Value Engineering

Hi Sankar

A value engineering excercise is usually where a contractor is requested to review the design and speciification and suggest ways and means whereby costs can be reduced.

It can be a problem however if not all the factors are considered.

I once worked on a large hospital where the contractor suggested a saving by reducing the basement area by 30%. The cost saving was considerable but the change added 5 months to the contract period - the contractor lost a lot of money.

As regards the difference in the contract forms I can't think of any off hand - you will need to read both sections to see if there is any fundamental shift in risk allocation.

Best regards

Mike Testro.

Dear sir,

Both Fidic & Nec encourage Value Engineering by Contractor.By doing so if contractor Save money for client .how the benifit shared i heard that for NEC it is 50 -50 & Fidic it is 20 -80(20 for contractor) ,but i am not sure whether it is right or not.it is not clearly mentioned.Do u have any idea regarding this

regards

sankar vijayan