The Good VE: “Very Early”, Not Value Engineering
Though innovative design is a fundamental cornerstone of any development, discipline is needed to ensure that the project will be constructed within strict cost parameters. AG Architecture, Inc., (AG) has created a unique methodology to support detailed pricing estimates and provide clients with realistic project costs during the conceptual and schematic design phases. Most of the projects we are associated with require guaranteed maximum prices at the end of the design development stage. Our well-refined package and the support of our in-house engineering staff ensures that the formerly critical construction document phase is now a simplified process of documenting difficult decisions made much earlier in the design process.
The Traditional Bid Process
Traditionally a client would tell an architect what type of building they were looking for, and the architect would then develop a design and supporting documents to meet the owners' specific program. This process could take anywhere from 10 to 14 months, depending on the project's complexity. Another 1 or 2 months would pass as the project progressed through the bid process and costs were analyzed. If the project went over the established budget at this point, it placed a severe hardship on the owner and the rest of the team.
After a year or more of working with the plan, the owners are now emotionally attached and have all of their “wants” included in the design. Any adjustments that need to be made to meet the original budget feel like a compromise. Also, the design and construction members of the team have expended a lot of time and expense into a plan that will now need to be readdressed.
Here's the key question: If budget plays such an important role in defining the project and its success, why should it take so long to determine what it will actually cost?
When the state of the economy affected one of AG's large clients and their construction work came to a halt, we stopped to ask ourselves this same question. As AG geared up for a new project with another large client, we had the extra time and manpower available to rethink how to effectively and efficiently approach the process. We believed there had to be a better way.
Over the years, we have learned that an aesthetically pleasing, functional solution to the owners' unique program has to be supported with a high level of service. Developing this methodology is one way we provide value-added. The traditional method of value engineering (VE) addresses budget excess as an after-the-fact reaction. The goal of our methodology is to provide significant cost information “very early” in the project process. We wanted the contractor to be able to establish accurate pricing at the very beginning of the project.
AG uses our now-extensive library of drawings, specifications, and photos to communicate the design intent with the owner and the contractor. We develop a project manual and a set of drawings that reflect the specifics of the project.
The Schematic Design Bid Process
In the past, we would give the contractor copies of the specifications from an earlier project. Although these specifications contained standard construction “boilerplate” information, with the limited time that the contractor had to bid the work, these specifications became too cumbersome to be useful. The schematic design specifications we now produce address the quality of the products that will go into the building in a concise and simplified manner, serving as a more useable reference.
The drawing portion of this package includes information on the building architecture, as well as structural, mechanical, and electrical systems. The architectural drawings and specifications contain all of the standard information for plans, elevations, and typical sections that you would normally find at this level of document development. It also contains information that you would not normally find at this stage, such as room finish and door schedules, millwork details, and reflected ceiling plans. These extra details allow the contractor to do line item take-offs without having to make any assumptions as to the intended level of finish selections.
The engineering package contains information at a similar level of detail. On some projects we will even include designs for two totally different structural or HVAC systems to ensure that the project starts in the most cost-efficient manner.
During the schematic design bid process, the individual line-item pricing allows us to identify any anomalies. Comparing information from similar projects, we are able to address areas that do not fit the norm and correct them.
The beauty of this methodology from our standpoint is that we can provide these fairly comprehensive documents within four weeks after the conceptual design has been approved. From the operational perspective, this requires a team of senior-level associates to be assigned to this stage of the project. While the number of hours devoted to this phase won't necessarily increase, there is a greater cost commitment to having this level of expertise generating information and making key decisions. The return on this investment is that the client will know whether the project is starting out on the right foot at the beginning of the process rather than at the end. The process enables us to make decisions as to how to incorporate the owner's wants into the project without making the owner feel as though they are compromising the original design.
The Design Development Phase
After the team has analyzed the schematic design bids and made the appropriate adjustments, they move to the design development phase. This phase will further define the documents and expand on the amount of the detail and information. Because the structural and mechanical options have been priced and confirmed, they can move forward, confident that these major components will cause any cost excesses.
By the time the actual construction documents are prepared, the team is confident that they have made all the right decisions and the pricing is in line. All the “heavy lifting” has been done, and all the key decisions have been made. This phase is simply taking this information and documenting it with enough additional detail to allow the contractor to actually build the building.
We have refined our project delivery method to address projects ranging from $20-50 million and from 200,000 to 400,000 square feet. Instead of sending a project out for bid, holding our breath, and crossing our fingers that the cost will be reasonable, we now know that the final construction drawings are a formal documentation of important construction decisions made much earlier in the design process. No more “back to the drawing board.”
Addressing job costs “very early” allows us to make informed decisions as to what we can and cannot do. The team decisions are made involving everyone up front prior to final documents. It is the best, most economical way to put all the parts together. While the traditional bid process still occurs, AG Architecture has chosen to deliver an added benefit to clients: an innovation that we feel improves our process. HD
Stephen J. Alexander, AIA, has more than 35 years of experience in project management. As the principal responsible for oversight of the process that takes projects from design to completion, he has set AG Architecture, Inc.'s standards for code research, document and specification preparation, securing approvals, and providing project management during construction and communication with clients throughout the design and construction process. Based in Wisconsin, AG Architecture has designed multifamily housing and senior living environments throughout the United States.