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Legal aspect of value engineering implementation in Jakarta (Indonesia)

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DOI: 10.1080/15623599.2018.1511946

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Legal aspect of value engineering implementation

in Jakarta (Indonesia) construction projects

Rachmi Yanita & Krishna Mochtar

To cite this article: Rachmi Yanita & Krishna Mochtar (2018): Legal aspect of value engineering
implementation in Jakarta (Indonesia) construction projects, International Journal of Construction
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INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT
https://doi.org/10.1080/15623599.2018.1511946

Legal aspect of value engineering implementation in Jakarta (Indonesia)

construction projects
Rachmi Yanita and Krishna Mochtar
Department of Civil Engineering, Institut Teknologi Indonesia, Jakarta, Indonesia

ABSTRACT KEYWORDS
In Jakarta (Indonesia) there are regulations on value engineering (VE), but the implementation Value engineering
in construction project somehow still grows slowly. Therefore, in-depth interviews to Indonesian implementation; constraints;
VE experts, regulators and practitioners of infrastructure projects in Jakarta are conducted to support regulation
obtain the main obstacles and efforts to overcome. Then discussion and seminar on VE is con-
ducted to get more inputs from construction stakeholders. It is found and recommended: stake-
holders low understanding on VE government regulations and its benefits so that the role of
the VE Indonesia Association in VE socialization should be enhanced, no existence of VE imple-
mentation Guideline and the Code of Ethic and thus the existing law should be improved by
creating them, no existence of public financial system to accommodate the share saving con-
cept in VE so that it should be improved. These findings and recommended solutions can be
useful for any parties elsewhere who face the similar VE implementation problems.

Introduction implementation, VE has not been implemented into

The budget of infrastructure development in
Indonesia is relatively large part from the state
budget, foreign loan or funds and other funding sour-
ces. Implementation of value engineering (VE) is
believed to be beneficial for the project owners, con-
sultants and contractors. It aims to optimize the func-
tions and cost of a project. The cost saving with VE
implementation may be around 2.5%–41% of total
budget (Palmer et al. 1996; Mustansir Husain Raj
2002; Untoro 2009; Vahid et al. 2018) depending on
the type and condition of the project. For example,
the total state budget of development projects in 2012
amounted to 40 trillions rupiah, then the saving may
be minimum 2.5% or around 1 trillion rupiah. On the
other hand, regulation supporting the VE are found
in Jakarta Governor Decree No 108/2003 regarding
Implementation Procedures of Jakarta Province
Budget. It is also found in Public Work Minister
Regulation No 45/2007 regarding Technical Guideline
for State Building Construction where VE technical
implementation is arranged, including the amount of
the incentive for the contractor that proposes alterna-
tive offers through Value Engineering Change
Proposal (VECP) with cost savings. However, despite
the existing regulations and the benefits of the VE
the system of the construction work in Indonesia,
including in Jakarta – where the most construction
activities exist in Indonesia. Consequently, there are
three research questions. First, why VE is not imple-
mented in Jakarta infrastructure procurement sys-
tem. Second, whether existing regulations are
effective in promoting VE implementation. Third,
what are the solutions proposed to enhance VE role
in the construction industry. Therefore, the purpose
of this study is to find the cause of this problem
and the alternatives to its solution. The objective of
this study is to obtain dominant inhibiting factors
and their solution of VE implementation in terms
of the legal aspects (regulations). The findings and
recommended solutions may be useful for any par-
ties elsewhere who face the similar VE implementa-
tion problems.
Literature review
VE implementation
By definition, VE is a systematic method to improve
‘value’ of goods or products and services using the
probe function. ‘Value’ is the ratio of the cost func-
tion. Value can be increased by either increasing or

CONTACT Rachmi Yanita rachmi.yanita@iti.ac.id

ß 2018 Informa UK Limited, trading as Taylor & Francis Group
2 R. YANITA AND K. MOCHTAR
Figure 1. Cost aspects and project life cycle (Kirkham 2015).
reducing the cost function. It is a central principle of
VE that basic functions be preserved and not be
reduced as a result of pursuing value improvements
(Urmila 2015). In the United States, the United
Kingdom, and Japan, the implementation of VE is
accompanied by the active role of the VE associations
in terms of providing understanding of the VE con-
cept, its implementation benefits in construction proj-
ects, establishing its implementation guidelines,
evaluating the implementation and development of its
benefits and finally certifying VE expertise. In the
United States, it is carried out by the VE expert asso-
ciation, Society of American Value Engineers (SAVE);
the association actively has been contributing to
improve the construction community’s understanding
of VE through seminars, training, workshops, annual
conferences and certifications with communicating
through the web sites since 1959. Currently, the asso-
ciation acts globally, namely SAVE International.
Similarly, in Japan it is carried out through the Japan
VE experts association of the Society of Japanese
Value Engineering (SJVE) since 1965; SJVE has strong
link with SAVE International in many levels, such as
training, qualification, etc. (Christos 2007). In the
United Kingdom, it is carried out by the United
Kingdom VE experts association of the Institute of
Value Management since 1965. In Indonesia, the VE
experts association is HAVEI (Association of
Indonesian Value Engineering Experts); it has link to
SAVE International. However, according to its
official, the association has not been active in socializ-
ing the VE concept, conducting seminars and confer-
ences on VE.
The implementation of VE and its alternative
techniques used in construction projects vary due
to differences in cultural conditions and procure-
ment systems. For example, VE system used in the
United States is different from that used in the
United Kingdom and Japan [Kaming and Prastowo
(2013) and Christos (2007)]. Christos (2007) state
that the VE system in Japan is a continuous process
of improvement during all the construction phases,
including to involve the design team and the VE
facilitator in design phase, as well as the construc-
tion team involvement in construction phase. On
the other hand, in the United States and the United
Kingdom, the VE system is an event of improve-
ment only during construction phase. Furthermore,
there is culture differences between the United
States and Japan VE system. The Japanese is long-
term oriented while American is short-term ori-
ented. On the other hand, the difference between
VE system in the United States and the United
Kingdom is emphasized more on manufacturing by
focussing on products than on the construction
[Christos (2007)]. Furthermore, VE system in
Indonesia is similar with the United Kingdom and
the United States that it is not a continuous process
of improvement and it is short-term oriented
(Yanita and Mochtar 2015).

As for cost savings, the parties during construction
process conduct studies/workshops to produce recom-
mendation and innovation for cost savings.
Identification of success VE is used to strengthen the
implementation of the program and good practices
that are reported each year, making it useful for
future projects [Kaming and Prastowo (2013)].
According to Indonesia Magazine ‘Construction’ in
1992 and Chandra (2006), two of 12 common
obstacles in VE implementations in Indonesia include
first the lack of assertiveness and initiative of the
owner to apply VE, so that consultants and contrac-
tors do not undertake VE; second, the lack of incen-
tives from the savings, so it is not attractive to
consultants or contractors to carry out the VE. These
two obstacles can be minimized with government
regulation on VE implementation. Furthermore,
according to Kissi et al (2017), one of important com-
ponents in VE implementation obstacle is lack of gov-
ernment supports including implementation
regulations.
In the project cycle (with phases: infrastructure
need, feasibility study/planning, detail engineering
design, procurement, construction, project handing
over/PHO, maintenance and final handing over/
FHO), an evaluation is always necessary to produce
optimum work through VE principle. VE is an
attempt to optimize the product accompanied by cost
efficiency. VE is a systematic method to improve the
value and usefulness of a product by examining the
function. Because the value is the ratio between func-
tionality and cost, then the value can be increased
either by improving the function or reducing costs.
The main target is the preservation of the basic func-
tions VE product that should not be reduced as a
result of remedial value (Chavan 2013; Miladi Rad
and Yamini 2016). In construction, VE is used to
solve the problem, indicating and evaluation of costs
that can be streamlined while improving function and
quality (Kaming and Prastowo 2013). The aim is to
increase the value of a product and to qualify the per-
formance of products at the lowest cost. Research
conducted in the United States by Palmer et al.
(1996) shows the savings achieved in the implementa-
tion of VE in the construction project is quite large,
reaching to 34%–36% of the total project cost budget.
Figure 1 illustrates that the earlier VE performed at
the stage of a project cycle, the greater the cost reduc-
tion that can be obtained than if performed in the
next stages of the project. The level of difficulty to do
the changes will be higher in the latter stage of the
project, which is also accompanied by the
INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 3
consequences of rising costs to make changes in the
design. In the construction project cycle, VE involves
consideration the existence of material, construction
methods used, transport problems in the execution of
the work, limited work sites or restrictions in work
execution, planning and organization, costs, benefits
and others. Expediency which can be given includes a
reduction in maintenance costs, improved quality,
reduced environmental impact and so forth.
According to Kaming and Prastowo (2013), VE is
not: design review, which corrects mistakes or reas-
sessing decisions made by designers. VE is not a cost-
cutting process, namely the process of lowering costs
by reducing unit costs with the expense of construc-
tion quality, reliability and performance. However,
VE is more oriented to the real costs and analysis
functions, and quality control, which controls the
quality of a product because it is more than just
review the status of the reliability of a design.
In developed countries like the United States and
Japan, they are realizing the benefits of VE so that
owners and contractors take advantage of VE. On the
other hand, there are several previous studies on the
obstacles in implementation of VE in Indonesia. First,
study of Kaming and Prastowo (2013) discovers the
obstacles are the lack of knowledge about VE due to
lack of socialization, seminars and workshops by VE
experts or government. Second, study of Untoro
(2009) shows the obstacles are the unavailability of
the VE regulation, the lack of competent personnel
and certified VE professionals, and the lack of under-
standing of technical and management aspects of VE.
Finally, Priyatno (2010) claims that the obstacles in
implementation of VE in Indonesia are the misunder-
standing of VE concept and international standards of
practice, the less experienced of VE personnel, and
the lack of implementation guidelines of VE.
Legal aspects of VE (regulation and contract)
In Indonesia, the concept of VE was introduced in
1986. However, since then up to the beginning of
2003 the development of VE is not widely known
because of the lack of government regulation that
explicitly allude VE programme implementation.
Jakarta Governor issued a Decree No. 108/2003
regarding Implementation Procedures of Jakarta
Province Budget and later in 2007 there is Public
Work Minister Regulation No.45/2007 regarding
Technical Guideline for State Building Construction;
both support and regulate the implementation of VE
in state projects. In 2010, Ministry of Public Works
4 R. YANITA AND K. MOCHTAR
(MPW) then issued a National Competence
Indonesian National Standard for VE practitioners. At
that time the implementation of VE on construction
projects started to appear although generally in pri-
vate projects (Kaming and Prastowo 2013). Budget
for the project is generally used Contract Change
Order and not VECP as prescribed in the Public
Work Regulation year 2007.
In Governor of Jakarta Regulation No 40/2014 as
the Amendment of the Governor of Jakarta
Regulation No 139/2009 regarding the Organization
and Work of Jakarta Housing Office Article 3, para-
graph 2 (j) it is stated that the Jakarta Housing Office
has the task of organizing housing, settlements and
technical guidance for building the regional govern-
ment with the function of supervision and VE to
building regional government including social facili-
ties and public facilities and supporting infrastructure.
Moreover, according to the Secretary of the
Construction Development Board of Indonesia
Ministry of Public Work at the opening of the
International Training and Certification VE in 2011
which was cooperated with SAVE International
United States, underlined five points related to VE
implementation in Indonesia construction projects.
The first point is that method of VE in its implemen-
tation in Indonesia is still a dearth of experts.
Consequently, government continues to create and
expand VE communities in HAVEI, through training
and certification for value engineers. The second
point is that the government is implementing a study
to prepare a variety of policies that could under pin
VE implementation in construction. The third point
is that the implementation of VE is not too optimal
because there is no equivalent legislation Law and
Government Regulation (PP) as the derivative regula-
tion under the Act of Construction Services, to par-
ticularly regulate VE implementation formally.
Finally, it is stressed that the government has
launched to accelerate infrastructure development in
the context of economic growth, expansion of
employment and poverty reduction; implementation
of VE in construction financed by government fund-
ing is very important, because it would bring
many benefits.
Implementation of VE in the United States is in
Public Law 104-106 which is a legal product similar
to legislation, in which there are quotations in the
form of a legal obligation to use the VE in the pro-
curement process routine in the Department of
Defense and other agencies. The legislation section 36
subsections 4306 contain first, each governing body is
obliged to implement and run the process and the
procedures cost savings based on VE. Second, VE is
a method of analysis of the functions of programme/
product/project, piece of equipment, buildings, facili-
ties owned by the state, which is contributed by the
contractor companies/individuals who are compe-
tent, and focussed on improving the performance,
reliability, quality, and safety. There are many stand-
ard contracts that regulate VE implementation. For
example, in the standard contract Construction for
engineering work and building the Federation
Internationale des Ingenieurs-Conseils 2005 article
13.2 regulates VE that the contractor can propose
changes where according to the contractor, can
speed the completion, reduce the cost of owner to
maintain the quality of work, improve efficiency
owner and beneficial to owner. If approved by
designers, the contractor should make his design
document. Once approved by designer, then docu-
ment of the changes and his fee (i.e. 50% of the cost
savings) is included in the contract. On the other
hand, if the design is not approved then the original
design is used.
Methodology
This research uses descriptive research method, to
determine the root causes and barriers to adoption of
VE particular problems associated with the legal
aspects and its alternative solution obtained from a
questionnaire survey. The research strategy is to get
comprehensive input on the constraints of VE imple-
mentation in Jakarta construction project by conduct-
ing survey with in-depth interview and discussion
with VE experts who have more than 15 years of
experience as a project managers or government offi-
cials. The discussion includes the problems of govern-
ment regulations and laws that exist in supporting VE
implementation, and alternative solutions for
improvement. The survey analysis results are dis-
cussed by the respondents and practitioners from
consultants and contractors in a Focus Group
Discussion (FGD) forum for final research results. To
obtain inputs and refine the research findings, the
FGD results then disseminated in a seminar with
audience of the construction community including
the owner, the consultants, the contractors, the local
government, the consultant and contractor associa-
tions, expert form universities and the VE expert
associations.
The questionnaire as the survey tool refers to some
of the obstacles of VE application from previous
 INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 5

Problems:
VE has not been applied in a cycle of construcon projects in Indonesia generally,
and Jakarta Province.

Literature Studies and results

of previous research on the Research Topics,
applicaon of VE in Jakarta & Objecves

Literature study : VE implementaon barriers and significant obstacles related

to legal aspects in Jakarta government’s Regulaon of VE implementaon.
Indonesia

Quesonnaire: Form quesons to in- depth interview.

Surveys and Data Analysis

1. Implementation of the survey was conducted through in- depth interviews using a
questionnaire containing a number of open questions. 9 Respondents are the Experts VE
of Highly Educated, the construction project professional in Jakarta (Owner, Consultants,
Contractors, Regulator (PUPR / Jakarta Public Works Department, experts VE ).
2. The questionnaire includes factors that cause VE barriers and measures to overcome
obstacles and their risks and benefits
3. Perform data analysis to get a causative factor affects descriptive method of analysis that
is seeing a trend of opinion of most of the speakers with the answers above 50% the
number of speakers is the most influential obstacles.
4. Based on the factors inhibiting effect, an analysis and discussion of the legal aspects and
regulatory support measures that will support the implementation of VE professionally.

Output: VE barrier causave factors that influence and root of the problem for the
analysis of alternave measures / policies and necessary regulaons to overcome
obstacles on the implement ion VE in the Jakarta government Project.

Focus Grpoup Discusion (FGD) on results of the study to the pares in the
construcon services related to the improvement of outcomes research.
(Parcipants of Government (PU / PU DKI), Consultants, Contractors, Universies.

Conclusion

Figure 2. Flowchart of research.

research (Kaming and Prastowo 2013) related to legal
and regulatory aspects. The questionnaire consists of
five sections. The first section is the respondent’s data
encompasses the experience of VE. The second sec-
tion is questions of VE regulations related to VE
implementation in general; 10 questions in this sec-
tion are to obtain the inhibiting factors of VE imple-
mentation and issues arising from current VE rules.
The third section is question on current implementa-
tion of VE particularly on construction works in
Jakarta; 16 questions in this section are to get current
condition of VE implementation in the Jakarta local
government projects. The fourth section is question
of factors inhibiting VE implementation in Jakarta
Construction Project; 10 questions in this section are
to get problems and root causes of VE implementa-
tion in the Jakarta local government projects. Finally,
the fifth section is questions to get suggestions to
overcome obstacles in applying VE; two questions in
this section are to get corrective steps to be taken, so
that VE can be applied and included in the infrastruc-
ture development system in Jakarta. It is structured in
open questions for discussion with the respondents to
derive the causes of obstacles and its relation to the
rules. Surveys with questionnaire to respondents
using in-depth interviews and discussions are con-
ducted to obtain a final their opinion factors inhibit-
ing of VE implementation based on the findings from
previous studies mentioned before from literature
study, including:
6 R. YANITA AND K. MOCHTAR
Table 1. Profile of respondents.
No Respondents Education Professionalism
1 Respondent 1 Project manager of big national S2 Centified
contractor company and member of HAVEI
2 Respondent 2 Lecturer, AVS, HAVEI and PE S3 Centified
3 Respondent 3 Regulator DKI, VE S2
4 Respondent 4 National contractor company, S2
regulator, professional Association, VE
5 Respondent 5 National contractor company S1 Centified
6 Respondent 6 National contractor company, S2
regulator, Association, VE
7 Respondent 7 Developer S1
8 Respondent 8 Private contractor S1
9 Respondent 9 Private contractor S1 Centified
 understanding of respondents to the legislation
(Act) and the regulations related to VE implemen-
tation, and whether the existing legislation is suffi-
cient to support the parties to implement the VE;
 the VE implementation experiences in Jakarta gov-
ernment construction projects to discover the main
problems according to the existing regulation;
 the important factors/root of the problem of VE
implementation;
 and finally, feedback in overcoming the obstacles
to get input of alternative solutions.
Respondents of the survey are owners, contractors
with experience working on projects in Jakarta, regu-
lators (MPW and Jakarta Government) and VE
experts who have construction certificate from the
Indonesia Construction Services Development Board
(LPJKN) and VE expertise certificate from SAVE
International in the United States that links from
HAVEI. The number of Indonesia VE experts with
experience in Jakarta construction projects procure-
ments is only around 30 experts. In this study the
respondents are nine experts with experience in
Jakarta construction projects.
The flowchart of the research can be seen in
Figure 2.
Data analysis from in-depth interview survey
results use the frequency analysis method. Factors
with frequencies above 50% are dominant inhibiting
factors affecting the application of VE. The ranking of
inhibiting factors is arranged according to fre-
quency percentage.
Survey results and discussion
Profile of respondents
Respondents are persons with undergraduate (S1),
master (S2) and doctorate (S3) education who are
Field Field of work at construction VE
experience project to day experience
>15 years Management and technical Yes
>15 years Management and technical Yes
– >15 years Management and engineering Yes
– >15 years Management Yes
>15 years Engineering –
– >15 years Engineering Yes
– >15 years Project manager development Yes
at owner’s project
– >15 years Management and engineering Yes
>15 years Management and engineering Yes
experienced in the project field, from the universities,
regulators (Jakarta Public Works Office and MPW),
practitioners implementing VE in construction phase
of the project or persons experienced VE as a repre-
sentative of the owner or a private contractor on the
project, including members of the HAVEI. The profile
of respondents is summarized in Table 1.
Implementation issues in construction projects VE
in the government of Jakarta
Based on in-depth interviews, it was found that, first,
only 22% of respondents who know about the govern-
ment regulations on VE implementation. These
respondents implement VE in their projects only for
their cost savings internally at construction phase. It
seems that programme socialization and promotion of
VE government regulations to the Indonesian
(Jakarta) construction industry stakeholders by VE
experts from association like HAVEI is still rarely
conducted and need to be improved. Its different
from the country where VE has been implemented.
In the United States, United Kingdom and Japan, for
example, the VE expert associations are very active in
socializing the benefits of VE in the construction
community, holding seminars on VE organizing,
workshops on VE results and VE expert profession
certification. Second, it was found that 80% of
respondents believe there is lack of commitment from
public owners (Local and Central Government) to
implement VE in their projects. This may be due to
the lack of their understanding of VE concept, the
benefit and its regulation. The VE concept should
begin at the conceptual design phase of a project as
applied in Japan, for the optimal project design and
cost as shown in Figure 1. It can be seen from survey
that 100% VE only conducted at construction phase
by the contractor. From discussions with respondents
it is discovered that VE in Indonesia applied by

public owners is similar to that implemented in the
United States and the United Kingdom that is applied
only in construction phase without any guidelines like
in Japan and the United States; for the future public
owners must be supported by an implementation
guideline prepared by HAVEI, as did SAVE and SJVE
so that their commitments and understanding in VE
implementation may be improved. Therefore, the
implementation of VE in Jakarta government con-
struction projects in this research is the VE process
undertaken by the VE expert/consultants on the basis
of the contract of employment of the owner at any
stage of the project cycle. In practice in Indonesia, it
is also known the internal VE, which is the imple-
mentation of the VE by internal contractors to min-
imize their own cost of project. Furthermore, the
respondents also believe that there are constraints
within the system of government financial manage-
ment and auditing policies that are less supportive of
the technical implementation of the VE. The system
of government financial management and auditing
regards the cost saving from VE implementation dis-
tribution to parties in construction project as a loss to
the government. This illustrates the state financial sys-
tem has not supported the implementation of VE.
Third, all respondents believe that the regulations
from government are not sufficient to support the
implementation of VE; For example, in Public Work
Minister Regulation No 45/2007 regarding Technical
Guideline for State Building Construction there is no
statement ‘mandatory’ for the project of building
12,000 m2 or above eight floors, and no sanction if it
is not implemented by any parties in construction;
consequently, the regulation is not implemented. The
stronger and more detail regulations (i.e. guidelines,
standard of procedures) which already exists in
United States, United Kingdom and Japan, which are
highly needed if VE is to be implemented successfully
in Jakarta-Indonesia. Finding number four is that
60% respondents stated that the implementation of
VE causes inconvenience to the designers and most of
the time creates conflicts among the parties in con-
struction project. This is because if the VE implemen-
tation results cost savings, then there is image the
designers are unprofessional in conducting their
work. Even this may be assumed by government audi-
tors as a matter of law because it causes financial loss
to the government. Consequently, only 10% of
respondents who did VE formally following the exist-
ing regulations; most of the time there is no large sav-
ings to share because they face problems with the
INTERNATIONAL JOURNAL OF CONSTRUCTION MANAGEMENT 7
government system of financial management and
auditing as stated above finding number two.
Alternative settlement of legal aspects for
implementation of VE in Jakarta
From further discussions, the respondents agree that
above four findings is of central importance to
improve the implementation of VE in Jakarta-
Indonesia in the future, and thus need actions to
overcome them. The first action is to compose more
assertive state regulation on VE implementation in
Jakarta construction, especially the state funded proj-
ects. This may be conducted either to compose the
new regulation or to strengthen the existing regula-
tions (Jakarta Governor Decree No 108/2003 regard-
ing Implementation Procedures of Jakarta Province
Budget and Public Work Minister and Regulation No
45/2007 regarding Technical Guideline for State
Building Construction). The latter alternative is by
equipping them with more detail guidelines such as:
the method of implementation VE in the planning,
design and construction phase as well as the rules of
the payment of cost-saving distribution to any parties
in construction; the detail criteria for project to be
implemented VE programme; and the primary task
and function of VE certified expert in such projects.
The most important alternative is to enhance HAVEI
role as a group of VE experts to make ‘VE implemen-
tation guidelines’ to be implemented in the infrastruc-
ture procurement process and endorsed by the
government that is successfully implemented by
SAVE, IVJM and SJVE.
The second action is the socialization and promo-
tion of VE concept regularly by HAVEI to the con-
struction project stakeholders, including with the
topic of the laws regarding the concept of VE, regula-
tions and guidelines for VE implementation, and the
good coordination to stakeholders in construction. In
this event, VE experts are involved in order to obtain
the right definition and mindset about the implemen-
tation of VE.
The third action is the creation of a VE Code of
Conduct to any parties involved in construction when
VE is implemented. The code of conduct may stress
that any design has unnecessary costs due to limited
time and knowledge of designers, and thus VE is to
obtain the optimal design of the existing design to
have optimum added value to all stakeholders in con-
struction by reviewing the quality aspect, work meth-
ods, maintenance and durability so that the
unnecessary costs of design is minimized.
8 R. YANITA AND K. MOCHTAR
A seminar of dissemination of these findings was
also conducted to get more input for the recom-
mended actions. The findings and the recommended
actions are confirmed by the participants of the sem-
inar which includes: the government of Jakarta,
Public Financial Auditing Institution (BPKP), Police
Department, Association of Lawyers (PERADIN) and
Construction Services Development Board.
Conclusion
From the findings and discussion above, it can
be concluded:
1. The problems in the VE Implementation of
Jakarta construction projects are:
a. Seventy-eight percent of respondents believe
that the understanding of construction stake-
holders of VE concept and benefits is still
low, and thus the construction stakeholders
in Indonesia are not willing to implement
the VE in their projects.
b. All respondents believe that the existing reg-
ulations of VE implementation in public
projects is not assertive and detail enough to
promote its implementation. For example,
the existing VE rules in Public Work
Minister Regulation No. 45/2007 as discussed
above, are not applied consistently and there
is no sanction if it is not applied. It illustrates
the absence of government commitment to
the implementation of VE in Indonesia. All
respondents also believe that there is obstacle
in VE implementation such as the problem
with the auditing methods in public financial
auditing institution that the cost saving from
VE programme implementation distributed
to project parties is assumed as loss of pub-
lic finance.
c. Sixty percent of respondents feel that the
implementation of VE causes inconvenience
to the designers, because the designers do
not comprehend the VE concept in optimiz-
ing the engineering design due to different
knowledge of construction parties especially
between the contractors and the designers.
2. The recommended action to overcome the prob-
lems in the VE Implementation of Jakarta con-
struction projects are:
a. HAVEI as the VE expert society, as the role
of the construction industry society, has to
be more active its role to socialize and
promote the VE concept regularly to the con-
struction project stakeholders to improve
their understanding and finally willingness to
implement and support VE programme in
construction projects. The implementation of
VE in United States, United Kingdom and
Japan is evidenced by the support of the high
activity of its VE association to improve
understanding of VE’s benefits for construc-
tion actors such as organizing seminars, cre-
ating VE implementation guidelines and
organizing workshops on VE results that
have been implemented and performing cer-
tification profession for VE experts. This can
be an example for HAVEI. The government
together with HAVEI and the other construc-
tion stakeholders, including the public finan-
cial auditing institutions may cooperate to do
such action.
b. To compose more assertive state regulation
on VE implementation in Jakarta construc-
tion, especially the state funded projects,
either by modifying the existing regulations
or by composing the new more comprehen-
sive VE implementation regulation. The cre-
ation of VE implementation guidelines is
carried out by HAVEI together with the gov-
ernment. By doing this any parties in con-
struction have to implement VE in their
projects by law, and finally the benefits of
VE may be realized in Jakarta-Indonesian
construction industry.
c. The third action is the creation of VE Code
of Conduct to any parties involved in con-
struction when VE is implemented in make
better understanding among the professionals
in construction, particularly between the
designers and VE practitioners in their each
job professionally.
These findings and recommended solutions may be
useful for any parties elsewhere who face the similar
VE implementation problems.
Disclosure statement
No potential conflict of interest was reported by
the authors.
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