Value Assured Engineering

A huge and perpetual challenge facing the owners (or erstwhile victims) of large-scale rail infrastructure projects is how to avoid seemingly inevitable budget overruns while guaranteeing the quality of on-time delivery.

This is a problem almost as old as time itself and appears to have become an expectation of both end-user clients and project contractors. This often creates a vicious circle where contractors appear to hold clients to ransom to pay more to get what they thought they had already paid for or, end up settling for an inferior result while the ubiquitous and debilitating ‘snagging’ process gets under weigh. In turn clients feel duty bound to threaten or action litigation against the errant or greedy contractor until eventually some form of settlement is reached and both parties ironically set off optimistically to start the next big project.

To break this cycle some innovation in thinking is needed and that essentially results from both the client and the project contractor actually agreeing that they are working to the same agenda to achieve the mutually desired result.

An example of just such innovation has recently been achieved through the application of ‘Value Assured Engineering’ (VAE) by Firstco, technical consultancy, project management and systems integration specialists, the Heathrow Express station at Heathrow’s new Terminal 5 has seen an initial target cost forecast of £21.25m, based on ‘business as usual’ solution, reduced to an anticipated final account of £17.05m – thus realising a 20 percent saving on the overall capital cost of the ‘Systems sub-project’.

According to Firstco’s managing director, Bill Martin: “This application of VAE, combined with Firstco’s use of superior products and the latest technology, has ensured the success of the project at every level.”

Martin added that VAE offers clients an alternative method of systems procurement and delivery. By separating the three primary elements of a typical large systems project and applying individual expertise to each of them, a more commercially focused solution can be obtained.

Mark Calnan, Firstco’s chairman, explained: “Traditionally, because of their perceived difficulty, systems projects are often awarded to a single major manufacturer. This appears to give the client a ‘one stop shop’ solution, with the selected manufacturer offering all the required elements ‘in house’ and so ensuring continuity of design throughout the various sub-systems.

“However, history shows this is not always the case.

“When large companies are given complete control of systems projects, they tend to use their own products and solutions. These may not be the most suitable solutions for the individual project and can lack innovation,” Calnan added.

“There is little or no incentive to drive down costs and members of the design team feel less responsibility for the project. All these factors can mean that the client does not get the best available technical solution at the most economic price.

“On the other hand, we believe that the VAE approach gives the optimum structure for managing the overall supply of a successful systems project,” he said. “And this has been justified in the case of the Heathrow Express station at Heathrow’s new Terminal 5.”

“VAE has a number of advantages – including tangible cost savings and a fully assured design,” said Martin.

“The equipment selected is the best available and not limited to one manufacturer or one technology. A concerted effort to achieve and exceed the project’s requirements is guaranteed and the project will be delivered on time and within budget.

“VAE means ‘best in class’ systems engineered at the lowest cost by specialist multidisciplinary teams,” he continued. “It ensures the optimal mix of technologies instead of slavish adherence to boilerplate products from one manufacturer.

“As our experience has shown, there is unconstrained innovation and a real commitment to achieving and exceeding the client’s requirements.”

How Value Assured Engineering (VAE) works

The three primary elements of VAE are:

• Engineering Design,
• Assurance / Compliance, and
• Cost Management.

By forming a team, drawing expertise from each of these disciplines, the client is able to realise huge potential savings in overall delivery costs. The team is headed by a Project Manager - who could be a member of the client team, thus aiding closer cooperation - assisted by planners and other support staff depending on the project’s size.

All three teams are specialists in their respective disciplines, have a definite structure and lines of communication – and are responsible for value, assurance and engineering. The teams have the ability to be expanded to suit the size of the project.

The Cost Management team has expertise with specific systems knowledge. It provides detailed equipment and labour budgets, cost control and earned value reporting throughout the project life cycle, together with the procurement of specialist packages.

The Assurance team deals with the capture of design, standards, safety, CDM, EMC, RAMs and human factors – along with traceability, change control and document control.

Firstco provides the Engineering team, with responsibility for conceptual and detailed design, asset management, procurement specifications, sub-contract management, commissioning, operator and maintenance manuals, operator and maintainer training and optional maintenance.