Value Engineering (VE) Clause Samples
The Value Engineering (VE) clause establishes a process for evaluating and implementing cost-saving or efficiency-improving changes to a project without compromising quality or performance. Typically, this clause allows contractors or project participants to propose alternative methods, materials, or designs that achieve the same project objectives at a reduced cost or with added benefits. The clause often outlines procedures for submitting proposals, reviewing suggestions, and sharing any resulting savings between the parties. Its core practical function is to incentivize innovation and cost efficiency during project execution, ultimately reducing overall project expenses while maintaining required standards.
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Value Engineering (VE). Value Engineering shall mean a function-oriented, structured team approach used to analyze and improve Value in a project. It is a powerful methodology for solving problems and improving performance and quality. Reducing cost may be a by-product of Value Engineering, improving value is the objective.
Value Engineering (VE). The Department of Transportation, Infrastructure & Energy (TIE) will entertain proposals brought forth by any bidder for Value Engineering (VE). The Department will review all proposals for technical merit and proposed cost savings. The Departm ent will then advise whether or not the VE Proposal is feasible. The Department’s decision shall be considered final. Proposal(s) from any bidder shall be submitted with their tender submission, bound and clearly separated from the primary tender submission, complete with a cover letter (signed and dated) summarizing the overall concept of the proposal. The cover letter shall also clearly state the amount of cost savings indicated both in written and digit format. Proposal(s) from any bidder shall contain a detailed breakdown of all related work activities complete with associated costs (credits and debits), with the net cost savings clearly indicated. All submitted proposals shall be reviewed by TIE as part of TIE’s evaluation in to order to determine the successful Contractor. Any proposals deemed acceptable to TIE will be eligible for cost savings sharing of 50% for the Department and 50% for the Contractor. There will be no compensation for those proposals which are deemed unacceptable. Note the 50/50 cost savings sharing shall not be applied to any credits to the Contract nor unused quantities. The cost savings sharing shall ONLY be applied to VE Proposals brought forth by the Contractor and agreed to with the Department. All costs related to updating TIE and/or Consultant drawings as a result of an accepted proposal shall be covered by the Contractor, independent from the 50/50 cost split items.
Value Engineering (VE). The CMR shall, after a complete review of the Project program and understanding of the intent of APS and the A/E, provide VE services as described below and offer cost savings suggestions and best value recommendations to APS. All recommendations must be fully reviewed with APS and approved prior to implementation. APS views VE as an ongoing process. The CMR is expected, therefore, to be pro-active and participate on an ongoing basis relative to VE ideas.
1. Develop VE concepts for consideration at the session noted in (2) below (it is anticipated that the A/E will be concurrently conducting a similar activity);
2. Brainstorming session(s) with design team;
3. Written cost studies shall be produced and submitted to APS within one (1) week of the final brainstorming session and shall include the original cost of the VE item based on the original design and the cost of the VE item to identify the cost savings or add for each item;
4. Formal presentation of the study to be conducted by the CMR with the Project Team at which time APS will make its VE decisions; it is anticipated that this presentation will be a 1-day effort; and,
5. Formal submission of the VE study document inclusive of a summary of VE items, applicable cost savings, selected items and their corresponding cost savings. The CMR shall also conduct VE studies during the remainder of the Pre-Construction Phase Services to evaluate specific items as requested by APS. The CMR takes the lead on this VE effort inclusive of compiling all VE ideas from all Project Team members (AE, CM and APS), determining the applicable dollar value of each and conducting the VE session with the Project Team at which time the team makes its recommendations to APS. When the CMR documents the VE ideas, the CMR is to show how the dollar values were derived for each VE item; that is, documentation of the detailed cost of the Work as originally designed per the current estimate and the detailed estimate of the VE item to determine what cost savings, if any, is projected. The CMR is to anticipate the need for VE as part of the design schedule; that is, at the commencement of each design phase and the determination of the due dates for the design submittal and associated cost estimate and reconciliation.
Value Engineering (VE). Is a systematic method to improve the “value” of design, goods or products, processes, and services by using an examination of function. Value, as defined, is the ratio of function to cost.
Value Engineering (VE). Analysis
1. The Professional will perform a value engineering (VE) analysis as required for projects on the National Highway System (NHS) receiving federal assistance with an estimated total cost of $50 million or more. The VE analysis will be performed in accordance with Chapter 50-3.02 of the INDOT design manual.
Value Engineering (VE). Proposed VE items included in the GMP shall be updated from previously submitted VE items and should reflect the “final acceptance” of VE items, which are part of the scope of work. The VE schedule shall identify current acceptance and the date of acceptance in an adjacent column. VE items must be resolved and accepted by the Owner prior to GMP submittal.