Surviving the VE Challenge

Katy Devlin
May 21, 2013
FABRICATION : SALES

The industry continues to witness the introduction of new, innovative possibilities in decorative and specialty glass. However, these products face one major hurdle before they can make their way into any project: value engineering.

Value engineering, or VE, comes into play when the project team faces budget constraints and looks to cut costs. This budget cutting often occurs at two stages in the project process: design development and bidding.

In the design development stage, “certain materials considered by the architects or designers are deemed to be too expensive and are replaced with cheaper alternatives,” says Marc Deschamps, business development manager, Walker Glass Co.

During the bid process, the general contractor or contract glazier might “go through the specs and decide, for different reasons, to push a cheaper alternative,” he says.

Decorative glass, for example, is a prime target for VE due to its high price point and late position on the project timeline. “Later in the construction process, the clients find themselves over budget, and the true process of VE kicks in,” says Bernard Lax, CEO of Pulp Studio Inc. “Any high value material is subject to the chopping block. With the glass being always at the end, it is always subject to this process.”

To avoid having decorative glass―and other specialty glass products―value engineered out of a project, suppliers offer the following tips.

Educate and Inform

“The main thing is to educate and inform,” Deschamps says. Suppliers should educate designers about the attributes of their products and provide detailed specifications about the glass. “Each type of decorative product has specific design and performance properties, as well as constructability considerations. Suppliers should highlight them to help architects and designers make appropriate decisions based on their needs and criteria that may, in certain cases, be subtle but quite crucial. It’s the product manufacturer’s job to ensure architects and designers understand the differences between products and assemblies, so that the finished product reflects their intent.”

Get Involved Early

Early involvement in a project can be even more valuable. “For glass suppliers, early collaboration with the building and design team is critical when working to protect products from being valueengineered out of projects,” says Jeff Razwick, president, Technical Glass Products.

“Conversations during the initial planning stage can help provide insights into the project team’s criteria. The more complete your understanding of how an architect envisions glazing playing into a building, the better your team can position your products and services to demonstrate their functional value,” Razwick says.

Provide Alternatives

Early collaboration provides glass suppliers the opportunity to suggest their own alternatives, if cost-cutting is necessary. Suppliers can “develop pricing options, provide product upgrades or offer custom work,” Razwick says. While these alternatives might reduce the scope of the glass on the project, they might save the glass from being cut completely.

“There is very little you can do [to protect your products from VE], except to maintain contact with the decision makers on the project and see if you can help find more affordable alternatives,” Lax adds.

Changing the product type or reducing the amount can create major cost savings, says Pete Hayes, architectural sales director, of Meltdown Glass Art & Design. “When we are advised of budget restrictions on a project, we will always recommend cost-saving measures such as using ‘clear’ glass material in lieu of more costly low-iron glass, or by helping our clients make efficient use of square footage,” he says. “There is a big difference in cost to have a floor-to-ceiling decorative glass feature wall versus 5-foot-high panels mounted on a half wall. By raising the glass up off the floor a few feet, square footage can sometimes be reduced by up to 40 percent, resulting in a large cost savings to the end user, which can help keep the decorative glass in the project.”

Be Irreplaceable

One surefire way to survive VE is to ensure your products are irreplaceable on the job, Hayes says. “It is always our goal to design an installation that the owner will view as the ‘jewel’ of their project,” Hayes says. “When architects and owners have this view of the glass installation, it often is protected from the VE process. We have seen many instances where owners will cut budgets for carpet, ceiling tiles and furniture just to keep the feature glass in the project.”

Sell Product Performance

Products will be value engineered out of a project if they are perceived to have a generic alternative. “The more generic the glass product is in the eyes of the building owner, the more likely it is the package will be subject to value engineering,” says Diane Turnwall, segment director, Interior Glass, Guardian Industries. Suppliers can help prevent a switch to a lower cost alternative by promoting product attributes and performance to show “there are no alternatives to the specified solution,” she says.

High-performing products may offer long-term cost savings and additional performance benefits. “Helping an architect understand how such products can provide value beyond aesthetics can go a long way toward boosting their specification, even in cases where the initial cost to install them might be higher,” Razwick says. For example, such performance benefits come into play when considering replacing decorative channel glass with lower cost plastic panels, he says. “While channel glass can’t always compete on price, it offers many supplemental benefits, including a longer life span, protection against color change, and the flexibility to be painted, coated or backlit to match the design team’s vision,” Razwick says. “When presented as a multi-faceted solution, its widespread functional value can outweigh price concerns.”

Work With the Glazier

The contract glazier is a key player in the VE debate. A glazier looking to further cut costs might opt for alternate products, Turnwall says. “The less ‘visible’ the specified product is, the more likely the glazier will look at alternatives they find acceptable, and make the selection that gives their business the highest profit opportunity. … If the customer perceives there are many equal alternatives, the product is subject to value engineering,” she says.

Close communication and collaboration with glazing customers can help prevent these substitutions. Provide glaziers “with information and support through the process so they understand the value of maintaining the specification as stated,” Turnwall advises.

Developing those close relationships also helps ensure that glaziers will work with the supplier on developing “alternative ways to achieve a similar aesthetic with a less expensive product when the contract is awarded,” Lax says.

Hayes adds that contract glaziers can protect products from being value engineered out of a project by “being fair with product markup in the bidding process, and by working closely with decorative glass manufacturers to make sure submittal samples meet the requirements in the project specifications, and are shared with the architect and owner in a timely manner.”

Katy Devlin is senior editor for Glass Magazine. E-mail Katy at kdevlin@glass.org.