Bids come back too high?
When those bids start rolling in and, uh-oh, they’re higher than expected, it’s time for value engineering! But hold on, it’s not about the lessons in good behavior from childhood; this is about strategically refining the project to cut unnecessary expenses, swap out materials, and ultimately bring the budget back on track.
Value engineering & cost cutting
might seem like a complex term, but it’s essentially a method to enhance the “value” of products or services by examining their function. Think of it as a balance between the function something provides and its cost. You can increase its value by either improving the function or reducing the cost.
This approach has roots dating back to World War II, when shortages pushed for innovation. The idea came about at General Electric when substitutions were made due to material scarcity, often resulting in cost savings and improved products. From there, the concept expanded into various industries and government agencies.
So, when it’s time to reassess and cut costs:
- Review the initial objectives and project parameters thoughtfully.
- Check if there have been any changes in priorities or functionalities since the project’s start.
- Identify areas where functionality can be reduced or eliminated without sacrificing the project’s core purpose.
- Consider if adjustments in the project’s scope are possible—can spaces be made smaller, or functions combined?
- Look for possible material or method substitutions that maintain quality but at a lower cost.
- Explore structuring the project to be built during a different time of the year to save on certain expenses.
The goal isn’t to cut corners but to find smart, creative solutions to bring the project in line with your budget without compromising its essence.
