DAILY INSIGHT: Value engineering done right

Sometimes, cutting back ends up costing more. 
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Sometimes, cutting back ends up costing more. 

By Steven M. Baule, CIO Advisor

Cutting corners or "value engineering" projects seems to be the way to do things today. However, the concept of "value engineering" doesn't often bring value to the organization. It tends to reduce the value of the project to the district and often gives the incorrect impression that the items cut were not really necessary and were simply fluff anyway. In fact, I think that given the financial constraints most schools and districts face today, value engineering makes little sense in many cases. Surely it is imperative for district leadership to review the scope of work on plans brought forward. Many of these plans include nice-to-have features that one or more committee members advocated for to the point they made it into the final scope of work. Items like those may often be excised through the value-engineering process. However, you shouldn't allow value engineering to cut into the actual meat of the project. One of the reasons for this is although you might save some money in the short term, coming back to complete a core piece of a project in round two will normally cost the district more money than simply completing the project at one time. The cost to contractors and other vendors to set up and exit a project doubles in most cases when projects are broken into pieces.

One of the best examples of a poor choice in value engineering was a school installed a token ring network, but to save money the district simply had the wires run back into the MDF and not actually terminated on the patch panel. In the end, the wiring contractor didn't leave enough wire for most of the cables to actually reach the patch panel. So the wiring all had to be extended and the splices ended up causing problems for the life of the STP cabling. It may have sounded like a good idea, but it wasn't.

Extra security lights, door alarms and similar items were removed from a school built a few years ago as a victim of value engineering. Post Newtown, all of those security items were demanded by parents and were a greater cost than if they had been included within the original scope of work. Cutting out the backup generator seems like an easy way to save some money, but after the district loses power a couple of times, getting the generator back onto the to-do list seems like a great idea.

So, how do we avoid having to value engineer? The best way is to do all of your homework up front, so that the scope of the project and the original budget estimates are accurate. Allowing the architect or other professional leading a large project the time up front to determine a reasonable scope of work is essential. If this process is followed, then you are more likely to have an accurate budget and are less likely to have to reduce the scope of the project after you receive the bids or proposals.

Another key is to ensure that everyone involved knows that the project must be done correctly, that as a leader, you don't want to cut corners that may well cause problems for the school five to 10 years down the road. In some ways value engineering is really about cutting corners. Tied to this is to ensure that you have the best possible estimates when you originally put the project into the budget process. This way you won't' end up with sticker shock at a later date.

Steven M. Baule is superintendent of North Boone CUSD 200 in Poplar Grove, IL. He has written several books on aspects of library and technology management and planning. Follow North Boone on Twitter @NBCUSD200.