Value Engineering (VE) process
Value Engineering (VE) is a tool that will improve the ability to manage projects, solve problems, innovate, and communicate. The VE program provides a tool to improve value in any project, product or process. Cost savings, risk reduction, schedule improvements, improved design and quality have been common outcomes of VE studies. Additional benefits include review of design, construction, and maintenance standards and enhanced teamwork skills and team dynamics.
VE studies must be conducted on all projects with a Total Project Cost Estimate (TPCE) of $30 million or more, regardless of funding source or the roadway status on the National Highway System (NHS). Use the TPCE method developed by Cost Estimating.
MnDOT has recognized tens of millions of dollars in project cost savings from completed VE studies. These savings represent a return on investment of over 75:1 when considering the cost of conducting the VE studies.
On Federal-aid highway projects, the Federal Highway Administration (FHWA) may withhold Federal-aid highway funds on any eligible project that did not receive a VE study.
The guidelines and requirements described here are for all MnDOT projects and locally sponsored projects on or containing MnDOT right of way.
For additional guidance, please discuss your project with the State Value Engineer to determine the best time to do a VE study and if risk assessment should be a component for your study.
A “project” is defined as a portion of a roadway, or facility, that MnDOT proposes to construct, reconstruct, or improve as described in the preliminary design report or applicable environmental document. A project may consist of several contracts or phases over several years.
Very large, complex projects must have at least two VE studies, first at a scoping or corridor level, followed up with a second study later in the project development phase.
A cost risk assessment may be integrated into this process when deemed appropriate by the District, MnDOT Program Managers, the State Design Engineer or the Project Scope and Cost Management Office.
Other projects that can benefit from VE studies
Projects approaching the state required cost threshold are strongly encouraged to have a VE study. It is likely that the final project cost exceeds the threshold amount once all project costs are known.
VE studies are encouraged on complicated or unique projects that are below the state required cost thresholds that may benefit from a VE study.
VE studies may be requested by the District, MnDOT Program Managers, or the State Design Engineer.
Length of a VE study
VE studies are strongly recommended to be a minimum of 4 days, with 5 days most desirable.
Teams will be multi-disciplined teams of 5 to 8 individuals who are not personally involved in the design of the project. The Project Manager requests MnDOT staff to fill half the team.
Depending on the size and complexity of the project, the number of members in a VE team may exceed the range specified above. However, a minimum of 5 individuals are required, as a team of fewer than 5 tends to limit the amount and variety of creative input.
The cost of performing VE studies is project related and is therefore charged to the District. Study cost is eligible for reimbursement with Federal-aid highway funds at the appropriate pro-rata share for the project studied.
Projects that are shared by outside agencies should split the cost of the VE study with MnDOT.
District VE liaisons
Each District will identify a person who will act as the VE liaison for their District. The VE liaison will work with the State Value Engineer in early identification of projects requiring or benefiting from a VE study, planning, and participating in the VE studies, following up after the study is complete with final recommendation decisions, and assisting the State Value Engineer with tracking VE recommendation decisions and Value Engineering Change Proposals (VECPs).
Studies will be facilitated by a Certified Value Specialist (CVS), as defined by SAVE International™. Facilitator(s) must be chosen from the MnDOT pre-qualification list of approved VE facilitators.