#9 Schedule of values - Project Schedule - Value engineering

Schedule of Values
The bid may include a requirement for schedule of values formatted to work with AIA G703.

Information presented in a uniform format from all bidders will ease the process of bid evaluation.

Scheduled items that vary wildly across the bidders may indicate;
-the bid documents including drawings and specification are not adequately conveying information to the bidders.
-some of the bidders are not sufficiently experienced for this type or scale of project
-low prices may indicate a bidder profit margin to low for viability
-high prices may indicate a bidder that may not want to win the bid, but wants to be keep on the bid list for future projects.

The schedule of values may be modified in contract negotiations in the period between identification of the winning bid and contract signing;
-the GC may adjust values to better reflect actual costs as information from subcontractors and suppliers is refined, without changing the total agreed bid price.
-the Owner may request changes to reflect their analysis of the proposed work schedule and the owners own cost estimate, without change to the total agreed bid price.

The schedule values include overhead and profit percentage modifiers, which are GC's internal information only.

The owner may use the schedule of values in combination with the Project schedule to predict each months payment request value, to establish borrowing needs.

The GC may use the schedule of values in combination with the Project scheduled and additional excel columns for overhead and profit to predict project cash flow needs and profit potential during construction.

Project Schedule

A project schedule based on items from schedule of values will be prepared by the GC in the period between wining the bid and contract signing. The owner may required a detailed Gantt schedule for complex project with time critical elements.

The GC will for internal management use develop a more detailed Gantt schedule including time critical activities;
-negotiate and schedule material and component deliveries
-negotiate and schedule subcontractors
-submital schedules and shop drawing procedure
-resource management of equipment and workforce across multiple projects.

Value Engineering
Ideally value engineering should be part of the design process from feasibility through to issue of bid documents;
-asphalt surface or gravel, the gravel is porous and may reduce the costs for stormwater management, but will potentially increase operating costs for maintenance and potential damage to cars from loose gravel.
-overhead power to light poles, reduce trenching and conduit costs, but less attractive
-wood light poles in auger holes with compacted soil rather than metal poles with concrete base, lower cost but less attractive.

Value engineering during feasibility may inform the owner and guide budgetary discussion;
-how long will the site be used as a parking lot?
-what does the potential parking lot customer expect from an airport parking lot?
-what services and qualities do competing airport parking lots provide?

The owner for budgetary reasons may decide that that the aesthetic qualities of the parking lot represent a necessary cost for competitive reasons.

Value engineering prior to issuance of bid documents, may inform the owner on options for construction types that produce the quality desired within projected maintenance constraints at a lower cost.

Value engineering by the owners team may be performed by the design team, owners own staff or an independent value engineering consultant. The produce of the value engineering activity may be incorporated into the final bid documents, or may be provided as alternates for bid;
-the owner decides asphalt paving is a necessary expense for quality, liability and maintenance of the parking surface, but changes from metal light poles with concrete base and conduit, to wood poles with compacted auger hole and overhead wires producing same surface illumination at lower cost.

The owner may have light pole change as part of the bid document or keep the metal poles and have the wood poles as as alternate.

Value engineering during contract negotiations, may be driven by bid costs higher than anticipated or economic forces reducing project funding or projected revenue;

The owners team with the GC's team review the construction documents and specifications for potential cost saving items.

The procedure for value engineering before a contract is awarded should be provided in the information to bidders, and may include value engineering discussion with a number of the bidders.

The product of value engineering will be part of the revised schedule of values and contract drawing revisions.

Value engineering after construction contract signing, may be driven by the same pressures as during negotiations; economic conditions, changes in owner borrowing, changes in projected revenue.

Changes may be proposed by the owners team, or the owner may request the GC to investigate potential cost reductions.

Changes after the contract is signed will change the contract value by "Change Order".

Assignment for Wednesday;

Add three columns to your excel version of G703; overhead 12%, profit 12% and scheduled value sum of estimated cost + overhead + profit.

MS Project Gantt schedule for schedule of value items using duration from NCCE or guesstimate, with preceedors (some of you already have this)

Produce a G703 with work completed the first payment period, 1 month. Items in progress can be claimed as a % complete of scheduled value.

Coming next;

#10 Payment voucher/cash flow
Chapter 11 Controlling Project Cost, Time and Quality; Construction Project Management by Gould and Joyce
#11 Return to GC's Project Schedule - Lead Time - Submitals - Delivery
#12 Project Schedule Cash flow predictions