Making Dollars and Sense of Value Engineering

Much of the information I share in this column is inspired by something that has happened to me, or a member of the Spector team, while out in the field. This week is no exception.

Not long ago, I was at a kickoff meeting with a commercial client of ours discussing a 150,000-square-foot core and shell renovation and interior retrofit. After going over the scope of the project and imparting some architectural advice, the conversation turned to an important topic: the budget.

Like some of the clients we work with, this client had a not-so-realistic preconceived notion of what they’d be spending, based upon a projection given to them by the building ownership. At this point, I did what I typically do when I encounter this situation and asked the client to please take a small step back … immediately.

Why such a strong reaction? Simply put, I feel strongly that the initial budget needs to be based on something tangible and that doing the math now saves a tremendous amount of time, money and stress down the road. Another bonus—obtaining a detailed budget—eliminates the need to work backward later on, playing catch-up from phase-to-phase to meet a projected budget.

I shared this point of view with our client, who quickly understood the reasoning behind my concerns. I recommended what one of the go-to owner’s reps we work with calls the sanity check, obtaining real-time actual quotes on work to be performed based on the approved program of needs and a two-dimensional drawing which includes the desired layout, design scheme and wish list of amenities. All of this takes into account the input of the entire design and construction team and, of course, the client.

In this instance, we were able to get a more realistic budget by getting on-the-ground quotes from a construction manager, specialty trades, a surveyor and all necessary parties needed to complete the project. After a three to four week period of information gathering, the team presented a detailed program back to the client to be reviewed, analyzed and approved by all parties on the job before the client invested in the creation of a full set of construction drawings. The result was exactly what we were hoping for – the client was armed with a true budget and realized the time and monetary savings we had hoped for.

This new, improved approach to value engineering is changing the model on how things are done. Many years ago, a client would go through the full schematics, design and construction documents, then work up a budget at that point and see if what they wanted fit in the budget or if they had to go back and make changes to make it work, simplifying a floor plan, selecting less costly materials or eliminating finishes to get to that desired number.

It may seem like additional work up front to perform this version of value engineering, but the proactive approach eliminates the need for constant contingency budgeting (and re-budgeting) later on. Performing this all-important sanity check during the early design phases, rather than the construction phases, means that the first budget revealed to the team truly has wheels.