United States
Environmental Protection
Agency
Oftice of Water
Washington DC 20460
EPA 430/99-87-Qi 1
March 1988
Water
Value Engineering for
Small Communities
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\&LUE ENGINEERING FOR SMALL COMMUNITIES
Office of Water
United States Environmental Protection Agency
Washington, D.C. 20460
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FOREWORD
The use of value engineering (VE) for wastewater treatment facilities during
their design development is a proven management tool that saves money. Since
September 1976, VE has been reguired for all wastewater treatment projects with
an estimated construction cost of $10 million or more, if financial assistance
was provided by the Environmental Protection Agency (EPA). In addition, EPA
has encouraged the use of VE on smaller projects. This program has been
extremely successful in controlling the cost of construction, as well as in
saving communities thousands of dollars each year in facility operating costs.
This document provides guidance to communities which are considering the use
of VE for their wastewater treatment projects. This document:
0 explains what VE is and provides examples,
0 illustrates the cost of VE as wall as its benefits, and
0 provides a simplified contract clause (a standard scope of service) to
be used in obtaining VE services.
Because this document is intended to provide an overview of the VE process,
details of the VE process have not been addressed. Detailed information on
the VE process may be obtained from the references listed in appendix D. The
use of VE for wastewater treatment facilities during their design develcpnent
is a proven management tool that saves money.
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TABLE OF CONTENTS
PAGE
FOREWORD i
LIST OF FIGURES V
SECTION 1 INTRODUCTION
1.1 Purpose 1
1.2 Methodology 1
1.3 EPA's Experience 3
SECTION 2 APPLICATION
2.1 What VE Provides 6
2.2 Who Benefits 6
SECTION 3 SECURING SERVICES
3.1 How to Secure Services 10
3.2 Selection Criteria 10
3.3 Personnel Selection , 11
3.4 Cost ., 11
SECTION 4 HOW VE IS ACCOMPLISHED
4.1 VE'Job Plan 12
4.2 Members of the Tean 13
4.3 Sequence of Tasks 14
SECTION 5 EXAMPLES
5.1 Overall Typical Study Results 18
5.2 Specif ic Examples 19
APPENDIX A STANDARD SCOPE OF SERVICE 27
APPENDIX B HISTORY OF VALUE ENGINEERING 29
APPENDIX C GLOSSARY 31
APPENDIX D REFERENCES 33
ill
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LIST OF FIGURES
FIGURE PAGE
1-1 Number of VE Studies 2
1-2 EPA 5-year Results - 1980 to 1984 4
1-3 Project Cost Savings fron VE 5
2-1 Annual Costs - Typical 6 MGD Facility 7
2-2 Typical VE Impact - 6 MGD Facility 9
4-1 VE 'Job Plan 12
4-2 Prestudy Phase Participants and Milestones 15
4-3 Study Phase Participants and Milestones 16
4-4 Poststudy Phase Participants and Milestones 17
5-1 Costs and Results of Typical VE Studies 18
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SECTION 1
INTRODUCTION
1.1 Purpose
This document applies to wastewater treatment facilities and their collection
and outfall systems that are to be constructed, renovated, expanded in capacity,
or improved in quality of treatment.
The purpose of this document is to encourage the application of value engineering
(VE) techniques during the design of these facilities. VE, applied during design,
is effective in controlling the cost of construction of these facilities, and
in minimizing the life cycle cost (ICC) of operation, maintenance, and
replacement (OM&R).
1.2 Methodology
VE is defined as an:
organized effort directed at analyzing the
functions of systems, conponents, goods,
and services in order to
satisfy required functions at the
lowest total cost of ownership, without
sacrificing the
necessary performance and quality.
The key to the universal applicability of VE is function analysis. All products
and designs are developed to achieve a function. Consequently, all costs are
incurred for the purpose of achieving a function. Function analysis defines
the essential purpose, or function, of each component and studies the cost/
worth relationship of the functions being provided.
If the worth of a function is not ccmmensurate with its cost, then value
improvement potential exists. Other ways of providing the function can be
found, or secondary and redundent functions can be eliminated.
VE is the only known technique which can accomplish the objective of reducing
costs without compromising required quality. This is accomplished through
understanding and applying two concepts:
1. Quality is ensured through performance requirements that are expressed
as functions. When VE properly identifies all functions and determines
alternative ways to perform them, required quality will always be
maintained.
2. Value is measured through the LCC, not just the initial cost. This
ensures that required performance in terms of maintenance, reliability,
and operations is considered when changes are suggested.
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NUMBER OF STUDIES
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1.3 EPA's Experience
Since September 1976, EPA has required VE to be applied on all treatment works
projects with a total estimated construction cost of $10 million or more.
Congress formalized the agency's VE requirements in the Clean Water Act
Amendents of 1981.
In the ensuing 8 fiscal years, VE has been applied to 346 projects, as shown
in Figure 1-1.
The increased use of VE on waste water treatment projects has been extremely
cost effective. As seen in Figure 1-2, the cost of conducting VE on these
projects has been but a small portion of the savings accrued.
In fact, during this period savings of $520 million were realized on 346
projects. The cost of VE on these projects (including the cost of redesign)
was $30.4 million. This represents a return-on-investment (ROI) of over $17
for every dollar of VE cost, based on capital savings alone.
Shown in Figure 1-3 is the impact of cost savings on total project cost for
each year. The average savings obtained was between 5 and 6 percent of the
capital cost for each project.
The ROI ranged frcm a low of $12.00 to a high of $34.00 saved for every dollar
of program cost.
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VE COST (4.5%)
SAVINGS (95.5%)
EPA 5-Year Results - 1980 to 1984
Figure 1-2
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BILLIONS OF DOLLARS
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SECTION 2
APPLICATION
2.1 What VE Provides
The use of VE pro/ides a community with an excellent opportunity to reduce the
present and future costs of wastewater treatment, while maintaining - and even
improving - the reliability and flexibility of the wastewater treatment system.
The use of VE also provides an independent review of the facility to be
constructed. This review is focused on obtaining the optimum value for the
project, using ICC as the economic measure of value. Facility value may be
increased in four ways:
1. by improving the efficiency of a facility with no change in ICC,
2. by retaining the efficiency of a facility with a decrease in ICC,
3. by combining increased efficiency with a decrease in ICC, and
4. by reducing initial cost with no change in facility efficiency or
annual cost of OM&R.
ICC analysis considers all OM&R costs, as well as the initial cost of purchase
or construction.
The canmunity selects an economic period, usually 20 years, on which to base
design decisions affecting OM&R. All costs during that period, for each
alternative considered, are converted by discounting at a stated interest
rate to present worth (PW) dollars.
If the facility has an expected useful life of longer than 20 years, the
residual value at the 20 year point is also discounted, and the discounted
value is included in the PW total.
2.2 Who Benefits
Depending on the amount of Federal and state grant assistance, as well as
the anount of ineligible reserve capacity, the typical small community pays
20 to 50 percent of the cost of constructing a facility. The community also
pays 100 percent of the annual cost to operate and maintain the system for
the next 30 years, if not longer.
The distribution of annual costs for a 6 million gallon per day (MGD)
facility located in the midwest is shown in Figure 2-1. When annualized
ever a 20 year period at an interest rate of 7.6 percent, the initial
capital construction cost for the facility represents less than one-half
of the ICC.
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INITIAL
(48.8%)
OPERATIONS
(23.2%)
MAINTENANCE
(9.6%)
ENERGY
(11.4%)
REPLACEMENT
(7.0%)
Annual Costs - Typical 6 MGD Facility
Figure 2-1
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When VE is applied to a project supported by an EPA grant, the community
benefits in several ways:
0 The cost of the VE study is, in effect, free to the community because
it will be more than offset by the recommended savings.
0 Reductions in initial cost are shared by the ccmmunity in the same
proportion as the grant. Required funding frcm ccmmunity taxes or
bonds will will be that much less.
0 All OM&R cost savings accrue to the conmunity. This could avoid an
increase in future user charges for operating the facility.
0 The VE study provides the ccmmunity with an independent review of the
project by a professional tean. The team's ccmments regarding design
improvements are a definite plus for the small ccmmunity that dees not
have the staff for in-depth project reviews.
An example of the results of VE can be seen at a facility in the midwest
which involved an expansion of its capacity frcm 3 to 6 MGD. After the
schematic designs had been completed, the VE tean estimated that the facility
would have an annual CM&R cost of approxiemately $956,000 before being value
engineered. This information, in itself, was of benefit to the ccmmunity,
since it previously had no idea of the magnitude of this cost.
The VE study for this facility generated an estimated $125,000 in reconmended
annual CM&R savings, which represented a 13 percent reduction in annual costs.
In addition, the VE tean identified savings of $1,523,000 in the intial
capital cost. This reduced the original capital budget by 16.5 percent,
frcm $9.2 million to $7. 7 million.
The impact of these benefits over a 20-year lifespan, using the 7. 6 percent
interest rate specified by the ccmmunity, is shown in Figure 2-2.
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MILLIONS OF DOLLARS
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SECTION 3
SECURING SERVICES
3.1 How To Secure Services
VE services should be procured directly by the community, rather than through
the engineering firm hired to design the facility. The design contract should
include, as part of the scope of service, a reguirement for the designer to
provide input for the VE study at the proper time in the design process. This
prepares the design firm to be cooperative, instead of defensive, when changes
are recommended by the VE team.
A standard scope of service for the VE contract is included in Appendix A. It
specifies that:
0 The community will contract the VE work to a VE consultant, who will
coordinate his work with the design tean.
0 The VE tean will consist of 5 members in key disciplines involving the
design areas having the greatest cost.
0 No member of the VE tean can have any participation in the original
design.
0 The VE tean will perform a 40-hour VE study at the 20 to 30 percent
completion stage of design.
0 All results frcm the VE study will be reviewed by both the design
consultant and the conmunity.
These provisions are straightforward, and provide for a good level of
independence between consultants to avoid any potential conflict of interest.
3.2 Selection Criteria
Selection should not be based solely on price. VE work reguires the use of
highly skilled individuals who have the capability, over a short time frame,
to apply the VE methodology to produce results. Therefore, selection factors
involving individual professional credentials, VE experience, and VE education
should weigh most heavily.
Specifically:
0 Give less credit for experience of the firm, and more credit for
experience of the individual tean members.
10
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0 Favor experience in performing VE studies over experience in teaching
VE.
0 Look for a team leader who has been examined by the Society of American
Value Engineers (SAVE) and awarded the title of Certified Value
Specialist (CVS), and who also has a working knowledge of the waste-
water treatment process.
0 Require that VE members be VE trained or have participated in at least
two VE studies.
3.3 Personnel Selection
A VE study is accomplished through the interaction of a multidisciplinary
team. Along with diversified experience, members of the team should be
selected carefully on the basis of their creativity, how they approach their
daily work, and their demonstrated ability to analyze and solve specific
problems.
Being sensitive to the problems involved in gathering information and having
the ability to present and promote alternatives are essential traits of
personnel selected. The ability to think though problems and present ideas
clearly, along with a moderate amount of perseverance, is also essential in
team members. An open mind and enthusiasm are positive elements in a VE
effort.
3.4 Cost
The normal cost for the VE services outlined in the standard scope of service
ranges frcm:
$15,000 to $28,000.
This represents a range of 0.37 to 0.71 percent of the estimated construction
cost of the facility for a project of $4 million in value. This figure
represents a relatifely insignificant cost when considering that the VE study
has the potential to yield significant cost savings for each dollar invested in
the VE study. For this this reason, the conmunity should focus more emphasis
on the cjualifications of the VE team leader and the proposed VE team members,
rather than on the proposed VE study costs, when contracting for VE services.
A slight increase in the study costs for a quality VE team will typically yield
significantly greater increases in the VE savings and the quality of the VE
study.
11
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SECTION 4
HOW VS IS ACCOMPLISHED
4.1 VE Job Plan
Part of the organized effort described in the definition of VE is the use of
the VE job plan. The job plan follows a five-step approach that is integral to
the VE methodology. Figure 4-1 shows the job plan, with the key questions to be
answered at each step.
Job Plan Steps
1. Information
2. Creative
3. Analysis
4. Development
5. Presentation
Key Questions
What functions are being provided?
What do the functions cost?
What are the functions worth?
What functions roust be accomplished?
What else will perform the function?
How else may the function be performed?
Will each idea perform the required functions?
How miqht each idea be made to work?
How will the new idea work?
Will it meet all the requirements?
How much will it cost?
What is the ICC impact?
Why is the new idea better?
Who must be sold on the idea?
What are the benefits?
What is needed to implement the proposal?
VE "Job Plan
Figure 4-1
12
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4.2 Members of the Team
Members of the VE team have certain advantages and opportunities that are not
afforded to those working in the design, construction, or maintenance phase of
a facility. They have:
0 ability to work in all disciplines without being restricted to specific
activities by organizational boundaries,
0 authority to spend the time required to study a problem thoroughly, and
0 access to help fron persons having expertise in many specialties.
It should be emphasized that VE is not intended to compete with the design
tean. On the contrary, the design team is an important part of the overall
effort, whose help is essential to the success of the VE study. The VE study
is designed to supplement the efforts of the design team, not to replace them.
The community is also a vital part of the VE effort. The conmunity should
designate a coordinator to oversee the conduct of the VE study and to serve
as a liaison for obtaining information needed by the VE team. An individual
knowledgeable in facility operation and maintenance would help to ensure that
local concerns are known.
The design consultant is responsible for providing data, conducting a project
briefing, reviewing VE proposals, and forwarding reconmendations to the
community.
The VE consultant, in accordance with the scope of service (see sample in
Appendix A), provides a team of five persons, typically consisting of:
tean leader- CVS with engineering degree
structural engineer
sanitary engineer
mechanical engineer
electrical engineer
When significant building structures (over 2,000 square feet) are included
in the project, one of the tean members should have architectual experience.
Also, one or more of the team members should have experience in operating
and maintaining a wastewater treatment facility.
13
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4.3 Sequence of Tasks
The VE effort is conducted in three broad phases - the prestudy, study, and
post study phases.
Prestudy phase
The prestudy phase involves obtaining the services of the VE consultant, as
well as preparing for the study phase. An overview of the secjuence of tasks
(major milestones) necessary to complete the prestudy phase is provided in
Figure 4-2.
Study phase
The study phase essentially covers the week in which the multidisciplinary
VE team conducts the study and prepares VE proposals. Figure 4-3 illustrates
the major activities that occur during this phase.
Poststudy phase
The poststudy phase involves preparing the final VE report and transmitting
the VE recommendations to the design consultant and to the ccmmunity for
review. This phase concludes v*faen the ccmmunity decides on the disposition
of each proposal, and the design consultant implements approved proposals
by revising the construction documents. See Figure 4-4 for the sequence of
key steps in this phase.
14
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PRESTUDY ACTIVITY
ui
COMMUNITY
1. Incorporate
scope of
service in
VE contract
2. Advertise
VE
procurement
VE
CONSULTANT
3. Identify
team members
4. Submit team
qualifications
and cost
proposals
COMMUNITY
5. Select
VE consultant
DESIGN
CONSULTANT
6. Provide
design
data
7. Provide
data for
LCC
estimates
VE
CONSULTANT
8. Schedule
VE study
9. Prepare
cost models
and
estimate
Prestudy Phase Participants and Milestones
Figure 4-2
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STUDY ACTIVITY
ON
VE TEAM
LEADER
1. Assemble
VE study
team
DESIGN
CONSULTANT
2. Brief
VE team
COMMUNITY
3. Attend
VE team
briefing
VE TEAM
4. Conduct
VE study
5. Prepare
VE proposals
6. Present
VE proposals
COMMUNITY
7. Attend
VE study
presentation
DESIGN
CONSULTANT
8. Attend
VE study
presentation
Study Phase Participants and Milestones
Figure 4-3
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POST STUDY ACTIVITY
VE TEAM
LEADER
1.
Prepare
final
report
DESIGN
CONSULTANT
2. Comment
on each
VE proposal
COMMUNITY
3. Review
VE report
4. Review
designer
comments
5. Approve or
disapprove
each VE
proposal
DESIGN
CONSULTANT
6. Implement
approved
VE changes
Poststudy Phase Participants and Milestones
Figure 4-4
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SECTION 5
EXAMPLES
5.1 Overall Typical Study Results
The actual cost for conducting studies on nine projects in various parts of the
country is shown in Figure 5-1.
The costs shown are total costs, including salaries and travel. In section 1.3
of this document, the ROI was in the range of $12 to $34 saved for each dollar
of VE prcgran cost. This was based only on savings in initial capital cost. If
one were to add the present worth of the sum of the annual savings over the life
of the facility, the ROI would range, as shown below? fron 40:1 to 198:1 for the
nine sanple projects.
Results have proven that the initial cost of VE is a sound investment for
communities.
Case
No.
1
2
3
4
5
6
7
8
9
Plant
Size
(M3D)
4
5
5
6
6
6
6
6
6
Initial
Cost
(Millions)
$ 9.5
21.3
9.6
13.3
14.5
29.5
8.1
11.9
3.9
VE
Study
Cost
$24,600
31,320
2 7, 800
27,100
22,000
28,300
18,000
27,000
15,000
Redesign
Cost
$15,800
6,100
4,300
2,800
6,600
21,000
8,300
14,600
4,400
ICC (PW)
of VE
Savings
(Millions)
$ 6.5
3.2
2.0
1.2
2.4
9.8
2.5
6.6
1.1
ROI
for
ICC
(PW)
161:1
86:1
62:1
40:1
84:1
198:1
95:1
159:1
57:1
Costs and Results of Typical VE Studies
Figure 5-1
18
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5.2 Specific Examples
On the following pages are seven specific examples of VE proposals drawn fron
the actual VE reports of the case studies.
They demonstrate that VE proposals can cover a wide range of subjects, including
all aspects of a wastewater treatment system. The case study topics are:
Proposal
No. Subject Matter
A-l Treatment process modifications
O-l Change sludge truck loading direction
p-1 Location of facility
p-2 Alignment of access road
S-l Reduction in number of valves
S-2 Length of piping inside tanks
V-l Placement of outfall line.
In addition to these examples, EPA has demonstrated VE applicability in virtually
every aspect of the treatment process. These include:
Wastewater treatment Solids handling
Flow equalization Raw sludge pumping
Flow measurement Gravity thickening
Screening Waste sludge pumping
Grit removal Sludge stabilization
Pre-aeration Sludge dewatering
Influent pumping Sludge conditioning
Primary sedimentation Incineration
Biological treatment Land disposal
Secondary treatment Transport
Return sludge pumping
Effluent filtration Wastewater transport
Disinfection
Dechlorination Sewer alignment
Nitrification Sewer material
Phosporus treatment Collection system
Odor control Pumping stations
Buildings & structures Interceptors
Yard piping Outfall
Site configuration Route selection
19
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VALUE ENGINEERING PROPOSAL
Title; Change sludge truck loading direction Number; A-l
Original Concept:
1 Provide building extension
|for new entrance to enclose
jtrucks while loading sludge.
I Add a new rear door to make
I this a drive through area.
e K i ^ T KJ c.
|Proposed Change:
I
iDelete the new extension.
j Provide a new overhead
I on the north side similar to
|the door being provided on
|the south end. Require trucks
jto enter from the north side
I instead of from the south.
I
{Discussion
i
|Trucks are 22 feet long and
I will easily fit in the existing
j22 foot bay. Currently, trucks
jback in from the north and line
j their dump bed with the north
(wall with the cab sticking out-
jside. If they pull in from the
(north, using the drive trough
(bay, the rear of the truck can
(be placed in the same relative
(position for loading from the
(sludge conveyor.
Life Cycle Cost Summary
Original
Proposed
Savincrs
$
$
__£___
Capital
15,700
3,400
12,300
Annual O&M
$
$
$
500
0
500
Total savings: (8%, 20 yrs)
Annualized - $
1,750 Present Worth - $ 17,200
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VALUE ENGINEERING PROPOSAL
Title; Treatment process modifications
Number; O-l
Original Concept:
Upgrade existing 2 MGD plant pumping facilities to 4 MGD,
substitute Rotating Biological Contactors (RBCs) for existing
trickling filters, and add phosphorus removal facilities.
^
// '//////'
Proposed Change:
CONcePT - PSOC65S FLOU1 DtSBftM
30/30/J
Use existing trickling filter as a roughening filter to
reduce the number of RBCs from 35 to 20. Use two-point
chemical addition, flocculation, and improved final settling
tanks increased to 10 foot Side Water Depth (SWD) to meet 0.5
m9/l phosphate limit without tertiary filtration. Add a third
final settling tank. For 30/30 effluent requirement, hydro-
clear type sand filters are included in the cost analysis.
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un-PUMM
£NOi-
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W//////M
SNOS (O'^itaD
Pts)*t_ TANKS
Ro ccutAnoi**
BY PftSS COVER PLOW) Q M4O
PROPOSED CHAINGE - PROCESS FLOW
OS INFECTION
TO OUT FftU-
Life Cycle Cost Summary
Capital
Annual O&M
Original $ 4,410,000 $ 31,500
Proposed $ 3,610,000 $ 9,860
Savings $ 800,000 $ 21. 640
Total Savings: (10%, 25 yrs)
Annualized - $ 109.800 Present Worth - $ 996.656
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VALUE ENGINEERING PROPOSAL
Title; Length of piping inside .tanks.
Number: P-i
Original Concept:
The discharge pipe is to be connected vertically into the
pump manifold. In addition, the gate valve is installed
horizontally. The distance required to make the installation
in this manner governs the width of the pump building covering
the well.
Proposed Change:
Install the gate valve vertically and connect into the mani-
fold by means of a vertical elbow.
Discussion:
Vertical installation will allow a 4.5-foot reduction in
building width. The elbow connection into the manifold will
'also prevent solids from clogging the pump in a no-flow
condition.
Life Cycle Cost Summary
Capital
Annual O&M
Original
Proposed
Sayings
$
$
$
20,800
0
20,800
$
$
300
0
300
Total Savings: (10%, 25 yrs)
Annualized - $ 2,592
Present Worth - $ 23,529
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VALUE ENGINEERING PROPOSAL
Title; Placement of outfall line
Number; P-2
[Original Concept:
I
|A 6,200-foot outfall line
(having a diameter of 42 inches
j is to be placed about 6 feet
[below grade. The pipe requires
[a siphon at a brook crossing.
[Also, there is a problem with
I the buoyancy of the pipe due
j to high ground water level. (&-
I MH.
- VII. 3S/ i
354 o
L'o"
*-
biV j-SJo \,1-<>\
r i '
|Proposed Change:
[Raise the pipe by 3 feet.
[Add 2 feet of cover over the
[pipe for frost protection and
I structural load protection.
|This reduces deep excavation
[problems as well as dewatering
[costs. It eliminates buoyancy
jproblems due to a high ground
[water table. A siphon still
[has to be provided at the
I brook crossing.
FJLL
V
II
.002.4,
Life Cycle Cost Summary
Capital
Original
Proposed
Savings
$
$
$
206,340 $
77,720 $
128,620 $
Total Savings: (10%, 25 yrs)
Annualized - $ 14.174 Present Worth - $ 128,620
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VALUE ENGINEERING PROPOSAL
Title: Location of Facility
Number; S-l
Original Concept:
The building structure is to be located on the south side of
the railroad track. The 60-inch round existing interceptor
is to be relocated, and the sewage pumped temporarily during
construction. The Parshall Flumes are to be bypassed with
60-inch pipes.
Proposed Change:
Relocate the building to the north side of the railroad tracks,
Rotate the building 90 degrees counterclockwise, and separate
the Parshall Flumes from the building. Shorten the building
by 12 feet to clear the railroad tracks and shift the odor
control building to clear the tracks. Place one wet well on
the existing 60-inch interceptor, and another new wet well
near the existing grit building. Break the line in the well,
after new work is completed. (See sketch)
Discussion:
The proposed location of the building eliminates temporary
pumping as well as the need to bypass the Parshall Flumes.
This change will also reduce a major part of the yard piping.
CEWBAOO ' ~x
WET WEU. )
* AT (SBAD* 2
\
gi
|«
Life Cycle Cost Summary
Original $
Proposed $
Savings $
Total Savings: (10%, 25 yrs)
Annualized - $ 58,351
I
Capital
661,825
188,395
473,430
•
Present Worth
Annual O&M
6,180
0
6,180
- $ 529,661
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VALUE ENGINEERING PROPOSAL
Title; Alignment of access road
Number; S-2
Original Concept:
Grading and paving of approximately 600 feet of access
drive.
Proposed Change:
Realign the access drive as shown below. Use a 3:1 slope
where appropriate. This will save 145 feet of drive.
Discussion:
The maximum planned 4 percent grade is not exceeded. There is
no interference with subsurface piping. Employees will have
a shorter travel distance, less roadway maintenance, and less
snow removal in the winter.
Life Cycle
Cost Summary
Original
Proposed
Savinas
$
$
$
Capital
49,100
34,350
14.750
K/V-CA-CA
Annual O&M
600
455
145
Total Savings: (8%, 20 yrs)
Annualized - $ 1,650
Present Worth - $ 16.200
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VALUE ENGINEERING PROPOSAL
Title: Reduction in number of valves
Number: V-l
Original Concept:
Flow is to be split through the use of 15 butterfly valves in
the splitter troughs. Each of the 15 square butterfly valves
cost $9,000.
T*OOCM
-V4—'-*<
NO.
Original Design
Proposed Change:
Use 9 butterfly valves, as shown in the schematic below. This
will allow the flow to go left or right in increments of 1/12
of the plant flow, performing exactly the same functions as
the original concept. Flow in trough 1 or 2 can go left or
right. The compartments of trough 3 are additive to troughs
1 and 2 to give flow increments from l/12th to 12/12ths in
either direction.
V+-
-v*
T/?oO v>
Capital
135,000
81,000
54,000
Annual o&M
$
$
__£
1,500
900
600
Total Savings: (8%, 20 yrs)
Annualized - $ 6,000 Present Worth - $ 59 , 900
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APPENDIX A
STANDARD SCOPE OF SERVICE
VALUE ENGINEERING
A. General
Whereas the Town has been awarded an advance of allowance for the preparation
of construction drawings and specifications for this project; and
Whereas the Town has selected a design consultant firm, hereinafter referred to
as the Designer, to perform design services for the project;
Now, therfore, the Town requires value engineering (VE) services to be provided
for the project in accordance with the requirements of this scope of service by
a value engineering consultant, hereinafter referrred to as the Value Engineer.
B. Requirements
1. VALUE ENGINEERING STUDY. The Value Engineer shall conduct a VE study in
connection with the design of this project, after the Designer submits the
20 to 30 percent design.
2. QUALIFICATIONS. The Value Engineer shall submit, for approval by the Town,
the qualifications of the individuals who will conduct the required VE study.
The Value Engineer shall provide the services of a tean leader who is a
certified value specialist (CVS), so certified by the Society of American Value
Engineers, to prepare for the VE study, lead it, and present the final report.
3. MULTIDISCIPLINARY TEAM. The Value Engineer shall provide four additional
teem members to assist in conducting the VE study. The five members of the VE
study team (including the tean leader) shall have the different disciplines
required to contribute to the study in the design areas having the greatest cost.
All tean members shall be degreed or eguivalent in the fields of chemical,
sanitary, civil, electrical, mechanical, or structural engineering. One team
member shall have architectural experience when significant building structures
are included in the project. Tean members shall have had VE training or previous
experience in serving on at least two VE study teans, and one or more shall be
experienced in plant maintenance and operations. None of the team members are
to have participated in the original design of the project.
4. FACILITIES. The Value Engineer shall provide suitable facilities for the
conduct of the VE study. Facilities shall be located away fron the normal work
place of the members of the VE tean. Facilities shall include large tables to
spread out drawings, telephones, and reproduction services.
5. DOCUMENTS. The Town will provide the Value Engineer two sets of all design
documents. These include drawings, specifications, computations, operating
data, and cost estimates. In addition, the Town will make available to the VE
tean the project's design program, process description, design criteria,
requirements of the Town, power rate structure, and hydraulic profile of the
plant. The Town will prepare a points of contact list with the nane, title and
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telephone number of key representatives of the Designer and the Town for use
by the VE tean during the study.
6. PRES1UDY WORK. The Value Engineer shall review the design documents at
least one week prior to convening the VE study tean, and shall 1) prepare a
cost model of the project based upon the Designer's estimate and 2) prepare
an estimate of the life cycle cost of operating and maintaining the plant,
based upon the project design, anticipated energy consumption, anticipated
chemical consumption, and the staffing levels reguired to operate the plant.
7. ME STUDY. The VE study shall be conducted by the multidisciplinary VE
tean over a consecutive, 40-hour, 5-day period. Methodology followed for
conduct of the study shall use the five-step, value engineering job plan
consisting of the following steps: 1 Information/functional, 2)Creative,
3) Idea Analysis, 4)Proposal Development, and 5) Present at ion.
8. DESIGNER PARTICIPATION. At the beginning of the VE study, the Designer
will make a formal presentation to the VE tean, explaining the design,
approach, and rationale used in developing it. The Designer will attend
the final presentation at the end of the VE study, to hear a presentation
of the reconmmendations from the VE tean.
9. TOW PARTICIPATION. The Town will participate in the conduct of the VE
study by approving team members, attending the Designer's presentation, and
attending the presentation of study reconmendations.
10. POSTSTUDY WORK. The Value Engineer shall prepare a written report
of the VE study. It shall contain an Executive Summary and sections which
describe the project, the study procedure, and the individual VE study
recommendations. Each VE study recommendation shall be supported by
a "before" and "after" description of the design change, technical
rationale, appropriate sketches, a cost estimate of initial savings,
and a cost estimate of the impact of the proposed change on life cycle
costs.
11. FINAL REPORT. The Value Engineer shall transmit five copies of the
final report to the Town within three weeks of completion of the VE study.
The Designer will review and provide written comments on each VE recommenda-
tion to the Town. The Designer will recamend acceptance, modification, or
rejection, as appropriate, of each VE proposal contained in the report. The
Value Engineer shall be available to comment on the rationale provided with
regard to acceptance of the recommendations.
12. IMPLEMENTATION. The Town reserves the right to accept, modify, or
reject any or all of the recommendations resulting from the VE study.
13. RELEASE OF INFORMATION. The Value Engineer may not release any
information concerning this scope of service without the express written
permission of the Town.
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APPENDIX B
HISTORY OP VALUE ENGINEERING
As a techinque, VE was first developed and documented in 1947 by Lawrence D.
Miles for the General Electric Company. It was used in industry for the next
ten years to improve products and reduce product cost.
In the 1960's VE was adopted by the Department of Defense to study expenditures
for military hardware and construction. In the 1970's, VE cane into much wider
use in the construction industry:
1970 General Services Administration applies VE to the design
and construction of all public buildings.
1972 American Institute of Architects (AIA) and the American
Consulting Engineering Council (ACEC) offer VE workshops
to train their members.
1974 EPA introduces VE to the Construction Grant Program
on a voluntary basis.
1975 Federal Highway Administration, in cooperation with the
American Association of State Highway and Transportation
Officials (AASHTO), formally initiates a VE program.
1976 EPA introduces mandatory VE for projects with estimated
construction costs of $10 million or more.
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APPENDIX C
GLOSSARY
Annual!zed cost
The uniform annual equivalent cost, at a given interest rate over a
specified period of time, of a present worth or initial cost. See life
cycle cost.
Capital cost
The initial cost to construct or upgrade a facility.
Life cycle cost (ICC)
The total cost to construct, operate, repair, and maintain a facility
for a specified number of years. Costs are added up in terms of their
present worth, or are expressed in terms of a uniform equivalent annual
amount. See annualized cost.
Lowest total cost of ownership
The lowest life cycle cost.
Million gallons per day (MOD)
The design capacity of the wastewater treatement facility.
Cperation, maintenance, and replacement (CM&R) cost
The cost of facility staffing, utilities, chemicals, replacement parts,
and service contracts (i.e. snow removal, custodial cleaning, sludge
disposal, etc.) during the life of the facility. These are normally
expressed as an annual cost for use in life cycle cost conputations.
Present worth (PW)
Future costs expressed in current dollars.
Return on investment (ROI)
The ancunt of VE savings divided by the cost of the VE services,
including the cost of redesign.
Value engineering (VE)
An organized effort directed at analyzing the functions of systems,
components, goods, and services in order to satisfy required functions
at the lowest total cost of ownership, without sacrificing the
necessary performance and quality.
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APPENDIX D
REFERENCES
For additional information on VE methodology and conducting VE studies, EPA
^nnSrner? P^ations available fron its Instructional Resource Center,
1200 Chambers Road, Roan 310, Columbus, Ohio 43212. Specific ordering
information may be obtained by calling 614-292-6717. The first two
documents on the reference list contain many more specific examples of
recommended VE savings.
1- Value Engineering Case Studies and Formats for Proposals and Reports
U.S. EPA 430/9-77-009, 'June 1977 ~ '
2 * Recommendations from Value Engineering Studies on Wastewater Treatment
Works, U.S. EPA 430/9-80-010, September 1980 ~
3> Value Engineering for Wastewater Treatment Works, U.S. EPA 430/9-84-009
September 1984 ~ '
The following bocks provide additional information on the methodology of VE
and ice. They may be obtained commercially through most bookstores.
4> Life Cycle Costing for Design Professionals. Alphonse Dell'Isola and
Stephen Kirk, McGraw Hill, 1981
5' Value Engineering in the Construction Industry, Alphonse Dell'Isola,
Van Nostrand Reinhold, 1982
6" Value Engineering Theory. Donald Parker, Miles Value Foundation, 1985
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