An Interview with Mary K. Baier, P.E. Transportation Principal Engineer, – Construction, State Value Engineering Coordinator; Gerard J. Graci, Transportation Engineer III; Eric J. Tallarita, P.E, Transportation Engineer III
The Value Engineering (VE) approach for transportation projects is handled in different ways in different states. Some view them as a check mark in the process. Some states limit the VE process to satisfying the Federal mandate to perform VE studies meeting the FHWA thresholds of $50 million for highway projects and $40 million for bridge projects. After years of experience, Mary, Gerard and Eric of the Connecticut DOT (ConnDOT) realized the effectiveness of the VE process and decided to change the culture at ConnDOT to make it more accepted and appreciated in the design process. Mary has called this approach “a revolution in the making.” Muthiah Kasi, Executive Vice President of Alfred Benesch & Company (Benesch), interviewed them at Benesch’s Glastonbury, Connecticut office from Chicago through a video teleconference for two hours. Following is their message condensed in an essay format.
Birth of a Revolution
ConnDOT embraced the VE program by creating a formal VE team to satisfy the revised Value Engineering requirement under the Code of Federal Regulations (CFR). The Department and the Design teams historically looked at VE as a requirement during the design phase. Mary, Gerard and Eric decided: “Why not start a revolution and make value engineering a desire, as opposed to a requirement on our projects and apply the process as early in the design phase as possible to maximize the benefits.”
MARY: Instead of being a burden or requirement to the design teams, we wanted to change that thought process where it will be viewed as an asset to the Department and to the design teams. By emphasizing the benefits of VE, the corporate culture needed to be changed to view VE as a valuable resource. Thus the revolution started.
Approach to “Winning” this Revolution?
MARY: When the VE team was formed, we observed people working in silos. Construction was working in the field with the contractors and design teams were working in their own areas, with very little interaction between the two, typically for dispute resolution. We have a saying in our office, not just for Value engineering, but for any tasks, “Blur the lines” between Design and Construction. We foster communication and help build relationships between Construction and Design staff. We are reaching out to subject matter experts (SME) within our Department that offer their expertise to the VE team during these studies. We get them involved. We find that the more people we expose to it, it not only increases our resources and our knowledge base, but it exposes them to the VE process, which can be enjoyable and exciting. They start to understand and appreciate it. We are getting the word out, about value engineering, how it’s adding value to the project and benefiting the Department and how it is a good thing; not just a mandate from FHWA (Federal Highway Administration).
Reluctance, Resistance and Responses
MARY: A Project Engineer working in District 3 Construction in New Haven, Connecticut, Joseph Sorcinelli says, “Any change for the Department is like turning the Titanic.” It’s a very difficult thing and it’s so true. We’re so entrenched in our processes that changes come slow. They do come, but it takes a little bit longer than most corporations. When Project Engineers in Design and Construction are assigned a project they feel that it’s theirs and are hesitant to have others look at it with a critical eye. So we understand the initial “mine” mentality. The “this is my project and I don’t need you involved” approach.
GERARD: We understand that it’s your project. We’re going to help you add value to your project. We understand human nature and we want to initiate the change and implement value engineering as a positive tool through education and involvement in the process. One of the things that recent VE studies have stressed is validation. People feel less threatened by that. Although they feel proprietary about their project, I think telling them that part of the process is validation of aspects of the original design, really helps smooth the whole process. You stress that to them and they start to understand it. I think it’s working well.
GERARD: In a recent VE study, we created 120 ideas and grouped them by each element of as-given design. When all ideas under a certain element were rejected, the conclusion was that the as-given element is the appropriate choice. That’s really the way to make the Designer feel positive about their efforts. The list of ideas that are accepted or rejected become a database to research questions and ideas posed to or by the designers in the future. When questioned; “Have you ever thought of this?” they could go back to this report and say, “Yes.” The VE Team looked at it and rejected it for this reason. I think that’s one of the real contributions to the design process.
GERARD: Overview of the VE process during the VE team’s presentation phase is a way to educate all groups within the Department that have a vested interest in a project; from Design to Maintenance. It reinforces the fact that we’re not second-guessing them and are trying to address their needs. We’re taking an outside, independent, and honest look, and we’re seeing what comes of it.
MARY: We are successfully moving away from the negative and inaccurate perception of VE being intended to find short comings in the design. The department has highly experienced engineers with proven track record to plan and design. They do a good job. They follow the scope and constraints as per standards and regulations. They have to meet budget and schedule constraints. When we do a VE, if the circumstances dictate, costs can increase; still resulting in a tangible benefit to the Department. These may be brought to the attention to the design team as a proposal or design suggestion.
ERIC: We’re planning on implementing a survey of the design team after the VE study to get their thoughts on the process. The survey will reveal what they liked, what they think that we can do to improve and refine the process. This will again, help to make them an integral part of the process; blurring the line between Design and Construction.
Seeking Champions and Influencers?
MARY: It takes a team to make a project successful. We can’t do it alone. We did have a champion at one point who retired a few years ago. We’re finding now more managers are taking an interest in the VE process. Scott Hill is one example. He’s the Bureau Chief of Engineering. He has been attending every reveal presentation, asking pointed questions. He has requested additional information from the team on topics that can be of on-going value to the Department. We’re starting to get multiple champions and influencers. THE REVOLUTION IS GROWING!
(Since the interview, Mark Rolfe, Chief Engineer of ConnDOT, has embraced the VE process to include all significant projects regardless of funding source or CFR requirements.)
First experience in proposing the Value Methodology to our supervisors?
MARY: We’re doing more with less. Like many other States, the resources aren’t there. The initial reaction was typically, “Nope, we got it covered, we can’t spend any more money for a VE on this project.” I have reached out to other projects, especially the state-funded ones, and it was always, “I have limited resources, Mary, I’d love to, but we can’t.” The initial response was always push-back. That’s one of our goals is to have more projects come to us and say, “Hey, you know, we think we can glean some value to the project by doing a VE on this particular job.”
Convincing our colleagues in other offices that this approach will benefit them
GERARD: We have multiple bureaus at the Department of Transportation. We actively foster open communication with the other units. We proactively go to other offices that are directly involved with projects. We recently reached out to the Office of Maintenance as they provide a real-world experience of the project and updates of the performance of past projects. So it’s basically education and communication.
MARY: We are currently developing a database of past VE studies (performed during the design phase), as well as value engineering change proposals (submitted during the construction phase) that come from the contractor. We’re in the process of developing a database for Department wide use. It will contain reusable information for similar or potential situations. Our goal, to get that up and running within the next year. This will demonstrate and reinforce the benefits of VE to our colleagues.
ERIC: Ultimately, it’s the results. By showing added value, by way of reduced costs, reduced time, or longer expected service life, to the project, the VE process can be promoted. You’ve got the Federal mandate, but there’s such obvious value to the product here that this can add. It’s a great learning experience. People are starting to realize that it has more of a value of than just a checkmark on a list of requirements. They’re going to want to do it.
Response to the statement: “We already do a VE, but it is not formal.”
MARY: I am encouraged by the statement. They are not saying we don’t want it; but we are already doing it. Now our response is, “why not an independent VE study.” Because when you’re so close to a project, you’re not looking at a global view. You sometimes miss some things. I like to emphasize this is an independent third-party review. We have somebody that’s not involved with the project to give a fresh set of eyes to look at the job.
GERARD: What I stress to people, and I try to mention it as often as I can, nobody’s second-guessing you. I mean, irrespective of the fact that we do have the Federal mandate to comply with; we’re not looking over your shoulder. Sometimes you let somebody have a look at it, and there’s a glaring opportunity for improvement, and you think, “Why didn’t I see that?”
GERARD: When I initially participated in one of the VE studies, I thought that I was in a room of crazy people, the walls were covered with sheets of paper, and they were coming up with these ideas and I’m like, “are these guys for real?” Then it all starts to narrow down and it makes sense. It causes people to think and it shows benefit. That’s why I encourage people to attend a VE session. If they come here and see all the interactive brainstorming that goes on, a light will go off. To me, that’s part of the process. Have you done it? Yes. You’ve done due diligence. If you’re the designer, absolutely, you know, you’ve put your best effort forward. And it’s not a critique. It’s not a criticism of your effort. It can be a reinforcement that’s it’s the correct design, a validation, or it can be a new idea.
ERIC: Often, the design team is working under constraints that you find out in the VE process that it shouldn’t be a constraint. So again, it’s thinking outside the box. And sometimes those constraints are discovered to not really be constraints when the presentation phase comes. In contrast, the VE Team can come in and look at it from all angles. They’re not under the same constraints and they can find potential value in projects.
ERIC: Most of the VE process except Function Analysis is not new. What is new is putting the elements together in a structured manner with a team of specialists who are not familiar with the given design. It is a revolutionary change that can be accomplished by progression. The main difference that needs to be pointed out is the Function approach. Dividing the elements and stating its purpose (Functions) and attaching cost is not done in an informal VE. Tying costs to functions can show that perhaps too much money is being spent on a function that isn’t the main goal of the project. This process can provide clues to where value can be added, costs cut and time saved. Project Managers are reluctant to add elements to the project. However, if the project can spend an additional 10%, it can increase the capacity, extend the service life, and benefit the user. In a VE we are looking at the return on your investment.
The status of implementation of the revolution:
MARY: We’re still in the middle of it, and we are carrying the guidon, like a cavalry charge going up the hill. We haven’t reached the top of the hill yet, but we’re winning the battle! We’re meeting all the CFRs. We’re meeting all the Federal mandates and all the rules and regulations. We recently finished our seventh VE study with Benesch. There has been a notable increase in Department interest from the first one to the most recent one. It doesn’t mean they agree with the findings of the study, but they have showed interest in what we have to say, and created a dialogue on some the important design decisions. That’s all we’re looking for.
GERARD: One of the recent studies had the most enthusiastic response. Not that the others weren’t well received, but there was a noticeable difference from our perspective on how it was perceived. We got some calls after the presentation about getting clarification. That, I think, just helps to reinforce that we are winning the revolution when you get that type of response from internal resources. We want people to hear and appreciate the possibilities. Then it’s up to them to accept or reject the proposals, for the current project. Towards that end we are making significant progress.
GERARD: After few VE studies and presentations the Department is starting to realize, not only that it helps to meet the Federal mandate for the VE, but they’re starting to appreciate the innate value within the process. In the past, when the scope of a project crept up over the threshold of the $40 million or $50 million in the CFRs, we have to tap them on the shoulders. We also tracked it, and we sent an email. saying, “we think you’re going to be approaching that threshold, you may need a value engineering study,” but what we’re finding is with some of the teams they are actually approaching us, saying you know, “we just had something added to the contract. We’re approaching this as we need to do a VE study. So we’re finding that they’re coming to us on their own. This is a vast improvement with the design teams from last year.
Long-term goal towards the implementation of the process
ERIC: Our 1-year goal is additional education. We’ve done some lessons learned lectures. We brought an outside consultant in to describe the process. We may also do some winter training for some of our engineers. Mary mentioned maybe a National Highway Institute (NHI) course, and training for our different specialists from Maintenance, Highway Design, Bridge Design and Construction; providing training on the VE process for future projects that might be relevant for an in-house VE.
MARY: The 3-year plan is to do VEs on projects below the FHWA threshold. We want to convince the designers, “hey maybe we can get some value out of a VE for this project, even though it is below the CFR threshold.” The 5-year plan is to create the culture where an additional project requests a VE for a project below the threshold without prompting from this Office.
Optimism towards reaching the goal
GERARD: It begins with enthusiasm on our part. We are participating in the workshop. We have committed our resources to actively manage the program. It’s a challenge, as you know. It’s an uphill battle. Well, we’re up to the challenge. But we’re having a blast with just the process alone. Our enthusiasm is starting to creep out to the rest of the Department. I think it’s doable. I really do, especially the short term goals. I think we can make it. We are getting the designers involved in the process. When they get enthusiastic, it will have a domino effect.
Future Training
MARY: I’m thinking a good first step would be another lunch and learn. Just do a lunchtime seminar and explain the VE process and potential training and outreach basically. I think education and communication; if we get it out there we might get some interest.
ERIC: We are aiming at the lower level and trying to get in the young engineers. You can attract the newer people since they’re not set in their ways. Eventually they’re going to grow within the DOT and become the decision makers. If you make them appreciate Value Engineering, as they climb the ranks, that’s going to help the department as a whole to move towards any new innovations. If you get the younger people and the mid-level people in on it early I think that’s going to pay off later. It might not pay off immediately, but we estimate that in five years, they may be the decision makers.
KASI: For immediate results, I would recommend an introduction to upper management with a focus on financial and public benefits of VE. This can be part of the long range plan as outlined above.
What we have learned on our journey so far?
Mary: We recognize in this process that we have wealth of knowledge in the Department. We started inviting maintenance to our VE kick-off meetings. They are by far our newest group of enthusiastic people. I’ve even had people contact me after to give a couple of points they wanted us to consider. So they’re into the process and they’ve bought in.
GERARD: I’m talking about the maintenance managers and the garage supervisors, the boots on the ground guys, they were in. They enthusiastically immersed right into the process. So I never assume anything. I always thought maintenance wouldn’t care. Guess what? I was wrong. In addition, the Design group attended two but the first one was inadvertent, they just received a meeting invite and they attended. They are in.
ERIC: We have also learned the value of team work throughout our promotion of the VE process. In order to successfully design and construct a project, collaboration between Design, Construction, Maintenance, Permitting and Fiscal units must take place. We have made strides in developing relationships across these different units. Relationships breed better and increased communication and ultimately improve the final product for Connecticut’s taxpayers.
VE at Construction Phase
MARY: During the construction phase the contractor has the flexibility of submitting a Value Engineering Change Proposal (VECP) and we actually pushed for a specification change recently. We used to have it at the threshold of $250,000 that was the minimum savings that the contractor can submit for a VECP, and that’s high.
ERIC: We actually lobbied for and had the threshold lowered to $100,000 in minimum savings.
MARY: We recently had one submitted for a New Haven job. It was a very interesting design change for a beam support for a pin and hanger assembly replacement. I actually kept a copy in my file for future reference. That’s how good it was. The contractor can even spin around the design proposals or design suggestions that are under the VE study, and submit them as a VECP. So we’re keeping our eyes out for those as well.
MARY: With ProjectWise (ConnDOT’s document control software) it’s easier to upload the VE study right into the project file where the contractor can see it. The contractor should have as much information as possible for a project, because it only helps the Department and the contractor in the end. They’re in the business of making money and our mission is getting a safe, quality project for the public.
Seeking time and resources
MARY: Does anybody have time and resources nowadays? We looked at it, how do we encourage people who have limited time and encourage them with the process?
GERARD: We are embedding a description of the VE process in the presentation phase of the VE study. By embedding and creating an interest, they’ll find the time and resources to be involved. It’s still a work in progress. We feel engaging people at the presentation -can be a really positive thing to do.
GERARD: We are thinking to shorten the Kick off time and maintain reasonable time at presentation. Lots of people like to come to the reveal. There’s a huge influx of people at the reveal, because they’re like, “oh, what did they find out?” We can shorten the meetings at the kickoff and that may attract more people to attend.
ERIC: On an encouraging note, the fact that our Management has allowed our internal VE team to fully participate in these workshops has been extremely beneficial to us. So we’re getting a first-hand look at the process every time and that’s a credit to our top management for allowing us to do that and taking us away from other things that we might have to be doing at the office.
Action Plan and Implementation
MARY: Our objective is to do more VEs, especially under the CFR threshold, and to encourage the conversations to begin at 30% design. We believe that the best time to do a VE workshop on a project is at preliminary design or 30% design.
MARY: The initiatives include education, communication, training and creating an accessible database to demonstrate track record. We’re doing outreach with units throughout the Department. We’re going to start creating a database of the VEs.
ERIC: I would just add that we’ve also instituted some controls within our group for upcoming VE studies. We developed spreadsheets where we can identify projects that may require a VE very early in the design phase. We highlight projects that might be just below the threshold now and then if the scope change happens they’ll be over.
GERARD: So we’re doing our job a little better to communicate with the designers when something might be in the pipeline. It’s also just self-improvement with our team to provide better information during the initial phase for the VE Team to make sure that they have access to everything. The designers are cooperative and help to make all project documents available to the VE team through ProjectWise.
MARY: We target young engineers for training, experience and support. We educate them and infuse the enthusiasm for the program into the people. Our Chief Engineer, Mark Rolfe is very metrics-driven. He actively uses performance metrics. He understands the value of metrics, using it as a report card. He reviews the metrics and asks us, “How can we improve the process?” We are in the process of creating a VE database as an ongoing resource and asset to the Department.
MARY: We need a measurement. I like to look at what was proposed during the Value Engineering workshop, presented at the reveal and what was actually implemented into the project and actually constructed in the field. We measure that for FHWA in our annual report, but I’d like to include that in our developing database.
A message to those reading this article
KASI: Performing Value Engineering above the threshold is a reality by Federal mandate that we have to deal with. Performing VE on all key projects which are below the threshold is beneficial. I think it’s smart. It’s a good business practice. Engineers should be made aware of its benefits to get them on board. I would add that I hope that Connecticut DOT’s experience with value engineering and this interview should shed some positive light on Value Engineering.
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