The terms of the contract provide that the contractor may use his own staff or employ consultants to make a study of the design, specifications, materials, and method of construction to determine if any of these items can be modified to permit the construction of the project at a cost less than the amount of the contract without reducing the quality or usefulness of the project and without unduly delaying the completion of the project.
Example 1:The design of a building required the installation of a number of sliding doors to be fabricated from an expensive paneling material available in one stock size, namely, 4 ft, 0 in. wide by 8 ft, 0 in long. The specified sizes of the doors were 2 ft, 7 in. wide by 4 ft, 1 in. high, equal to an area of 11 sq ft, to be cut from a panel whose area was 32 sq ft. The excess material, amounting to 21 sq ft for each panel, would be wasted because it could not be used elsewhere in the project. Prior to awarding a contract for the construction of the building, the owner, who was familiar with construction practices, directed that the size of the doors be modified to 4 ft, 0 in. by 4 ft, 0 in. In addition to reducing the cost, the modification improved the function of the doors.
1.The first stage is during or immediately after completion of the plans and specifications and prior to release to potential contractors.
2.The second state is after the award of the contract. The contractor is invited to submit to the owner detailed statements describing the modifications, with estimates showing the anticipated reduction in costs. The resulting net savings are shared by the contractor and the owner.
Example 2:It was estimated that a radio facility designed for the Qatar Ministry of Defense, Bureau of Yards and Docks, would cost QR. 17,000,000 as originally designed. When the design was subjected to a value engi neering analysis by a consultant, it was determined that certain modifications could be made, without affecting the operating function of the facility, which reduced the cost to QR. 15,000,000. The fee paid for the investigation was QR. 24,000. Thus, the net savings were QR. 1,976,000.
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