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Value engineering can’t just mean lowest cost

Tom Fitzpatrick

A year on from the Grenfell Tower tragedy, it’s hard to say with any certainty whether the way buildings are being procured in this country has improved.

But there are signs that, amid the uncertainty, certain lessons are being learned about the lowest-cost approach that failed in such tragic circumstances 12 months ago.

Our special issue coming out this week shows that the industry and local authorities are still struggling to grasp the right way to procure and what is safe in a post-Grenfell world.

On the one hand, changes are occurring. Social housing providers are procuring higher-end materials. Products never seen before on social housing are being installed. There is more evidence that local authorities are procuring with a heavier weighting on quality and not just cost.

Reassuringly, the construction supply chain is being asked for more technical information and companies are being challenged more about their proposed design and building solutions.

But still, there is confusion over appropriate ways to test and build housing infrastructure.

BRE labs are backed up with long waiting lists for safety tests, leading some companies to send materials to private testing facilities in Dubai, which is adding to the cost of getting crucial social infrastructure built.

Companies as varied as Barratt, Legal & General and Mace are footing bills of millions of pounds to replace cladding or to employ a round-the-clock ‘waking watch’ on buildings with unsuitable cladding. And experts want British Standard safety tests to be reviewed and updated, a task which will no doubt take years.

The Grenfell legacy must be one where communities, developers and the construction industry work together to create safer homes. This industry is part of the solution, but clients and organisations who house people must step up and take responsibility for avoiding lowest-cost procurement.

Ben Anthony’s documentary Grenfell aired on BBC this week and showed what happens when communities don’t have a say in the infrastructure around them. Among the most powerful images of the documentary was of Grenfell resident Edward Daffarn who lived on the 16th floor, addressing council members last year, having warned of a catastrophe at Grenfell long before it happened.

Councils and construction firms must start having frank discussions about the industry’s approach to ‘value engineering’, seen by many as a selling point on projects but too often just another way of saying ‘lowest cost’.

Ask yourself and ask your clients: what price would you pay to ensure Grenfell never happens again?

Readers' comments (1)

  • Martyn Phillips

    I applaud your recent article on: “Value engineering can’t just mean lowest cost”.

    Value engineering (VE) when properly conducted focuses on identifying balanced solutions through improved performance of several parameters (which can include CAPEX, OPEX or TOTEX). It is unfortunate that there are many misinformed organisations that think they are conducting VE, but are in practice doing only an untested, cost-cutting, drive-by.

    I have been a Fellow of the ICE and CIWEM since the late 80’s and have been formally qualified as a value engineering (VE) practitioner since the mid 90’s. As well, I am currently the VP of Global Affairs for SAVE International, which originated VE 70 years ago. In the United States, VE is mandated for Federally funded projects. There are formal procedures for Value Engineering Change Proposals.

    Re. “the industry’s approach to ‘value engineering’, seen by many as a selling point on projects but too often just another way of saying ‘lowest cost’ and the lowest-cost approach that failed”

    I visited London last November and February. I attempted to contact you with the aim of informing the UK industry that the diluted, drive-by, approach to VE is not effective, misleading and, frankly, quite dangerous. I also tried to get some interest from the ICE and CIWEM, but alas, to no effect.

    In 2002, my paper “A Value and Risk Management Approach to Project Development” was published in the Proceedings of the ICE.

    Not only are there are many opinions on VE, mostly deluded, but there is huge resistance to the concept of (real) VE. There seems be concerns that when VE improvements are made, there will be embarrassment by owner and design organisations as to why such improved solutions were not identified earlier. From both project management and fees perspectives, there can be concerns that more functional, cost-effective schemes could reduce income.

    I would like to think re. “Councils and construction firms must start having frank discussions about the industry’s approach to ‘value engineering”, that this will indeed occur. Having had a 50-year career in the construction sector, I would be happy to assist in interpretation, clarification and recommendations for value improving methods in the UK.

    Submitted by:
    Martyn Phillips, Fellow, Institution of Civil Engineers, Fellow, Chartered Institution of Water & Environmental Management, Fellow, SAVE International - formerly Society of American Value Engineers, Fellow, Hong Kong Institute of Value Management, Certified Value Specialist, Professional in Value Management.

    Email. mphillips@valueassurance.org. tel. +1 780 708 1624

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