Value Engineering: A Practical Guide to Adding Value 4

Wednesday, March 25th, 2015
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Value engineering in the construction industry is too often associated with cost cutting and compromise.

True value engineering, however, is about optimising solutions with a project’s defined goals in mind, reducing client risk, improving building efficiencies and keeping within established budgets and programmes.

Value engineering should not be about compromising value, rather it should mean adding value.

Here are a handful of practical tips from a structural engineering perspective to help achieve this:

Seek Advice From The Experts

Paying for the right advice invariably saves on overall building costs when a full life cycle analysis is considered.

As an example, the merits of seeking sound geotechnical advice early on a recently completed hotel project was clearly demonstrated when the client initially approached the market with a view to engaging the lowest priced fee for geotechnical services.

By their nature, geotechnical investigations are conservative because of the variability of sub-surface conditions or surprises that lie hidden in the ground. When, on our recommendation, this particular hotel client commissioned a second, more detailed geotechnical investigation with more rigorous data, the end costs of the footing construction were able to be reduced because of the better quality data that was provided for the footing design. The savings were significantly more than the difference in cost of the two investigations. Investing earlier in a project’s life can save immensely in concrete and steel reinforcement quantities and in actual material quantities.

Similarly, seeking expert wind loading advice during the early stages of a high-rise building design to identify possible structural dampening requirements allows engineers to derive a structure that can avoid the need for damping tanks before the spatial constraints are locked in.

Retaining Walls

Where retaining wall footings can be integrated with adjacent slabs, use the slab’s stiffness to help restrain the footing under the retaining wall from overturning. This technique can reduce retaining wall footings by 10 per cent or more.

Documenting adequate drainage behind retaining walls also removes the need to design for hydrostatic loading, in turn yielding a smaller-sized and more economical retaining wall structure and minimises the risks associated with waterproof structures, by deleting them.

Concrete Testing

The ability of a concrete supplier to document/prove the quality of its product goes a long way in giving the engineer confidence in pushing the concrete technology to its limits.

When a suspended slab concrete mix design can demonstrate it is achieving a specified microstrain of 700µm or less, it gives the engineer confidence in the ability to rationalise steel reinforcement quantities without compromising serviceability performance.

Use Standard Products

It’s not rocket science, but an off-the-shelf handrail, balustrade system, window mullion system, vehicle crash barrier or structural element will in every case be more economical to procure than their bespoke or specially designed counterparts.

Roof Purlins

Lapped sections facilitate continuous members and efficient purlin sizes. All cold formed roof purlins should be lapped where possible to yield a more efficient roof design.


The issue with reducing steel sizes is an increase in a structure’s dynamic response, which is more often than not overlooked. Smaller section sizes, particularly when walked over, will feel ‘bouncy’ if dynamic performance is ignored when downsizing sections.

In cases where small section sizes are supported over long spans, streamlining for efficiency should be avoided as it may negatively affect the performance of the structure if it means the structure’s dynamic response is increased as a result.

Recycled Building Materials

Although admirable from the point of view of sustainable design, sourcing recycled steel and timbers with identical material properties to their specified traditional elements can be labour intensive.

Clients should also be mindful of the additional incidental costs of installation (for example, surface treatments, corrosion prevention or surface preparation) when recycled options are tabled.

Concrete – Conventionally Reinforced vs Post Tensioned

The construction industry is trending toward post-tensioned concrete structures due to their inherent lower steel tonnages compared to conventionally reinforced structures.

Cost effective structures can be achieved by considering post tensioned options with less steel reinforcement.


An optimum economical slab thickness outcome can be achieved when end spans are kept within 70 per cent of the length of adjacent internal spans.

The benefits of structural formwork (such as Bondek and Condek) are increasingly becoming preferred by builders as it removes the need for formwork stripping and thus reduces slab construction cycle times.

Repetition and Standardisation

In multi-level buildings, where reinforcement layouts are different on each level, savings in labour costs can be gained by repeating reinforcement layouts on each level instead of individual and unique reinforcement arrangements on every floor.

Economies of scale will reduce the cost of connection details when connection types are distilled down to a handful of standardised connection types, as opposed to documenting different connections for each individual case.

Balancing Architectural Ambition With Budgets & Buildability

Aesthetically pleasing forms and exotic shapes can give character and personality to a building, but should be tested to validate what they deliver to the project.

Gravity-defying structures can add a premium to the overall building structure cost of up to 200 per cent or more. In situations where tight building budgets govern the approval or viability of a project, it’s better to approach the design from the point of view of what can realistically be achieved within the budget limits instead of going to tender with a wish list of items that will be deleted during the inevitable value engineering process once the contractor is appointed.

The result in the latter process is likely to deliver an end product that may seem somewhat incomplete or not well thought through.

Creative Substitutions

Where a material, product or element can be substituted for another of lesser cost, there is no reason that the substitution cannot take place provided that the proposed replacement satisfies the original element’s specification or performance criteria. However, the cost of someone assessing the proposed substitutions should not be overlooked.

As a simple example, sourcing structural steel internationally can be a regulatory minefield as Australian Standards are written around steel produced to Australian Standards. International steel may not comply, which makes for a difficult situation if the steelwork is on the wharf!

Plant Rooms

Screens that conceal plant rooms and equipment can be overlooked during preliminary design. An allowance should be flagged on tender drawings to avoid extra costs during the construction phase.

Fire Rating

By proving that steel lintels over door openings will deflect less than the two-millimetre fire gap over the door frame at 800 degrees Celsius we can eliminate the cost of fire protection over these doors.


The most common cost overrun on a building project occurs when the project team goes to tender with incomplete design documentation. With the increasing trend to compress the design program, it is now becoming generally accepted industry practice for projects to be tendered with 80 per cent completed documentation and drawings (although this is never really defined). The nature of this increasingly common project delivery model can cause two issues:

  1. Conservatism in design – Knowing that a building design is not completed, design consultants will tend to err on the side of caution by producing tender documentation with an additional factor of safety or conservatism embedded in the design.
  2. Exploitation of incomplete documents – there is an increasing culture for variations to be pursued. The trend in successful tender bids has been based on the procurement model of offering the lowest price possible to win the project and to then recoup revenue and losses, from a range of potential parties, based on incomplete or missing information on contract tender documentation and drawings.

The second most common type of variation occurs with concrete coring penetrations through slabs and walls due to non-finalised mechanical, electrical, hydraulic or fire engineering designs. In some cases, these additions or changes are unavoidable, but in depth co-ordination between all design disciplines to consolidate and allow for penetrations during detailed design prior to tender will minimise the need to post-core holes later on during the construction phase.

The third most common extra cost imposed on a typical building project is changes to the brief. Although unavoidable, their cost impact can be mitigated by encouraging any necessary changes to be finalised prior to tendering.

Allowing time to undertake design

Every project is different. However there is one aspect of design that remains constant across all projects: time pressures will always restrict the design process. When the design period is compressed, rushed engineering tends not to yield economical solutions.

Brief case studies of VM benefiting the client

Prima Tower, 72-storey residential tower

Core – The thickness of the core was reduced from 850 millimetres at its base to 400 millimetres thick at roof level to give additional sellable area back to the client.

Floor Plates – The floor plates above level 30 were redesigned to increase their gross area and literally grab additional sellable real estate out of the sky for the client.

Transfer Structure – 100 tonnes of steel reinforcement was reduced from the level 10 transfer structure once the upper loadbearing wall locations and floor design were finalised with significant cost savings

Abode 318, 58-storey residential tower

Wind tunnel testing was conducted very early on in the project. By considering its influence early in the design of the stair core and lateral bracing structure, any potential lateral movement was reduced from day one of the design process. The end benefit was the ability to avoid the construction of a costly damping structure to reduce building sway.

568 Collins Street, 68-storey mixed use tower

An outrigger system was employed to enable the core to be reduced, thus maximising sellable floor space.

It’s a simple principle but the most successful projects, in the context of meeting budgets and deadlines successfully, are those that are well planned from the beginning, have all their early investigations done thoroughly and have been given the appropriate time to complete a thorough design before going to tender.

Rushing through the project from concept to handover inevitably tends to cost the client in both construction time and budget terms more than it attempts to save.

This article was written in collaboration with Vincent Amato, associate – structures
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  1. Tony Fendt

    Thank you for an excellent article, Rennie, the simple things so far evade consideration 😉

  2. peer afridi

    A very well minutely detailed account of operations that form part of any construction project. Really commendable effort that would benefit those involved in construction business.

  3. David

    Rennie, I mostly agree with the themes of your article. The challenge the industry has is that the traditional approach to project formation, documentation, procurement and delivery has past its use by date. It is no good trying to rework the construction value proposition without reworking how construction is planned and organised. Just watch what is happening in Asia. I think today's AFR story (Meriton Builds Big Savings) is the writing on the wall. In my view Harry Triguboff is Australia's smartest builder and client. He is the modern day Dick Düsseldorf. It is a tragedy to observe the construction processes still practised by contractors. So much waste and sub-optimal building. Its time for clients to wake up and demand much more for less. That requires no lessening of quality or Value Engineering as it is applied by most Project Managers and Quantity Surveyors. They should spend a bit of time de-constructing a Meriton project, its pretty instructive.
    Harry should arrange to sell seats to watch his North Sydney development
    I expect that this project will be a game changer and Enstruct's Ross Clarke gets it from the conversations I have had with him and Meriton's contractors.

  4. Will

    Electrical construction encompasses the installation, design, wiring, testing and maintenance of electrical systems and equipment. This type of work is critical for the safety of commercial and industrial facilities, and requires a strong skill set of electrical and wiring expertise.