Value engineering doesn’t mean cost cutting, experts reveal at MEP UAE Conference

Experts agreed at a panel on Value Engineering and Sustainability that value engineering doesn’t mean cost cutting.

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L-R: Hassan Younes, director, Griffin Consultants (moderator); Sougata Nandi, founder and CEO, 3e Advisory; PR Jagannathan, sustainability manager at PCFC – Trakhees; Alistair Davis, director-MEP, Black & White Engineering; Benoit McNamara, design manager, Select Group; and Ramy Boufarhat, COO, JLW.
L-R: Hassan Younes, director, Griffin Consultants (moderator); Sougata Nandi, founder and CEO, 3e Advisory; PR Jagannathan, sustainability manager at PCFC – Trakhees; Alistair Davis, director-MEP, Black & White Engineering; Benoit McNamara, design manager, Select Group; and Ramy Boufarhat, COO, JLW.

At the MEP UAE Conference 2019 held on 24 April in Dubai, experts in the MEP sector deliberated the importance of value engineering on a project and perception of cost cutting measures that surround it.

PR Jagannathan, sustainability manager at PCFC – Trakhees, said: “For a developer, value engineering is interpreted as cost cutting, this can have even severe ramifications if consultants are brought in mid-way through to value engineer a project.”

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Sougata Nandi, founder and CEO, 3e Advisory joined Jagannathan on the panel along with Ramy Boufarhat, COO, JLW; Alistair Davis, director-MEP, Black & White Engineering; Benoit McNamara, design manager, Select Group. The panel was moderated by Hassan Younes, director, Griffin Consultants.
Nandi said that the definition of “value” varied from people to people, and that none of the definitions are incorrect. For the same person, value can mean different things at different points in time. He added: “We’ve never been told by a client ‘here’s an additional $10m to make the project even more sustainable than before’. I've always been asked how to cut $10m from a project. Hence, sustainability goes out of the window at the outset. Value means different things to different people.”

Davis, from MEP consulting firm Black & White Engineering, bifurcated the concept of cost cutting from an operating cost point of view. He said: “Value engineering is about getting additional value into a project whether that is part of the capex or opex; and if you can make something a bit more sustainable. But that all depends on the type of client you have. A client looking to build, own and operate will always take a longer term view rather than a developer that looks to build and sell.”

Younes agreed to Davis’ point and added: “I [as a consultant] like to focus more on optimising the system and reducing the costs because you are building something smaller rather than looking at cheaper products.”

Contractors also claim that they are brought in to value engineer a project quite late in the process. “The type of value engineering we get asked to do as contractors on some traditional projects involves a lead time of just two weeks to look at a design (to try and find costs savings). In such cases we address the low hanging fruits - we change certain makes, we open up the specs and change certain aesthetics. We can’t work above the ceiling from an MEP point of view or in the core of the building, or look at distribution because it’s too late by then since everything is locked in by the architects,” said Boufarhat.
McNamara represented the developer community on the panel and drew a link between value engineering and return on investment, and increasing the overall asset lifecycle.
From a developer’s point of view Benoit added that certain decision taken around value engineering can affect the image of the brand. “Putting one AC unit where there should have been two FCUs (fan coil units) in order to save costs will affect the experience of the occupant, which could leave them unsatisfied. Developers need to be cautious when making such decisions,” McNamara said.

Jagannathan added: “The market needs to come to a state of maturity that a well performing building - even if it’s not going to be owned/operated by the client - is going to leave behind a good image that will help in future projects. Subsequently, developers also need to understand the propensity of tenants to pay more for a building that has a better energy usage index will be higher even though the building might be old.”
He also added that it’s important for a building to be maintained correctly post-handover while ensuring the value of systems such as BIM are truly optimised well into the future.
“We all know building management systems that is projected as the greenest system to run a building. But none of the BMS systems are programmed to deliver energy savings. They function as building monitoring stations. Meanwhile, BIM as a technology is beneficial if you start from AutoCAD, bill of quantity, drawings and maintenance of equipment all through. But if you use BIM to submit drawings it’s wasteful. You might as well use AutoCAD,” Jagannathan said.

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