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Value Engineering

2 replies [Last post]
Tue, 2011-04-26 05:35
Sankar Vijayan
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Joined: 21 Sep 2010
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Can any one explain the Value engineering Clause of FIDIC & NEC3 ?Which is more benificial to Contractors?

Thanks & Regards

Sankar Vijayan

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Replies

Wed, 2011-04-27 07:09
#1
Sankar Vijayan
User offline. Last seen 4 years 7 weeks ago. Offline
Joined: 21 Sep 2010
Posts: 58
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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

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Tue, 2011-04-26 08:51
#2
Mike Testro
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Joined: 14 Dec 2005
Posts: 4418
Groups: Building Information Modelling, Content Moderators, GPCCAR Editors

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.

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