November 20, 2002
Value Engineering Produces Substantial
Cost Savings in Office Space Construction
 Today's
unyielding economy is causing corporations across the board
to clutch their purse strings with the same vigor Antowain Smith
clutches the pigskin. The hip, elaborate office build-outs that
were flooding the industry a couple years ago have subsided
and the days of keeping up with the "jones.com" are no longer.
Two years ago the trend was to build unique, inviting office
spaces that would attract employees from a slim pool of available
labor. Creating an enticing office setting, in many instances,
was owners' primary concern despite what cost may have been
incurred to achieve the end product. Offering an upbeat workspace
was considered as much of a job perk as a prospering 401k plan.
Now, in light of the difficult economy, not only is a prospering
401k an anomaly, but chic office environments are taking a back
seat to sensible spending practices. As a result, the demand
on general contractors (GCs) to identify cost control solutions
has increased significantly.
The GCs that shine in this arena are those who can provide innovative
value engineering (VE) solutions. VE is a process that involves
the GC, architect, subcontractors and owner to formulate methods
for which a desired built space can be achieved via the most
cost conscientious means.
General Contractor
An owner's budget is typically established up-front and the
architect is responsible for designing to that budget. If further
cost reduction is necessary, the GC's input produces fresh alternatives.
In the case of a renovation, for example, a GC will evaluate
if any existing elements can be reused. Can any fixtures, doors,
frames or ceiling panels be reused? Is there any excess in design?
Perhaps a design calls for an expensive finish to be used throughout.
Are there areas of minimal traffic where a less expensive finish
could be used instead?
Architect
Because VE should never cause a design's integrity to be compromised,
the architect must always be involved in the process. When shopping
for alternate fixtures and finishes, the architect's input is
critical to maintain the owner's desired look. Together, the
architect and GC should be able to offer an owner three to four
affordable options for each VE suggestion. These options are
presented on a detailed spreadsheet created by the GC that indicates
the reduced cost for each item.
Subcontractors
A GC's relationship with its subcontractors determines how well
a GC can derive solid VE solutions. Although the GC and architect
work together to come up with VE options, it is the subcontractor
who does the legwork for researching the cost and practicality
of each particular VE suggestion. The better the relationship
between the GC and its subcontractors, the more likely a subcontractor
is to "go the extra mile" in researching VE suggestions.
Once all VE selections have been approved, additional cost savings
can be procured through the selection of the most appropriate
subcontractor for the job. A subcontractor that might be able
to perform small jobs efficiently, for example, may lack the
ability to do so on large jobs. A knowledgeable GC will know
which subcontractors can perform a job at the best value.
Owner
Although the owner has the final say in all VE, the owner's
input should be involved in the process from the start. After
all, it's the owner who will occupy the space day in and day
out. The owner best knows the budget and where money is best
spent.
The recent build-out of Guardian Life Insurance Company inside
111 Huntington exemplifies the benefit VE can add to a tenant
build-out. Lee Kennedy Co., Inc. performed the construction
of Guardian's 7,500 s/f Boston offices designed by Gensler.
Lee Kennedy Co. and Gensler worked together with the owner's
representative, Meredith & Grew, Inc., to set a budget early
in the building process. Gensler drew a contemporary, attractive
design that was achieved financially with the assistance of
some VE derived by Lee Kennedy Co.
When originally designed light fixtures, for example, turned
out to be more expensive than anticipated, Lee Kennedy Co. and
Gensler shopped for alternative fixtures that still fit the
design yet cost significantly less. The original design also
called for high-end fabric panels to be used frequently throughout
the space. The use of the panels was analyzed and the team determined
that the panels could be used in the main focal points of the
space only. Similar adjustments to carpet and soffits brought
the design within the intended budget.
The outcome was an eye-pleasing office environment and a satisfied
owner. A few minor changes largely enhanced cost savings and
minimally affected design.
Eugene Kennedy
is a project executive at Lee Kennedy Co., Inc., a Boston based
general contractor. He has overseen many tenant build-outs for
clients such as Mass Financial Services, Investors Bank & Trust
Company and Atlas Venture Inc.
Scott Robbins
is Chief Estimator - Corporate Construction at Lee Kennedy Co.
He has performed estimating for numerous tenants inside the
John Hancock Tower, The Prudential Center and 111 Huntington,
among others. |
