The Keys to Avoid Value Engineering

“Value Engineering.”

Carrying a stigma of ‘compromising design until it’s cheap enough,’ the term strikes fear in the hearts of many an architect.

The fact is, if you’re faced with the need for significant value engineering you’ve missed out on something much more critical: Value Design.

The most responsible, valuable services an architect can provide their client focus on three things: a building efficiency that supports the client’s Pro Forma; focus on large areas that can be optimized (hint: not the finishes!); and cautious awareness for places that cost-cutting might have adverse effects down the road.

At the beginning of a project, we work to balance investor expectations (an efficient, leasable building) with user desires (highly amenitized) through the ratio of leasable space to gross square footage (building efficiency). A similar balance must be struck with regard to ceiling heights and facade articulation to find an efficient floor-to-skin ratio.

In general terms, about one-third of a building’s cost is in the structure; one-third is in the mechanicals, a quarter is in the envelope, and the remainder – nine or ten percent – is associated with the finishes. With that in mind, we strive to optimize the large systems that can make the greatest budgetary impact like structure, HVAC, and window/wall systems over smaller, visual savings like minimizing finishes. This maximizes building value while preserving a top-quality user experience – which will be critical to market demand down the road.

As designers and technical experts, we have to maintain as much knowledge as possible on the going rate for materials and labor, and even try to predict the future costs. As contractors get busy, costs rise. Concrete price hikes on the horizon? Better design for steel. That material or system that’s less expensive–are there other systems that’ll change cost as result of the decision? What about the cost to redesign? Increased risks or costs over the lifespan of the building?

At FitzGerald, we’re committed to value design, which starts with the first conversation about how a parcel of land will become an economically viable, successful project. Engaging your architect early is one key to that and assembling the Design & Construction team can grant access to real-time cost feedback that is paramount to that success. Early discussions about the key aspects of the project – codes, structural system, building type, target market, and zoning – will go a long way to maximize value and eliminate surprises.

I’d love to compare notes. If you agree, disagree, or want to talk more about how we could support your upcoming projects, drop me a line at mderouin@fitzgeraldassociates.net.

Mike DeRouin, CSI, CCCA
President