VALUE ENGINEERING

AT FHWA

Ken Leuderalbert, P.E., PMPFHWA VE Program Manager

SAVE International® 2012 Annual Conference

Government Value Management Conference

June 14, 2012

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Overview of FHWA/State DOT Program

VE Program Performance

Overview of FHWA VE Regulations

Future VE Initiatives/Goals

Presentation Agenda

FHWA/State DOT Overview

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FHWA’s Interest with VE

1784 studies resulting in nearly $10 billion in project cost savings or avoidance over the last five years.

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FHWA’s Interest with VE

On average the VE program has produced the following benefits:

VE teams recommend ~ 10% project savings

State DOTs implement ~50% of all VE recommendations

VE recommendations save ~5% of projects construction costs

For every dollar spent on VE analyses, agencies realize a $165:1 return on investment

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FHWA’s Interest with VE

VE Program 2016 Goals: http://www.fhwa.dot.gov/ve/measures.cfm

Maximize VE effect of project cost and performance 55% of VE Recommendations Implemented 8% of Project Construction Costs Saved

Enhance Quality of State VE Program All States have established VE Program and Policy 50% of all VE studies conducted prior to 30% plans

Improve FHWA’s Stewardship of VE Program Division engaged in VE Studies Divisions verifying required VE Studies are Conducted

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Previous update to VE regulation was 1997

Jun 23, 2011 – NPRM Published

Aug 22, 2011 – end of public comment period

Mar 15, 2012 Final Rule Published in Federal Register

http://www.gpo.gov/fdsys/pkg/FR-2012-03-15/pdf/2012-6244.pdf

April 16, 2012 Implementation Date of Final Rule

Overview of FHWA VE Regulations

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There are now five section to VE Regulation:

627.1 Purpose and Applicability627.3 Definitions627.5 Applicable Projects627.7 Programs627.9 Conducting a VE Analysis

Changes to VE Regulation

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Section 627.1 Purpose and Applicability

Prescribes programs, policies and procedures to ingrate VE into project planning and development

Establish and sustain policies and procedures to monitor, assess and report on VE program and analyses conducted

Overview of 2012 VE Regulation

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Section 627.3 Definitions

Added definitions for: Bridge Project Project Total Project Costs VE Analysis VE Job Plan VECP

Overview of 2012 VE Regulation

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VE Job PlanStructure for conducting and documenting results of VE analysis Information Phase Function Analysis Phase Creative Phase Evaluation Phase Development Phase Presentation Phase Resolution Phase

Overview of 2012 VE Regulation

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Section 627.5 Applicable Projects All FAHP NHS Projects >$25M All FAHP Bridge Projects >$20M All Major Projects on or off the NHS Projects with delayed construction that undergo

a scope or design change resulting in meeting threshold

Any FAHP projects FHWA determines appropriate

Overview of 2012 VE Regulation

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Section 627.7 VE Programs State DOTs must establish and sustain a VE

program Document Policies and Procedures Identify, Schedule and Conduct VE Analysis Ensure VE analysis follows VE Job Plan Resolve and implement approved

recommendations Monitor and Assess VE Program Submit annual report to FHWA

Overview of 2012 VE Regulation

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Section 627.9 Conducting a VE Analysis

Independent, multi-disciplined team Team leader with VE expertise Use of consultants Timing of VE analysis Consider all project objectives/commitments Follow the VE Job Plan

Overview of 2012 VE Regulation

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Simple, do everything we just talked about.

Identify a VE Coordinator Develop a VE Policy/Procedure Develop an Annual List of Projects Identify VE analysis resources for each study Follow VE Job Plan Resolve Recommendations Report on Program Performance

State Actions to Implement the VE regulation

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Review and Approve VE Policies and Procedures

Review of Annual List of VE Projects

Ensure VE analysis is conducted on all required projects

Monitor and participate in VE analyses

Monitor Recommendation Resolution Process

Annually Report on VE Program Results

Division Stewardship of VE Program

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Release 2011 VE Performance Report - Spring

Update the VE Order (Policy) – Summer/Fall

Initiate Development of VE Stewardship & Oversight Tool Box for FHWA Divisions – Summer Enhance consistency of FHWA efforts Provide guidance and resources to assist divisions

with carrying out specific VE tasks or functions

FHWA Future Activities

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Share Successful VE Practices: http://www.fhwa.dot.gov/ve/

VE Training: http://www.nhi.fhwa.dot.gov/

Recording of VE Webinar Outreach: http://www.fhwa.dot.gov/ve/

VE regulations and policies: http://www.fhwa.dot.gov/ve/vepolicy.cfm

FHWA VE Program Website

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AASHTO VE Technical Committee:

http://design.transportation.org/Pages/ValueEngineering.aspx

AASHTO VE Guide: https://bookstore.transportation.org/

collection_detail.aspx?ID=43

Other VE Resources

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Questions on VE regulations and policies: Ken LeuderalbertVE Program Manager317-226-5351

ken.leuderalbert@dot.gov

VE Website: http://www.fhwa.dot.gov/ve/

Questions and Answers