A Synthesis of
Highway Practice
Value Engineering
Applications in
Transportation
Preliminary Results Presentation
David C. Wilson, P.Eng., CVS
2004 Government VM Conference
Montreal, QC
This Presentation…

Five Aspects:
• VE in Transportation – History Lesson
• Study Objectives
• Survey Approach and Literature Review
• Key Observations
• Future Directions and Needs
History Lesson
1940’s – VE development in manufacturing
 1950’s – US Government (Bureau of Ships)
 1960’s – Incentives in construction contracts
 1970’s

– 1970, Federal-aid Highway Act required VE
– 1973, FHWA appointed VE Coordinator;
encourages VE
– 1975, FHWA/NHI VE training program initiated

1980’s – AASHTO recognizes VE; Guidelines
History Lesson

1990’s
– 1991, ISTEA permitted FHWA to revisit VE
requirement (encourage vs. require)
– 1993, OMB Circular A-131 VE requirement
– 1995, National Highway Designation Act

$25M threshold on federal-aid NHS projects
– 1997, FHWA Regulation 23 CFR Part 627 response
– 1999, AASHTO Guidelines revised

2000’s
– 2002, Final ruling on D/B VE requirements
History Lesson

NCHRP 78 (1981)
– VE primarily on standards and specifications
– Few DOT’s active at the time
– DOT VE Pioneers
 California – 1969
 Idaho and Virginia – 1973
 Minnesota – 1975
 Florida – 1976
 New Mexico – 1977
 Oregon and Pennsylvania - 1979
NCHRP 35-04 Study Objectives/Approach

Summarize current practices/programs
 Focus
–
–
–
–
–
–

Policies, guidelines, project selection
Education and awareness
Applications
Implementation
Monitoring
Future Needs
Approach
– Extensive DOT survey
– Literature Review
Survey

46 question survey developed
 Distribution
– NCHRP sent survey to 52 DOTs in United States
– TAC sent survey to Canadian DOTs and Cities
– Toll Authorities not included
– Federal Lands recently received survey

Response
– 37 US DOTs; 4 Canadian DOT’s
– 3 Cities (New York; Ottawa; Winnipeg)
Survey
Did not respond
to survey
Note: Puerto Rico did not respond (not shown)
US DOT Responses Still Required
The Top Ten – 5 Year Summary
> 200 Studies
100 - 200 Studies
< 100 Studies
Source: FHWA
Literature Review

Scope
– North America

Primary Sources
– AASHTO
– FHWA
– Miles Foundation
– Conference Proceedings
– Journals
– Universities
Key Observations

Developing policy and guidelines
– FHWA VE Regulation serves as basis in US
– No common federal requirement in Canada
– Selected DOTs
 Developed specific guidelines
 Developed manuals
– Separate manuals
– Chapters within Design Manuals
Key Observations

Selecting Projects
– Generally US DOTs use $25M threshold
– Some variation examples
 Nevada - $10M (if policy enacted)
 Pennsylvania, Ohio - $20M
 New Hampshire - $50M
 Virginia, Alaska, Ontario - $10M
– Rarely on small projects
– Build stakeholders consensus
– Validate project scope or resolve issues
– “Because we have to!”
Key Observations

Comparative benchmarks
– 1981 (NCHRP Synthesis 78)
 Primarily on standards and specifications
 Rarely projects
– 2004 (NCHRP Synthesis - New)
 Rarely standards and specifications
 Primarily on projects
Key Observations

Team Leaders
– Majority require CVS as Team Leader
– AVS and VMP generally not permitted
– Most require a PE as a leader

Job Plans
– Generally similar to SAVE Job Plan
– Variations generally expand basic steps
 Caltrans has 13 step job plan
Key Observations

Education and Awareness
– Training
 FHWA/NHI; Consultants; SAVE Conference
– 70% of DOTs do not have a formal program
– 19 DOT’s with training programs in place (5-10 yrs)
 California – 1,200 staff
 Virginia – 2,300 (1,500 still with VDOT)
 Washington, New Jersey, Ontario – 350 each
 Michigan, North Carolina, Arizona - < 20 each
– Budget constraints have impacted training
Key Observations

VE Related Tools
– Most Popular
 Cost models
 FAST diagrams
 Evaluation matrices
– Emerging
 Project Performance Measures
 Risk registers
 Cause-Effect (Wishbone diagram)
 Choosing By Advantages (long term opportunity)
Key Observations

Study Duration
– Typically 3-5 days; sometimes split workshops
– DOT Motivation
 Staff availability
 VE study costs
– Pressures on VE Team
 Selecting ideas
 Evaluating ideas
– Results/quality may be affected if not enough
time allocated to workshop
Key Observations

Evaluating/Shortlisting Ideas - Criteria
– Project cost
– Constructability
– Road safety
– Traffic staging
– Schedule impacts
 Right-of-way
 Environmental
Key Observations

Emerging Evaluation Approaches
– User delay
 During construction
 Post-construction
– Road safety
 Explicit consideration of crash costs
 Human factors reviews

Reaching consensus
– 60% of DOTs use open discussions to reach
agreement
Key Observations

Acceptance of VE Proposals
– ± 60% of DOTs have form of implementation
strategy or meeting in place

Michigan, Ontario, California have meetings

New York permits Regional Offices to decide on VE
proposals
– VE Organization Reporting Relationship
 Primarily part of Design Branch
 Some report to Financial Branch
– New York City
– Virginia
Key Observations

Monitoring VE Performance
– FHWA reporting requirements typically govern
 Focused on ROI
– Construction costs
– Study costs
– Savings (design or construction – VECP)
– Performance Improvement
 California
 Florida
 Virginia
 New Mexico
 Washington
Key Observations
9000
FHWA Program Report
Top 10 States – VE Expenditures
8000
7000
5000
$8,460
4000
$1,110
$1,100
$1,070
1000
$1,260
$2,060
2000
$1,390
$4,030
$5,280
3000
$1,510
Cost (Thousand Dollars)
6000
MICHIGAN
WISCONSIN
MARYLAND
TEXAS
NEW JERSEY
COLORADO
0
CALIFORNIA
Source: FHWA
FLORIDA
VIRGINIA
NEW YORK
Key Observations
Value Engineering Performace
Measures 2001-2003
FY 01 Net project Savings $57.2 million
FY 02 Net Project Savings $71.0 million
FY 03 Net Project Savings $41.3 million
Source: WSDOT
Developed
Partners and or
consensus
building
Compressed
Development or
construction
schedule
Improved
Constructability
Enhanced
Operational
Performance
Minimized R/W
and or
Environmental
Impacts
FY 2001
FY 2002
FY 2003
Recommendations
Implemented
80%
70%
60%
50%
40%
30%
20%
10%
0%
Threats and Opportunities

Education
– Refresh knowledgeable workforce
 DOT staff attrition or promotion
 Consultant demographics
– SAVE Module I and II
 Training courses need to evolve
 Permit more diverse VE-related tools
– NHI Courses
 Maintain access to DOTs
Threats and Opportunities

Project Scope and Selection
– Opportunities to expand VE
 Smaller projects (lower thresholds)
 Non-NHS federal-aid projects (non-mandated)
 Standards and specifications

Measuring Performance
– Consider project performance improvement
 Project performance measures
 Tracking database (racing forms)
Threats and Opportunities

Stakeholder Involvement
– Value planning
– Value-based design charettes

VE Acceptance
– Defining implementation process
 Detailed responses
 Due Diligence
– Declaring a “Champion”
 Managing the VE proposals
 Managing the decision-making system
Research Needs/Challenges

Key Challenges
–
–
–
–
–
How can we improve the readiness of the VE
community?
How can safety, risk, user delay and other user
costs be effectively considered?
What is the most appropriate method to measure
project performance?
What role will emerging evaluation techniques
play in future decision-making?
How can links be forged with other assessment
tools?
Summary…

Five Aspects:
• VE in Transportation – History Lesson
• Study Objectives
• Survey Approach and Literature Review
• Key Observations
• Future Directions and Needs
A Synthesis of
Highway Practice
Value Engineering
Applications in
Transportation
Preliminary Results Presentation
David C. Wilson, P.Eng., CVS
2004 Government VM Conference
Montreal, QC
Contact
David C. Wilson, P.Eng., CVS
Vice President
NCE Limited
2800 Fourteenth Avenue, Suite 206
Markham, ON, L3R 0E4
T (905) 943-4443
F (905) 943-4449
david.wilson@nceltd.com