Critical Cuts

 VALUE ENGINEERING 01Value engineering allows you to cut costs without compromising quality.   

By Paul Ruig 

Particularly in construction projects with tight budgets or in softening markets, being as cost-efficient as possible is critical. One of the best ways construction managers can accomplish this is through cutting costs out of the line-of-sight, where it won’t be noticed by the end user. 

This idea of “value engineering” was introduced by Lawrence Miles while working at General Electric during World War II. With a shortage of cash and raw materials, he needed to find a solution to eliminate costs without sacrificing the quality of the end product. 

Many years later, value engineering strategies are more valuable than ever. Builders, engineers, designers, owners, management staff and anyone else involved with the project should be consulted when developing and employing these cost-saving measures, 60 percent of which can be found long before the project breaks ground during the planning and pre-construction phases. Here are four simple ways to employ value engineering in your next construction project:

The 10-Foot Rule – High-quality finishes using authentic materials are often worth the added cost as long as they can be appreciated. But using the same materials throughout one building in all areas can be a waste because a portion of your finishes are out of the occupant’s line-of-sight. Genuine wood floors instead of laminate may be worth the added cost, but do you really need real wood for the exposed beams of a restaurant’s ceiling? Substituting aluminum that appears to be wood, veneered/laminated wood or even foam can bring down the cost without changing the end user’s experience. 

Generally, higher quality finishes should be used below the 10-foot mark, while faux or lower quality versions of the same material can be used above it. If it’s going to be out of a person’s line of vision, it’s an opportunity for savings. Just make sure not to skimp in high-visibility areas.  

Lower Ceiling Heights – While high ceilings can be an attractive architectural feature, removing even just a few inches from the floor-to-ceiling height can result in significant savings if you can reduce a building below the “high-rise” required threshold. This minimal change isn’t noticeable to the consumer, and allows the overall budget to be reduced or re-allocated to high priority amenities. 

In addition to requiring more materials, buildings that are above the high-rise designation come with added costs  that are related to fire, life and safety codes for emergency access, automatic sprinkler systems, alarm and communications, elevator safety, smoke detection, seismic regulations, backup power, helicopter landing areas and more. These can vary by state, region and city, but regardless of the area, the reduction of the building height can save major costs.

Pre-Fabrication – Pre-fabricating components of a structure, with only the final assembly happening on-site, standardizes the production process, reduces potential complications that come with building on-site, saves time, minimizes waste and often results in lower costs due to economies of scale.

Building and assembling components in a warehouse or factory with more space and a wider variety of tools and machinery is preferable when considering the many limitations that construction sites have. It also reduces the number of deliveries that need to be coordinated at the construction site, and generally makes the logistics of a project much simpler. 

Monitor Commodities – Construction managers should constantly be monitoring the price of relevant commodities to ensure they are using the most cost-efficient material at the time of construction. By substituting for aluminum wire when copper prices are high or using steel when concrete is costly, you can display your value and expertise to clients and save them significant money. 

This is one area where construction managers need to be especially nimble. Commodity prices are quick to change and may not stay consistent from the time project plans are finalized to when construction begins. If the cost of granite skyrockets as soon as you break ground on an office project, it may be best to recommend a change to quartz.

These seemingly small changes can save clients hundreds of thousands, even millions, of dollars without affecting the integrity of the final product or necessitating a cut in amenities. Whether the overall budget is decreased or the project scope is expanded because of the additional capital, making just a few of these adjustments can be extremely valuable for owners. 

Paul Ruig, LEED AP, is vice president of the Greater Los Angeles region at C.W. Driver Companies, a premier builder providing general contracting, construction management and design-build services to the Western United States since 1919. With 20 years of experience, Ruig works with project owners and architects to oversee construction projects from preconstruction and planning phases to final project delivery. He can be reached at [email protected] or (949) 261-5100.



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