Looking for a way to save money on your projects? Look no further than your partners in the project bid or project completion processes!
Value Engineering (VE)
Value Engineering is a structured approach study, to be performed by a multi-disciplinary team, for analyzing the function of an item, generating alternatives through creative thinking, and providing the needed function at the lowest life-cycle cost, without sacrificing safety or necessary quality, and with minimal disturbance to the community and environment. A VE study constitutes an independent approach to the project, with the specific objective of determining the worth of basic functions, setting a target cost, and identifying design alternative(s) that provide the needed utility at a lower overall cost. Both State DOT’s and local agencies are required to conduct a VE study prior to the completion of final design on each applicable project that uses Federal-aid highway funding for all projects greater than $50,000,000.
Alternative Technical Concepts
Alternative Technical Concepts (ATCs) is a process where the agency seeking bids on a project allow the bidders to propose different project completion designs, methods, or other cost savings ideas as a way to lower the overall project cost.
ATCs are part of the Every Day Counts (EDC) initiative in Ohio. As a resource for ATC ideas which have been proposed and chosen on state level projects in Ohio, the LTAP Center has created a database of this information. Ohio LPAs are encouraged to review the database to see if any of the proposed cost savings measures can be applied to their own projects.
Value Engineering Change Proposals (VECPs)
Another process which is similar to ATCs is the Value Engineering or Value Engineering Change Proposal (VECP) process. VECPs occur after the award by the contractor during the course of construction. A VECP encourages the contractor to propose changes in the contract requirements which will accomplish the project's functional requirements at a lower cost or improve value or service at no increase or a minor increase in cost.
While the number of ATCs in Ohio are still growing, VECPs are numerous. The links below will provide you with information on VECPs proposed, accepted or rejected on Ohio projects.
LPAs are also encouraged to consider implementing the ATC and VECP processes in their own project contracting. If you have more questions on ATCs or VECPs for LPAs, please contact Chase Wells in the ODOT Office of Construction Management at firstname.lastname@example.org or or 614.466.4789.
Frequently Asked Questions about VE, VECP and ATC
· What is Value Engineering (VE)?
VE in design (VE studies) refers to the systematic application of recognized techniques in which a multi-disciplined team of individuals not personally involved in the design of the project takes a “fresh look” at the project (generally during the early stages of design) to ensure that stakeholder needs will be met in an efficient and cost-effective way. For more information on ODOT’s VE Program, Click Here, or contact Don Fisher in the ODOT Division of Engineering at email@example.com, or 614.387.2614.
· What is an Alternative Technical Concept (ATC)?
Where a bidder has a different way of completing a project that they feel is less expense and/or improves project delivery time than what is described in your agency’s bid documents, usually utilized in a Design-Build procurement.
· What is a Value Engineering Change Proposal (VECP)?
Where a contractor who has already been awarded a project has a different way of completing a project that they feel is less expense (or only minimally more expense) and which improves project delivery time, project value or service.
· Why should my agency care about ATCs and VECPs?
Every agency has experienced shrinking budgets. ATCs and VECPs help your agency stretch your budget dollars. Whether it is project direct costs or shortening the length of your project, the amounts which can be saved are tremendous with bidders and/or contractors and your agency working together.
· How does the ATC process work?
Each bidder is responsible for working with your agency to propose their cost-savings ideas. Your agency reviews the proposed cost-savings ideas (ATCs) and approves or rejects them. If the idea is approved, then the bidder incorporates the changes into their bid proposal.
· Does every bidders’ proposed ATC (cost savings) get shared with the other bidders?
No. What a bidder proposes stays confidential between the agency and the bidder until such time as a bidder is awarded a contract. Or, if the bidder doesn’t receive the contract award, the agency may for a fee request to purchase the ATC from the bidder. Otherwise, the idea stays with the bidder as their property so they can propose it as an ATC again in the future to provide their firm a competitive edge.
· Where can I learn more about how ATCs work in Ohio?
National ATC information:
· How does the VECP process work?
Ohio has a specific process for how VECPs are handled during a project. Please visit the Value Engineer Change Proposal’s (VECPs) policy webpage to learn more.
Additional VECP information: