Report Title:

State construction, infrastructure, and transportation projects

Description:

Requires value engineering and charrette services for construction, infrastructure, and transportation projects that cost more than $2,500,000. (HB2210 HD2)

HOUSE OF REPRESENTATIVES

H.B. NO.

2210

TWENTY-SECOND LEGISLATURE, 2004

H.D. 2

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO ECONOMIC DEVELOPMENT.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that inadequate design and planning result in poor-quality construction and excess costs.

Improving the quality of construction is an important issue because annual construction expenditure in Hawaii is approximately $3,000,000,000, and the State spends between $500,000,000 to $1,250,000,000 annually on capital improvement projects.

The legislature finds that the value engineering methodology helps organizations compete more effectively in local, national, and international markets by:

(1) Decreasing costs;

(2) Increasing profits;

(3) Improving quality of construction;

(4) Expanding market share;

(5) Saving time;

(6) Solving problems; and

(7) Using resources effectively.

Value engineering is a recognized field of study in engineering education and taught at the college of engineering at the University of Hawaii at Manoa. Value engineering is the systematic process of review and analysis of an engineering project by a team of persons not originally involved in the project. Such a team may offer suggestions to improve project quality and reduce the total cost of the project by combining or eliminating inefficient or expensive parts or steps in the original proposal, or by redesigning the project with different technologies, materials, or methods.

All federal agencies already require the use of value engineering pursuant to Public Law 104-106 (1996). The United States Department of Defense has reaped immense benefits amounting to tens of billions of dollars ever since the implementation of value engineering in the 1950s, with average savings of more than $20 for every $1 invested. Other agencies are now reporting similar dividends.

The larger value engineering methodology prevalent in the industry also includes charrettes and functional analysis concept design.

The legislature also finds that the U.S. Department of the Army has recently required the use of planning charrettes for twenty to thirty per cent of their construction projects, because of the benefits to construction value through the identification and calculation of appropriate scope and costs.

Another derivative of value engineering is the design charrette, which is used to achieve the long-term goals of cost-savings, reduction of change orders, and reduction of claims and litigation.

The purpose of this Act is to require the use of value engineering and charrette services for construction, infrastructure, and transportation projects costing more than $2,500,000.

SECTION 2. Chapter , Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . Value Engineering and charrette services

- Planning charrettes on state projects. (a) State capital improvement projects shall require the use of outside planning charrette services to define the scope and cost of projects. These services shall be procured at the inception of the project, before five per cent of the design has been completed.

(b) All such planning charrette services shall be conducted for at least one week and be supervised by cost specialists. During this time, the stakeholders shall extend their full cooperation to fulfill the aims of the planning charrette exercise.

(c) Payment for planning charrette services shall be made at the prevailing market rates.

- Design charrettes on state projects. (a) State capital improvement projects shall require the use of outside design charrette services to define the functions and objectives of specific designs. These services shall be procured when twenty-five to forty per cent of the project has been designed.

(b) All such design charrette services shall be conducted for at least one week and be supervised by value specialists. During this time, the stakeholders shall extend their full cooperation to fulfill the aims of the design charrette exercise. For projects costing more than $5,000,000, the minimum time for the exercise shall be eight working days.

(c) Payment for design charrette services shall be made at the prevailing market rates.

- Value engineering on state projects. (a) State capital improvement projects shall require the use of outside value engineering services to enhance the value of projects. These services shall be procured and completed once the design is seventy-five to eighty-five per cent complete, but before the project is put out to bid for construction.

(b) All such value engineering services shall be conducted for at least one week and be supervised by value specialists. During this time, the designers shall extend their full cooperation to fulfill the aims of the value engineering exercise. For projects costing more than $5,000,000, the minimum time for the exercise shall be eight working days.

(c) Payment for value engineering services shall be made at the prevailing market rates.

- Use of charrette and value engineering services. (a) Services shall be used in this order:

(1) Planning charrette;

(2) Design charrette; and

(3) Value engineering.

(b) Decisions shall be made on whether to adopt planning charrette recommendations, and information shall be corrected before project design continues.

(c) Decisions shall be made on whether to adopt design charrette recommendations. If adopted, the recommendations shall be incorporated into design drawings before the design is completed.

(c) Decisions shall be made on whether to adopt value engineering recommendations. If adopted, the drawings shall be revised appropriately before the project is put out to bid for construction."

SECTION 3. This Act shall take effect on July 1, 2020.