 Value engineering (VE) was developed during World War II by the General Electric Company to deal effectively with shortages of skilled labor and raw materials. VE is a systematic method of examining performance to improve the value of projects or processes, value being defined as the ratio of performance to cost and thus capable of being increased by either lowering the cost or improving the performance.
Although wartime shortages are a distant memory, MoDOT today faces a distinct shortage of available highway funding that places great importance on value-based, i.e., "practical", design. While VE in the classic sense tends to be somewhat more structured, VE and practical design are truly one and the same. The goal of VE is to build the right project at the right time, achieving delivery of project purpose and need with proper project scope.
MoDOT uses VE to ensure that the public receives full value for every tax dollar invested in Missouri’s transportation system. VE techniques are used to improve productivity in nearly every aspect of MoDOT’s operation, including practices, processes, and procedures. In highway construction, VE encourages contractors to submit proposals for modifying the plans, specifications, or other requirements of the contract to reduce the project’s construction cost.
Program History
Federal F.Y. |
No. of Studies |
Design Phase Savings |
Construction Phase Savings |
Department Cost |
Return on Investment |
1988 |
10 |
$8,800,000 |
$0 |
$49,000 |
180 |
1989 |
11 |
$3,200,000 |
$0 |
$125,000 |
26 |
1990 |
7 |
$8,100,000 |
$104,000 |
$65,000 |
126 |
1991 |
5 |
$6,800,000 |
$252,000 |
$92,000 |
77 |
1992 |
3 |
$5,900,000 |
$175,000 |
$73,000 |
83 |
1993 |
12 |
$4,100,000 |
$561,000 |
$147,000 |
32 |
1994 |
14 |
$13,000,000 |
$762,000 |
$164,000 |
84 |
1995 |
14 |
$6,200,000 |
$557,000 |
$165,000 |
41 |
1996 |
19 |
$13,100,000 |
$1,481,000 |
$245,000 |
60 |
1997 |
17 |
$7,620,000 |
$380,396 |
$159,411 |
50 |
1998 |
11 |
$12,190,000 |
$476,355 |
$146,976 |
86 |
1999 |
15 |
$2,700,000 |
$250,981 |
$249,272 |
12 |
2000 |
17 |
$9,645,000 |
$653,543 |
$278,239 |
37 |
2001 |
15 |
$17,300,000 |
$654,000 |
$179,288 |
100 |
2002 |
6 |
$37,000,000 |
$1,300,000 |
$119,950 |
319 |
2003 |
4 |
$13,900,000 |
$174,486 |
$52,160 |
270 |
2004 |
5 |
$8,060,000 |
$740,098 |
$66,928 |
131 |
2005 |
8 |
$59,929,000 |
$791,047 |
$104,353 |
582 |
2006 |
24 |
$39,786,000 |
$3,269,933 |
$194,939 |
221 |
2007 |
12 |
$52,348,000 |
$4,170,000 |
$82,309 |
687 |
Totals |
229 |
$329,678,000 |
$16,752,839 |
$2,758,825 |
126 |
During the life of this program, the department has documented savings totaling over $330 million at a cost of less than $3 million; a rate of return of $126 for every $1 invested.
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