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ParsCo, LLC

55 South A Street

P.O. Box 12862

Pensacola, FL 32591

O:  850.696.7656

F:   850.390.4943

Visit us on the web at www.parscoconstruction.com

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ParsCo Construction located in Pensacola Florida services the entire Gulf Coast Region and Southeast – www.parscoconstruction.com. With over $500M in experience, ParsCo has devised solutions to construction cost budget issues. It seems that all too often Owners end up with a project that they can’t afford to build and they are forced to cut costs and sacrifice design elements to make a project a reality. 

ParsCo is an expert in the value engineering process. If ParsCo is engaged on the front end of a project, the Owner will rarely find themselves with a design that can’t be constructed for their budget. ParsCo makes sure they govern over the design process to prevent over design. 

However, if ParsCo is not involved in the design stages, they can still be brought in to to “value engineer” a design and make a project a reality.  

Value Engineering (VE) is not a design/peer review or a cost-cutting exercise. VE is a creative, organized effort, which analyzes 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, multi-disciplinary 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.Value Engineering is a conscious and explicit set of disciplined procedures designed to seek out optimum value for both initial and long-term investment. First utilized in the manufacturing industry during World War II, it has been widely used in the construction industry for many years. 

ParsCo’s VE services can be applied at any point in a project, even in construction. However, typically the earlier it is applied the higher the return on the time and effort invested. The three main stages of a project and VE’s application are described below.

Planning

At the Planning stage of development, there are additional benefits to be derived from a ParsCo Value Engineering Workshop. The ParsCo team can:

• Review the program
• Perform a functional analysis of the facility
• Obtain the owner/users definition of value
• Define the key criteria and objectives for the project
• Verify/validate the proposed program
• Review master plan utility options (e.g. Central Utility Plant versus individual systems)
• Offer alternative solutions (square footage needs per function, adjacency solutions, etc.)
• Verify if the budget is adequate for the developed program

The benefits are tremendous.

• Any changes to the program at this stage have very little if any impact on schedule and A/E time and redesign costs.
• The project will be developed with fewer changes, redesigns, and a greater understanding by all parties of what the final function and space allocations will be.
• An independent team can bring a fresh outside view of alternate solutions from other similar projects.

Design

This is the stage that ParsCo is used to becoming involved, when the design has at least made it to the schematic stage. Most government agencies require at least one VE session at the design stage on projects over a certain $ size. The primary tool available to the VE team is the ParsCo Workshop—typically a 40-hour session (or less for smaller or less complex projects).

The ParsCo Workshop is an opportunity to bring the design team and client together to review the proposed design solutions, the cost estimate, and proposed implementation schedule and approach, with a view to implementing the best value for the money. The definition of what is good value on any particular project will change from client to client and project to project.

Methodology and Approach

During the actual ParsCo Workshop portion of the VE study, the five-step Job Plan is followed:

The ParsCo VE Job Plan follows five key steps:

1. Information Phase
2. Speculation (Creative) Phase
3. Evaluation (Analysis) Phase
4. Development Phase (Value Management Proposals)
5. Presentation Phase (Report/Oral Presentation)

These five key steps are described as follows:

1. Information Phase:
At the beginning of the ParsCo VE Study, it is important to:

• Understand the background and decisions that have influenced the development of the design through a formal design presentation by the design A/E.
• Analyze the key functional issues governing the project. The functions of any facility or system are the controlling elements in the overall VE approach. This procedure forces the participants to think in terms of function, and the cost and impacts associated with that function.
• Define Owner’s objectives and key criteria governing the project.
• Determine Owner’s definition of Value.

2. Speculation (Creative) Phase:
This step in the ParsCo VE study involves the listing of creative ideas.

• The VE Team thinks of as many ways as possible to provide the necessary function within the project areas at a lesser initial or Life-Cycle Cost which represent improved value to the client.
• Judgment of the ideas is prohibited.
• The VE Team is looking for quantity and association of ideas, which will be screened in the next phase of the study.
• Many of the ideas brought forth in the creative phase are a result of work done in the function analysis. This list may include ideas that can be further evaluated and used in the design.

3. Evaluation (Analysis) Phase:
In this phase of the Project, the ParsCo VE Team, together with the Client and/or Users,

• Defines the criteria to be used for evaluation.
• Analyses and judges the ideas resulting from the creative session. Ideas found to be impractical or not worthy of additional study are discarded. Those ideas that represent the greatest potential for cost savings and value improvement are developed further. A weighted evaluation is applied in some cases to account for impacts other than costs (such as schedule impacts, aesthetics, etc.).

4. Development Phase:
During the development phase of the ParsCo VE study, many of the ideas are expanded into workable solutions. The development consists of:

• Description of the recommended design change.
• Descriptive evaluation of the advantages and disadvantages of the proposed recommendation.
• Cost comparison and LCC calculations.
• Each recommendation is presented with a brief narrative to compare the original design method to the proposed change.
• Sketches and design calculations, where appropriate, are also included in this part of the study.

5. Presentation Phase:
The last phase of the ParsCo VE Study is the presentation of the recommendations in the form of a written report. A briefing/oral presentation of results is made to the Client and Users, as well as the Design Team representatives. The recommendations, the rationale that went into the development of each proposal, and a summary of key cost impacts are presented at that time so that a decision can be made as to which Value Management proposals will be accepted for implementation and incorporation into the design documents.

In addition to the monetary benefits, a VE Workshop provides a valuable opportunity for key project participants to come together, then step aside and view the project from a different perspective. The ParsCo VE process therefore produces the following benefits:

• Opportunity to explore all possible alternatives
• Forces project participants to address “value” and “function”
• Helps clarify project objectives
• Identifies and prioritizes Client’s value objectives
• Implements accepted proposals into design
• Provides feedback on results of the study

Construction

During this phase value engineering is still possible through the use of Value Engineering Change Proposals (VECP). ParsCo, a Certified General Contractor, can propose solutions that offer enhanced value to the owner, and share in the financial benefits realized. Clearly the owner must consider the proposals very carefully, from a life-cycle perspective and a liability perspective. The A/E team must be brought in to the decision-making process to agree to the proposed change as not having any negative impact on the overall design and building function. The evaluation of a VECP is treated similarly to any change order during construction, with issues such as schedule and productivity impacts being considered along with the perceived cost savings generated.

Conclusion

In the final analysis, Value Engineering is not only beneficial, but essential because:

• The functionality of the project is often improved as well as producing tremendous savings, both initial and Life-Cycle Cost.
• A “second look” at the design produced by the architect and engineers gives the assurance that all reasonable alternatives have been explored.
• Cost estimates and scope statements are checked thoroughly assuring that nothing has been omitted or underestimated.
• Assures that the best value will be obtained over the life of the building.

ParsCo Construction recently completed a new restaurant project in Downtown Pensacola in a historic building.  The Owner didn’t have a set of design drawings and was limited to a tight budget.  With this in mind, ParsCo used past methodologies and  design approaches to assist the Owner in saving money on the restaurant design and putting that money towards construction.  In the end the project was completed and the Owner was satisfied. 

If you are planning a new restaurant project it is important to plan/budget properly for the following: 

Restaurant Design and Construction Budgets – Usually one of the first questions we’re asked by those embarking on restaurant projects relates to budget.  How much does it cost?  Well, budgets can swing dramatically from project to project, but here are some rules of thumb.  Generally, restaurants are built between $25 – $300 a square foot (some mega projects or ultra-high-end projects have gone for a few thousand a square foot), but this also depends on whether we are doing a renovation, or new construction.  The cost for “restaurant design” and planning is often around 5-10% of the construction budget (considering strictly the design phases of the project, not larger concept development issues involved in large scale development projects).  The type of restaurant you are building is certainly a factor – you’ll spend more per square foot for a fine dining restaurant than a fast-casual concept, generally speaking.  Also, you should expect an entirely different financial model in approaching the creation of a new restaurant concept you plan to roll-out nationwide versus a single one-off concept.  The former requires much more planning and development.  An average Red Lobster is believed to cost around $120 per square foot and an average Starbucks around $85 per square foot.  However, these companies have spent millions and millions in design, branding and purchasing planning/efficiencies, so a start-up shouldn’t expect to be anywhere near these ranges in creating a new concept from scratch.  It is amazing how often someone thinks they will be the next Starbucks within a 10 year period and with a $500,000 investment.  Starbucks has spent hundreds of millions of dollars to perfect what we see today in their latest restaurant prototype.  It’s more than just wishful thinking to think it can be duplicated as a growth concept within the cost of what they can today build a single unit they’ve spent so much perfecting.  Mega chains can afford seven-figure per year Executive Vice President’s and teams of hundreds working on a new concept.  It’s believed well over $10M (“soft” costs) is spent developing just the prototype plans some projects.  So can a new prototype be created for less than $10m?  Of course.  By all means.  It’s less likely though that the next billion dollar brand can be conceived within less than the cost of opening a single unit though.  At a minimum, you can expect to spend a lot more in the years to come correcting the mistakes of the under-funded prototype.  There’s a saying, “Measure twice and cut once”.

ParsCo prides itself in working with customers that don’t have the budget but have the vision to create a new concept and make it a reality.  This requires the ParsCo construction team to assist them through the design and building process.  No matter how large or small a new project is, ParsCo will work with you on developing the design and budgets necessary to make your project a reality. 

Construction Documents – If you’re going to build or remodel a restaurant, ParsCo will need a set of scaled construction documents, often called "working drawings". These documents can be drawn on a CAD system or by hand and consist of space plans, elevations, schedules and details. These drawings are generally prepared by several design consultants and engineers, integrated into one set for submittal to your local building and health department.

Building Codes – All your plans, drawings and specifications should be in compliance with the building and health codes that are applicable to your location.  Your drawings, plans, equipment and finish specifications should be approved by the following regulatory agencies:

• City or County Health Department
• Building Inspections/Planning and Zoning Departments
• Dept. of Building and Safety
• Fire Marshall
• Department of Restaurants or Authority Having Jurisdiction over Licensing

Each department will have an application and permit/licensing and possibly even a plan review fee.  Note that during this review process it is not uncommon to find out that additional design changes may be required which may also change the costs of the construction for your project. 

ParsCo, LLC

55 South A Street

P.O. Box 12862

Pensacola, FL 32591

O:  850.696.7656

F:   850.390.4943

Visit us on the web at www.parscoconstruction.com

ParsCo utilizes numerous different ways to deliver a project to Owners. One of ParsCo’s preferred methods that has become increasingly popular recently is ParsCo’s Integrated Project Delivery (IPD). This delivery model is based on construction principals that adds value through maximizing efficiency and collaboration of all involved (owner, A/E, builders, trade contractors, facility managers, end-users). 

ParsCo has been a pioneer in utilizing this method and has perfected the system.  This method can be implemented in conjunction with typical delivery methods such as CM-at-Risk or Design-Build.

IPD is based on a philosophy of facilitation and empowerment, which creates a truly integrated team composed of both key project stakeholders and trade contractors. IPD integrates trade contractors’ expertise into the design effort through a process called Design Assist, which involves bringing onboard trade contractors during the design phase through a competitive and value-based procurement process so they can collaborate directly with the designers — resulting in buildings designed around actual equipment and systems, superior constructability reviews, and RF’Is and other questions being clarified prior to construction documents.

Key principles of IPD include:

1)       Collaborative innovation and decision-making

2)       Mutual respect and trust

3)       Open and enhanced communication

4)       Early involvement of key participants

5)       Intensified planning preconstruction management

6)       Design Assist

7)       Appropriate use of technology (BIM, iBuild)

8)       Optimizing effectiveness and efficiency throughout project life-cycle

9)       Continuous process improvement

Some of the Major Benefits of IPD are:

1)       Schedule optimization (eliminates schedule waste)

2)       Reduced project costs (through schedule optimization/refined coordination)

3)       Increased team communication, collaboration, and cohesion

4)       Higher quality facilities based on a common goal and increased collaboration with trades

5)       Safer jobsite through better understanding of workflow by all

For more information on how ParsCo professionals can assist you in your next project using IPD contact us at 850-696-7656 or email us at info@pars-co.net.