Ethiopian Institute of Architecture Building Construction

And City Development (EiABC)

Value Engineering Practice on Building Construction

Projects at Addis Ababa, Ethiopia

GROUP NAME ID.NO

BINIAM BELAYNEH UGR/6761/12
BONSA MELKAMU UGR/1145/12
LEUL AMARE UGR/1297/12

Sub to Mr. ZEWDU AND Ms. LINA

Sub. Date_ May 30/2023

Contents
CHAPTER ONE : INTRODUCTION ............................................................................ 3
1.1 Research background ......................................................................................... 3
1.2 Problem statement ............................................................................................. 4
1.3 Significance of the Study ......................................................................................... 4
1.4 Scope of the study ............................................................................................... 4
1.5 Research objectives ............................................................................................ 4
1.5.1. General Objective ................................................................................................ 4
1.5.2. Specific Objectives ....................................................................................................... 5
1.6 Research Question’s. .......................................................................................... 5
Chapter Two : Literature review ................................................................................ 5
2.1 General .......................................................................................................................... 5
2.2 Global Experience of Value Engineering .................................................................. 5
2.3 Construction value engineering practice in Ethiopia ........................................................... 6
2.3 Effective time to apply value engineering .............................................................. 6
2.4 Benefits of Value Engineering ............................................................................ 7
Chapter Three: Research Methodology .................................................................... 7
3.1 Research Approach ....................................................................................................... 7
3.2 Method of Data collection ............................................................................................ 7
3.3. study area ................................................................................................................. 8
3.4 Method of Data Analysis ........................................................................................ 8
CHAPTER FOUR: WORK PLAN/SCHEDULE AND BUDGET ............................. 8
4.1 WORK PLAN/SCHEDULE ........................................................................................... 8
4.2 BUDGET .................................................................................................................... 9
References ...................................................................................................................... 10
 CHAPTER ONE : INTRODUCTION
1.1 Research background

Construction is widely acknowledged as the most important single constituent in a

developing country’s investment program with about 50% of total capital formation (ERA,
2005). It corresponds to the 60% public capital investment in Ethiopia. With such - a high
contribution the construction industry has - a major influence on the economic growth of
a country and is, conversely, dependent on the state of the economy for the realization of
its potential (ERA, 2005; Tadesse, 2009). An inefficient and ineffective construction
industry will, therefore, adversely affect all other sectors of the economy.

The construction sector plays an important role in short term trends, annual and more
frequent development not only for the sector itself but also for other economic activities.
Construction activity generally contributes much to the country's total activity, at least
with the corresponding demand for materials and labor inputs. The swings in the level of
construction activity tend to both amplify and to lead the movements in the economy as
a whole.

Recently the construction industry in Ethiopia is in fast growing mode and the industry
plays a vital role in the countries development in terms of creating job opportunities and
serving as a base for other sectors to work on it. Since the industry is playing role for the
growth of the country in so many ways, priority should be given for it to meet its need
intended purpose in a sustainable and economical way. The industry is full of mistakes
due to its complex nature, which result in, arise of claim and disputes between the
stakeholders because of quality, time and budget issues.

One of the main reason for delay of construction project in Ethiopia is price escalation of
material. In order to counter balance this, the idea and implementation of Value
Engineering should be promoted. It is is a creative, organized effort, which analyses the
requirements of a project for the purpose of achieving the essential functions at the lowest
total costs (capital, staffing, energy, maintenance) over the life of the project.

Through a group investigation, using experienced, multidisciplinary teams, value and

economy are improved through the study of alternate design concepts, materials, and
methods without compromising the functional and value objectives of the client.
 1.2 Problem statement

Construction industry plays an important role to develop the physical infrastructure,

enhance economic activities and enable social development of the country. But one of the
main problem faced by the construction industry in Ethiopia are: Price escalation of the
materials price, cost efficient design and method of work. According to (SMEC, 1999;
MoWUD, 2001; ERA, 2009) the Ethiopian construction industry is said to cover many
inefficiencies and ineffectiveness in its delivery system and processes. This bad
effectiveness affects the country’s resources, and not delivering the intended purpose.

Therefore, Value engineering focuses on function analysis of research objects and strives
to achieve the required function reliably at the lowest life cycle cost to gain the best
integrated benefits and which Value Engineering seeks optimizing and improving
decision making to realize the optimal expenditure of owner funds while meeting required
function at the lowest cycle cost. . The aim of this study to assess problems concerning the
idea and implementation of VE in construction, at Addis Ababa building projects and
forwarding recommendation regarding the importance of applying VE in construction
project.

1.3 Significance of the Study

Since value engineering in construction offers a strategic approach to optimizing project

costs while maintaining quality, functionality, and performance. By identifying and
enhancing sustainability, and reducing risks, it helps the industry to accelerate
significantly by reducing unnecessary expense while maintaining quality and
functionality.

1.4 Scope of the study

The scope of the research is on building projects only in Addis Ababa which are on the
stage of design and construction. In order to make more specific and time bound the
research focus on building projects completed by grade one (G-1), contractors, (G1)
consultants and clients which are registered by Addis Ababa city construction bureau.

1.5 Research objectives

1.5.1. General Objective

To assess the idea and implementation of value engineering in Addis Ababa building
project.
 1.5.2. Specific Objectives
➢ To study the impacts of value engineering interms of cost, time and durability of
construction projects.
➢ to explore the implementation of VE in design and construction stage.
➢ To identify the negative consequence of not concerning VE in Addis Ababa
building project.

1.6 Research Question’s.

1. In what extent the concept of value engineering adapted in construction industry

at Addis Ababa building project?
2. What is the role of value engineering both at the design and construction stage?

Chapter Two : Literature review

2.1 General
Value Engineering is a professional team approach in its application-oriented functions
and carried out systematically used to analyze and improve the value products, design,
facility, system, or service. Value engineering is a good methodology to solve problems or
reduce the cost, can improve the performance or quality requirements set (Society of
American Value Engineering, 2009).

According to (Zimmerman and Hart 1982) is a method of value engineering in the form
of cost savings by using a systematic approach to get the balance of the best functions of
cost, strength and appearance of a structure on the project.
Value engineering have been practiced in the industrial sector for nearly 70 years now,
the success and the economic impact of VE resulted in the spread of this technique into
other sectors including construction industry.

Most people in the construction industry believe that value engineering is a new program
still in its infancy. Value engineering, as applied to the construction field, has been there
since the late 1960s or early 1970s. Value engineering is not a new concept (Zimmerman,
et al., 1982).
2.2 Global Experience of Value Engineering
The year 2007 marks 60 years of the life of the value management service. During the first
four decades North American thinking dominated its development because of this It is
believed that the origin of VE is USA. However, during the past ten years developments
in principally Europe, Australia and China (notably Hong Kong) have seen the divergence
of ideas and practices, which have impacted the progress of the value methodology in
North America. The early years of Value Management have been dominated by the US
practice. A watershed occurred in the mid-1980s with the international use of the method
in construction (Kelly, et al., 2004).
According to Dell‟Isola, 1997, approximately twenty-one countries have active Value
Engineering practitioners. SAVE International Chapters are also located in Korea, India,
France, Germany, Hungary, Saudi Arabia, and Australia. In addition, there are currently
programs throughout Europe, Canada, South America, Taiwan, and South Africa
(Dell'Isola, 1997).

2.3 Construction value engineering practice in Ethiopia

One of the challenges the Ethiopian construction industry was facing is traditional
method of management. Latest management technologies and approaches utilization was
minimal. Almost all experts in the project have no knowledge on the principle of
value engineering and has no willingness to implement the principle. The evaluation
made using value engineering principle shows the current management practice was
more conventional and the industry is still facing delay of projects, cost overrun and poor
quality while there are opportunities to minimize such problems. After finishing desk
study, the researcher tried to implement value-engineering principles in companies in
order to find out the improvement. However, most of stakeholders were not interested to
do so and almost all of the respondents were new for the principle. This is mainly due to
the Ethiopian construction industry experts are not flexible to adopt new construction
management practices. 63.6% of respondents believe that their company is using new
technologies and approaches for construction. Nevertheless, the desk study shows the
management system the industry using was not supported by the latest technologies and
computerized system. Most of the companies (80.3%) has scheduled meeting with
stakeholders. However, the interview shows that it was not fruitful as expected.
(Tsigereda Garomsa, Elmer De Castro Agon, Sintayehu Assefa. Concept of Value
Engineering and Current Project Management Practice in Ethiopian Building
Construction Projects. American Journal of Civil Engineering. Vol. 7, No. 1, 2019, pp. 1-
8. doi: 10.11648/j.ajce.20190701.11).

2.3 Effective time to apply value engineering

Value Engineering should be performed as early as possible – before commitment of
funds, approval of systems, services, or designs – to maximize results. The potential
savings is much greater the earlier Value Engineering is applied. When Value Engineering
is applied later, two things increase: the investment required to implement any changes,
and resistance to change (Dell'Isola, 1997).
Value engineering is effective in many areas of the construction industry, and it can be
utilized at different stages in the life of a building. The greatest potential for the
integration of VE exists in three major areas:
1. Planning and design
2. Construction
3. Maintenance and operations
Of these three construction areas, the greatest potential for integrating value engineering
lies in planning and design. Early in the development of value engineering, architects and
engineers were resistant to the implementation of VE. The typical approach to planning
and design was to proceed with design until an established time for example, schematic
or design development, or wait until a cost overrun surfaced. In time, it became apparent
that more savings were being lost than realized. Eventually, the U.S. government and
owners, who recognized continual cost overruns and poor value results, encouraged the
design community to embrace VE. As a result, the application of value engineering moved
to earlier design phases and was integrated into the design process. (Dell'Isola, Alphonse
J. 1997).

2.4 Benefits of Value Engineering

Value engineering is considered as a very effective approach, which must be understood
at all levels of the project management and must be accepted every part of the world. The
benefits of this approach are listed by K. Ali et al. in four main categories.
➢ Simplification of methods and procedures, which saves time, cost and resource.
➢ Better communication and understanding of project objectives leading to better
quality work and responsiveness to clients priorities.
➢ The client gets opportunity to formally participate on design process. Hence
increases, the focus of client to the project.
➢ The parties in the industry will have good communication.

Chapter Three: Research Methodology

3.1 Research Approach

➢ Quantitative and
➢ Qualitative
However, we mostly use qualitative research approach because our research methodology
is based on Ground theory it is predominantly inductive which develops the theory from
the data collected rather than having some pre-data hypothesis.

3.2 Method of Data collection

✓ Observation
✓ Interviews
 ✓ Questioners and desk study.
3.3. study area
The Area chosen will be construction building companies which are GC-1 building
projects found in Addis Ababa. The organizations were assured that the purpose of the
study is purely for academic purpose i.e. to conduct comprehensive study on the idea and
implementation of value engineering in the industry. The interview for in depth
discussions will be undertaken with selected professionals at top managerial level in their
respective organizations.

3.4 Method of Data Analysis

After review of different relevant literatures data, collection tools were adapted and used.
It is free from any bias and it included in the output. We use ordinal scale to measure
level of usage by responding firms from “Very low involvement” to “Very high
involvement” that is, 1= Very low involvement, 2= low involvement,, 3= Medium
involvement, 4= high involvement , 5= Very high involvement. All the collected
information from the survey will be checked and verified.

CHAPTER FOUR: WORK PLAN/SCHEDULE AND BUDGET

4.1 WORK PLAN/SCHEDULE

We plan this research project will take four months. We propose timescale that can
be updated according to the situation, as follows:

N Activity March April May June

o W W W W W W W W W W W W W W W
. 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
1 Organizing data collectors
2 Literature review
3 Questionaries’ development
4 Data collection
5 Data analysis
6 Conclusion
7 Recommendation •

8 Final report submission

4.2 BUDGET

No. Item/ description Unit Amount Unit cost Total Cost

(ETB) (ETB)

1. Stationary Materials
1.1 Stapler Piece 1 35.00 35.00
1.2 File Binder Piece 1 25.00 25.00
1.3 Correction Fluid Piece 2 20.00 40.00
1.4 Pen Piece 12 8.50 102.00
1.5 Pencil Piece 2 12.00 24.00
1.6 Paper Pack 3 100.00 300.00
1.7 Flash Disk (32G.B) Piece 1 300.00 300.00
Sub-total (1) 826.00
2 Copy and Print Pages
2.1 Copying (literature Pages 100 1.00 100.00
review)
2.2 Printing (literature Pages 150 1.00 150.00
review)
2.3 Copying (Questionnaires) Pages 100 1.00 100.00
2.4 Other print outs Pages 150 1.00 150.00
Sub-total (2) 500.00
3 Transportation Cost 600
3.1 To the study area Trip 10 50.00 500.00
4 Cost during Interview - - - 1000.00
4.1 Mobile Card - - - 500.00
Sub-total (3) 2000.00
Grand Total (1+2+3) 4425.00
Unexpected Cost (15% of Grand total) 664.00
Grand Total 5,100.00
 References
Garomsa, Tsigereda, Elmer De Castro Agon, and Sintayehu Assefa. "Concept of Value
Engineering and Current Project Management Practice in Ethiopian Building
Construction Projects." American Journal of Civil Engineering 7.1 (2019): 1-8.

Abenezer Tesfaye,Franoli Mathewos,Hermela Sisay “VALUE ENGINEERING PRACTICE ON

PRACTICE ON CONSTRUCTION PROJECT IN EAGLE HILLS REAL ESTATE AT LEGAHAR DURING
DESIGN STAGE, ADDISABABA” ADDIS ABABA UNIVERSITY
A.Sharma and R. M. Belokar, “Achieving Success through Value Engineering: A Case
Study,” in Preceding’s of the World Congress on Engineering and Computer Science,
2012, vol. II, pp. 24–27
Berawi MA. 2013. Developing Conceptual Design of Mega Infrastructure Project: Creating
Innovation and Added Value. Vallue World, The American Society of Value Engineering
(SAVE) International Conference, Washington (USA)

Dell'Isola, Alphonse J. 1997. Value Engineering: Practical Application for Design,

Construction, Maintenance & Operations. United States of America: R.S. Means
Company, Inc., 1997. 087629-463-8.
Division of Highways, West Virginia Department of Transportation. 2004. Value
Engineering Manual. West Virginia: WVDOH Office Services Division (Available at
http://www.transportation.wv.gov/highways/engineering/files/WVVEMANUAL.pdf),
2004
Kelly, J., Male, S., & Graham, D. (2004). Value Management of Construction Projects2nd
Edition. Blackwell: Wiley.
K. Ali, A. Ahmed, and R. K. Pandey, “Concept of Value Engineering in Construction
Industry,” Int. J. Sci. Res., vol. 5, no. 4, pp. 1231–1237, 2016.
Miles D Lawrence. 1971. Technique of Value Analysis and Engineering. New York: The
McGraw-Hill Companies, Second Edition.

Society of American Value Engineering (2007)

Zimmerman, Hart. 1982. Value Engineering A Practical Approach for Owner, Designer,
and Contractors. New York: Van Nostrand Reinhold Company.