A man in a checkered shirt uses pencils and calculators to mark up a set of construction drawings

We all know that value engineering, or VEing, is a process to help control costs in a construction project by selecting alternatives to the current design that are more affordable or more readily obtainable. For example, VCA Green’s return on investment approach has netted back to developers the following realized savings:

    • Energy modeling showed that SEER 15 conventional splits systems could get the building to comply with having multiple ductless mini splits in the HVAC system: $2.3 million savings.
    • VE to properly size solar hot water system in combination with an efficient HVAC system and high efficiency boilers: $375k savings.
    • VE lighting controls through a 3rd party lighting design review: $200k savings

However, selecting an alternative to the designed specification may lead you down the path of non-compliance or possibly ending up with a system that doesn’t operate as the owner or occupant expects. This could result in anything from minor rework up to wholesale replacement of systems and could create costs far more than the savings that the VE initially achieved, as well as create a sentiment that could prevent you from being invited to bid future projects.

In this article, we will discuss real events from real projects (maintaining confidentiality) and present some scenarios that might have prevented the issues from arising in the first place. All this to help you achieve a compliant, comfortable, and efficient project, with no rework.

Outdoor parking lot lights

The original design called for 18-foot-tall, dimmable parking poles with motion sensors. These lights were somewhat expensive, so they were value engineered into 18-foot-tall fixtures with no dimming or motions sensors. Unfortunately, Title 24 Energy Code requires outdoor luminaires greater than 40 watts, where the bottom of the luminaire is mounted 24 feet or less above the ground, to be operated with motion-sensing controls.

Their VEd design failed mandatory testing and the fixtures needed to be retrofitted with compliant controls. Costs for the retrofit, contractor time, and an additional acceptance test ended up costing more than the original fixtures would have cost.

Indoor lighting in an office building

The networked lighting system specified was VEd out and local lighting controls were only installed to control the lights. Unfortunately, the suite was about 15,000 square feet and under their current code cycle, Automatic Demand Response (reducing total lighting power by at least 15% in response to utility signals preventing blackouts) was required for buildings over 10,000 square feet. For the lighting system to meet code, the networking components for the control system had to be retrofit on top of the newly installed and completed local controls at an additional cost of $18,000 to the building owner.

Had the original networked lighting system been retained, it’s likely the installation labor for those networking parts that were needed anyway could have been wrapped up in the original install. Arguably, this could have also saved about $9,000 in retrofit labor.

Indoor dimming of lighting

Dimmable lights cost more than simple non-dimmable lights and as such are VEd out frequently. The code requirement for dimming capability becomes stricter each code cycle and is currently required for general lighting in enclosed spaces 100 sq. ft. or larger with a connected general lighting load greater than 0.5 watts per square foot. Additionally, new LED fixtures require continuous dimming from 10-100%, and step dimming or “A-B Switching” is no longer permitted.

Thermostat selection in multi-family residential

To comply with California Energy Code, demand-response-capable thermostats are sometimes a required feature. Unfortunately, the specified thermostats in one recent project were VEd to a cheaper thermostat that did not have this feature. Once identified, this required the replacement of all non-compliant thermostats at an unknown but certainly very high cost. Had a question been posed to the engineer who originally specified the demand response thermostats, this mistake could have been avoided.

How do you prevent making mistakes when looking into performing value engineering?

When a subcontractor proposes an alternative, always run the option through the design engineering firm or engineer of record to confirm that no code violations will result. Also, ask for an operational cost analysis on the option. Frequently, alternative products bring different operational performance and often consume more energy. If you were originally designing to just meet code required efficiencies, VEd alternatives could throw the building’s overall efficiency out of compliance as well as increase operational cost for the lifetime of the building or system.

Don’t forget to ask about life cycle costs and warranties as well. Sure, saving construction costs is important, but some lower cost products have higher hidden costs, making the VE process a futile effort. VCA Green can help you weigh these options.

Moe Fakih, Principal

Robyn Vettraino, Principal

Contributing Writer: Wayne Alldredge