International comparison of value management practice

Value management is defined by the Society of American Value Engineers (SAVE) as the systematic application of recognised techniques which identifY the function of a product or service, establish a monetary value for that function, and provide the necessary function reliability at the lowest overall cost. The philosophy of value management is based on the premise that a certain amount of unnecessary cost is inevitable in building design due to the inherent complexity of the process and that significant cost savings can therefore be achieved by the identification and subsequent elimination of this unnecessary cost. Value management has worked successfully in the US under the name of value engineering or value analysis. However it is still a relatively new cost engineering concept in Australia. The main theme of this paper is to examine the application of value management in the Australian construction industry. The Australian practice was then compared critically with the established practice in the US. Two cases of value management application on Australian construction projects were studied. The information was collected from the questionnaire surveys on the participants and structured interview with the pertinent project managers. The results of the case studies showed that the Australian practice deviated markedly from the US practice. Very limited application of the techniques advocated in the US were practised in Australia.