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USACE 'value engineers' save Europe District $150 million in 2009

Oct 29, 2009

By Rachel Goodspeed (U.S. Army Corps of Engineers Europe District)

The U.S. Army Corps of Engineers Europe District value engineering program identified more than $150 million in potential savings on projects in fiscal 2009 – the most ever identified in a fiscal year to date.

“That’s $150 million in potential savings of taxpayer dollars that can fund other projects and programs,” said Paul Mason, the District’s value engineering officer.

The biggest contributors to the windfall include $21 million in accepted savings from a Missile Defense Agency site in Poland and $18 million in potential savings from a family housing project at Wiesbaden.

“The aim is to increase the value of the project in cost and/or efficiency,” Mason said. “It makes good engineering and design sense, and it’s smart economics to ensure the taxpayers get more value out of their tax dollars.”

Value engineering is a process where a multidisciplinary team of architects and engineers improves “value” by evaluating a project and generating ideas that are tested for overall value.

Recommendations can include suggestions for cost, time and system changes that may result in savings without sacrificing quality, aesthetics, or operations and maintenance capability. Many people have the idea that value engineering is only about cutting costs, but it’s more than penny-pinching, Mason said.

The process then introduces a third party to get a fresh look at better, more efficient ways of designing and constructing the facility, said Ken Turner, a District program manager who oversees the VE program. That doesn’t always mean cutting costs – sometimes costs may stay the same.

“If we find a means to do something a better way, we end up producing a better product for our customer,” he said. “Usually we are looking for cost savings, but not always. Sometimes those savings are procured in the facility’s operations and in maintenance.”

The initial amounts are labeled as “potential” savings as the project delivery team and construction agents still need to determine feasibility and legal roadblocks to accepting the change, Turner said. Division commanders must approve changes over $1 million.

As the District moves into fiscal year 2010, Mason said he expects to see more savings coming out of the program, which include the Network Warfare Center in Wiesbaden and various school projects in Kaiserslautern.

Despite the success, Turner said the District is looking at revamping the program, which has stayed the same for a long time.

“As part of the quality management and quality assurance initiatives, we are drafting a system that defines the process for conducting and, more importantly, documenting a value engineering study,” he said.

Once the process is set up, project managers should expect training to show them a standardized process for required documentation.

“We want to ensure we’re involving the project managers as much as possible in the VE process,” Mason said. “By standardizing the process and incorporating training, we are trying to further VE benefits to make sure good ideas are incorporated and we get feedback for better business practices.”

The Office of Management and Budget mandates Department of Defense agencies do VE studies on construction if the project is more than $10 million. Projects between $2 million and $10 million may waive the study, although not often. Under $2 million, a VE study is not required.

“Value engineering plays a critical role in enhancing the value of our products for our customers,” Turner said. “We’re getting the biggest bang for our buck, which is extremely vital in this economic climate.”

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