Alternative Delivery Systems-Value Management-Value Engineering Policy

It is the policy of the Division of Highways (DOH) to design, construct and maintain the State Highway System in the most cost-effective and efficient manner possible. The systematic application of Value Analysis and Industrial Engineering principles and methodologies shall be a major component in the overall effort to reduce costs and improve productivity throughout the Division of Highways.

A 1992 study of the DOH Value Engineering (VE) Program by a private consultant recommended the development and approval of a formal VE policy. The consultant stated that a formal policy would legitimize VE efforts and recognize the specific responsibilities and authority of the VE program, which will improve the effectiveness of the program.

This policy establishes a systematic program for cost reduction and productivity improvement efforts throughout the Division of Highways (DOH). This policy provides authority and assigns responsibility for administering the program and for reporting the results of program efforts.

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IV. Responsibility and Procedures

Responsibility

The Value Management Section (VMS) of the Design Services Unit shall be responsible for completing Value Engineering (VE) Preconstruction, Maintenance, Equipment, Engineering Management, or other studies for the purpose of reducing costs and improving productivity as selected by the VE Advisory Panel.

The VMS shall be responsible for promoting and encouraging the usage of the Value Engineering Proposal (VEP) clause and facilitating expeditious reviews of proposals received from contractors.

The VMS shall be responsible for ensuring that an appropriate number of DOH personnel are adequately trained to perform the scheduled VE studies. Additional training for select VE team leaders shall be arranged through the VMS.

The VMS shall be responsible for reporting the results of studies and VEP's annually to the State Highway Engineer-Design. The report shall be submitted at the end of each Fiscal Year.

Procedures

VE Advisory Panel
The VE Advisory Panel shall be comprised of: State Highway Engineer-Design, State Design Services Engineer, State Roadway Design Engineer, State Bridge Design Engineer and State Hydraulics Engineer for Highway Design selections and approvals. For selections and approvals of other areas panel members will be added or dropped as is appropriate.

Unit VE Coordinators
Each Unit in the Division of Highways shall designate a VE Coordinator to represent the Unit. The VE Coordinator shall provide assistance to facilitate VE studies. Assistance may include, but is not limited to, identifying potential topics for VE studies, identifying potential VE team leaders or team members, gathering information for VE studies, and coordinating the space and materials needed to complete VE studies.

Preconstruction VE Studies
1. Selection and Scheduling of Studies:
  -Any project having a construction cost greater than $2,000,000 may be scheduled for at least one VE study. Additional VE studies of projects may be conducted, if deemed necessary by the State Highway Engineer-Design. The Value Engineering Office (VEO) shall examine the NCDOT Transportation Improvement Program and projects in cost containment each Fiscal Year and prepare a list of candidate projects for VE studies. From this list the Advisory Panel will select the projects that will constitute the Preconstruction portion of the Value Engineering Program. Justified requests to delete or postpone studies of projects shown on the list may be submitted to the State Highway Engineer-Design for approval.
  
  Value Engineering studies of roadway or structure design projects ideally should be accomplished during the following phases:
  
  Planning Report - After the Planning Report has been completed, but before it has been submitted for approval. For major highway projects it is Additionally, projects in the 40% - 100% design stage may be studied if significant potential for savings exists and time permits.
  
  Shelf projects may be scheduled for VE studies anytime within the annual program.
  
  Each project or topic will be scheduled for the VE study at least three (3) months in advance by the Value Engineering Office (VEO). All time spent for preparation, site visits, performing the study, and reviewing and presenting study results, should be charged to the appropriate project number, if available, by all participants.
2. Minimum Study Requirements:
  When a VE study is performed, the following minimum requirements should be met: - The VE study should be conducted according to "AASHTO Guidelines For Value Engineering, 1987" and "Value Engineering of Highways, USDOT, FHWA".
  
  - All VE teams should consist of persons having technical expertise which is appropriate for the study. Personnel should be engineers with a minimum of two years experience, or high level technicians with a minimum of five years experience. Study team members shall be selected by the Unit or Division Office VE Coordinators.
  
  - It is preferred that all VE team members be trained in the Principles of Value Engineering. Training shall be arranged by the VEO. - A team leader will be selected by the VEO.
  
  - A Value Engineering Facilitator will be assigned to each VE study by the VEO. The Facilitator shall ensure that the study is properly documented and that a final report is prepared, detailing the VE recommendations and cost savings resulting from the study. The Facilitator shall coordinate formal presentations of VE recommendations when required.
  
  The Facilitator shall compute ultimate savings resulting from VE recommendations based upon actual contract bid prices or other acceptable methods.
3. Review and Implementation of VE Recommendations:
  All VE recommendations shall be reviewed for technical conformity by the appropriate Unit prior to review and approval by the VE Advisory Panel.
  
  VE recommendations for Standard Specifications and Standard Drawings shall be reviewed for technical conformity by affected Design, Construction, Maintenance, and Materials Engineers. Approved recommendations shall be submitted to the Implementation Committee and/or Standards Committee.
Value Engineering Proposals (VEPs)
1. The VEO will be primary investigator for all VEPs. Operational responsibility includes, but is not limited to, requesting specific Units to review proposals; evaluating and coordinating these reviews; and reporting the recommended action to be taken in wirtten form to the Construction Unit.
2. All initial contacts by Contractors, Subs, Division Staff, Central Construction Unit or other Operations Units with Design Branch staff concerning potential VEP's or VEP development are to be communicated to the VEO without delay.
Maintenance and Equipment VE Field Studies
1. Selection and Scheduling:
  Candidate topics for VE field studies will be selected by examining annual expenditures of Bridge Maintenance, Roadway Maintenance, and Equipment and Inventory Control. High cost items shall be identified annually by the appropriate Unit VE Coordinator and listed as potential study items. From this list, the VEO will develop a short list of study items for finalization with affected managers and/or Unit VE Coordinators. A preliminary assessment of improvement potential may be required by the VMS prior to including an item for a VE study.
2. Review and Implementation of VE Field Study Recommendations:
  All VE recommendations resulting from field studies will be reviewed for technical conformity by affected Design, Construction, Maintenance and/or Materials engineers. Recommendations shall be discussed with affected managers by the VEO prior to initiating implementation through appropriate channels.
Engineering Management (EM) Studies
The EM Group's primary goal is to minimize expenditures by maximizing productivity in all areas of the Division of Highways.

The Value Engineering Office (VEO) in conjunction with the Unit Coordinators shall prepare a list of candidate studies for inclusion into the annual program.

Review by the VE Advisory P
Recommendations resulting from studies or VEPs which are rejected may be reviewed by the VE Advisory Panel. A clear explanation of the reason for rejection must be presented to the panel by the VEO and/or rejecting Unit representative.

The Advisory Panel may concur with the rejection, approve the recommendation, or require modifications be made to enable the recommendation to be approved.

Advisory Panel meetings are to be scheduled by the State Highway Engineer-Design. Meetings will normally be held quarterly. However, meetings may be called more frequently to expedite decisions regarding time sensitive projects.

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