The Contractor's Role in Building Cost Reduction After Design
Author：Waddle,Todd W.
Nationality：UK
Derivation：Cost Engineering; Feb2008, Vol. 50 Issue 2, p14-21
It has become evident from recent news articles that inflationary pressures and incread construction activity are causing many building projects to come in well over owner's budgets. This trend has incread dramatically over the past few years, as much of the construction industry has been impacted by an unprecedented increa in the cost of construction. The historical rate of increa in construction cost has been under five percent per year, as reported by the Engineering News Record . Over the last few years, the industry has en a significant increa from historical escalation rates, up to 10-15 percent per year in many regions of the US. The increas have been caud by a variety of factors, including the following.
• Shortage of steel resulting from rapid growth in China.体育教师述职报告
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• Demand for materials in the US resulting from incread hurricane damage.
• Rising oil prices leading to higher manufacturing and transportation cost.
• Rising labor cost becau of incread construction activity .
To be successful in having over budget projects awarded, the building contractor has had to take a proactive role in working with owners and design teams to reduce project cost to amounts that owners are able to award. This cost reduction is normally accomplished through the following methods.
• value engineering;
一年级数学测试卷• scope reduction;
Value Engineering
Value engineering (VE) has been defined as a systematic method to improve the value of goods and rvices by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be incread by either improving the function or reducing the cost.
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It is a primary tenet of value engineering that quality not be reduced as a conquence of pursuing value improvements . VE is a process originating at General Electric Company (GE) during World War II. Becau of shortages of skilled labor, raw materials, and component parts, engineers at GE
looked for acceptable alternates and often found substitutions that resulted in reduced costs and/or product improvement.高中生教师评语
GE developed a systematic process that they called value analysis. Over the years the name gradually changed to VE. The basic steps of VE include the following：
• Information gathering: project requirements defined, function analysis.
• Alternates: various ways of meeting the requirements and functions.
• Evaluation: asssment of alternates on how well they meet requirements and costs savings.
• Prentation: lection of best alternatives to be prented to client for decisions.
True VE evaluates life cycle costs such as initial cost, maintenance cost, operational cost, life span, time value of money, replacement cost, and frequency of replacement. VE can be undertaken at any stage of the building design process; however, it is most effective in the early stages, since it is less costly to make changes to preliminary documents .
Scope Reduction
Scope reduction involves identifying areas of the project scope of work that can be reduced in quality, quantity, or both in a manner that is acceptable to the owner.超重失重
Scope reduction items of work often consist of material or equipment substitutions that lo
wer the cost of the project, but may not be an equal substitute. An example of quantity scope reduction would be to reduce the guttering system on a pitched roof from the entire roof perimeter to entrances only. A quality scope reduction example would be to provide vinyl composition floor tiles (VCT) in lieu of ceramic floor tiles.
After a project has been determined to be out of budget becau of high bids, the project is normally either cancelled, redesigned and re-bid, or negotiations are held with the low bidder to reach an acceptable contract amount. For the building contractor that is lected for negotiations, this is an opportunity to move toward project award and to also build a relationship of trust and openness with the owner and design team that could lead to future projects.
First, the building contractor should meet with the owner and design team to fully understand the owners project requirements, priorities, life cycle considerations, and budget.
Next, the building contractor's role is to u his estimating and construction experti to a
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nalyze various components and systems within the project for alternate solutions. The contractor should also bring in key subcontractors and suppliers who are often able to identify alternate materials and/or systems within their specialties. Each division of work should be examined and evaluated for VE solutions. In past years, this process and rvice was considered part of the building contractors overhead. However, in today's market, some contractors will negotiate rates and be reimburd for the time and effort that they spend in this process in the event that the
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