e. to the time the construction contract is placed.
Part 4 covers Construction Administration and Management, i.e. all post-contract matters.
Any Appendices are situated at the end of each Part.
B3 An Index follows Part 5.
C Status of Content
C1 For convenience, Guidance and Information is integrated. Each paragraph is
prefixed with a or an to indicate its status.
C2 ‘Guidance’, as the word implies advice to Members of the RICS on aspects of
their profession. Where recommended for specific professional tasks, procedures are intended to embody ‘best practice’, i.e. procedures which in the opinion of the RICS meet a high standard of professional competence. Members are not required to follow the advice and recommendations contained in such paragraphs. They should, however, note the following points.
Should an allegation of professional negligence be made against a surveyor, the Court is likely to take account of the contents of any relevant guidance notes published by the RICS in deciding whether or not the surveyor had acted with reasonable competence.
In the opinion of the RICS, a Member conforming to the practices recommended in this Note should have at least a partial defence to an allegation of negligence by virtue of having followed those practices. However, Members have the responsibility of deciding when it is appropriate to follow the guidance. If the guidance has been followed in an appropriate case, the Member will not necessarily be exonerated merely because the recommendations were found in RICS Guidance.
On the other hand, it does not follow that a Member will be adjudged negligent if he has not followed the practices recommended in this Handbook. It is the responsibility of each individual surveyor to decide on the appropriate procedure to follow in any professional task. However, where Members depart from any practices recommended in this Handbook, they should do so only for good reason. In the event of litigation, the Court may require them to explain why they decided not to adopt a recommended practice.
In addition, Guidance Notes are relevant to professional competence in that each surveyor should be up to date and should have informed himself of Guidance Notes within a reasonable time of their promulgation.
C3 Material classified as ‘information’ is intended to provide information and
explanations to Members of the RICS on specific topics of relevance to the profession. The function is not to recommend or advise on professional procedures to be followed by surveyors. It is again, however, relevant to professional competence to the extent that a surveyor should be up to date and should have informed himself of such information within a reasonable time of its promulgation.
Members should note that if an allegation of professional negligence is made against a surveyor, the Court is likely to take account of the contents of any relevant information published by the RICS in deciding whether or not the surveyor has acted with reasonable competence.
D Currency of References
The cases cited and the editions quoted were up-to-date at the time of writing. However, readers should check current rulings and additions.
E Invitation
RICS Books would welcome comments upon and suggestions for additions and amendments to this Handbook. They should be provided in writing to RICS Books Publishing, Surveyor Court, Westwood Business Park, Coventry, CV4 8JE.
F Subscription Service
Any change of address should be notified to the address appearing below: The Surveyors’ Construction Handbook Subscription Service
RICS Books Surveyor Court
Westwood Business Park Coventry CV4 8JE
PART 1, SECTION 1
The Surveyors’ Construction Handbook Part 1, Section 1 (01/03) Effective from 1/3/03 Page 1
PART ONE: THE CLIENT
SECTION 1: THE CLIENT’S REQUIREMENTS AND
ROLES
1.1.1 Establishing the Client’s Objectives
1.1.1.1 Client satisfaction will be maximised if the client’s objectives as established
in the business case for the project are met. The surveyor should be able to assist with the development of the business case and the prioritisation of project objectives (see 3.1.1.6 and 3.1.1.9).
1.1.1.2 The type of client will affect the criteria which must be met if the client is to
be satisfied with the project.
1.1.1.3 Owner occupiers are usually primarily concerned with building
performance in terms of functionality and costs in use. They may also be concerned with image and building style. In this sense, value for money is a key criterion. Developers, on the other hand, may be driven by market conditions which enable the project to be let or sold at maximum commercial advantage. They may be predominantly concerned with speed rather than performance.
1.1.1.4 This is not to say that owner occupiers are unconcerned about time. Indeed,
certainty of completion date may be a key issue. Nor is it fair to suggest that developers are unconcerned about building performance or cost. There are market conditions where both of these issues may become important.
1.1.1.5 However, the client’s purpose in initiating a building project is usually
driven by the need for the project as a functional unit or as an investment. There will usually be particular criteria for achievement which are critical or important to each particular client. Possible objectives are as follows: (a) Cost-related
• minimise capital cost
• maximise capital cost/value ratio
• maximise capital cost/worth to client ratio
• achieve necessary income cash flow profile
• minimise management costs
• minimise maintenance and insurance costs
• minimise tax liability
• respect capital cost constraint
• be energy efficient. G G I I I
(b) Marketability
• maximise prompt or future disposal (freehold or otherwise).
(c) Use-related
• optimise operational requirements of intended occupier(s)
• provide greatest flexibility in potential uses
• reflect intended occupier’s requirements/preferences/ability to afford
• meet social/management/occupier’s special needs (e.g. disabled).
(d) Environmental
• minimise health and safety risks
• choose materials which reflect sustainability
• aesthetically please (e.g. impression on occupier’s customers)
• minimise any alterations to specific features
• reflect planning authority’s brief/policies
• minimise potential opposition
• reflect corporate style or personal preferences of proposed
occupier/employees
• maximise comfort of occupants
• minimise inconvenience to others during construction.
(e) Timing
• construct within a defined period
• minimise risks of delay during construction.
1.1.1.6 The importance of each of these criteria will be relative to the objectives of the
client, the business case for the project and to the extent to which he/she is able to cope with risk (see 3.1.2.9). It is important that the client seek investment appraisal advice in respect of the project and that the appraisal considers ‘what if’ questions to ensure that the impact of changes of key components in the appraisal is clearly understood. A chartered surveyor will be able to assist the client in these matters. However, the giving of advice on some of the requirements listed above is, of course, outside the competence of the surveyor. Where such a particular requirement is important to the client and outside the client’s expertise, the client should be advised to seek other professional advice.
1.1.1.7 Many construction projects suffer from poor definition due to inadequate time
and thought being given at an early stage1. This is often because there is a
sense of urgency fuelled by the desire for an immediate solution. Investing time at the beginning of a project in developing a complete definition taking account of all the requirements will reduce the likelihood of changes later. The later that changes are made in a project, the more they are likely to cost in both direct and knock-on effects (see 3.1.4.14 and 3.1.2.14(f) & (g)).
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1.1.2 The Role for Independent Advice
1.1.2.1 With the potential for the involvement of many consultants and/or
constructors in a project and the range of contracts associated with their employment, all but the most experienced client may need advice. The advice offered should be informed and unbiased and it should be based upon a logical analysis of the needs of the client, the type and character of the project and the range of appropriate strategies available.
1.1.2.2 This advice can be offered by a member of the client’s design team or can be
a separate function. It may be more difficult for a design team member to remain impartial in carrying out this process and it is recommended that any expert retained should be solely for this purpose. This function can be identified as the role of the principal adviser and may encompass:
• Assistance in preparing the business case (the business case)
underpinning the project
• Identifying the needs and requirements (briefing)
of the client
• Defining the project (project definition)
• Matching needs and project characteristics (procurement strategy)
with appropriate procurement strategy
• Facilitating the associated selection and (implementation)
contractual processes and policies
1.1.2.3 Possible sources for the appointment of independent advisers include suitably
qualified and experienced construction professionals such as chartered surveyors.
1.1.3 Project Brief
1.1.3.1 The importance of a clear project brief to the successful completion of the
project and in ensuring appropriate performance of the project cannot be over emphasised. The inexperienced client will need professional help in the preparation of the brief. The project brief is a comprehensive statement of the client’s requirements for the project based on close consultation between the client and users and based upon the parameters established (see 3.1.1.10 and 3.1.1.12).
The project brief may include: (a) project description;
(b) how it fits into the client’s corporate plan (e.g. it may be part of a larger planned development);
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(c) number of people that are to occupy the building, together with their space requirements;
(d) schedule of accommodation and quality of internal environment; (e) standards;
(f) equipment and special services/requirements; (g) when the building needs to be available for use; (h) quality and cost limitations;
(i) life span; (j) site; and
(k) statutory controls.
1.1.3.2 This is the initial control document for the early planning of the project;
without it, little constructive work can be done. If all the information required for the project brief is not readily available, it is better to issue it in an
incomplete form and to update it progressively1.
1.1.4 The Client’s Role
1.1.4.1 This section briefly explains the client’s responsibilities through the life of a
construction project. In carrying out their role, clients, depending on their knowledge and expertise, will need help from their professional advisers, project managers and other consultants, whose roles are also explained in this handbook. This section aims to outline the client’s task in setting policy and formulating strategy, and explains how it should be carried out.
1.1.4.2 The success of any project will depend upon the motivation given by the
client. Experienced clients may take a leading role in the procurement process; less experienced clients will need to seek advice or to appoint advisers to assist them. Where projects are of a large or complex nature it may be advisable to consider the appointment of a project manager.
1.1.4.3 Effective management is vital in any construction project. The client’s prime
role is to establish a structure for the management of the project and to make sure that it works. A crucial part of any effective management structure is efficient communication. To perform effectively, all parties must have timely G
1Construction Industry Board, Briefing the Team, Thomas Telford Publishing, London, 1997. G
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PART 1, SECTION 1
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access to all information relevant to their tasks and the project’s objectives and status (see 3.1.4.11).
1.1.4.4 The client has substantial influence on the design of the project in respect both
of functional efficiency and of overall appearance, and, therefore, has to take particular care to:
(a) understand fully the purpose of the building; ensure that the requirements of the users are accommodated; and communicate those requirements to the designers (see 3.1.1.10); and
(b) appoint designers with proven ability in designing buildings which satisfy users’ requirements and harmonise with and contribute to the quality of the built environment. The selection of the right people is emphasised as a key to success (see 3.1.4.8).
1.1.4.5 The accompanying figure indicates the activities in the procurement process
and when activities are usually performed. As can be seen, the client’s role is significant, with a wide range of activities to perform and implement before both the design and the construction processes. In the performance of these activities, the client can expect to be supported and advised by his/her adviser or (if appointed) the project manager. More detail for each of these activities can be found in the section of this handbook indicated in brackets in the figure.
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1.1.5 The Client’s Responsibilities
1.1.5.1 The client should set policy and outline strategy including:
(a) setting and prioritising the project objectives within the business plan; (b) planing to meet the objectives (the pre-design phase);
(c) implementing the plans (the pre-construction phase); (d) controlling their implementation (the construction phase);
FIGU RE TO IN DI CA TE T HE A CT IVITIES IN TH E P ROC U REMEN T PR OC ESS Pre-Design Phase Pre-Construction Phase Construction Post-Construction
Client’s Role Develop business case for project (3.1.1.9) Appoint adviser (3.1.1.6) Define client’s responsibilities (3.1.1.7) Project Brief (3.1.1.12) Appointment of PM (if appropriate) (3.1.4.7)
Appointment of design and cost consultants (3.1.4.8) Procurement strategy* (3.1.1.13) Value management (3.1.4.16) Procurement strategy (3.1.1.13) Design overview* (3.1.4.12)
Cost Control overview* (3.1.4.13)
Whole-life Costs (3.1.4.15)
Value Engineering (3.1.4.17)
Time control overview* (3.1.4.14)
Quality control overview* (3.1.4.18)
Appointment of constructors (3.1.4.9)
Confirming the business case (3.1.1.9)
Design overview (3.1.4.12)
Cost control overview (3.1.4.13)
Time control overview (3.1.4.14)
Quality control overview (3.1.4.18) Change control overview (3.1.4.19) Commissioning (3.1.1.17)
Occupation and takeover (3.1.1.18)
Procurement Strategy
Procurement strategy development (3.1.2)
Implementation Resources (Client) (3.1.4.3–5)
Organisational structure (3.1.4.6)
Contractual arrangements* (3.1.4.10)
Systems and controls* (3.1.4.11)
Implementation policy (3.1.4.2)
Contractual arrangements (3.1.4.10)
Systems and controls (3.1.4.11)
Systems and controls (3.1.4.11)
* Indicates the activity will continue into the next phase
( ) Indicates the section of this document referring to the activity in more detail
PART 1, SECTION 1
The Surveyors’ Construction Handbook Part 1, Section 1 (01/03) Effective from 1/3/03 Page 7
(e) arbitrating between conflicting demands; and
(f) evaluating the complete project against the objectives (the
post-construction phase).
1.1.5.2 The client also has a dual management function:
(a) to manage the client input; to co-ordinate functional and administrative needs; to resolve conflicts; to act as the formal point of contact for the project (see 3.1.4.11); and
(b) to supply the technical expertise, to assess, procure, monitor and control the external resources needed to implement the project (see 3.1.4.3–5).
1.1.5.3 In particular, the client should be satisfied that:
(a) the project brief is comprehensive and clear and has the full support of the
users1&2(see 3.1.1.12);
(b) any constraints demanded by the project funder(s) are known and their impact understood;
(c) the critical assumptions made in preparing the initial estimates and programmes are valid, realistic and achievable (see 3.1.1.9);
(d) cost estimates are comprehensive and include all capital and resource costs;
(e) allowances made in the feasibility and viability assessments to cover possible risks are sufficient (contingency allowance);
(f) substantial sensitivity analysis and ‘what if’ studies have been carried out to assess the effect of possible changed criteria on the viability of the project; and
(g) plans are in place for adequate project management including systems for cost, time, quality and change control.
1.1.5.4 The client should also co-ordinate and resolve conflicts between all interested
sections of the client organisation including (see 3.1.4.6): (a) user groups – who will work in the building;
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1Kelly, J., MacPherson, S., and Male, S. (1992), The Briefing Process: A Review and Critique, RICS, Department of Building Engineering and Surveying, Heriot Watt University. This document is out of print.
2Construction Industry Board, Briefing the Team, Thomas Telford Publishing, London, 1997. G
(b) specialist groups – responsible for technical systems within the building, e.g. communications, computers;
(c) facilities management – who will manage the completed building including maintenance and security;
(d) finance and accounts – who will plan and control expenditure and pay bills as they arise; and
(e) legal advisers – who will advise on and monitor the client’s formal relationships with outside parties.
1.1.5.5 The client is responsible for ensuring that all necessary decisions are made on
time. Timely decisions are necessary to avoid delays and increased costs: the decision-making process requires as much planning and management as any other activity. This will include (see 3.1.4.11):
(a) scheduling the key decisions to be made;
(b) identifying the decision makers and their required procedures; (c) ascertaining the time required for making decisions;
(d) establishing a formal programme for decisions;
(e) warning decision makers regarding forthcoming submissions – making sure items are on the agenda;
(f) preparing on time fully detailed submissions and/or presentations in full compliance with procedural requirements;
(g) following up submissions throughout the decision making process; and (h) promptly communicating decisions made to the parties affected by them.
1.1.6 Appointment of Project Manager (where appropriate)
(see 3.1.4.7)
1.1.6.1 Due to the complexity of modern buildings and the potentially large number
of parties involved in the process the client may wish to appoint a single person to draw the process together and manage it to ensure that the overall performance, time, cost and quality requirements are achieved. The project manager may be a member of the client organisation who is given sole, or predominant, responsibility for the project. Project management practices also exist to enable appointment to be made on a consultancy basis. In this case, G
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selection should be based upon resources, reputation, and price; and services should be clearly identified.
1.1.6.2 It should be emphasised that the role of the project manager should be to act
as part of the client organisation.
1.1.7 Appointment of Consultants (see 3.1.4.8)
The process of selecting and appointing the design team and the cost consultant is carried out by the client who may seek the advice of his/her advisers. The terms and conditions of these appointments are governed by the procurement strategy adopted for the project.
1.1.8 Appointment of Constructors (see 3.1.4.9)
The selection of those who will actually construct the project is often key to a successful outcome. Selection should always be on quality as well as price and ideally the procurement strategy governing when they are appointed should facilitate the early involvement of constructors in the design process.
The selection of procurement strategy is a complex one and is referred to in Part 3 section 1 of this handbook.
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Appendix A: Further Reading
Construction Industry Board, Briefing the Team, Thomas Telford Publishing, London, 1997
Construction Industry Board, Partnering in the Team, Thomas Telford Publishing, London, 1997
Construction Industry Board, Selecting Consultants for the Team: Balancing Quality
and Price, Thomas Telford Publishing, London, 1997
Construction Industry Council, The Procurement of Professional Services: Guidelines
for the Value Assessment of Competitive Tenders, CIC, London, 1997
European Construction Institute, Partnering in the Public Sector: a Toolkit for the
Implementation of Post-Award, Project Specific Partnering on Construction Projects,
ECI, Loughborough, 1997
Kelly, J., MacPherson, S., and Male, S., The Briefing Process: A Review and Critique, RICS, Department of Building Engineering and Surveying, Heriot Watt University, 1992. This document is out of print.
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PART ONE: THE CLIENT
SECTION 2: VALUE ENGINEERING
Introduction
Value management (and within it, value engineering) is a structured method of eliminating waste from a client’s brief and from the design on a construction project before binding commitments are made. Used to deliver more effective and better quality buildings, for example, through taking unnecessary costs out of designs, value management ensures a clearer understanding of the brief by all project participants and improves team working. According to the Construction Task Force report, ‘Rethinking Construction’ (published by the DETR in July 1998) it is practiced by up to a quarter of the construction industry in the UK. The report also estimates that while the objective of value management is to increase value, it can also reduce costs by up to 10 per cent.
Value management is the wider term used in the UK to describe the overall structured team-based approach to a construction project. It involves clearly defining the client’s strategic objectives, considering optimum design solutions within the context of the client’s business objectives and deciding which of these provides the optimum lifetime value to the client, as well as a review of the whole process after occupancy. Value management includes value engineering as part of this process.
Value engineering is a ‘systematic approach to delivering the required functions to the required quality at the least cost’, i.e. a method of ensuring that the client gets the best possible value for money in terms of safety, performance and delivery targets. It is a structured form of consensus decision making that compares and assesses the design solutions against the value systems declared by the client.
This section of the handbook looks at the carrying out of a value engineering exercise during the early design phase of a project, i.e. an evaluation of design solutions against the client’s brief. Value engineering, as described here, can be a stand-alone exercise (a value engineering workshop) or may be part of an overall value management process.
In describing the value engineering process this section aims to assist surveyors both in advising clients on the use of value engineering and taking part in a value engineering exercise as part of the design team. It is not intended for surveyors acting as value engineering facilitators and makes no attempt to address the very particular skills required for this role.
1.2.1
Why Value Engineering?
1.2.1.1 Value engineering has grown in popularity for the simple reason that it
actually works. Construction projects can often take on a life of their own when members of the design team become focused on their own particular problems and time constraints. Consequently, the true objectives of the client get lost along the way. Value engineering relates design proposals directly back to a client’s business, thus ensuring that a management system is in place which forces designers to justify their decisions when tested against the client’s required function.
1.2.1.2 A value engineering exercise can only relate design proposals to a client’s
business requirements if early value management studies have encapsulated these requirements within the brief. If a value engineering exercise is carried out in isolation from any strategic review of the project requirements, it can only act as a functional assessment of the technical design solutions and their relative cost. However, even in this limited function it can still be very useful.
1.2.2
Applicability
1.2.2.1 The technique of value engineering can be employed on any project. However,
more complicated and higher value buildings are likely to benefit the most (see figure 1). This is because it is more difficult to develop the design brief in such instances and consequently a design solution may be adopted without being questioned, usually because of time constraints placed upon the designers.
1.2.2.2 Many client organisations will only undertake value engineering on schemes
over a certain value. For example, Railtrack will carry out the technique on projects valued at £250,000 or more and Northumbrian Water will only consider it for projects worth over £1m. Despite this, there is no reason why the process should not be applied to smaller schemes. Furthermore, value engineering will be invaluable where repetitive schemes are being considered G G Optional Essential High Complexity Low Value Low High
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as improvements and savings can be incorporated into future schemes. They can also be tested in practice, leading to the sort of continuous improvement recommended by the ‘Rethinking Construction’ report.
1.2.2.3 Value engineering works irrespective of the procurement route taken. It is a
discipline upon the design team members and the clients who appoint them. Where the contractor is mainly responsible for the design, for example, design and build, develop and construct or PFI projects, the technique is just as appropriate in ensuring that a well-defined statement of requirements is first established and that subsequent design solutions address the function of the building most economically.
1.2.3 At What Stage Should Value Engineering be Carried Out?
1.2.3.1 The greatest benefits can be obtained by commencing the VE process at the
earliest possible stage. Once it has been established that the client’s needs will best be met through a construction project the purpose of the first VE exercise should be to inform the brief. When an experienced client has prepared the brief, or a value management exercise has already examined the client’s requirements, the value engineering exercise (which will address the proposed design solutions) is best done towards the end of the ‘scheme design’. Several workshops may be necessary at each of the crucial decision-making stages of a project:
(a) A first exercise (a functional analysis of requirements), to define the project needs and inform the brief, could be carried out as early as ‘option appraisal’, and since this could generate the greatest benefit to the client the timing is crucial. Carry it out too early and not enough will be known about the problems associated with the building function, whereas too late and minds become set on the solutions formulated by the design team.
(b) A review of the project at ‘outline design’ could be conducted to ensure that the decisions taken earlier have been implemented or, if changed, that they still meet the functional requirements.
(c) Another review (a functional analysis of the solutions) would then be carried out at ‘scheme design’ to test individual building elements involving traditional cost planning/life cycle costing techniques.
1.2.3.2 This section of the handbook considers the evaluation of a design at the end of
the scheme design phase, but the process will be the same whenever it is carried out. The ‘objectives’ of the project should remain the same throughout the process and they should be validated at the beginning of each workshop. The objectives of each workshop may be different. If the project objectives do change the whole direction of the project will need to reassessed.
1.2.3.3 It is important that time for the value engineering process and any resultant
redesign is included in the scheme design programme at the outset. G
1.2.4 Who Should Carry Out Value Engineering?
1.2.4.1 It is strongly recommended that a value engineering exercise is organized by
an experienced value management facilitator to ensure that the value engineering participants retain their objectivity and that an unbiased approach is maintained.
1.2.4.2 The value engineering participants should represent the principal stakeholders
in the project namely, the client, the building users and the design team (designer, engineers and quantity surveyor) and also the contractor, where applicable. It is important that each of the participants have the authority to make decisions at the workshop. It may also be appropriate to include clients’ advisers, for example, letting agents or rating valuers.
The participants should be those who can make decisions and provide information related to the specific aims and objectives of the workshop. These may include:
• those people with responsibility for the needs of the business;
• those with specific responsibility for development, design and
implementation of the operation/project;
• those with responsibility for the management and/or maintenance of the
operation; and
• those who will be affected by the outcome.
Different stakeholders will be required to participate at different stages of the project.
1.2.4.3 The optimum size of a value engineering panel would depend upon the
complexity of the project as well as the skills of the facilitator. However, it is considered that panels of more than twelve members are difficult to manage. Panels with fewer than four members could be considered ineffective. However, it is important that all stakeholders are represented even if this results in a larger group.
1.2.4.4 It is common practice in North America to appoint an outside team of
consultants to question the design team’s solutions. However, this practice has been known to cause resentment between the project team and the external advisers and might therefore compromise the final design solutions. It is considered that an experienced facilitator independent of the design team, with an appropriately briefed panel, will ensure that the design team’s solutions are adequately tested at the workshop.
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1.2.5 How Long Should It Last?
1.2.5.1 The length of time taken over the value engineering workshop will depend on
the complexity of the project and the level of design detail that has been completed.
1.2.5.2 The ‘40-hour workshop’ is the classic industrial value engineering standard.
However, two-day workshops at key points during the design process are more common in the UK construction industry.
1.2.6 Preparing for a Value Engineering Workshop
1.2.6.1 Prior to the workshop, it is most important that an agenda is agreed by the
panel and distributed by the facilitator.
1.2.6.2 In addition to an agenda, a functional analysis of the client’s requirements
should be drawn up.
The client’s value criteria will have been developed in the first value management workshop. With each successive workshop these criteria will be developed further into a function diagram. This should be included in the workshop handbook. If it is to be developed further this will take place as part of the information stage of the workshop.
The functional analysis should always be generated by the client representatives with the help of the other members of the workshop. It is the role of the facilitator to facilitate this process, not to take part in it.
All participants must be prepared to propose and challenge design solutions. The input of all participants (not just those who are experts in a particular discipline) is one of the strengths of the VE process and should be encouraged by the facilitator.
1.2.7 Functional Analysis of Design Relative to the Client’s
Requirements
1.2.7.1 It should be understood that it is not possible to find meaningful alternatives
to a technical solution without first identifying the function required of it.
1.2.7.2 Functional analysis is any technique designed to appraise value by careful
analysis of function. This can be simple ‘creative session’ of the functions and possible alternatives, but the most common method is using a functional analysis systems technique (FAST) diagram.
1.2.7.3 The FAST system uses a ‘function diagram’ which identifies the basic
function ‘what is required’ on the left-hand side and more detailed secondary functions working from left to right until all the means of achieving these G
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functions ‘how are they to be fulfilled’ are identified on the right. See figure 2 for an example of a FAST diagram. It should be understood that this is a broad-brush technique.
The objective of functional analysis is to produce a complete description of the end purpose of the design in terms of what it must do.
Reference is sometimes made to different types of FAST diagram: Classical FAST, Technical FAST or Customer/Task FAST.
The original FAST diagram was a presentation of the user-related and product-related functions of a design solution. It was a technique used to assemble the functions of a product in a hierarchy and to assess ‘why’ and ‘how’ they are delivered. This is known as a Classical FAST.
Subsequently it was recognized that all functions did not fit into the flow logic so it was decided to separate out the functions that are always active, whether the product is operational or not. It was also decided to separate out those functions that only occur one time regardless of repetitiveness of the process. This diagram describes what a product, element or component must do and is known as a Technical FAST.
It was then recognized that, ideally, it is the customer who should determine the value of the product and that the FAST diagram should include the customer/user in the development of value study projects. The resulting FAST
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diagram has become known as a Customer or Task FAST. It is this concept from which the Value Tree has developed.
All FAST diagrams should include a scope line on the left-hand side of the diagram. The scope line limits the area of the project on which attention is being focused. The scope is the portion of the project that is selected for the value study.
The FAST model displays functions in a logical sequence and tests their dependency. It does not indicate how a function should be performed. There is no such thing as a correct FAST model, only a valid FAST model.
1.2.7.4 Most practitioners insist that functions are defined in terms of ‘active
verb/measurable noun (or phrase)’ combinations, for example, ‘minimize energy consumption’. This improves clarity, helps all panel members develop a shared understanding and promotes the examination process. These should be interrogated by asking ‘why’ the client requires this in order to examine how it should be achieved.
1.2.7.5 The process of setting up a FAST diagram is of matching the functional
elements of the building (object functions) to the client’s required functions (user functions). The functional requirements need to be broken down until they are reflected in elements which can be priced (and built). This process is called ‘functional decomposition’. For example, the requirement for increased energy efficiency might be provided by increased levels of insulation which might be achieved by changes to all or any of roof, walls, floor, windows and doors or finishes. The number of levels ‘of decomposition’ required cannot be predetermined.
1.2.7.6 VALUETREE
A Value Tree is a diagram that describes the business driver (mission) for a project or need and the criteria that need to be satisfied in order to achieve it. A Value Tree should be developed at an early stage in order to inform the brief. However, it can be developed at any stage in order to confirm the brief. It will generally be carried out by the client organization in order to establish whether a project is the solution to their needs. The criteria are then developed further into the functions required in order to achieve them. The scope line for a project will begin to the right of the Value Tree.
1.2.7.7 Appendix A gives an example of part of a Value Tree and a FAST diagram for
a health centre.
Function elements (object functions) are defined in the BCIS publication,
Standard Form of Cost Analysis: Principles, Instructions and Definitions and
in Section 2.3 of this handbook.
1.2.8 Pricing the FAST Diagram
1.2.8.1 As the FAST diagram progresses and different solutions are found, it becomes
possible to establish alternative costs for achieving a given function. However, it is important that all functions are clearly defined if costs of alternative proposals are to be meaningful. Also, it should be remembered that it is the design solutions to the functional requirements that are being priced and compared to the value and importance that the client puts on that function. For example, the client can identify the value of savings from reduced energy consumption or may rank this as important for other reasons. The value engineering team’s task is to put a price on the various design solutions suggested that will achieve this end. It is creativity in finding the most economical solution that is the essence of the value engineering exercise.
1.2.8.2 Fees and value added tax (VAT) and other financial and fiscal matters may
also need to be considered.
1.2.9 Presenting a Design Solution to a Value Engineering Workshop
1.2.9.1 Design solutions should be presented as designers normally would to any
panel of users. However, they should expect to be questioned quite extensively. They should keep an open mind and maintain objectivity in justifying their proposals because the objective is to find the most cost-effective solution, not to criticize for the sake of it. On the other hand, designers should be prepared to stand by their design solution if they think it is correct for the function being considered.
1.2.10 The Workshop
1.2.10.1 A value engineering workshop will work through phases of information,
speculation, evaluation, development and presentation:
(a) The ‘information phase’ identifies the spaces, elements and components in terms of the functions they fulfill. It asks the questions about what is the prime function of an element?; what are it’s subsidiary functions?; what does it cost?; what is it’s value? It is at this stage that the FAST diagram is developed and it is against the background of this information that the value engineering evaluation will be made.
(b) ‘Speculation’ is the brainstorming stage which will generate the ideas from which solutions will be developed. It is important that each member of the panel thinks positively. The facilitator will ensure that no one is allowed to become overly critical of another member’s contribution in order that ideas flow. All ideas should be logged at this stage. However, in order to encourage idea building, they should not be analysed or rejected. It is important that the underlying functions of suggestions for improvement are listed for evaluation later. Design solutions should not be developed at this stage to ensure that G
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‘what is to be achieved’ is properly addressed. All optional solutions should only be considered at the evaluation stage.
(c) ‘Evaluation’ is the analysis of the ideas generated by the earlier speculation. Again, a positive feeling will be encouraged by the facilitator with advantages/disadvantages being discussed in an even-handed manner. At this stage some ideas will be rejected and the best taken forward. It is essential to ensure that all the ramifications of any suggested changes should be considered. For example, if the exercise has suggested a change to a piece of M&E equipment, the effects on the control management systems and structural requirements must also be considered.
Life cycle costing can be an important factor in the process when considering optional solutions but the criticality of this aspect will hinge on the client’s philosophy.
(d) ‘Development’ of the ideas to be taken forward will be initiated at the meeting and a programme established for completion of this stage. Often the detailed development including life cycle costing, if appropriate, will be continued beyond the initial meeting and the outcome presented to a subsequent meeting for the panel to determine which design options to adopt. (e) ‘Presentation’ takes the form of a report prepared by the facilitator which records in some detail all elements of the study and concludes with those options to be incorporated in the developed design. This report is normally presented to the client by the value engineering panel at a meeting held within one or two weeks of the date of the workshop.
1.2.10.2 The workshop should focus on expensive items or ‘mismatches’, for example,
parts of the FAST diagram which are important to the client but which have been allocated little money or have cost a lot of money but do not contribute to the function.
1.2.11 Assessing the Value of the Workshop
1.2.11.1 Areas for research/change identified at the workshop could be grouped into
three categories:
(i) those that are removed/changed and result in reduced cost;
(ii) those that are added/changed and result in additional cost; and (iii) those that are identified for investigation but not implemented
1.2.11.2 The financial benefit should then be identified against all elements within
categories (i) or (ii).
1.2.11.3 A major benefit of the workshop which will be enjoyed by the panel members
is a better understanding of the project functions and common ownership of the team-based designs solutions which have evolved.
1.2.12 Implementing the Results
1.2.12.1 The value engineering panel’s decisions are recommendations that need to be
accepted by all stakeholders. Those stakeholders that are not part of the panel are likely to have a right to comment before decisions are adopted.
1.2.12.2 Once the workshop’s proposals have been sanctioned by the client, decisions
should be fed back to the design team, briefing those members whose work is affected as to why the changes were made.
1.2.12.3 If necessary, amendments to the design brief, design programme and scope of
professional team’s brief should be incorporated into these documents.
1.2.13 Feedback from Post-Occupancy Evaluation
1.2.13.1 It is important for any client to carry out a project review to demonstrate how
project objectives have been achieved and particular problems overcome. As part of the project evaluation process, it should be established whether the project represents best value for money and whether or not key design changes made as a result of value engineering have achieved the benefits expected. These should always be set against the cost of carrying out the exercise. G
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Appendix B: Typical Example of a Value Engineering Process
B1 BACKGROUND
A retail client with a regular development programme for a series of new
stores (typical size 8,000m2) entered into a partnering agreement with key
members of the construction team for four new projects.
To encourage value engineering, the partnering contractors share in any savings that relate to any accepted proposals.
For two of these projects the client opted for a design and build contract for the services installations (mechanical, sprinklers and electrical).
In an effort to reduce costs and ultimately add value to the schemes, the client set a target of reducing the costs on these projects by 10 per cent, with no material effect on quality or health and safety.
To set a benchmark for this reduction model cost plan costs for a typical store (derived from historical records) were modified to suit the new scheme layouts. Allowances were included for any items that were classified as ‘site specific’ (e.g. acoustic requirements stipulated by the district surveyor). Cost plan figures were based on the client’s current specification.
Due to the volume of developments undertaken by the client and the repetitive nature of the works, the savings generated by value engineering can be incorporated in any future schemes.
B2 SPECIFICEXAMPLE: VENTILATION TOSALESFLOOR
The original design was based on previous solutions and included ‘traditional’ ventilation.
At the ‘information phase’, the functional requirement, including the need for ventilation, was examined against the client’s desire to reduce capital costs. This identified that a high proportion of the cost of the mechanical installation related to the provision of ventilation to the sales floor of the store (plant, distribution ductwork, diffusers, etc.)
At the ‘speculation phase’, the client’s engineering department worked closely with the mechanical partnering contractor to consider alternative methods of ventilating the sales floor of the store.
The alternative method of ventilation proposed was of the displacement type. With displacement ventilation, air is only conditioned at the level at which occupiers are breathing. Air is introduced at low level and at low velocity. Natural convection currents are utilised to remove excess heat and pollutants out of the occupied zone. There is a saving in the amount of ductwork required, as only two runs of ductwork are needed on the sales floor. (The
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traditional method is designed for four separate branches of ductwork.) The new specification requires diffusers of the displacement type, with the facility of automatically varying the air throw pattern whether in heating or cooling mode.
Furthermore, the proposed system required ventilation to the occupied zone only rather than the full building space. This has resulted in capital cost savings on plant and in the likely running costs of the system.
The evaluation identified significant savings. Summary of Value Engineering Exercise
Original installation: Traditional ventilation Value engineering proposal: Displacement ventilation
Benefits: Saving on air handling plant size Saving on chiller plant size Saving on sales floor ductwork Savings on capital cost: Air handling plant 10%
Chiller plant 5%
Ductwork and diffusers 25%
At the ‘development phase’, the proposed method was discussed with other members of the design team to ensure that any impact on the other building elements, the project programme and the interface with other subcontractors were taken into account.
Appendix C: Further Reading
British Standards Institute. Value Engineering, Value Analysis Vocabulary – Part 1:
Value Analysis and Functional Analysis, BS EN 1325–1 1997, British Standards
Institute, London, 2000.
Building Cost Information Service. Elements for Design and Build, BCIS Ltd, 1996 Building Cost Information Service. Standard Form of Cost Analysis; Principles,
Instructions and Definitions, BCIS Ltd, 1969 (Reprinted 1997)
Connaughton, John, N., Green, Stuart, D., Construction Industry Research and
Information Association. Value Management in Construction: A Client’s Guide, CIRIA, London, 1996
Dell’isola, Alphonse. Value Engineering in the Construction Industry, Van Nostrand Reinhold Co., New York, 1983
Dell’isola, Alphonse. Value Engineering: Practical Software Applications for Design,
Construction, Maintenance and Operations, R. S. Means & Co., Kingston, MA, 1997
Green, Stuart, D. and Popper, Peter, A. Value Engineering: The Search for
Unnecessary Cost, Chartered Institute of Building, Berkshire, 1990
Institution of Civil Engineers. Creating Value in Enginering, Thomas Telford Publishing, London, 1996
Kelly, John and Male, Stephen. A Study of Value Management and Quantity Surveying
Practice, RICS Books, Coventry, 1988
Kelly, J.R. and Male, S.P. A Study of Value Engineering and Quantity Surveying
Practice, Heriott-Watt University, Edinburgh, 1989
Kelly, J.R. and Male, S.P., Heriot-Watt University, Department of Building Engineering and Surveying, Royal Institution of Chartered Surveyors. The Practice of
Value Management: Enhancing Value or Cutting Cost? RICS, London, 1991
Law, Alastair, G. An Introduction to Value Engineering: A New Technique in
Technology Assessment and Evalution, Alastair G. Law, Washington DC, 1981
May, Susan, C., College of Estate Management. Value Engineering and Value
Management: A CPD Study Pack, College of Estate Management, Reading, 1994
Mole, Kelly, Fernie, Grongvist and Bowles. The Value Management Benchmark:
Good Practice Framework for Clients and Practitioners. Thomas Telford Publishing,
London 1998
Norton, Brian, R. and McElligott, William, C. Value Management in Construction: A
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Palmer, Angela. A Critique of Value Management, Chartered Institute of Building, Berkshire, 1990
Royal Institution of Chartered Surveyors. Value and the Client (papers presented at a
conference held at the RICS on 29 January 1992), RICS, London, 1992
Smith, J., Jackson, N., Wyatt, R., Smyth, H., Beck, M., Chapman, K., Shirazi, A., Hampson, K., Royal Institution of Chartered Surveyors. Can Any Facilitator Run a
Value Engineering Workshop? RICS, London, 1998
Zimmerman, Larry, W. and Hart, Glen, D. Value Engineering: A Practical Approach
for Owners, Designers and Contractors, Van Nostrand Reinhold & Co, New York,
