Click for next page ( 5


The National Academies | 500 Fifth St. N.W. | Washington, D.C. 20001
Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement



Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.

OCR for page 4
5 CHAPTER ONE INTRODUCTION BACKGROUND thesis of Highway Practice 78 (1). In the United States, fed- eral and state policies have been developed and implemented State highway and transportation agencies are confronted by requiring value studies for high expenditure projects. Many many complex problems. Foremost among these is that during the past few years, financial resources have become increasingly transportation agencies now have project delivery strategies scarce in relation to existing and [future] needs. It is widely in place that incorporate VE and, in some cases, project fund- believed that this condition will persist through the [next decade] ing approvals that are selectively tied to the completion of and perhaps beyond. VE studies. The use of VE as a project management tool con- Turner and Reark (1) tinues to grow and could be further enhanced by sharing information on the application and management of current These words, written almost a quarter of a century ago, intro- VE practices and programs in North America. duced NCHRP's initial look at value engineering (VE) in transportation. NCHRP Synthesis of Highway Practice 78 OBJECTIVES AND FOCUS summarized key observations and forecast transportation agency expectations at the time. State transportation agencies The purpose of this report is to summarize the current prac- (STAs) continue to face and overcome these challenges tices in VE in highway transportation agencies in the United today. In many instances, STAs have developed successful States and Canada. VE is used by many of these agencies VE programs, as one approach, to help them cost-effectively during the planning, design, and construction phases of their deliver needed infrastructure and satisfy their customers and projects. Some agencies have expanded the application of key stakeholders. VE to standards and processes as well. VE is the systematic review of a project, product, or This synthesis identifies the reported best practices, key process to improve performance, quality, and/or life-cycle cost strengths, and challenges of current VE study processes and by an independent multidisciplinary team of specialists. The agency programs. The report is intended to serve as a guide VE process, referred to as the Job Plan, defines a sequence of to those agencies interested in applying VE and/or improv- activities that are undertaken during a VE study, before, dur- ing the effectiveness of VE in their projects and programs. ing, and following a workshop. During the VE workshop, the Key topics discussed in this report include VE team learns about the background issues, defines and clas- sifies the project (or product or process) functions, identifies Policies, guidelines, and selection; creative approaches to provide the functions, and then evalu- Education and awareness; ates, develops, and presents the VE proposals to key decision Applications; makers. It is the focus on the functions that the project, prod- Implementation; uct, or process must perform that sets VE apart from other Monitoring; and quality-improvement or cost-reduction approaches. Future needs. In the United States, VE, or more accurately, the value SCOPE AND CONTENT methodology (VM), has been used to improve transportation projects for more than 30 years (2). Traditionally, VE has This synthesis is based on information collected during a been used by transportation agencies and municipal organi- detailed literature search and from documents made avail- zations to reduce or avoid excess capital construction ex- able by selected transportation agencies and municipalities in penditures. However, VE can play a broader role to support North America. In addition, a survey exploring VE policy, effective decision making for transportation projects to guidelines and applications, project selection, implementa- increase project performance and quality, balance project tion and monitoring issues, industry preparedness, and future objectives, and manage community expectations. opportunities, was distributed to transportation agencies in the United States and Canada. Additional insight, gained from The application of VE on transportation projects has the author's personal experiences and through contacts, is also evolved substantially since the publication of NCHRP Syn- shared, where appropriate.

OCR for page 4
6 The survey was distributed to 53 transportation agencies the influence and impact that the federal government has on in the United States, including all 50 states, the District of VE activities in the United States. The activities of the Cana- Columbia, Puerto Rico, and FHWA's Central Federal Lands dian provincial DOTs and the three cities are also compared. Highway Division (FLH). The survey was also distributed to the 13 senior Canadian transportation agencies (provinces The VE Job Plan for most STAs uses elements of SAVE and territories) and major municipalities by the Transporta- International's Value Methodology Standard (3) issued in tion Association of Canada (TAC). Fifty completed survey 1998, or AASHTO's slight variation of it. Several states and responses were received from 42 states, FLH, four provinces, provinces have, or are in the process of developing or modi- and three cities. fying, the tools in the Value Methodology Standard to be more specific to transportation projects and the related issues The Nebraska Department of Roads indicated that the to improve the outcome of VE reviews. An example of this is survey questionnaire was not applicable to their organization. the recent interest by some STAs to use project-performance The province of Newfoundland and Labrador also responded, measurement to evaluate the effectiveness of proposed VE but indicated that it does not have a VE program at this time. alternatives. Several agencies are using VE to manage stake- Responding Canadian provinces were British Columbia, New holder expectations to improve public or stakeholder buy-in Brunswick, Ontario, and Saskatchewan. New York City (New and project commitment. These aspects are discussed as well. York), the Canadian cities of Winnipeg (Manitoba) and Ottawa Training practices and the level of financial commitment that (Ontario), and FLH also completed the survey. appears to be necessary to sustain value expertise are pre- sented in this chapter. This synthesis report is intended to serve as an extension to NCHRP Synthesis of Highway Practice 78 (1), document- The VE Job Plan establishes a successful sequence of activ- ing the continued and evolving application of VE on high- ities to understand the study subject (project, process, or prod- way projects in the United States and Canada. The organiza- uct), define the project functions, generate and evaluate ideas, tion and content of the report are discussed here. and eventually develop and present the VE proposals during the workshop stage. However, no universally accepted process Chapter one presents the background for the synthesis currently exists to implement the VE proposals. Consequently, including the material generated by the Topic Panel. The some STAs have developed their own approaches to ensure genesis of the synthesis as well as the objectives and scope that the VE proposals are systematically and fairly reviewed of work are included. Different users and organizations may for implementation. The effectiveness of the VE programs is have variations of the VM definitions. One set of definitions also of interest for two reasons: (1) to be compliant with fed- is provided in the Glossary to facilitate reviewing this eral VE program reporting requirements and (2) to attract report. adequate funding to operate the program. These aspects are also discussed in chapter three. Chapter two includes a brief history of VE and traces the developments of VE applications in transportation projects, Chapter four presents the current implementation chal- from its early beginnings in the 1960s to the present. Empha- lenges and how several transportation agencies have attempted sis has been placed on the motivation for transportation agen- to overcome these challenges. Key implementation issues, cies to use this management tool in their infrastructure devel- including the development and maintenance of core agency opment programs and the eventual development of policies VE expertise and sustainable program funding, are discussed. to mandate VE on major projects. The role of SAVE Inter- This chapter also presents evidence that the traditional moti- national (SAVE), the U.S.-based international professional vation to reduce project costs may be, in part, giving way to society promoting the worldwide use of VM, which influ- a broader appreciation and emphasis on the opportunities to ences the value industry and how transportation agencies increase project value and performance. This improvement apply VE, is also presented. typically has a far reaching social benefit, although trans- portation agency expenditures to achieve this benefit do not Chapter three presents the observed current VE practices in always provide a direct and immediate return on investment. transportation, gained from the literature search results and the detailed survey. A portion of the chapter presents how trans- Chapter five focuses on the identification of potential portation agencies initiate VE studies and why. Also included future opportunities and research needs related to the appli- are the approaches and procedures used to select VE team cation of VE in transportation. Critical to the sustained suc- members, and who is typically responsible for their selection. cess in VE is the ability and readiness of the value community A discussion of the required skill sets of the VE Team Leader to support the VE programs operated by the transportation and the technical specialists is presented as well. FHWA cur- agencies. This chapter includes a discussion on how the value rently tracks the specifics of VE studies performed by the community can meet the expectations of the STAs. STAs on the National Highway System (NHS). This is sum- marized to provide a counterpoint to the total number of VE Chapter six presents the concluding remarks that reflect studies being done by the transportation agencies to reflect on the issues identified and discussed in the synthesis report.