Value Engineering Support

Section 1

Purpose

Value Engineering (VE) is the systematic process of achieving the required functions and performance of a building at the minimum whole-life cost, without compromising quality, safety or statutory compliance. At RIBA Stage 2, the QS plays a central role in the VE process: providing elemental cost data from Cost Plan 1, identifying high-cost elements relative to BCIS benchmarks, quantifying the cost implications of alternative design options, and preparing comparative analyses to support design team decision-making.

Stage 2 is the most cost-effective point in the RIBA plan of work to undertake VE. Design variables are still fluid, decisions can be reversed with minimal abortive work, and every £1 of cost saving identified at Stage 2 costs a fraction of the abortive design cost that would be incurred making the same change at Stage 4 or later. RICS Value Management and Value Engineering (2nd edition, 2017) confirms that the value improvement potential declines sharply beyond Stage 3.

Critically, VE is not a cost-cutting exercise. Its purpose is to optimise the ratio of function to whole-life cost — a VE proposal may legitimately recommend an increase in capital cost where whole-life savings are demonstrably greater. The QS must present both the capital and whole-life cost implications of every VE option to enable the client to make a genuinely informed decision.

Section 2

Key Principles

RICS Value Management and Value Engineering (2nd edition, 2017): the primary RICS guidance note defining the VE process, the QS role, workshop methodology and reporting requirements in the UK construction context.
BS EN 12973:2020 — Value Management: European standard defining value management principles, function analysis, and the relationship between value, function and cost.
RICS Whole Life Costing (1st edition, 2016): VE proposals must be assessed for whole-life cost impact, not just capital cost — this is a fundamental RICS obligation at Stage 2.
NRM 1: Order of Cost Estimating and Cost Planning (2nd edition, 2012): the Cost Plan 1 elemental structure is the primary tool for identifying VE targets and quantifying proposed savings.
HM Treasury Value for Money guidance (2021): public sector projects must demonstrate VFM across the whole life of the asset; VE at Stage 2 is a key mechanism for achieving this.
Construction (Design and Management) Regulations 2015 (CDM 2015): VE proposals must not compromise the CDM hierarchy of risk control or introduce new design hazards.
RIBA Plan of Work 2020 — Stage 2 Concept Design: identifies the VE review as a Stage 2 gateway deliverable before design development proceeds to Stage 3.

Section 3

Practical Application

Step 1

Prepare the VE analysis from Cost Plan 1: identify all Group Elements where the elemental unit rate (EUR) exceeds the BCIS benchmark by more than 10–15%, or where the element's cost as a percentage of construction cost is above the BCIS norm for the building type. These are the primary VE targets.

Step 2

Brief the design team on VE targets before the workshop. Circulate Cost Plan 1 elemental summary and BCIS benchmark comparison. Request each designer to identify potential specification alternatives for their high-cost elements before the workshop.

Step 3

Facilitate or support the VE workshop. For each VE proposal, establish: (i) the function it serves; (ii) the capital cost impact; (iii) the whole-life cost impact; (iv) any quality, risk or programme implications; (v) compliance with statutory requirements (CDM, Building Regulations, planning conditions).

Step 4

Quantify the cost impact of each VE option. Use Cost Plan 1 elemental rates and quantities as the baseline. Apply BCIS data for alternative specifications. For complex proposals, prepare a preliminary cost model with stated assumptions.

Step 5

Prepare a VE option appraisal table for each proposal: columns should include Option, Description, Capital Cost (£), LCC NPV (£), Total Value Impact (£), Quality/Risk Rating and Recommendation (Accept/Reject/Further Study).

Step 6

Present the VE appraisal table to the client with the QS recommendation. The recommendation must clearly state whether the proposal is recommended on whole-life cost grounds, not just capital cost.

Step 7

Update Cost Plan 1 to reflect all accepted VE decisions. Issue a Cost Plan 1 (Revision 1) with a VE schedule summarising accepted proposals, savings achieved and the revised elemental budget.

Step 8

Document all rejected VE proposals with the reasons for rejection. This record is essential for audit purposes — demonstrating that VE was properly considered — and for future reference if the brief changes at a later stage.

Section 4

Common Mistakes to Avoid

Focusing solely on capital cost savings without assessing whole-life cost impact — a VE proposal that reduces capital cost but increases maintenance or energy costs may deliver negative value over the asset's life.
Allowing VE proposals to compromise statutory requirements — no VE saving justifies reducing fire compartmentation below Building Regulations standards, reducing accessibility below Part M requirements, or removing CDM-required protection measures.
Failing to document rejected VE options — without a documented rejection record, the audit trail is incomplete and the design team may be unable to demonstrate that VE was properly considered.
Introducing VE proposals after Stage 3 — at Stage 4, design changes trigger abortive drawing, engineering and procurement costs that can substantially exceed the proposed saving. VE after Stage 3 gateway must be formally justified.
Treating VE as an emergency budget reduction measure rather than a structured design optimisation exercise — reactive cost-cutting without function analysis does not constitute VE and risks specification quality.
Presenting VE proposals to the client without whole-life cost data — the client cannot make an informed decision between options if only capital costs are shown.

Section 5

APC Competency & Quick Reference

APC Competencies: Value Management (L2) | Design Economics & Cost Planning (L2) | Cost Management (L2) | Life Cycle Costing (L1)

What is the difference between value engineering and cost-cutting?

Value engineering is the systematic optimisation of the ratio of function to whole-life cost. It may recommend an increase in capital cost where operational savings are greater. Cost-cutting simply reduces expenditure, potentially at the expense of quality, function or compliance. VE without function analysis is not VE — it is cost reduction.

How does the QS contribute to a VE workshop?

The QS provides the Cost Plan 1 elemental breakdown, identifies high-cost elements relative to BCIS benchmarks (the primary VE targets), quantifies the capital and whole-life cost impact of each VE proposal, prepares the VE option appraisal table, and updates Cost Plan 1 to reflect accepted decisions.

At what point in the RIBA plan of work is VE most effective?

VE is most effective at Stage 2 (Concept Design) and early Stage 3 (Spatial Coordination). RICS guidance confirms that value improvement potential declines sharply once design is developed — post-Stage 3 VE is constrained by abortive design costs, and post-Stage 4 VE is rarely cost-effective.

Section 6