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Index

19

22

Industry

All Roads Lead to Rome


EDITORIAL
Jack V. Michaels,

he Romans were the greatest road


builders o f the ancient world. Given
the tools and materials they had at their
disposal, they were probably the greatest
road builders o f all time. I t is instructive
to compare some aspects o f the U.S.
Interstate Highway System w i t h those o f
the Roman road system.
The Roman road system provided a l l weather access to the most distant
provinces. The most well-known, the Via A p p i a (or Appian Way),
joined Rome w i t h the city o f Capua and extended to the heel o f
Italy. The V i a Flaminia connected Rome w i t h the Roman colony
in former Celtic territory. I n Britain and North A f r i c a , as w e l l as i n
Italy, we can trace the path o f Roman conquest by the growth o f
the Roman road system.
A l l told, the Romans built 50,000 miles o f roadways through
territory that today covers more than 30 countries. I n truth, one
could say that " A l l roads lead to Rome." I n fact, the access that this
network o f roads provided facilitated the spread o f Christianity.
The roads were remarkably durable and remained in use during
the Middle Ages. Parts o f the roads are still in use today.
The U.S. Interstate Highway System has yet to match the
number o f miles o f the Roman road system. The system was
instituted by the Federal A i d Highway Act o f 1944 as the National
System o f Interstate and Defense Highways. The act authorized a
system o f limited-access highways not to exceed 40,(XH) miles.
Subsequent legislation increased the limit lo 42,795 miles.
The U.S. Interstate Highway System is essentially completed.
The implementation has almost met the design criteria o f carrying
20% o f the nation's motor traffic, connecting all o f ihe contincnial
United States, and reaching 90% o f all Ihe U.S. cities w i l h
populations o f 50,000 or more.
As i n the United States, road building was an important
function o f Roman rulers, whose functionaries awarded contracts
and supervised construction. A s the roads were extended into the
provinces, responsibility f o r funding and work was assigned to the
provincial governors. These governors received subsidies f r o m
Rome and frequently imposed toll collection.
I n the case o f the U.S. Interstate Highway System, the federal
government paid 90% o f the cost and the states paid 10%. Several
states have converted portions o f the interstate highways within
their boundaries into toll roads.

Ph.D., P.E., CVS

advertising his benevolence. Here is a small sample o f what I


found while probing the U.S. Department o f Transportation's
Public A f f a i r s O f f i c e on the Internet.

Secretary Pena Announces Grant o f $79 M i l l i o n f o r Secaucus


Commuter

Secretary Pena's Remarks at New York Waterway Loan


Guarantee Announcement

D O T Announces $12.4 M i l l i o n Grant to New Jersey Transit


Corporation

Transportation Secretary Pena Signs Agreement f o r L i g h t


Rail Funding i n Northeast N e w Jersey

Secretary Pena Announces A i r p o r t Improvement Grants f o r


New M e x i c o

D O T Gives $125 M i l l i o n i n Federal Transit Funds to N e w


York's Queens Connector Project
The more things change, the more they remain the same. B y
the way, only about half o f the roads i n the United States are
paved. A l l roads still lead to Rome.
We are devoting an entire issue o f Value World to transportation
because o f the problems we face in the third millennium. I thank
SAVE International f o r inviting me to participate in this issue and
for the chance to talk again to the readers.
Goodnight and 30.

Jack V. Michaels, Ph.D., P.H., CVS, is editor emeritus of Value


World and contributed
"Critical Technology
in
Transportation
Stuff Report," which appears on page 2 of this issue.

The reigning Roman emperor used inscriptions on milestones


along the provincial roads as a means o f asserting his authority and

I H S Q W

O R L D

Volume 20, Number 1, March 1997

Critical Technology in Transportation Staff Report


Jack V. Michaels, Ph.D., P.E., CVS

INTRODUCTION

dvanced technology remains a d r i v i n g force i n U.S.


economic prosperity and national security. Maintaining the
strength and competitiveness o f U.S. technological enterprises is
vital to the nation's interest. I n the current climate o f intensifying
global competition, rapid technological change, geopolitical
uncertainties and limited resources, the need f o r identifying
critical technologies f o r concentration o f effort has intensified.
Value World's staff adapted this article f r o m the "Report on the
T h i r d Biennial National Technologies Review," w h i c h was
obtained v i a the Internet f r o m the U.S. Department o f
Transportation's Bureau o f Transportation Statistics. The report
covers the state o f the art f r o m 1990 through 1994, and designates
the technology areas and specific technologies that constitute
priorities f o r federal and industry-cooperative R & D efforts. For
transportation, the areas that need attention are aerodynamics,
avionics and controls, propulsion and power, systems integration,
and human interface.

AERODYNAMICS
Aircraft Aerodynamics
Aerodynamic efficiency is one o f the key parameters that
determines the weight and cost o f an aircraft. Roughly speaking,
an aircraft's range is directly proportional to its aerodynamic
efficiency without any increase i n f u e l usage. Such fairly recent
aerodynamic technologies as supercritical airfoils and winglets
have already provided substantial increases i n aerodynamic
efficiency over first-generation jet transports, and there are many
emerging aerodynamics technologies worthy o f development and
implementation. One o f the most promising, especially f o r
improving efficiency i n j e t transports, is laminar f l o w control.
For commercial aircraft, improved aerodynamics reduces
operating costs, thereby making the aircraft more competitive on
international markets. I t also significantly contributes to the
national security by improving efficiency and performance o f
military aircraft.

Surface Vehicle Aerodynamics


Surface vehicle aerodynamics provide the scientific foundations f o r
developing lower drag shapes for automobiles, buses, trucks, and
trains. As vehicle speed increases, aerodynamic drag becomes a
major contributor to vehicle inefficiency and increased f u e l
consumption, higher levels o f noise, and control problems.
Aerodynamically designed vehicles can be both quiet and

Volume 20, Number 1, March 1997

more efficient than existing vehicles, although current vehicles


already incorporate efficient aerodynamic shapes. Drag reduction
translates into reduced energy consumption and more efficient
vehicles, and ultimately lowers demand f o r foreign o i l .

AVIONICS AND CONTROLS


The United States leads i n most avionics and controls technology,
and is likely to maintain but not increase its edge over the
next several years. T w o European f i r m s , France's Sextant
Avionique and the United Kingdom's General Electric Company,
are challenging the leadership across a wide range o f avionics
products; but, w i t h the current downturn i n military budgets and
commercial developments, f e w companies w i l l be w i l l i n g to risk
large investments solely f o r the commercial market.

Aircraft and Spacecraft Avionics


Several goals drive development o f f l y - b y - l i g h t control systems:
increased resistance to electromagnetic interference and increased
bandwidth f o r data and weight reduction. Fly-by-light systems also
provide better protection against lightning strikes. Moreover, fiberoptic cables can carry vast amounts o f data and offer potential
weight advantages. The technology w i l l probably not be used i n
commercial transports until the 21st century.
U.S. firms, led by M c D o n n e l l Douglas, appear to have the lead
in f l y - b y - l i g h t development. M u c h o f the impetus f o r the U.S.
developments comes f r o m the Advance Research Projects
Agency's technology reinvestment program. The United States
also is the leader i n ring laser gyro technology and has a slight lead
in fiber-optic gyroscopes, an alternative technology f o r aircraft
inertial-grade accuracy. U.S. manufacturers retain a lead i n global
positioning systems receivers and processing equipment, largely
because o f experience developing the satellite system.
Spacecraft avionics currently involves issues o f reliability,
space certification, miniaturization, reduced power consumption,
and "black b o x " modularity. Spacecraft control systems, on-board
navigation systems, and precise engine throttling would all benefit
f r o m further improvements i n this area. There is a growing trend
toward the standardization and assembly o f building block
components to achieve a number o f different functions and, in this
way, avoid a requirement to develop a large quantity o f special
purpose systems.

Surface Transportation Controls


Surface transportation controls span applications, f r o m
microprocessor-based emissions-control systems for monitoring

PHIIH W O RL D

and controlling engine performance to reduce emissions and


optimize engine performance, to the myriad components that
w o u l d be essential to attain an intelligent vehicle highway system.
A critical examination o f the emissions control application
suggests that these systems may operate effectively f o r much o f a
vehicle's useful l i f e ; but, ultimately, many o f these systems may
degrade and exhibit highly variable behavior that is accompanied
by gross emissions o f hydrocarbons.
Thus, the issue is not to develop systems whose performance
when new is exemplary. Rather, i t is to develop reliable
maintenance-free emission control systems that w i l l operate at
close to new-car levels when a vehicle is w e l l past 100,000 miles
and into its third, fourth, or f i f t h level o f ownership. This remains
a major challenge, particularly i f years o f neglect and poof ,
maintenance are considered. I n general, i t seems plausible to think
that reliable emission control systems f o r exhaust and evaporative
emissions hold the key to reducing urban emissions and ozone
formation i n many areas, particularly i n California, where 40% o f
vehicles have more than 100,000 miles on their odometers. The
United States is preeminent i n this technology area, driven by our
commitment to clean air.

PROPULSION AND POWER


Propulsion technologies are important to both national security
and economic prosperity because better engines improve f u e l
economy, reduce maintenance costs, and allow designing a
smaller, cheaper aircraft to perform some required mission. The
interaction o f propulsion and aerodynamics is essential f o r
developing powered l i f t vehicles.

second-tier manufacturers are increasing their roles i n the


development o f smaller engines.

Spacecraft Power Systems


Spacecraft power systems provide power f o r spacecraft missions,
communications, and housekeeping functions. I n the case o f lunar
or planetary missions that involve instrumented or human
landings, surface power systems also must be p r o v i d e d .
Efficiency, power density, reliability, environmental risk, safety,
and shielding must all be considered i n any power system.
Space power systems are relevant to both economic progress
and national security. They contribute to sustainable economic
g r o w t h through promoting efficient energy production and
utilization technology, and help the environmental monitoring and
assessment function through their ability to provide long-term
power f o r environmental monitoring satellites. They contribute to
national security through their ability to provide energy sources
for military surveillance systems.
The United States is preeminent i n spacecraft power systems,
based largely on the relative scale and sophistication o f its space
effort. Only the United States and Russia are manufacturing
radioisotope thermal generators essential f o r the space mission to
the planets, but there is a possibility that the United States w i l l
abandon research i n this technology.

SYSTEMS INTEGRATION
Systems integration refers to the ability to design, produce, test,
and implement large-scale complex systems that have individual
elements that often use advanced technology components. The
most widely cited example is manned space flight.

Aircraft Turbines
I n the turbojet engine, a key objective o f the last 40 years has been to
increase combustion temperatures f o r better efficiency and reduce
fuel consumption without burning up the turbine blades. This is done
by using better materials such as the ceramics mentioned elsewhere,
better cooling approaches, and better computational analysis
methods. Reduced emissions and noise are also becoming extremely
important f o r the civil sector. Performance improvements i n engine
technology historically have been driven by military programs, and
commercial engine development w i l l continue to benefit f r o m
mUitary research efforts. The United States leads i n aircraft turbine
engine technology, based on its superior military technology, but
shares the lead i n commercial propulsion systems technology with
the United Kingdom's Rolls Royce.
Because o f the trend toward higher-thrust'engines, i n concert
w i t h the trend toward larger aircraft, by the year 2000 deliveries o f
engines w i t h greater than 45,000 lb. thrust are forecasted to
become more than 50% o f the market by value. The trend toward
higher-thrust engines has two general consequences f o r the
competitiveness o f engine manufacturers. First, the higher costs
associated w i t h development o f these large engines have led to
more j o i n t international programs and the transfer o f technology
to second-tier manufacturers. Secondly, w i t h the attention o f
technology leaders focused on the high-thrust end o f the market,

MlsMIIJ W O R L D

Intelligent Transportation Systems


Intelligent transportation systems use advanced computers,
sensors, electronics, communications, and other technologies to
improve the safety and efficiency o f all modes o f surface
transportation f o r people and goods, i n c l u d i n g intermodal
transfers. Areas currently being emphasized are: travel and
transportation management, travel demand management, public
transportation operations, commercial vehicle operations,
emergency management, and vehicle control and safety systems.
The latter technology w o u l d culminate i n an automated
highway system and include different types o f collision avoidance
systems, vision enhancement, improved safety readiness, and precrash restraint deployment. O n some stretches o f highway,
automatic platooning o f vehicles that are electronically controlled
could increase lane capacity by three or f o u r factors. I n addition to
the above major areas, electronic payment services w o u l d improve
convenience and efficiency f o r toll collection, personal vehicle
use, interstate tracking, and public-transit users.
There seems to be no clear leader i n intelligent transportation
systems technologies. The United States, western Europe, and
Japan are pursuing active programs involving both private and
public resources.

Volume 20, Number 1, March 1997

H|NMH'rtin und Aircruft Integration

Human Factors Engineering

t o i u p l r i r integration ol' an aircraft or spacecraft, as opposed to

The

HM'M' oni|H)iu'ul design, requires broad experience, a complete

countermeasures i n high performance aircraft, and even cockpit

unilci standing of all component technologies, and a design

display and instrumentation. A s the pressure suits universally

iiifiiisiiiK'lurc including methods, tools, and people. The added

w o r n by fighter pilots are capable o f being pressurized, i t is more

United

States

has

clear-cut

lead

in

antigravity

m m p l c M l y of making many subsystems operate simultaneously,

of

w HIHMII mlerference with each other, requires a special set o f skills

technology. The ultrasonic Doppler f l o w techniques f o r assessing

ihiil aic different from skills required to design and b u i l d an

individual pilot status during h i g h " g " have been more f u l l y

individual component.

evaluated, and control algorithms have been refined and reduced

Multidisciplinary optimization hopes to allow complex system

a deployment decision rather

than one

o f underlying

to practice i n the United States.

optimization of hundreds or thousands o f variables resulting i n

The l i m i t o f human capability, however, is becoming an

lower aircraft weight and cost Lower weight and cost w i l l , i n turn,

important factor i n safe and effective operation o f transportation

improve the competitiveness o f U.S. aircraft on w o r l d markets and

systems. H i g h gravity loads experienced by military pilots reduce

will result in aircraft that are more friendly to the environment

the availability o f well-oxygenated blood to the retina, which

Ivcnuse they w i l l use less f u e l and produce fewer emissions. I n

causes "gray out," a tunneling o f vision, and eventually a loss of

addition, multidisciplinary aircraft design w i l l allow designers to

blood f l o w to the brain that results i n loss o f consciousness.

pinducc better military aircraft, contributing to national security.

Countermeasures using small ultrasonic transducers are able to

litiropc is slightly behind the United States i n overall systems

sense the reversal o f blood f l o w at h i g h " g " and are used to control

integration capability f o r c i v i l and military aerospace systems.

the pressure i n a lower body garment intended to restrict the

Willi the development o f the Boeing 777, the United States took

pooling o f blood i n the lower abdomen and legs. Lessons learned

ihe lend in Ihe design and manufacture o f commercial aircraft.

f r o m the deterioration o f the visual f i e l d under high " g " loads have

Hoeing used an integrated approach through f u l l y digital product

also been applied to instrument design, head-up displays, and

ilclimtion. with all parts created by computer systems. Airbus has

alarm systems intended to catch a pilot's attention even i n a high-

not yet used this approach and may not f o r the next several years.

noise, high-stimulus environment.

I lowrvcr. liurope does have the capability to integrate increasingly


complex aircraft systems, as demonstrated i n a host o f commercial

Spacecraft Life Support

.md military aircraft. Japan, on the other hand, has not yet led a

Spacecraft l i f e support involves issues o f reliable, closed,

major commercial development and has had d i f f i c u l t y w i t h

physical-chemical, or bioregenerative systems. The goal is an

kYHlrms integration o f its military programs.

integrated, stable ecosystem w i t h greater simplification, minimal


resupply, and greater degrees o f closure. Current baseline designs

HUMAN INTERFACE

f o r the space station depend entirely on reliable resupply o f air and


water consumables f r o m the ground. The Russian " M i r , " the only

A human interface is an essential element i n the successful design

permanently manned platform currently i n space, provides an

.ind Mile, reliable operation o f any transportation system. The f i e l d

example o f the capabilities o f water recycling and CO2 removal

nl iitidy thai leads to proper design focuses on human capabilities,

w i t h total dependency on ground-based resupply o f oxygen.

limitations, behavior, and performance while interacting w i t h

The mass costs are unacceptable f o r any extended-duration

tuitiplcx engineered systems and environments. The role o f the

manned missions, either on the lunar surface or f o r Mars transit

human <>|H'rntor in the control loop has changed greatly f r o m

and exploration. W h i l e the Russians believe they can simply stock

( l i n i n g , navigation, and piloting as traditionally conceived to the

supplies f o r a two-year mission, serious long-term exploration

t t H i i m l ol complex systems i n relatively infrequent off-nominal,

requires a commitment to bioregenerative, closed, ecological life-

|n4t-uliiilly high-risk situations.

support systems. These systems must be capable o f recycling and

I ho w illingness to use and perhaps depend on technology, as

providing air, water, and f o o d , w h i l e controlling toxics and

.^<fM>M (l lo human operators, is a cultural phenomenon not simply

bacterial or v i r a l contamination. Stable, robust life-support

Iwmmlcd by the basic technology. A primary case i n point is the

systems are essential to reducing remote outpost dependencies on

tVuii"* ol automation entailed in the Airbus f l i g h t control systems.

resupply missions. I n order o f complexity, partially closed

At .(iiioiimiidii becomes more capable, the degree o f keeping

physical-chemical "systems w o u l d be first, f o l l o w e d by closed

innti.ui> MI Ihe control loop and the ability to override the control

physical-chemical systems.

Mt* n will become more of an issue. I n the case o f highly


<MMI*I<I4

midline,ii control regimens where computer control is

tl <il> n>*iiii, iipeinior training and operator acceptance pose

Jack V. Michaels,

. M l * nit |*IIIII<-MIV in pmiiculai the judgment of when and how to


|IM< .llllUlllilllllll

director

organization
training

H<m*t* su N - . J * . 1 \ l , 1. IM*

Ph.D.,

for Management
specializing

P.E., CVS, is the publisher


Science,

and

an Orlando,

in technical

and business

executive

Florida-based
texts

and

materials.

M s l M I U w

R L D

TRANSPORTATION FOR A GROWING REGION


Patrick O'Neill, P.E., and Eric Meng, CVS, AIA

VM I I H

iw

portion o f the U n t i e d States is

projects. The legislature also required the T I B to consider project

< l * m m in>; unparalleled growth, w i t h predictions f o r 20%

Northwest

cost, length, and complexity i n determining the need f o r V E

l*^anUinMi im leases within the next five years. Transportation has

studies.

lw *! i l * ' pi unary issue affecting both budgets and quality o f l i f e ,


*t<*iigl*mi tin- ivgion. Yet even with transportation budgets at their
feifteti
i-m

ibt- iiiins|>oilation systems are able to grow at only a 5%

m*A idi|>a>ers are resisting even higher taxes.


\ fiinl

The T I B initially required all funded projects exceeding $1


m i l l i o n i n total costs or $3.5 m i l l i o n per mile to undergo V E
studies. Staff members also had authority to require studies f o r
projects that were considered to be complex, i f i t involved major

pail of tilts disparity must be overcome by increasing

structures, extensive right o f way, complicated traffic control or

4m #Hfe KMH s ol all funded transportation projects. Fortunately, i n

detours, or expensive construction methods. The agency director

1A*tfiingit><i uiate, those responsible f o r transportation planning

had authority to waive these requirements i f i t was determined that

l fiMMliiiir have recognized the important role value engineering

significant savings could not be gained f r o m a study. The threshold

<

was recently raised to $2 m i l l i o n i n total project costs.

in . k ' l i n i n g creative, efficient systems.

I IIMHV ih,HI a decade, the Washington State Department o f


lnmt|i<iiniii. ihe Port o f Seattle (Seattle/Tacoma), and the
,

Vtil4 /I'ii|tri

Sound

metropolitan agencies

(Metro)

have

Initially,

facilitators were used

f r o m the ranks

o f the

Washington State Department o f Transportation ( W S D O T ) . W h i l e


that worked f o r a while, the board f o u n d i t took too many W S D O T

*ftMMMM*<l a* live, maiulatory value engineering programs. The

staff members f r o m their duties and tied up T I B staff i n trying to

toAMMNII

fill

piograin. using in-house trained staff w i t h both i n -

teams w i t h volunteers. I n late 1991, the T I B advertised f o r

tmmtm <MMI MnlV|>ciKlcnt facilitators, has applied V E to all major

certified value engineers (CVSs) to facilitate V E studies on a

*mtl, ii|>l \ pto'eets, and has diligently tracked the results.

consulting basis. Six consultants were chosen i n the initial round

\ >f. nil* passed initiative is now i n design f o r a m u l t i b i l l i o n *MW KgKHiiil commuter transit system that encompasses light

and a seventh was added a year later. Consultants are assigned


projects by the T I B staff on a rotating basis.

muni tn-mmulei tail and regional bus. This voter initiative failed

The average length o f a noncertified, facilitator-led V E study

M. l i i k i allempt, but, with the assistance o f f o r m a l value

was three days, and the average certified facilitator-led V E study

*Mf* m

was leconliguicd and succeeded at the polls a year later.

was f o u r days. Costs o f the studies have not been tracked on a

In* o l IIH- more effective V E programs is managed by the

regular basis, but a 1993 survey o f 26 studies done by CVSs

l***t|>M4iiM>M Improvement Board ( T I B ) , which

administers

showed total V E costs ranged f r o m $6,100 to $24,900 per study.

tMMlif lot local transportation improvement projects. A l t h o u g h

These costs included the facilitator, team members,

M .**> o l M'wral transportation V E programs, i t is coordinated

support costs, and additional consultants, when required.

M b Or* i<*lwi piogiams to increase the availability o f experienced

The T I B funds projects but does not have responsibility for

lacilitalors and team members. Patrick O ' N e i l l

design or construction o f those projects. The local agencies are

.Htlmiri ilk* I I H program, selecting appropriate projects, team

responsible f o r design and construction, and have been given

*m**4wi*

responsibility f o r f o r m i n g a V E team and contracting directly with

W*NI

HMnd

agency

ami lacihtators.

an assigned V E consultant.
The facilitator is involved in determining the ex|H"itise needed
V A l U f

INCINEERING A N D THE TIB

f o r the team and can be enlisted to f o r m the team. The T I B has no

Ik* m i ,i NVashingion state agency directed by a 21-member

rigid

(**m*l

lln- |Mim,iiv ptiriMisc o f the T I B is to administer state

implementation is critical. To that end, the local agency decision

(iMtmlwitf l< Im al government transportation projects through

makers are encouraged lo be in attendance at Ihe end of the study

m**-*i *<<o<i-iii> Revenues for these projects come f r o m the state

f o r a V E team presentation of findings. I he T I B also requires the

process

for

the

studies

themselves

but

believes

**t*t * MKI il> moioi vehicle excise tax. Projects are funded by

local agency to address all V l i recommendations IK*fore funding

I III %imc in i n i i i h i i i a i i o n with local matching funds and


fQUt qfr mul.M , .HlllllltllmllS

the construction phase o f a project. Recommendations do not have

I ^ H * ~ ^ I | m M ' d ly the Washington Legislature in

to be accepted by the agency, but rejections must lx" explained.

1988

The T I B has been involved m doing V I - studies since 1985 and

I I I ! io tti'scliip niles and procedures requiring V E

has overseen Ihe completion ol almost I(X) V l i studies to date (see

m*w ** *> |wihtiiM'd l> an iiiieragency team for certain

Figure I). Until I9'>2, studies were conducted by the agencies

-t^Ht***!!

*fa

ft

Volume 2 0 , NIIIIIIK-I I, March I W 7

Value Engineering Studies


Certified Facilitators vs. Non-certified Facilitators

1985

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

Completion Year

Figure 1

Value Engineering Studies


Recommended Savings vs. Accepted Savings

1985

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

Completion Year

Figure 2

Volume 20, Number 1, March 1997

K B E D w

R L D

receiving volunteer help f r o m other organizations. Since then, the


T I B requires certified value specialists be assigned as facilitators.
O f the 22 studies done prior to using certified facilitators, $9.7
m i l l i o n i n savings were recommended f o r an average o f $440,000
per study, and $1.6 m i l l i o n i n savings were accepted by the
agencies. Since then, 70 studies have been led by certified
facilitators recommending a total of $105.7 m i l l i o n i n savings f o r
an average of $1.51 m i l l i o n i n savings per study, while $35.5
m i l l i o n i n recommendations were accepted by the agencies (see
Figure 2).
One goal o f the T I B as a state agency is the completion of
quality projects that meet the needs of the local agency. The T I B
is not after cheap projects. V E studies are one means being used to
accomplish that goal. A major and welcome byproduct o f V E ha's
been the dollar savings as noted above. The $37 m i l l i o n savings'
have been made available to be used by the local agencies f o r more
projects. The return has been w e l l worth the investment o f $6,000
to $24,000 per study. 1996 numbers are incomplete as o f this
writing.
M u c h of the credit should be given to the local agencies for
their cooperation and acceptance o f the value engineering process.

Eric Meng, CVS, AIA, leads the architecture,


engineering,
and
research firm MENG.
The firm specializes
in the design
of
complex public facilities including education, transportation,
and
technology. Meng has led more than 350 value analysis studies for
buildings,
transportation,
utilities, ports, construction
products,
management
systems, and environmental
remediation. He teaches
and facilitates
creative value-engineering
techniques
nationally
and internationally.
He is particularly
interested in the
application
ofVA as a design tool. Eric is active as past president of the Seattle
Chapter of SAVE and serves on the board of SAVE
International
as Vice
President-Marketing.
Patrick O'Neill, P.E., has 25 years of engineering
experience
in
the public-works
field,
the last five with the Washington
State
Department
of
Transportation.
O'Neill
holds
primary
responsibility
for the Urban Arterial
Trust Account
(UATA)
program.
He earned his bachelor
of science degree in civil
engineering
at St. Martin's College in Lacy, Washington, and has
been a registered professional
engineer since 1976. O'Neill
first
trained in value engineering
in a management
training course at
Clark County in 1977.

Value Engineering and Partnering in Highway


Construction
Kirk Juranas, P.E.

he M i s s o u r i Department o f Transportation ( M o D O T )
introduced partnering into the state's highway construction
program i n 1991. Since that time, value engineering has been a
major area of emphasis that adds value and extends limited
resources to accomplish the same function.
The partnering process uses many V E principles. The project
teams are brought together representing designers, construction
managers, and f i e l d personnel f r o m contractors, subcontractors,
utilities, local municipalities, and the state. The key concept is
working together toward a common goal that is established by the
partners. This requires communication o f each member's priorities
and the priorities o f the public to draw up a partnering agreement
that all members support. The use o f V E is a key tool f o r making
improvements to the project and is included i n the partnering
agreement.
V E provides opportunities f o r the state to control costs and
allows the contractor to increase profit. Since the savings benefit
all parties, the partnering team can work together to generate and
refine cost-saving methods. The diversity o f the group provides

EBEQw o RL D

much o f the expertise needed to develop proposals into working


alternatives for proposed construction.
This year, the 1996 M a r v i n M . Black Excellence i n Partnering
Award f r o m the Association o f General Contractors was presented
to M o D O T and Fred Weber Inc. for j o i n t achievements on the
construction o f a new single-point urban interchange at Route 67
and 1-55 i n Saint Louis County. The project was completed six
weeks ahead o f schedule, w i t h no fatalities and no unresolved
disputes. As a result, M o D O T and the contractor were able to split
$600,000 i n V E savings. The V E proposals involved changes i n the
construction staging and traffic control, changes i n temporary
pavements, and r o c k - f d l base i n lieu o f stabilizing permeable base.

Kirk Juranas, P.E., is value engineering


administrator
Missouri Department
of Transportation,
P.O. Box 270,
City, MO 65102,
U.S.A.

Volume 20, Number 1, March 1997

for the
Jefferson

Value Engineering in the Transportation Sector


Harlen E. Smith, RE., CVS

INTRODUCTION

his article w i l l examine the transportation sector w i t h respect


to value engineering during 1997 to determine the prospects
for V E i n this sector.
I w i l l first look at the volume o f w o r k expected i n the
transportation sector by looking at federal appropriations, which
give us a yardstick to measure the w o r k expected i n this sector i n
1997. I also w i l l take a cursory look at the legislation that is
intended to advance the requirements f o r value engineering. I n
both areas, I w i l l show examples o f what we are seeing i n our
efforts to provide value engineering services concentrated i n the
transportation sector.

BUDGETS
One encouraging yardstick f o r measuring the potential f o r value
engineering i n the transportation sector i n fiscal-year 1997 ( F Y
'97) is the federal budget. I n an effort to avoid a government
shutdown and demonstrate legislative accomplishments to voters,
both Democrats and Republicans put aside their differences and
agreed to f u n d i n g increases f o r many federal programs,
particularly i n the area o f infrastructure. Congress completed
seven o f the 13 federal agency f u n d i n g bills as stand-alone bills,
and the remaining bills were rolled into a large omnibus
continuing resolution (CR), w h i c h Congress approved just hours
before the October 1, 1996, deadline.
A summary o f F Y '97 federal agency appropriations is shown
i n Table 1.
Transportation appropriations on the federal level include:

FY '97 Department
of Transportation
(DOT)
Appropriations.
Overall, f u n d i n g f o r infrastructure programs is more than
1996. I n addition to transportation programs, programs that
saw increases include the Veterans Administration, the U.S.
Army
Corps o f Engineers,
the General
Services
Administration's construction budgets, the Environmental
Protection Agency's water infrastructure state revolving loan
funds, the National Aeronautics and Space Administration
( N A S A ) , and the Federal Emergency Management Agency
(FEMA).
D O T programs did very well, receiving $1 b i l l i o n more
than F Y '96 in total funding ($37.9 billion vs. $36.67 billion).
Most major programs did better than last year, and highway
and transit programs actually ended up with more money i n
the f i n a l b i l l than they had in either o f the individual House or
Senate bills.

Volume 20, Number 1, March 1997

Federal
Highway
Administration
(FHWA).
The f i n a l
obligation ceiling is $18 billion, w h i c h is higher than either
the House or Senate numbers and $450 m i l l i o n more than the
F Y '96 level. The total available f u n d i n g f o r the highway
program is approximately $20 billion, which is also higher
than F Y '96 figures by $86 m i l l i o n .
The f i n a l b i l l also included $150 m i l l i o n i n federal funds
f o r the 10 states selected to participate i n the State
Infrastructure Bank program. Additional states have six
months to apply to participate i n this demonstration program.
Federal Transit Administration
(FTA). Total F T A f u n d i n g o f
$4,382 b i l l i o n is also higher than that i n the House or Senate
bills and $331 m i l l i o n higher than F Y '96 funding.
Federal Railway Administration
(FRA). The original House
b i l l made severe cuts i n funding for A m t r a k and the Northeast
Corridor Improvement Program (NECIP). However, i n the
end, N E C I P is budgeted to receive $175 m i l l i o n , $60 m i l l i o n
more than F Y '96 and considerably better than the zero
funding i n the House. A m t r a k received a total o f $223 m i l l i o n
for its capital program.
Transportation appropriations on the local level include:
California. Santa Clara County passed a sales-tax measure to
f u n d a combined highway/transit program that w i l l include
funding f o r light-rail extensions. Measures A and B w i l l
impose a nine-year half-cent sales tax. Measure A lists 16
specific projects to be funded. Measure B mandates a halfcent hike i n sales tax, f r o m 7.75% to 8.25%. Projects
encompass highway improvements, traffic management, and
transit.
Georgia. Gwynett and DeKalb counties passed a sales tax f o r
infrastructure improvements.
Missouri. A Kansas City retail sales tax o f $0.00125 was
passed i n Kansas and Missouri counties to repair and restore
the Kansas City U n i o n Station, including parking facilities.
This tax w i l l raise approximately $18 m i l l i o n .
North
Carolina.
A $950 m i l l i o n bond referendum f o r
statewide highway improvements passed i n this state. I n this
package, $500 m i l l i o n w i l l be used to accelerate the
construction o f outer loops around seven o f North Carolina's
m a j o r metropolitan areas; $300 m i l l i o n w i l l f u n d
improvements to the primary highway system (increasing i t to
four lanes); and $150 m i l l i o n w i l l be used to pave rural roads.
Washington.
The Seattle Regional Transit Authority (RTA)
ballot approved a sales-tax measure to fund a redefined
regional transit plan.
Intermodal

Surface

Transportation

Efficiency

Act (ISTEA)

II

ISIOUGElw O R L D

Table 1 Federal agency appropriations (capital improvements and infrastructure)


FY'96

Agency Request

Department of Transportation/Federal Highway Administration


Total
$19.9 billion
$19.4 b i l l i o n
Obligation ceiling
$17.5 billion
$17.7 b i l l i o n
ITS
$218 m i l l i o n
$250 m i l l i o n
State Infrastructure Bank
0
$336 m i l l i o n
Federal Transit Administration
Total
Sec 9
Sec 3
New Starts
Plan & research
Federal Railway Administration
A m t r a k capital
High-speed rail
Northeast Corridor
Improvement Program
Federal Aviation Administration
AIP

House Bill

Senate Bill

Final F Y ' 9 7

$19.6 b i l l i o n
$17.5 b i l l i o n
$228 m i l l i o n
0

$20 b i l l i o n
$17.6 billion
$244 m i l l i o n
$250 m i l l i o n

$20
$18
$235
$150

billion
billion
million
million

$4.05 billion
$2.05 billion
$1.66 billion
$666 m i l l i o n
$85.5 m i l l i o n

$4.29 billion
$2.15 b i l l i o n
$1.79 b i l l i o n
$800 m i l l i o n
$85.5 m i l l i o n

$4.05 b i l l i o n
$2.05 b i l l i o n
$1.66 b i l l i o n
$666 m i l l i o n
$85.5 m i l l i o n

$4.38 billion
$2.14 billion
$1.9 billion
$800 m i l l i o n
$85.5 m i l l i o n

$4.38 billion
$2.14 billion
$1.9 billion
$760 m i l l i o n
$85.5 m i l l i o n

$230 m i l l i o n
$24 m i l l i o n

$296 m i l l i o n
$26 m i l l i o n

$120 m i l l i o n
$19.7 m i l l i o n

$250 m i l l i o n
$26.5 m i l l i o n

$223 m i l l i o n
$26.18 m i l l i o n

$115 m i l l i o n

$200 m i l l i o n

$1.45 billion

$1.35 b i l l i o n

$200 m i l l i o n

$1.3 b i l l i o n
$1.4 billion

$175 m i l l i o n

$1.46 b i l l i o n

Environmental Protection Agency


Water loan fund/grants

$2.81 billion

$2.85 b i l l i o n

$2.76 b i l l i o n

$2.81 billion

$2.87 b i l l i o n

Department of Veterans Affairs


Construction

$326 m i l l i o n

$439 m i l l i o n

$405 m i l l i o n

$368 m i l l i o n

$425 m i l l i o n

Administration Disaster Relief

$222 m i l l i o n

$320 m i l l i o n

$1.12 b i l l i o n

$1.32 billion

$1.32 b i l l i o n

General Services Administration


Federal Construction

$545 m i l l i o n

$715 m i l l i o n

$540 m i l l i o n

$657 m i l l i o n

$657 m i l l i o n

Corps Construction

$804 m i l l i o n

$914 m i l l i o n

$1.03 b i l l i o n

$1.04 b i l l i o n

$1.08 billion

Department of Energy
Environmental restoration

$5.55 b i l l i o n

$5.40 billion

$5.40 b i l l i o n

$5.60 b i l l i o n

$5.45 b i l l i o n

National P a r k Service
Construction

$192 m i l l i o n

$143 m i l l i o n

$119 m i l l i o n

$165 m i l l i o n

$163 m i l l i o n

Military Construction

$2.72 b i l l i o n

$2.76 b i l l i o n

$3.24 b i l l i o n

$3.27 billion

$3.35 billion

Trade & Development

$40 m i l l i o n

$40 m i l l i o n

$38 m i l l i o n

$40 m i l l i o n

$40 m i l l i o n

$1.43 billion

$1.75 billion

$936million

$1.25 billion

$1.15 billion

Federal Emergency Management

World B a n k
& various development banks

ISEUOW O RL D

Volume 20, Number 1, March 1997

Status and Update. The I S T E A o f 1991 expires on September


30, 1997. Congress must pass and the president must
sign reauthorization legislation by that date, or funding f o r
federally aided highway and transit programs w i l l end. The
discussion to date on I S T E A I I has been general i n nature,
focusing on broad program structure rather than on specific
items.

LEGISLATION
The O f f i c e o f Management and Budget's Circular A - 1 3 1 was
revised i n 1993. This circular requires federal departments and
agencies to use value engineering as a management tool to reduce
program and acquisition costs. I t also requires the inspector
general to p e r f o r m random audits o f federal agencies to determine
the level o f value-engineering activity. This circular is scheduled
for another sunset review i n 1998.
The f o l l o w i n g value engineering bills have been introduced,
but not passed:

H.R. 133, introduced by Representatives Cardiss Collins o f


Illinois and John Conyers o f Michigan

H.R. 2014, introduced by Representative Leslie Byrne o f


Virginia

H.R. 719, introduced by Representative Cardiss Collins o f


Illinois
As o f February 10, 1996, we have Public L a w 104-106, the
Defense Authorization A c t , Section 4306. The newly added
Section 36, titled Value Engineering, states that each executive
agency shall establish and maintain cost-effective value
engineering procedures and processes.
Legislative efforts pertaining to value engineering have
definitely affected the transportation sector, not so much because
of the legislative mandate to perform value engineering, but
because most major transportation sector projects are at least
partially financed by government agencies. To qualify f o r funds,
projects w i l l have to comply w i t h the mandates. Legislation by
itself w i l l not move people to change but might cause them to
begin to take notice. Whatever the case, people are human, and we
should not think that they w i l l make changes i n the way they w o r k
just because o f some piece o f legislation or because we, as value
engineering practitioners, want to help them and their projects be
more cost efficient.
I have recently worked w i t h a number o f state Department o f
Transportation agencies seeking to perform value engineering on
their projects and have f o u n d that these agencies vary widely i n
their use o f value engineering. Some have embraced i t and are
using i t widely. One agency is planning to increase its annual value
engineering studies f r o m approximately 20 to 100 or more. Other
agencies either do not use value engineering to a great extent or do
not f u l l y understand what they can do, and do not at least
openly show any signs o f changing the way they do business.
Some o f these agencies say that they have been performing
transportation projects in their states f o r many years without using
value engineering and do not see the need to change. Others have
had differing experiences w i t h value engineering and are taking

10

Volume 20, Number 1, March 1997

somewhat o f a cautious wait-and-see posture before committing


their projects to this tool.
In the June 1996 issue o f Interactions,
John H o v i n g wrote an
article titled "The Defense Authorization A c t It's i n Our
Hands." I n that article, John writes, " I f a Democratic president and
a Republican Congress can agree that value engineering is good
for American taxpayers, then it's time f o r all members o f S A V E to
vigorously and creatively let government decision makers,
businesses and the media k n o w o f the importance o f value
engineering."
John makes a point here that is very important to us as value
engineering practitioners. We seem to be very prolific i n our
writings and speeches about value engineering. I t is time f o r us to
take i t to the next level. We need to let the rest o f the w o r l d k n o w
about value engineering and what i t can do to help make their
programs more cost-efficient and successful :
We must continuously communicate value engineering
capabilities and success stories to those decision makers who can
do something about i t . We need to submit articles about value
engineering to industry and professional publications that our
clients and government agencies subscribe to and read, as w e l l as
to call on them to discuss where they are w i t h respect to value
engineering i n their programs.
We should not expect to see a tremendous growth i n the use o f
value engineering i f we do not actively promote i t to those
decision makers who have the ability to insist that this set o f
techniques be used. John concludes this article by writing, " N o w
is the time you can make a difference. Be proud and vocal about
what value engineering can do."
Now that we have discussed the budget appropriations f o r F Y
'97 i n the transportation sector and the legislative mandates f o r
value engineering, how does this relate to the prospects f o r value
engineering services i n F Y '97?
In the article referenced above, John includes the f o l l o w i n g
table, released annually by the O f f i c e o f Management and Budget
and depicting the dollars saved by value engineering i n F Y '95.
I expect that the same data f o r F Y '96 w i l l be available i n A p r i l
1

Table 2 Dollars saved through value engineering


Federal department/agency

Dollars saved - F Y '95

Department o f Defense
Department o f Transportation
General Services Administration
A r m y Corps o f Engineers
Department o f the Interior
Department o f Agriculture

$734,385,000
686,373,874
109,608,453
59,554,000
22,427,840
8,764,155

Department o f Justice
Department o f Veterans A f f a i r s
Department o f Health and Human Services
Agency f o r International Development
State Department

5,990,387
2,270,800
1,884,464
800,000
91,721

UHMOW O R L D

or May, and that we w i l l see an increase across the board in the


dollars saved by V E . W i t h the F Y '97 increases i n federal budgets
i n the transportation sector over the F Y '96 budgets previously
discussed, and the increased emphasis by legislation to utilize
value engineering more widely by federal agencies, I believe this
produces an atmosphere that w i l l provide the opportunity and
requirement f o r value engineering to expand its use i n F Y '97 i n
all federal agencies, including the transportation sector. Coupled
w i t h a perceived interest by most advertisements f o r major
projects to include value engineering, we can be optimistic about
the prospects f o r growth i n the foreseeable future.

As i n these examples, there is more involved than just deciding


to perform V E studies. Agencies are sometimes wrestling w i t h
circumstances on the periphery that affect their entire programs.
We need to be prepared to consult w i t h them on some o f these
situations.

FORECAST

SUMMARY

I am not suggesting that all this V E work is going to just f a l l into


our laps. There is much work to be done to help clients wrestle
w i t h their many concerns about how to get their projects
completed. Value engineering is just one o f the tools available to
them to help meet their goals.

I have tried to give y o u reasons f o r optimism about the prospects


f o r value engineering i n the transportation sector i n F Y '97. You
have seen F Y '97 federal agency budgets compared w i t h F Y '96
budgets to show the relative increases i n budget appropriations and
give some indication as to the legislative thrust f o r value
engineering usage by federal agencies. There are no guarantees;
however, we do believe that prospects f o r V E i n the transportation
sector are going to be healthy i n F Y '97.

We, the practitioners of value engineering,


must become more active in helping our
prospective clients understand what value
engineering can and cannot do for them.
We, the practitioners o f value engineering, must become more
active i n helping our prospective clients understand what value
engineering can and cannot do f o r them. They have questions and
concerns that require careful consideration i n order to meet all
their needs. Recently, we talked to a state transportation agency
that does approximately 20 in-house value engineering studies per
year. I t wants to expand the number o f studies to more than 100
per year not a trivial task. I n discussions, the agency seemed
reluctant to use outside consultants and has already come to
recognize that i t has not done more because o f its workload. The
staff is there to design and manage transportation projects;
performing value-engineering studies is not their highest priority.
They have streamlined the process so that most studies are

BQEBw

o RL D

completed i n less than 40 hours.


Another state transportation agency recently conducted a V E
study f o r the first time i n about 10 years. For reasons beyond the
scope o f this article, the agency took more than a year to decide
what to do about the alternatives proposed. I n the end, i t rejected
them all.

REFERENCE
Connor, Cathy, ed. PB Legislative
Update. Dallas, Texas: Parsons
B r i n k e r h o f f Construction Services Inc., September 16,
October 4, October 18, and November 8, 1996.

Harlen E. Smith, P.E., CVS, is the immediate past president of the


Dallas/Fort
Worth Chapter of SAVE International.
He is now
serving as Vice PresidentAdministration
of SAVE
International
and has served the society in other positions. Smith is employed by
Parsons Brinckerhojf
Construction
Services Inc., where he is an
assistant
vice president
and manager
of Value
Engineering
Services. Parsons Brinckerhojf
has been chosen by Engineering
News-Record ( E N R ) for eight consecutive
years as the number
one engineering design firm in
transportation.

Volume 20, Number 1, March 1997

11

Value Engineering on Commuter Rail:


An Owner's Story
Ginger R. Adams, CVS

n 1995, the firm I w o r k f o r V E I , Inc. was one o f several


considered to perform a series o f value engineering studies f o r
the Fort Worth (Texas) Transportation Authority, also k n o w n as
"The T," on the R A I L T R A N Commuter Rail project. V E I was
fortunate to be selected f o r the w o r k and conducted three V E team
studies over a period o f approximately three months. Rather than
tell our o w n story, I am pleased to offer the f o l l o w i n g , which was

published on the Internet i n February 1996 by the Federal Transit


Administration ( F T A ) . O n the F T A Web site, there is a category
called "Lessons Learned," w h i c h covers a wide variety o f topics
related to F T A activities. The ninth lesson is repeated below
exactly as i t appears on the Web page (except f o r formatting,
w h i c h has been m o d i f i e d to f i t this article).
The F T A Web site is at http://www.fta.dot.gov. Lessons
Learned is at http://www.fta.dot.gov/library/program/119.htm.

LESSONS LEARNED NO. 9


FEBRUARY 5, 1996
Value Engineering ( V E ) on Transit Projects
Background
The R A I L T R A N Commuter Rail Project extends between Fort
Worth and Dallas [Texas] along an existing 34-mile corridor
w h i c h was acquired j o i n t l y by the cities i n 1983 f r o m the trustee
o f the former Chicago Rock Island and Pacific Railroad. The
Federal Transit Administration also participated i n the acquisition
o f this real estate. The cities have designated their local transit
agencies, The Fort Worth Transportation Authority (The T ) and
Dallas Area Rapid Transit ( D A R T ) , to develop the commuter rail
services f o r the cities.
Services are being implemented i n several phases. Phase 1,
being implemented by D A R T , extends 10 miles f r o m Dallas to
South Irving. Phase 2, being implemented by The T, extends f r o m
South Irving to Fort Worth. Phase 2 is comprised o f a series o f
elements:

A n Intermodal Transportation Center ( I T C ) located at the site


of the Texas and Pacific Railway Terminal Building (listed i n
the National Register o f Historic Buildings).

12

A 1 . 5 mile " d o w n t o w n " connection between the I T C building


and the existing R A I L T R A N corridor.
Improvements and additions to the existing rail facilities
w i t h i n the existing R A I L T R A N corridor to allow j o i n t use o f
operations w i t h freight trains and passenger service. This
w o r k includes passing sidings, signals, upgraded track, etc.

Volume 20, Number 1, March 1997

Five new passenger stations between the I T C and South Irving.


Expansion o f the Equipment Maintenance Facility developed
by D A R T .

Acquisition o f diesel locomotives and passenger coaches.


A t the concept phase, the project had an estimated cost o f $101
m i l l i o n (1992 dollars) at completion. Based*on a more detailed
preliminary engineering work, the estimated project cost increased
to $140 m i l l i o n , significantly above what was considered feasible.
A t this point the planned Value Engineering program was initiated.
Overview
Value engineering is defined as an organized effort to analyze the
function o f systems, equipment, facilities, procedures and supplies
by a multidisciplined group f o r the purpose o f achieving the
required function at the lowest total cost. Considerations are given
to e f f e c t i v e ownership consistent w i t h requirements f o r
performance, reliability, quality, maintainability and safety. F T A
guidelines endorse the use o f value engineering i n analyzing the
design and cost effectiveness o f federally funded projects.
I n keeping w i t h the F T A guidelines, The T, through its standard
consultant selection process, solicited proposals f o r value
engineering services to be performed on three o f its major design
components o f the Commuter Rail Project. These components
included the Intermodal Transportation Center i n d o w n t o w n Fort
W o r t h , the D o w n t o w n R a i l Corridor, and the R A I L T R A N
Corridor.
Following selection o f the V E consultant, The T collaborated
w i t h the consultant i n the development o f a customized w o r k
program which was tailored to the specific issues and needs o f the
R A I L T R A N / C o m m u t e r Rail project. The five-phase V E process
(Information,
Speculation,
Analysis, Development
and
Presentation) was f o l l o w e d ; however, additional program features
were introduced to maximize the V E results.
A Preparation phase was added to familiarize the design
consultants and the owner w i t h the V E process and to establish a
"team" concept among the design consultants and the owner. A
Decision phase was also added f o l l o w i n g the V E Presentation
phase during which the team members discussed each proposal
prior to the owner's decision on acceptance, acceptance w i t h
modification or rejection. This was f o l l o w e d by an Implementation
phase during which the design consultants confirmed the cost
savings o f each V E proposal through more detailed estimates. The
V E manager then monitors the implementation o f the proposals
through final design.
Also, each V E team was staffed to ensure that the necessary

IMsMlgJ W Q R L D

specialized expertise was represented. This was considered


especially important on this project which included many diverse
and specialized components.

Summary
The T's success i n achieving a significant reduction i n the project
cost is attributable to a number o f factors:

A prudent management decision to utilize the V E process was


fundamental.

The timing o f the V E studies at the conclusion o f preliminary


engineering and before final design provided the V E team
w i t h the necessary level o f design development information
and, at the same time, allowed adoption o f the proposals
without causing serious delays due to lost design effort.

The establishment o f a team concept i n v o l v i n g the


collaboration o f the owner, V E consultant and the design
consultant resulted i n a cooperative productive effort.

The addition o f formal preparatory and f o l l o w - u p phases to


the basic five step V E process resulted i n a complete program
designed to deliver the m a x i m u m V E results.

The Lesson
The Fort Worth Transportation Authority recognized early i n their
preliminary engineering design that the available budget could not
support the escalating costs o f the Project and remain debt free.
Prudent management decisions lead to the use o f value
engineering as one means to bring the costs back i n line w i t h
available funding. A n important part o f the V E studies included
the direct involvement o f The T's management staff and design
consultants. The design consultants presented the design concepts
to the V E team as w e l l as provided them w i t h preliminary design ,
documents, preliminary estimates and schedules. The V E team
made a site visit to each o f the project components and was
accompanied by the project management staff and consultants
who pointed out various aspects o f the existing conditions and
proposed plans. The V E team then began to develop proposals f o r
presentation to The T and its project management staff.

Prudent management decisions


lead to the use of value engineering
as one means to bring the costs
back in line with available funding.
The V E process was successful i n identifying cost savings
proposals. Proposals that were not accepted, were rejected
primarily because they d i d not maintain The T's program
requirements. M a n y proposals were not accepted as presented but
were noted as warranted f o r further study. A l l accepted proposals
w i l l be incorporated into the project during final design.
There were 87 V E proposals offered f o r consideration, o f
which 38 were accepted. The total estimated savings identified by
the V E proposals was approximately $11 m i l l i o n . The estimated
project cost that the V E team analyzed was approximately $78
m i l l i o n . The percentage o f savings equates to approximately 14%.
The cost to p e r f o r m the V E study was $129,000, resulting i n a
return o f $85 f o r every $1 invested i n the studies.

K O E D w

R L D

Applicability
The application o f value engineering can be applied to most major
Transit Capital projects across the nation. I t has proven to be a
successful method f o r reducing project costs while maintaining a
project's functional objectives. The success o f V E can be
maximized by tailoring the basic V E process to the specific needs
o f each project and by integrating the V E effort into the overall
project design development process.
Reference
The Fort Worth Transportation Authority Intermodal Project
O f f i c e , Paul B y r n e , Intermodal Project Manager, 817/
871-8858.

Ginger Adams is immediate past president of SAVE


International
"The Value Society" (formerly the Society of American
Value
Engineers). Adams has more than 25 years'experience
in business
operations
and management,
including 17 years in the field of
value analysis/value
engineering. A certified value specialist
since
1990, Adams is vice president of VEI, Inc., a Dallas,
Texas-based
value engineering
consulting firm, where she participates
in
corporate financial and management
planning.

Volume 20, Number 1, March 1997

13

Can Value Analysis Play a Part


in Transportation Research?
Rod Curtis, RE.

esearch is a major component o f the transportation industry.


One marvels at the efforts expended toward developing new
methods and materials, and at the success o f those efforts. Those
not familiar w i t h the transportation industry might think o f i t as
somewhat staid when compared w i t h the electronics world.
Nothing could be farther f r o m the truth!
The transportation industry is constantly changing and needs to
keep doing so to have any chance o f meeting the challenges we
face. This is especially true given the growing difficulty o f
obtaining resources f o r the design and construction o f
transportation infrastructare. The need f o r infrastructure continues
to increase, but the resources available do not keep pace a
familiar theme i n the public sector.
The purpose o f this article is not to take the reader through a
review course o f the w o r l d o f transportation research. Rather, I
w o u l d like to suggest some opportunities f o r the use o f value
methodology i n the research field. As is always the case w i t h value
work, I am not offering or touting a panacea. Wonderful things are
happening i n transportation research, and this w i l l continue to be
the case w i t h or without the use o f value analysis. Responsible
value practitioners are not trying to f i x a problem, and must
constantly struggle to avoid the perception o f the know-it-all
"efficiency expert," riding i n on a white horse to solve all the
world's problems. Value analysis is, however, a tool well-suited to
helping those involved i n research get the most f o r their expended
resources and f o r the taxpayers, w h o are usually footing the b i l l .
As practitioners, our goal must be to increase the knowledge and
usage o f this p o w e r f u l tool. Those o f us i n the public sector, or
w o r k i n g f o r the public sector, have the added mission o f
maximizing the value o f the taxpayer dollar. I hope that this article
encourages experimentation i n this area.
A major premise o f this concept is that a disconnect is likely to
occur between research engineers and their customers i n the
design, construction, and maintenance sections o f state
departments o f transportation (DOTs). The two groups are likely
to w o r k i n separate physical environments, and the nature o f their
w o r k differs significantly. B y design, a research environment is
somewhat more cloistered and may be closely related to a
university. Engineers responsible f o r design, construction, and
maintenance tend to have much more frenetic styles o f work,
trying their best to do more w i t h less. Some time ago, I conducted
an i n f o r m a l survey o f research directors f o r state DOTs around the
country. W h i l e not a l l o f the respondents perceived that there was
a significant problem i n this regard, all agreed that value analysis

We c o u l d use the value methodology, practiced by


multidiscipline teams, to surface and prioritize research needs.
A D O T recently conducted a survey o f more than 30 technical
standards to ascertain the opinions o f its staff about the potential
for value improvement. N o w A D O T is f o l l o w i n g up on the
information i t received and w i l l soon generate a list o f standards on
which to conduct value studies. D u r i n g this process, I became
aware that the research group was procuring a consultant to study
bridge approach and anchor slabs, w h i c h happened to be one o f the
highest scoring standards on our survey. Checking f o r overlap, I
discovered that the research effort was to be directed only to the
joints i n these devices, not the overall item. This may or may not
be a worthy expenditure, but i f the " l e f t hand" knew about the

(based on m y brief description i n the survey) could be helpful i n

interest i n value improvement evidenced by our survey, and the

14

Volume 20, Number 1, March 1997

improving their connections to their customers.


There are two aspects o f research w o r k that are candidates f o r
the use o f value analysis.
The first involves deciding what subjects should be researched.
Resources are limited, and ideas must compete f o r selection f o r
research. A t the Arizona Department o f Transportation ( A D O T ) ,
where I work, the research group sends annual requests asking
engineers i n the design, construction, and maintenance groups to
suggest subjects f o r study. This is a well-intentioned gesture. But,
f r o m conversations w i t h i n the design community, the decisions
about what w i l l actually be researched are not necessarily
connected i n a formal way to the input received f r o m these surveys.
Even i f the decisions are responsive to this input, how do we, as an
agency, know that we are expending our resources on the most
important topics and not on the personal agendas o f a small
number o f well-placed people?

... we don't yet have complete knowledge of


how value analysis can function as apart of
the agency culture, not just as a separate unit
conducting value engineering studies. If we
would learn how to do this, connections ...
could greatly increase our efficiency, to say
nothing of building consensus and teamwork
across functional boundaries.

MilMIMI W O R L D

"right hand" knew about the imminent research effort, w e might


w e l l have decided to look at the bigger picture, not just the joints.
This is not a criticism o f the people involved. There is nothing to
f i x . I t is just that we don't yet have complete knowledge o f how
value analysis can function as a part o f the agency culture, not just
as a separate unit conducting value engineering studies. I f we
w o u l d learn how to do this, connections such as the one suggested
by this example could greatly increase our efficiency, to say
nothing o f building consensus and teamwork across functional
boundaries.

and may help w i t h the larger goal o f including the methodology i n


the organization's culture. Either way, the value practitioner
should be clear about how the process w i l l w o r k and communicate
it to all involved. I have learned the hard way that aspects o f value
analysis that seem clear and simple can nevertheless f a i l to be
absorbed by key personnel. I t may not be rocket science, but i t is
different than the concepts and approaches that most public works
professionals are used to working with. A n d , f o r overworked
public servants, "different" sometimes means "not now, I ' m too
busy."

The second opportunity f o r the value methodology is really an


extension o f the first, but on a more technical level. Once we have
decided what to research, value analysis can play an important role
in the actual work by bringing to bear its big gun f u n c t i o n ,
analysis. The concept o f the language o f function can be used to
ensure that the research is heading i n the critical direction. What
functions exactly are to be examined, and why? A l t h o u g h
proactively searching f o r new ways to achieve needed functions is
a worthy activity, i n a w o r l d o f scarce resources i t makes sense to
scratch where i t itches. To return to the previous example, i f we
decided to research bridge approach and anchor slabs, we could
answer the "what" and " w h y " questions w i t h a brief value-analysis
session conducted by a multidiscipline team o f the appropriate
players. A r e we going to analyze only the joints i n these structures?
Or perhaps we should critically examine the entire concept. The
skills needed to conduct the research may vary greatly, depending
on which functions we feel need to be looked at.

A very brief model f o r the incorporation o f this concept might


be as follows:

Once we k n o w the precise functions that concern us, how


much is i t costing us today to provide those functions? Again, even
though pure research is desirable, we are most o f the time seeking
lower-cost methods o f achieving needed functions. Another
possibility, o f course, is that we have identified a function we need
but is not being delivered today. Precisely what is that function?
H o w much are we w i l l i n g and able to pay f o r that function? The
no-nonsense rigor o f a properly executed function analysis can
help the "more w i t h less" folks communicate w i t h the researchers
so that both can w i n .
When thinking about a possible model by which this concept
could be built into the research efforts o f a public works
organization, one key decision clearly needs to be made. We could
involve essentially the same people i n all three activities, namely:
identifying the items to be researched, identifying the specific
functions to be analyzed, and determining the existing costs o f
those functions and other cost data. Or w e could use three separate
groups, probably w i t h some overlap i n membership. The former
has the advantage o f developing a stronger expertise and
consensus among the smaller number o f players but may require a
considerable amount o f their time. The latter approach has the
advantage o f involving more people i n the value-analysis process

MiMHJ W O R L D

1.

Identify research items Using surveys, customer feedback,


cost models, matrices, and multidiscipline team(s), create a
consensus as to what items are worthy o f research effort and
in what priority.

2.

Identify
functions
for
analysis
Using function
brainstorming and FAST diagramming, determine which
functions are i n question. Check back w i t h survey
respondents and others as needed to ensure that the work is on
track.

3.

Determine
function/cost/value
relationships
Using
available cost model information, assign cost to function and
create consensus on targets f o r research, such as: f i n d a way
to provide Functions X , Y, and Z reliably, at a present worth
(life-cycle) cost equal or less than $C.

4.

Research effort Complete the research work, and check


back against the targets and logic developed i n earlier steps.
Have we really unearthed something o f superior value or just
something different?

I n summary, i t is m y belief that value analysis methodology


uses just the right combination o f rigor, logic, creativity, team
building, and consensus building to make i t an ideal tool f o r
bringing together the disparate worlds o f research, design,
operations, and maintenance i n a transportation/public works
agency. I intend to use this brief article as the guide f o r an
experiment i n m y agency, and I encourage other practitioners to
do the same.

Rod Curtis, RE., is the value engineer for the Arizona


Department
of Transportation,
a position he has held for more than eight
years. He earned
degrees
in civil engineering
and
public
administration,
and has nearly 30 years' experience
in public
works engineering
and management.
Curtis currently serves as
president of the Arizona Chapter of SAVE International
and as
chairman of the AASHTO Value Engineering
Task Force. He is
currently completing the requirements for his CVS
certification.

Volume 20, Number 1, March 1997

15

Value Briefs

he f o l l o w i n g briefs are excerpts f r o m the recently held 1996


Discover Awards to innovators around the world. I n the
automotive and transportation fields, inventions include a spincontrol mechanism, a side-impact airbag, catalytic converters,
drowsiness monitors, and Volkswagen's quiet diesel engine. The
f o l l o w i n g text f r o m the July 1996 issue o f Discover magazine is
copyrighted 1996 by The Walt Disney Co. and is reprinted w i t h
permission o f Discover magazine.*

sliding to the left, i t applies the brake to the left f r o n t wheel. On a


mixed surface when one wheel is on, say, asphalt and another is
on dirt the system varies the braking pressure applied to each
wheel, bringing the car to a smooth, stable halt. A s a last resort, the
system slows the car by throttling back or shifting gears.
The Electronic Stability Program is now available as standard
equipment i n Mercedes' S600 and SL600 V-12 models and can be
installed on V-8 models f o r an additional $1,870.

WINNER

FINALISTS

Spin Control
Mercedes-Benz's Electronic Stability Program

Saved by the Sausage: B M W / S i m u l a Government Products'


Side-Impact A i r B a g

Innovator: Armin
Mueller
You're driving d o w n the highway and a box falls o f f the truck i n
front o f you. As y o u swerve to avoid it, your car might fishtail
what engineers call yaw and even go into an uncontrollable
spin. I f this happens, your antilock brakes w o n ' t do much good,
because they act w i t h equal force to slow each wheel. What's
needed are brakes that can be applied to each wheel independently.
Engineer A r m i n Mueller and his team at Mercedes-Benz have
devised a braking system, called the Electronic Stability Program,
that can be used exactly that way. Its eight sensors, at various
positions i n the car, keep track o f what the driver is doing and how
the car is moving, and a watchful central computer looks f o r the
precise set o f conditions that indicate yaw.

Innovators: Klaus Kompass and Gershon Yaniv


A i r bags have succeeded i n reducing injuries f r o m f r o n t a l
collisions, but many head injuries still occur because o f inadequate
protection f r o m side impacts. I n 1993, when B M W Safety
Engineering Director Klaus Kompass and his colleagues
considered protecting passengers' heads w i t h side air bags, they
found that conventional air bags w o u l d not do the trick; they were
too slow to deploy, the explosives needed to u n f u r l them were
themselves dangerous, and the bags tended to get pinned to the
side i n a collision, rendering them useless. A radical new design
was called for.
Fortunately, Gershon Yaniv, research director at Simula
Government Products i n Phoenix, had already begun developing a
side-impact air bag, which he and Kompass adapted f o r B M W ' s
cars.
Leave i t to a bunch o f Bavarian engineers to name the five-footlong hot-dog-shaped air bag the weisswurst, after their favorite
local sausage. O f f i c i a l l y k n o w n as the Inflatable Tubular Structure,
it is pinned on one end to the top side corner o f the dashboard and,
on the other end, to the ceiling above the door catch. The whole
thing tacks up behind the interior door t r i m .
" M u c h o f the inflation time o f frontal air bags is the time they
need to u n f o l d , " says Kompass. "Our bag inflates i n just 20
milliseconds." A small explosion f i l l s the bag w i t h superheated
gas, which keeps it inflated f o r several seconds long enough to
protect the head in cases i n w h i c h the car rolls.
To make the concept work, Kompass and Yaniv had to develop
a balloon that could expand instantly, accept the hot gas without
bursting, and be easy to stow i n narrow spaces. They also came up
w i t h a thin sleeve strong enough to hold the balloon i n its wiener
shape. "The hardest thing was to make the components reliable and
still thin enough," Kompass says.

Once the computer decides the car is sliding


or spinning, it automates the brakes to
stabilize it. For instance, if the car's rear is
sliding to the left, it applies the brake to
the left front wheel.
For example, to tell whether the driver is frantically trying to
regain control o f the car, a set o f sensors measures the angle o f the
steering wheel and the pressure applied to the brake pedal. Other
sensors measure whether the car is accelerating sideways, or
whether the wheels are turning at different speeds. "The key
breakthrough," says Mueller, "was being able to develop a yawrate sensor f o r automotive applications."
Once the computer decides the car is sliding or spinning, it
automates the brakes to stabilize it. For instance, i f the car's rear is

16

Volume 20, Number 1, March 1997

BOIIBW O R L D

B M W engineers have put the f i n i s h i n g touches on the


Inflatable Tubular Structure i n time f o r the company's 1997
models.
Body Heat: Ergenics's and National Renewable Energy
Laboratory's Cold-Start Catalytic Converters
Innovators: Mark Golben, David Benson and Tom Potter
Catalytic converters are good at removing most o f the noxious
gases f r o m car exhaust, but they have a big drawback: they w o r k
only when the car is warm. Consequently, automobiles emit as
much as 70% o f their pollutants i n the first two minutes after
starting up. T w o engineering companies have independently come
up w i t h different ways o f solving this cold-start problem and
making converters more efficient.
'
M a r k Golben got his inspiration f r o m a newspaper article '
about a researcher who used an electric heater to w a r m a catalytic
converter to working temperature i n a f e w seconds. Rather than
using costly electricity, however, Golben thought o f heating the
converter w i t h the alloy metal hydride. " W h e n a hydride absorbs
or releases hydrogen, the reaction creates instant temperature
swings often dramatic that are very predictable," he says.
Golben and his research team at Ergenics i n Ringwood, N e w
Jersey, designed a heater to be mounted i n the exhaust system just
upstream o f the catalytic converter. The heater includes two
containers o f metal hydrides one at a higher pressure than the
other separated by a valve wired to the vehicle's ignition key.
When the engine starts and the valve opens, the hydride i n the
pressurized container releases hydrogen, w h i c h f l o w s to the l o w pressure container and is absorbed. This reaction releases
sufficient heat to warm the car's exhaust to 7 5 0 , enough f o r the
converter to begin working. A s the engine warms up and the
exhaust temperature rises to 1000 F or higher, the low-pressure
alloy heats up and pushes the hydrogen back through the valve to
its original container, resetting the mechanism f o r the next trip.
Golben finished the heating system last summer, and Ergenics
is looking f o r partners to help commercialize i t . Expected to cost
no more than $100, the heater could be retrofitted to an old car.
"Right now our heater assists a vehicle's catalytic converter,"
Golben says. "Eventually, i t could become the converter."
D a v i d Benson and T o m Potter at National Renewable Energy
Laboratory i n Golden, Colorado, took a different approach. They
developed a catalytic converter so w e l l insulated that i t stays warm
almost indefinitely. To trap heat, the converter is surrounded by
"vacuum insulation" t w o sheets o f metal w i t h a vacuum
between them " w h i c h works like a thermos bottle," Benson
explains. The half-inch space between the insulation and the
converter is f i l l e d w i t h an aluminum magnesium alloy, which
melts and absorbs heat when the converter gets hot. Later, when
the converter cools, the alloy solidifies, giving up heat to the
converter.
To keep this w e l l - b u n d l e d converter f r o m overheating,
Benson's group also adds a bit o f metal hydride to the vacuum
layer to help regulate the temperature. A s the converter's
temperature rises above 1100 F, the hydride begins to release
hydrogen into the vacuum. The hydrogen conducts the excess

ITfclMHJ W O R L D

warmth away. When the engine is turned o f f and the converter


begins to cool, the hydride reabsorbs the hydrogen and restores the
vacuum layer's effectiveness.
In tests, the National Renewable Energy Laboratory's converter
was found to stay warm f o r 61 hours after the engine was turned off.
Since 98% o f all car trips occur within 24 hours o f each other, that
amounts to a possible reduction o f more than 70% i n auto
emissions. We're being encouraged by the B i g Three automakers,"
Benson says. "We're on a fast track with this."
Awake at the Wheel: Nissan's Drowsiness Monitor
Innovator: Hideo
Obara
To keep drivers f r o m nodding o f f , Nissan developed a device back
i n 1983 that triggered an alarm when the steering wheel moved
erratically. But the auto company found that by the time the driver
begins moving the wheel, i t is sometimes too late to prevent an
accident.
In 1990, Nissan Engineer Hideo Obara and his team came up
w i t h a way o f catching drowsy drivers earlier. They mounted a
camera on the dashboard to peer into the driver's eyes and make
sure they were open and alert.
When the driver starts the car, the camera takes a snapshot o f
his face and records an image o f his eyes. Throughout the trip, the
camera continuously scans the driver's face while an onboard
computer compares the pictures w i t h the original image to make
sure the eyes are still open and that they aren't drooping or being
diverted f o r too long f r o m the road. The computer uses all this
information to generate an alertness rating, and i f it falls too low,
a loud buzzer startles the driver back to f u l l consciousness. A t
night an infrared lamp illuminates the driver's face.
Although the system is still stamped by drivers w h o wear
sunglasses, "the most d i f f i c u l t problem i n creating i t was helping
the computer locate the driver's eyes and do i t w i t h i n a set period
of time," recalls Obara. "Our technique begins by measuring the
driver's facial outline and then defining the possible areas where
the eyes might be."
Obara and his team completed tests o f the drowsiness monitor
in 1995, but until there is consumer demand f o r what w o u l d be a
pricey system, Nissan has no plans to build the monitor into any
o f its cars.
Nissan developed the monitor as part o f a demonstration o f
several new safety technologies, including a device that releases a
bracing fragrance when the driver dozes, and another that brakes
the vehicle and flashes its warning lights i f the driver can't be
roused.
Diesel Delight: Volkswagen's Quiet Diesel Engine
Innovator: Karl-Heinz
Neumann
Because diesel f u e l is cheaper than gasoline and burns more
efficiently, w i t h less carbon monoxide i n its exhaust, dieselpowered cars are, i n principle, a good idea. The problem is noise.
Instead o f using spark plugs to ignite their f u e l , diesel engines rely
on pistons to compress the fuel-air mixture, creating enough heat
to set o f f a loud explosion. A diesel engine would roar like a tank
without modifications that end up sacrificing its wonderful f u e l

Volume 20, Number 1, March 1997

17

efficiency.
Ever since the U.S. auto industry's brief infatuation w i t h diesel
cars i n the 1970s, their waning popularity has bothered Karl-Heinz
Neumann, the director o f diesel engineering at Volkswagen. A f t e r
studying the problem f o r 15 years, Neumann and his team o f
engineers came up w i t h a quieter way to ignite the f u e l . Instead o f
dumping f u e l into the cylinder and exploding i t i n one big bang,
Neumann's method is to squirt i n the same amount o f f u e l but
slowly, over a longer period o f time. As a result, the f u e l burns i n
a series o f small, quiet explosions. Called turbo direct injection, or
T D I , this engine ensures more thorough burning o f f u e l .
To make the process work, Neumann had to devise an
elaborate electronic circuit that translates the pressure o f the
driver's f o o t on the gas pedal, and dozens o f other factors, into
perfectly timed explosions o f f u e l i n the cylinders. A particularly

delicate challenge was to design the engine geometry to ensure


optimum efficiency each piston ends i n a b o w l shape, f o r
instance, to promote better m i x i n g o f the f u e l . "The amount o f f u e l
the T D I injects is calculated against the precise diameter o f the
injection holes and also the shape o f the hole," Neumann says.
"This is the basis o f the T D I system."
Volkswagen introduced Neumann's turbo direct injection
engine i n its 1996 Passat, w h i c h gets 45 miles to the gallon on a
highway and 37 miles to the gallon i n city traffic a l l the while
p u f f i n g out 20% less carbon dioxide than today's typical gasoline
engine.
*To subscribe
to Discover magazine,
Subscription price is $29.95for
one year.

call

800/829-9132.

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Volume 20, Number 1, March 1997

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BIIIJBW O R L D

Value Engineering and Product Design


By Paul N. Romani

ecent legislation mandating the inclusion o f value


engineering provisions i n government contracts has opened
a new domain. However, the degree o f control being applied is
already stifling the technique's f u l l potential. I t is unfortunate that ,
many i n the value engineering profession are overlooking this fact
i n their rush to celebrate a legislative victory.

This article has two purposes: to reject the pigeonholing o f


value engineering solely as a "procurement" technique, and to
point out the absence o f definitive accountability f o r value
engineering's success i n the public law containing provisions f o r
the method.
I n a memorandum to executive department and agency heads
dated October 15, 1996, Franklin D . Raines, director, O f f i c e o f
Management and Budget, wrote, "the Federal Acquisition R e f o r m
A c t , Public L a w 104-106, section 4306, (which amends the O f f i c e
o f Federal Procurement Policy A c t ) , requires that each executive
agency must establish and maintain cost e f f e c t i v e value
engineering procedures and processes." The term "value
engineering" is defined i n Public L a w 104-106 as: " A n analysis o f
the functions o f a program, project, system, product, item o f
equipment, building, facility, service, or supply o f an executive
agency, performed by qualified agency or contractor personnel,
directed at improving performance, reliability, quality, safety, and
l i f e cycle costs." The emphasis on procurement r e f o r m is clear.
Nowhere i n the act or the definition is there an emphasis on
applying the methodology i n the design phase o f product
development. Design is the area where return on investment w i l l
be greatest. The value engineering community must reject the
time-honored purchasing theory in favor o f another that is broader
and compatible, but not congruent. To paraphrase Thomas S. K u h n
i n The Structure of Scientific Revolutions: "Persons who share the
same paradigms are committed to the same rules and standards."
For the value engineering methodology to mature and reach its
potential, the purchasing paradigm must be abandoned, and its
supporters both theorists and practitioners must convert or
maintain an open mind when i t comes to considering a paradigm
w i t h design at its core. W h y design? Because i t :

Enhances the utilization o f feedback data f r o m usage tests or


trial runs;

Increases the possibility o f product or equipment revisions


due to changes i n the user's needs;
A l l o w s integration o f technological innovation not apparent at
the time o f the original design;

M a y improve product functionality and lower costs i n spite o f


time and money restrictions imposed on the initial design.

t!OVJBw O R L D

Consider the words o f Takeomi Nagafuchi, general manager o f


quality control at Ricoh: "Seventy percent o f quality control is
determined at the design stage. So, naturally, the biggest effort is
made at that stage. I f y o u improve manufacturing only, y o u w o n ' t
get much improvement." Nagafuchi knows what he is talking
about. He was the project manager who helped w i n the Deming
Prize f o r Quality Control f o r Ricoh, the first photocopier company
ever to w i n the coveted award.
John M a y o , vice president o f A T & T ' s Bell Laboratories, sees
American industry stranded i n what he calls an "inspect and f i x "
mode. This means that components that f a i l during tests are simply
replaced by better quality (and more expensive) parts. Few
attempts are made to redesign products around less expensive
components. Thus, f i n a l designs released f o r manufacture
commonly exceed budgeted cost. The Japanese redesign f o r
quality. "One Japanese watchmaker f o u n d that i t isn't necessary to
use an expensive quartz crystal to achieve high accuracy i n a
wristwatch. A n inexpensive capacitor could compensate f o r
cheaper crystals without sacrificing overall accuracy," says M a y o .
The messages o f both Nagafuchi and M a y o are clear: You can't
inspect quality into a product. The earlier you value engineer a
product, the greater are your prospects f o r an enhanced return on
investment.

You can't inspect quality into a product. The


earlier you value engineer a product, the
greater are your prospects for an enhanced
return on investment.
H o w do the Japanese capitalize on design savings? The answer
is simpler than one would expect. Product designers tear apart
existing equipment ( o f any type) and thoroughly test every part. A
copier w i t h 3,000 parts w o u l d require every nut, bolt, and screw to
be examined. They believe this is the best way to determine w h i c h
parts are necessary and w h i c h parts can be replaced. For example,
Canon replaced the dry toner i n its early copiers w i t h an energyefficient liquid that reduced power consumption f r o m 250 to 110
volts. M i n o l t a retaliated by replacing 27 micros witches w i t h a
simpler electronic part. W h y ? Products w i t h fewer parts are more
reliable and cost less to build and operate.
Contrast Minolta's design changes w i t h a-design f l a w that
Xerox faced. I n 1960, Fortune magazine named Xerox's model

Volume 20, Number 1, March 1997

19

914 photocopier "the most successful product ever marketed i n


America." T w o years later, the company made the Fortune 500 f o r
the f i r s t time, c o m i n g i n at 423. Unfortunately, X e r o x
management made t w o costly mistakes: I t rested on its laurels
rather than seeking ways to improve, upgrade, and lower the cost
of its product; and i t ignored the Japanese and concentrated on
besting I B M and Kodak. Humiliation followed, and the Cinderella
growth story that accompanied the machine's popularity ended
abruptly.
The 914's fuser paper had a tendency to catch f i r e when i t
came into contact w i t h hot fuser rollers. Since Xerox was the only
company i n the marketplace w i t h technology to produce images
on ordinary paper, continuous design improvement was seen as
superfluous. Developmental stagnation proliferated. I n case o f
fire, Xerox urged operators to do nothing and let the fire burn out.
Instead o f redesigning the fuser rollers, Xerox equipped each
machine w i t h a f i r e extinguisher, which i t euphemistically labeled
a "scorch eliminator." The precaution did not placate many
customers. To publicize this design defect, Ralph Nader, author o f
Unsafe at Any Speed, traveled to Rochester, N e w York, and
publicly assailed the Xerox 914, claiming its design was shoddy.
He said the 914 i n his Washington office caught f i r e three times
during a four-month period.

With the institutionalization of value


engineering, excuses are no longer acceptable.
To borrow a word from the Japanese, we
should desire to be "dantotsu" the best of
the best in every business venture.
I n the meantime, the Japanese had captured the l o w end o f the
copier market i n less than ten years. Executives at X e r o x were
shocked to f i n d that the Japanese could sell a copier (Canon) at a
p r o f i t f o r less than i t cost Xerox to make one. Underestimating the
Japanese cost X e r o x dearly. Its piece o f the $25 billion copier
market dropped f r o m 82% to 4 1 % between 1976 and 1982. I t has
since rebounded, but not to previous market-share levels and only
after intensive redesign efforts.
Wake-up calls such as this have made American management
more sensitive about the distinction between new product research
and process research. (Some managers use the terms "pioneering
research" and "sustaining research.") Combined traditional R & D
budgets help to obscure these fundamental differences i n
emphasis. N o matter. The important point is that organizations are
becoming more aware o f the need to l i n k process R & D w i t h newproduct R & D , and value engineering can be the key to the link.
University o f Pennsylvania economist E d w i n Mansfield found
that "Japanese f i r m s spend f u l l y two-thirds o f their R & D budgets
on process R & D " significantly more, he claims, than their
American counterparts.
Japan Steel's Oita Works has as its slogan " 0 0 1 " f o r zero
accidents, zero pollution, and number one performance. A t Toyota

20

Volume 20, Number I , March 1997

M o t o r Company last year, a h a l f - m i l l i o n suggestions were


received f r o m employees about materials savings, general quality,
and labor saving. A n d this was without the monetary incentives
such as value engineering change proposals. I f the Japanese can do
it, we can too. W i t h the institutionalization o f value engineering,
excuses are no longer acceptable. To borrow a w o r d f r o m the
Japanese, we should desire to be "dantotsu" the best o f the best
i n every business venture.
H a l f a century o f sporadic use o f value engineering
methodology i n government agencies proves i t has merits too
valuable to be ignored; however, the management backing needed
to support full-fledged value engineering programs has not been
present. One reason is the failure o f subordinates to f o l l o w through
on suggestions f r o m busy executives. The illustration that f o l l o w s
is f r o m Jonathan Daniels' book about Franklin Roosevelt and his
cabinet, titled Frontier on the Potomac:
" H a l f o f a President's suggestions, which theoretically carry
the weight o f orders, can be safely forgotten by a Cabinet
member. A n d i f the President asks about a suggestion a second
time, he can be told i t is being investigated. I f he asks a third
time, a wise Cabinet officer w i l l give h i m at least half o f what
he suggests. But only occasionally, except about the most
important matters, do Presidents ever get around to asking
three times."
Through their actions, managers need to convince staff
members o f the organization's seriousness i n making value
engineering methodology an integral part o f the w o r k process.
Management also needs to ensure adequate funding. Richard M .
Cyert and James G. March theorize in A Behavioral Theory of the
Firm that most government entities use more resources than
actually are required to meet their assigned functions. They term
these excess resources "organizational slack." M o s t agencies have
s u f f i c i e n t resources to divert some o f them to the value
engineering effort without adversely affecting the accomplishment
o f their duties.
Value engineering can save a company money. I n M a y 1996,
the H o v i n g Group reported General Accounting O f f i c e estimated
savings i n the 3% to 5% range when value-engineering techniques
were used i n government programs. These funds alone, i f
reprogrammed, are more than sufficient to sustain first-rate
governmentwide value-engineering initiatives.
I n the Fall 1968 issue o f The Defense Management
Journal,
George R. A l l e n and Paul N . Romani wrote, "Management must
do more than endorse value engineering and place i t i n an
appropriate organizational unit. Top company officials have the
responsibility f o r establishing and vigorously pursuing definite
cost-reduction goals. They also should provide value engineers
w i t h access to all company specialists to assure the utilization o f
the widest possible pool o f knowledge in the cost-reduction
effort." Later they say, "Insufficient support by top management,
or delays in action on value engineering [change] proposals, w i l l
severely reduce the possibility for expanding effective value
engineering programs." What was true then, is true now: Public

BfcMIIJ W O R L D

Law 104-106 notwithstanding. Spirited support at the top o f the


organization is central to value engineering's success. Now, the
development and delivery o f consumer-oriented quality products
may be crucial to the prosperity and economic health o f the
American economy.

SELECT BIBLIOGRAPHY
Government Publications
T h i r d Report o f the National Performance Review. Common
Sense
Government/Works
Better and Costs Less. Washington, D.C.:
Government Printing Office, 1995.
U . S. Department o f Defense. National Defense Authorization
Act
for Fiscal Year 1996, Public L a w 104-106. Washington, D.C.:
Government Printing Office, February 10, 1996.
U . S. O f f i c e o f Management and Budget, O f f i c e o f the Director.
Agency
Value Engineering
Programs.
Washington, D.C.:
October 15, 1996.
Books
Asman, David, ed. The Wall Street Journal on Management
2.
New York, N.Y.: Plume Books, 1991.
Bowles, Jerry, and Hammond, Joshua. Beyond Quality. New York,
N . Y : Berkley Books, 1992.
Cyert, Richard M . , and March, James G. A Behavioral

Theory

of

the Firm. Englewood C l i f f s , N.J.: Prentice-Hall, Inc., 1963.


Daniels, Jonathan. Frontier
on the Potomac.
N e w York,
N . Y : The M a c M i l l a n Company, 1946.
Gibney, Frank. Miracle by Design. New York, N.Y.: Times Books,

Paul N. Romani is president


of R3, a firm specializing
in cost
containment,
proposal development,
and network selection
and
configuration.
Earlier in his career, he served for nine years at the
White House three as deputy director of the computer
center
and six as director of administrative
operations for the White
House and the 17 agencies
of the Executive
Office of the
President. He holds a doctorate in public administration
and an
M.B.A. in information
sciences.

Got a way with words?


Would you like to help
promote VE?
Value World is looking for an associate editor to
assist w i t h technical review of papers submitted to
the journal. I f you are interested i n compiling and
reviewing potential articles, please contact
Editor-in-Chief Del Younker at 407/859-5537 or
Barbara Scott-Turbett at

1982.
Kuhn, Thomas S. The Structure of Scientific
University o f Chicago Press, 1971.

Revolutions.

Chicago:

SAVE International headquarters


at 847/480-1730.

Articles
A l l e n , George R., and Romani, Paul N . Barriers to V E Growth.
The Defense Management
Journal (Fall 1968).
Other
Hoving, John. A Call for Action from John Hoving.
D . C : M a y 1, 1996.

t!OfjDw O RL D

Washington,

Volume .'(). Numliei I. Maieh I

21

Annual Index
Compiled by Jim Heinrich, VMP

ARTICLES
Application o f V E Techniques i n Evaluation Contract Proposals.

Thunder: Ghost Surveys That Backfire. K i n g , Thomas R. Vol. 19,


No. 2 (June 1996): 33.

Gernerd, K u r t A . V o l . 19, N o . 1 (March 1996): 13-16.


Competitive Management f o r Product, Performance, Productivity
and Cost. Riordan, J.J., and Tocco, A . R . V o l . 19, N o . 2 (June
1996): 14-21.

Thunder: H o w Not to Deliver Constructive Criticism.


Thomas R. Vol. 19, N o . 3 (October 1996): 23.

King,

Thunder: Promoted into Danger. K i n g , Thomas R. V o l . 19, N o . 1


(March 1996): 30.

Cost Charting Technique. Mudge, Arthur E. Vol. 19, N o . 1 (March


1996): 25-29.

True Grit. Doer, John. Vol. 19, N o . 1 (March 1996): 1.

Development and Status o f V E i n the Hungarian Industry.


Nadasdi, Ferenc, and Udvarhelyi, Zsuzsanna. V o l . 19, N o . 3
(October 1996): 24-31.

Value Analysis: A n Effective Tool i n Process Re-engineering.


Prud'homme, Roch. Vol. 19, N o . 2 (June 1996): 22-24.

Employee Motivation, Value Engineering, and the Reinventing


Government Process. Romani, Paul N . V o l . 19, N o . 3 (October
1996): 14-16.

Value Analysis Techniques A p p l i e d to Project Concept &


Development. Thiry, Michael. Vol. 19, N o . 2 (June 1996): 10-13.
Value Based Decision M a k i n g f o r the Small Engineering F i r m .
McElroy, Robert C. Vol. 19, N o . 3 (October 1996): 9-11.

Environmental Value Engineering o f the Design and Selection o f


Materials i n Buildings: The Process and Future. Tenah, K w a k u .
Vol. 19, N o . 2 (June 1996): 6-9.

Value Engineering i n Construction Management. A r d i t i , D . , and


A l i f e n , R. Vol. 19, N o . 3 (October 1996): 1-7.

The Heart o f the A r t o f Management. Selg, Richard. Vol. 19, No.


1 (March 1996): 6-12.

Value Engineering: Paradigm Pliancy i n A c t i o n . McClintoch, Scot.


Vol. 19, N o . 2 (June 1996): 1-3.

Marketing o f Value Engineering Through H u m a n Resource


Development. Narasimhan, R . L . V o l . 19, No. 3 (October 1996):
17-21.

Value Improvement f o r the 21st Century. Adams, Ginger. Vol. 19,


No. 1 ( M a r c h 1996): 2-5.

Meeting the Requirements f o r Future Competitiveness Through


Value Analysis. Mustafa, Anwar. V o l . 19, N o . 2 (June 1996):
25-29.
The Role o f Value Management i n I m p r o v i n g Australia's
Economic Performance. Bushell, John. V o l . 19, N o . 1 (March
1996): 17-24.

The Value Management M o d e l . Godfrey, Donald. V o l . 19, N o . 2


(June 1996): 30-33.

AUTHORS
Adams, Ginger. Value Improvement f o r the 21st Century. Vol. 19,
N o . 1 (March 1996): 2-5.

Taking V A / V E Into the 21st Century. Greenfield, H . B . , and


Mendelsohn, S. V o l . 19, N o . 2 (June 1996): 4-5.

A r d i t i , D . , and A l i f e n , R. Value Engineering i n Construction


Management. Vol. 19, N o . 3 (October 1996): 1-7.

Team Building The Secret o f Successful V A / V E Program.


Mukhopadhyaya, A n i l Kumar. Vol. 19, No. 3 (October 1996): 12-13.

Bushell, John. The Role o f Value Management i n Improving


Australia's Economic Performance. V o l . 19, No. 1 (March 1996):
17-24.

22

Volume 20, Number 1, March 1997

KBEBw O RL D

Doer, John. True Grit. Vol. 19, N o . 1 (March 1996): 1.


Gernerd, K u r t A . Applications of V E Techniques i n Evaluation
Contract/Proposals. Vol. 19, N o . 1 (March 1996): 13-16.
Godfrey, Donald. The Value Management Model. V o l . 19, N o . 2

Selg, Richard. The Heart o f the A r t of Management. Vol. 19, No.


1 (March 1996): 6-12.
Tenah, K w a k u . Environmental Value Engineering o f the Design
and Selection o f Materials in Buildings: The Process and Future.
Vol. 19, N o . 2 (June 1996): 6-9.

(June 1996): 30-33.


Greenfield, H . B . , and Mendelsohn, S. Taking V A / V E Into the 21st
Century. Vol. 19, N o . 2 (June 1996): 4-5.

Thiry, Michael. Value Analysis Techniques Applied to Project


Concept & Development. Vol. 19, No. 2 (June 1996): 10-13.

K i n g , Thomas R. Thunder: Ghost Surveys that Backfire. Vol. 19,


No. 2 (June 1996): 33.
K i n g , Thomas R. Thunder: H o w Not to Deliver Constructive
Criticism. Vol. 19, N o . 3 (October 1996): 23.
K i n g , Thomas R. Thunder: Promoted into Danger. Vol. 19, N o . 1
(March 1996): 30.
M c C l i n t o c h , Scot. Value Engineering: Paradigm Pliancy i n
Action. Vol. 19, N o . 2 (June 1996): 1-3.
McElroy, Robert C. Value Based Decision M a k i n g f o r the Small
Engineering Firm. Vol. 19, N o . 3 (October 1996): 9-11.
Mudge, Arthur E. Cost Charting Technique. Vol. 19, N o . l (March
1996): 25-29.
Mukhopadhyaya, A n i l Kumar. Team Building The Secret o f
Successful V A / V E Program. Vol. 19, N o . 3 (October 1996): 12-13.
Mustafa, A n w a r . M e e t i n g the Requirements f o r Future
Competitiveness through Value Analysis. V o l . 19, N o . 2 (June
1996): 25-29.
Nadasdi, Ferenc, and Udvarhelyi, Zsuzsanna. Development and
Status o f V E in the Hungarian Industry. V o l . 19, N o . 3 (October
1996): 24-31.
Narasimhan, R . L . Marketing o f Value Engineering Through
Human Resource Development. Vol. 19, N o . 3 (October 1996):
17-21.

Call for Papers


Value management professionals are
invited to propose papers for presentation
at the:
Hong Kong Institute of
Value Management
International Conference 1997
November 12-13, 1997
Pacific Place Conference Centre
Hong Kong
Abstracts due April 30, 1997
For more information, contact:
Conference Secretariat, International
Conference Consultants Limited,
at (852) 2559 9973,
fax (852) 2865 1528,
e-mail: icc@asiaonline.net

Prud'homme, Roch. Value Analysis: A n Effective Tool in Process


Re-engineering. Vol. 19, N o . 2 (June 1996): 22-24.
Riordan, J.J., and Tocco, A . R . Competitive Management f o r
Product, Performance, Productivity and Cost. Vol. 19, N o . 2 (June
1996): 14-21.
Romani, Paul N . Employee Motivation, Value Engineering, and
the Reinventing Government Process. V o l . 19, N o . 3 (October
1996): 14-16.

t Q E D w

R L D

Volume 20, Number 1, March 1997

23

ntematiorial
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Croup

Inc.

Stephen J . Kirk. Ph.D.. A I A . C V S , F S A V E


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