Whether from surprise expenses, an underestimated timeline or simply wanting to maintain a conservative budget, you might be asking, “how can I save money on my office buildout?”
At AQUILA, our project managers are experts at helping clients construct a realistic budget from the beginning, but we understand that sometimes projects need to be scaled back. In these situations, a technique known as “value engineering” can be a great way to reduce the expenses of a project.
In this article, you will find:
- An overview of what value engineering is
- How to use value engineering to save money on your office build-out project
- Potential issues that may arise with value engineering
How to Use Value Engineering
During the initial budgeting process, your project manager will consider all the factors that could affect the project’s costs, as well as what your TI allowance will cover. They will also factor in a contingency allowance as a protection against any unexpected expenses that may come up.
However, even with these precautions, there is always a chance that the original budget will not be sufficient. In these cases, you should have a discussion with your project manager to see if value engineering is a viable option.
If you decide to implement value engineering, you will need to sit down with your project manager to go over the original budget. In this meeting, you will decide which aspects of the budget are now unnecessary or were underestimated. After identifying which parts of the budget need to be changed, your project manager will begin working out a plan to implement those changes without causing too much delay to the project.
For example, imagine you are midway through your project, but quickly running out of funds. You had originally wanted private offices, new carpet and floor to ceiling windows, but now realize that you cannot have all three. Rather than continuing with the project and paying for expenses that far exceed your budget, your project manager will help you decide which aspects of your project should be scaled back or eliminated and which aspects will still be possible.
Real World Examples of Value Engineering
To illustrate how value engineering can work in the real world, here are a few examples of simple ways to “value engineer” an office build-out project:
Scale Back an All-Glass Conference Room
These days, glass-walled conference rooms are very on-trend. But they can also be expensive.
One simple and inconspicuous way to value engineer this is to change the way the glass panels are joined. Most interior designers will spec butt-glazed glass, but if you switch to raco framed glass, you can sometimes save upwards of 50%.
Switch to Plastic Laminate Counter tops
Another example of value engineering that can save money during your office build-out is choosing less expensive finishes for your millwork.
Most users will spec solid surface counter tops. By changing to a plastic laminate counter top you can save a substantial amount of money. You can often find plastic laminate options that look similar to solid surface.
If you don’t want to compromise on the look in your public spaces, consider switching to plastic laminate in spaces that are back-of-house such as employee coffee bars for and workrooms.
Choose a Less Expensive Carpet
An easy way to save money is to simply change the carpet specification. There are numerous commercial carpet manufacturers that very similar products in a variety of colors and patterns. They also vary in price point.
With a little bit of searching you can often find a carpet that is very similar to the one you like but that costs significantly less. Saving $5-10 per square yard installed in carpet can end up saving thousands of dollars on the bottom line of the project.
Issues with Value Engineering
Most of the problems with value engineering arise when last minute changes are needed.
If construction supplies have already been ordered, design drawings are finished and your deadline is quickly approaching, value engineering can end up costing money before it saves money. Having plans redrawn and items returned does not come cheaply, so you must account for those additional expenses if you are considering value engineering as an option.
The other obvious issue is that the result of your project might not necessarily look exactly like what you had originally envisioned. While this may not be a major issue, it is still something to consider when deciding between value engineering or finding additional funding for your project.
Need a Project Manager?
We hope this article gave you a good idea of how you can use value engineering to save money on your office build-out. Because handling alterations to a build-out project can be complicated, we recommend utilizing the expertise of a project manager.
If you would like to discuss ways to save money on your office build-out, or would like to learn more about the project budgeting process, schedule a consultation with our project management team today.
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- What is a Tenant Improvement Allowance and What Does it Cover?
- What is an Amortized Tenant Improvement Allowance & How Can It Help Pay for My Office Build-Out?