What role do whole life carbon assessments play in Value Engineering?  

Value engineering has been around for nearly 80 years and the practice has generally focused on capital costs. But the demands on quantity surveyors and contractors are continuing to evolve. A recent survey by the construction consultancy firm RLB found that 33% of contractors are being asked to provide whole life carbon assessments on schemes, a substantial increase from last year’s 14%.  This indicates that evaluating the embodied carbon impact of a project is becoming an increasingly important priority for clients.

You get out what you put in

Value engineering (VE) is a practice that developed during the post-war era, as a result of the scarcity of materials prompting alternative designs. In its most basic form, VE is a balancing equation that hinges on increasing value through ‘the ratio between benefit (outputs) and the cost or effort (inputs) required to achieve it’ (Value management and value engineering, RICS professional standards and guidance, UK). It is a process of clearly identifying and prioritising the client and stakeholders’ requirements and delivering these with the most economical solution.    

Traditionally, it’s hinged on balancing the design with functional requirements, design preferences and capital costs.  And, not surprisingly, the definition of what constitutes value will vary from client to client.     

It’s normally the role of the quantity surveyor to quantify the different priorities in such a way that they can be compared. The QS needs to assess the impact of the decisions on the measurable factors – while also eliminating unnecessary cost from the project or asset to improve the ratio between benefits and costs.      

The key to the process is understanding the priorities and quantifying them, which requires data. In some circumstances the functional requirements and design preferences can be prioritised and mapped on to a cost plan to ensure that the balance of the budget reflects the preferences.

The carbon impact

This process has become more complex as, increasingly, clients expect to see both embodied and operational carbon factored into the calculations.  The quantity surveyor may be asked to supply a life cycle cost budget for both cost and carbon against which alternative design solutions can be judged. The solution needs to be one that the client can afford and delivers as much of their requirements as possible.

Historically, carbon and cost benefit analyses have been difficult to do, due to a lack of consistent methodology and data. But recent developments in methodology – such as RICS’ updated Professional Standard – and a growing wealth of carbon data, drawn from industry initiatives that include the Built Environment Carbon Database (BECD), have made them easier. If a client wants to install more insulation to improve the energy efficiency of a building, it’s now possible to compare the capital or embodied carbon cost of installing the material with the corresponding benefit, i.e. will the invested time, effort and cost achieve what’s required?

In the beginning, there was design

To reap the full benefits of value engineering and have as much influence on cost as possible it’s important to give it consideration early on in the project, ideally in the outline design phase.  According to Circular Ecology, changes at a later date can result in cost increases of up to 10-20% and the opportunity to ensure benefits decreases as the project progresses.

The same can be said for carbon. We know that decisions made in the design phase of a project can impact both the operational and embodied carbon load of a building or project, so it’s important to get them right as early as possible. Life cycle cost planning (LCCP), as part of a whole life carbon assessment, can help to determine the durability of various materials or assess the amount of repair and maintenance (R&M) a particular component or asset may need. It could also predict or mitigate the risk of problems in the future.

Although there’s no hard and fast rule to say value engineering must include life cycle assessments for assets and components, it can enhance value if it results in reduced costs over the lifespan of the building.  However, it can be difficult to convince clients or stakeholders with opposing viewpoints – where one may only see extensive upfront costs, another may see the value in the investment.

This is particularly relevant when it comes to choosing materials with lower embodied carbon or that improve the energy efficiency of the building. For example, spending more initially on energy efficient materials may be another additional upfront cost but this could be outweighed by operational savings on heating and lighting. Conversely, value could be reduced if upfront costs of materials are cheaper but need more R&M over the building’s lifespan.

It might also be worth considering LCCP to minimise maintenance or cleaning costs, or to impose maintenance and cleaning cycles to match a company policy. For example, reducing the specification of a flat roof covering may lower capital costs by 25% but may also decrease the life expectancy of the roof from 40 to 25 years. This means it might need to be replaced more frequently than originally intended and mean it’s more susceptible to damage that will need repairing during the covering’s life.

The cycle of life

In addition to supporting carbon emission reduction methods, LCCP can also help to mitigate the risk of buildings falling into disrepair.

Last year, as the RAAC crisis unfolded in schools, we explored how the crisis could have been avoided with LCCP. In the case of RAAC, the National Audit Office (NAO) has reported a significant funding shortfall contributing to deterioration across the school estate, contributing to the eye-watering sum of £1.8 billion in emergency funding it’s reported to have allocated for repair work.

As far back as 1994, NAO reports recommended annual inspections if the building structure was in poor condition, and five-yearly intervals if the structure was in good condition.

LCCP can also help surveyors and facilities managers make better-informed decisions around whether a building can be used beyond its initial design life, with adequate maintenance, or whether it needs to be demolished or rebuilt. The ability to answer these questions with the help of tools that provide cost and carbon comparisons is becoming increasingly important, as the debates surrounding retrofit versus new build continue to rumble on.

Conclusion

Life cycle cost planning can be used on its own or form an integral part of the value engineering process. It plays a significant role in identifying the construction or installation costs of specific materials, as well as their ongoing operational and maintenance costs of various assets and components. Establishing a benchmark elemental capital and life cycle cost plan at the earliest stages of a project will call on historic benchmark data from client or consultants’ databases, augmented by data from independent databases such as BCIS. As the design develops, the benchmark elemental costs can be replaced by estimated costs based on the chosen design or options. At this stage it will be possible to estimate the embodied and operational carbon and other environmental impacts. 

However, this works best with the guidance of a quantity surveyor to calculate life cycle costs or provide construction data from a reliable and relevant source, as part of an elemental cost plan.

Until whole life embodied carbon reporting is mandated, it’s likely that cost will remain the main priority driving people’s decision making – not least as many businesses and contractors continue to see their profits squeezed, due to high borrowing costs and inflation.

However, excluding carbon from the value engineering equation could leave industry professionals trailing behind.  More governments worldwide are continuing to tighten building regulations to improve energy efficiency.

There is also increasing evidence that upfront investment in energy-efficient technologies and more sustainable materials, could lead to lower operational expenditure and increased life cycle longevity. Therefore, it’s wise to factor this into design choices from the outset to prevent costly retrofitting – by getting into the habit of undertaking whole life carbon assessments at an earlier stage, using tools that are aligned with the RICS whole life carbon assessment for the built environment standard and methodology. It’s become far easier and simpler to invest in this due to the combination of new methodology and technology that makes cost and carbon comparisons possible. In addition, there is also the potential for quantity surveyors to offer a wider remit of services, as a result.