VE Change Proposals & Option Evaluation Flashcards
How is influence of cost affected by the amount of time spent on an activity
Disproportionally
Spend a lot of time in construction phase with little ability to influence cost and vice versa
2 objectives of VE
Attempts to mitigate the risk that contractors proposals will harm the project
Provides rigour to development of design revision
What are VE change proposals (VECPs)
Provide a formalised process by which the contractor can suggest changes to add value
Should always increase (or at the least not reduce) functionality
What is the content of a VECP
Description of proposed change
Explanation as to benefits and drawbacks of proposal
Change may be to the design or contract form
List of changes to the contract required
Estimates of functionality and cost implications
Itemised costs incurred by the contractor in preparing VECP
How are VECPs produced
Scope is clarified of the technical problem within the wider project
Workshops with right stakeholders
Create an opportunity to examine functionality that the design element must provide
What are VE incentivisation clauses
An incentive clause provides a mechanism and a reward to the contractor for using VE thereby passing suggestions/savings to the client
Makes VE mutually beneficial
Pain/gain share in target cost contracts also act in a similar manner
How is a preferred option identified
A systematic approach to option evaluation is required
Judgement is also required to finalise the systematic process
Three basic approaches to option evaluation
Evaluation by comparison (systematic)
Evaluation by simple rating (useful for listing)
Evaluation by value metrics (most rigorous but required model of value)
What is the Pareto 80/20 rule applied to VE
80% of a system trait is provided by 20% of the system elements
Most useful 20% of options can be identified to leave the remaining 80% for VE
