Value Engineering Has the Potential To Reduce Mass Transit Construction Costs

Millions of dollars in federal, state, and local construction funds can be saved by applying value engineering (VE) to the designs of construction projects funded by the Urban Mass Transportation Administration (UMTA). GAO conducted this review to determine: (1) how effective VE would be when applied to heavy rail and bus construction projects; and (2) whether VE could produce greater savings than the UMTA peer review on one aspect of a proposed subway station.

Most transit authorities that receive UMTA funds lack the technical expertise to design projects. To obtain this capability, they hire architectural/engineering firms. Because the firms design facilities to satisfy the requirements of transit authorities, the cost to construct the facilities may be greater than necessary. The design plans are evaluated by UMTA regional engineers for cost effectiveness, safety, and technical feasibility. However, UMTA officials and architectural/engineering representatives acknowledge that UMTA does not have enough engineers to adequately review designs. Unlike VE, peer review does not include use of a job plan, analysis of the functional requirements of a system before recommendations are made, or use of formal criteria and guidelines. UMTA believes that peer reviews held during the conceptual and informational stages of project development have saved millions of dollars in construction costs. For fiscal years (FY) 1965 through 1981, UMTA has provided about $18 billion in capital grants to local transit authorities to construct and rehabilitate rail and bus facilities, which included $7.5 billion for rail and $1.5 billion for bus projects. The remaining funds were used to purchase rolling stock and equipment and for similar purposes. In FY 1981, obligations for UMTA capital programs totalled about $2.9 billion; $866 million was used for bus and $2 billion for rail projects. GAO believes VE can significantly reduce construction costs as demonstrated in VE workshops and by other federal agencies.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Sarah F. Jaggar Team: General Accounting Office: Resources, Community, and Economic Development Division Phone: (202) 275-1000