Value Engineering

Value Engineering (VE) is a systematic method of examining performance to improve the value of projects or processes. Value is defined as the ratio of performance to cost and thus capable of being increased by either lowering the cost or improving the performance. MoDOT’s values and tangible results place increased importance on value-based, practical design. While VE, in the classic sense, tends to be somewhat more structured, VE and Practical Design are intended to achieve the same goal. The goal of VE is to build the right project at the right time, achieving delivery of project purpose and need with proper project scope.

MoDOT uses VE to ensure that the public receives full value for every tax dollar invested in Missouri’s transportation system. VE techniques are used to improve productivity in nearly every aspect of MoDOT’s operation, including practices, processes, and procedures. In highway construction, VE encourages contractors to submit proposals for modifying the plans, specifications or other requirements of the contract to deliver improved projects of the best possible value.

VE studies are performed to add value to a project, not to simply reduce costs. VE studies should challenge project scoped that exceed the minimum necessary to deliver the project’s purpose and need. As stated in the law, VE studies are conducted "to provide suggestions for reducing the total cost of the project and providing a project of equal or better quality."

MoDOT’s goal is to have some form of Value Analysis on every project.

The formal VE process entails a systematic process of review and analysis of a project during its design/project development phase, resulting in recommendations to improve value while addressing the project’s purpose and need. The study consists of the following seven phases, which is also known as the job plan:

Pre-Study Phase - The Policy and Innovations Engineer works with the TPM and DVEC to set up the study (see the Project Manager's Guide for additional information).

Study Phase - A multidisciplinary team not directly involved in the planning or design of the project, conducts the VE review by: investigating and analyzing the planning, design, and constructability of a project.

Informative Phase - identifying project functions and costs and worth.

Creative Phase - creatively speculating on alternate ways to perform the various functions. 

Evaluation Phase - evaluating the best and/or least life-cycle alternatives.

Development Phase - developing acceptable alternatives into supported recommendations.

Presentation Phase - presenting the team’s recommendations to the appropriate staff.

Post Study Phase (or Resolution Phase) - Approval and implementation of VE recommendations and finalizing the VE Report. The VE Report should consist of:

  • The names and contact information for the participants
  • A description of the project
  • A summary of the functional determination or consideration given for the project
  • A listing of the generated alternative solutions
  • The anticipated savings costs associated with each alternative
  • A copy of the district’s or division’s response indicating accepted alternatives and anticipated savings 
  • Any additional pertinent information associated with the study 

In addition, required VE studies for bridge projects should include the following:

  • A review of the bridge substructure and superstructure requirements with consideration for alternative construction materials
  • An engineering and economic assessment with consideration of acceptable designs
  • A life-cycle cost analysis and consideration of construction duration