DEVELOPMENT OF CONTRACTOR’S VALUE ENGINEERING IMPLEMENTATION MEASUREMENT MODEL (APPLICATION OF THE MODEL IN THE EPCC PROJECT OF CONTRACTOR PT.X)

• Main Author: Ng, Andrew
• Format: Theses
• Language: Indonesia
• Subjects: Teknik sipil
• Online Access: https://digilib.itb.ac.id/gdl/view/61127
• Institution: Institut Teknologi Bandung

VE (value engineering) is a systematic method carried out by a multidisciplinary team in evaluating designs in construction projects to produce life cycle cost (LCC) efficiency while remaining consistent with achieving the required quality. In Indonesia, VE has been implemented by various contractors and consultants, but there are still gaps in its application to the best practice, including: (1) misinterpretation of the concept and benefits of VE by various stakeholders in the construction industry, which is applied as a cost-cutting tool at the expense of quality and not yet focused on LCC efficiency; (2) have not implemented VE in accordance with the methodology. Several state-owned contractors have implemented VE for various types of construction projects, including the EPCC project. The EPCC delivery method provides a well-integrated value chain, namely the planning, design, procurement, construction, and testing stages which are the overall scope of the contractor. On the one hand, this is very supportive of the VE study carried out by the contractor, because it can consider constructability at an early stage of design. On the other hand, with the lump sum contract type, the EPCC project presents a significant risk to the contractor. VE is one of the contractor's efforts in managing these risks so as to produce good project outputs. Due to the constraints and benefits of implementing VE, it is important to evaluate the implementation of VE by contractor PT.X, which is the object of the case study, against the project objectives. PT. X was chosen because it is a highly qualified state-owned contractor company that has become a leader in providing EPCC services to other state-owned contractors, in terms of length of experience, market share controlled, and variations in the portfolio of EPCC projects that have been carried out. The objectives of this research are to (1) evaluate the implementation of VE by PT.X on the EPCC project against the International VE standard; (2) propose recommendations for improvement based on the findings in the evaluation process. This research consists of 2 parts, namely (1) development of measurement model of VE implementation by contractors; and (2) application of the model with a case study on the EPCC project of contractor PT.X. The measurement model consists of aspects, factors, and indicators of VE implementation which are compiled with a literature review of VE standards and critical factors. The initial model was then validated by interviewing 5 VE experts. Then, the quantitative methods used for the measurement model are: (1) DEMATEL-ANP hybridization to prove the interdependency relationship between aspects and determine the weight of aspect assessment; (2) AHP for determining the weight of factor assessment; (3) Determination of the weight of indicators with a questionnaire about the level of importance in the Likert scale. In this quantitative method, 5 VE experts were involved in pairwise comparison questionnaires for methods (1) and (2), and questionnaires (3). Then, 43 project teams in the case studies were included in the questionnaire (3). Validity and reliability tests were carried out for the data from the questionnaire (3). The case study was conducted on the PT.X EPCC project, which consists of 4 projects in the oil & gas sector, 2 projects in the industrial plant sector, and 6 projects in the power plant sector. The assessment is carried out by the VE study team leader in the project, namely the site engineering manager and the project manager. The assessment is carried out at the indicator level which is then calculated using the hierarchical additive weighting method. The results of the assessment show that the implementation of VE in the oil & gas projects in the case study has been effective. The application of several industrial plant and power plant projects has not provided good output. The analysis of the interdependency relationship shows that the aspect of the VE team-building and the participation of the owner, which is considered lacking, greatly affects the process and output of the study. In the aspect of the VE team-building, the implementation has not yet involved VE experts as facilitators and the project team's understanding of the VE methodology is still inadequate. This is due to inadequate socialization of PT.X's VE procedures and training to various project teams. In the aspect of owner participation, the owner's capability in providing mature FEED and understanding of VE is not sufficient. Recommendations for PT.X contractors that were concluded from this research are: (1) it is necessary to increase socialization and training on the VE methodology to teams in various projects; (2) good communication about VE is needed from the beginning of the project and it is important to arrange contractual clauses related to the VE process so that the results of the study can be implemented and the benefits can be realized by both parties; (3) VE studies are carried out by the contractor systematically based on the methodology and applied as early as possible in the engineering phase. Recommendations to the owner are: (1) it is necessary for the owner to understand that VE will provide win-win benefits between the contractor and the owner; (2) in order for these benefits to be realized, it is important for the owner to support the contractor's VE process by providing contractual clauses regarding VE equitably, providing mature FEED and owner requirements, evaluating objectively, and providing commitments to implement VE study result. Recommendations to the HAVEI association are: (1) it is necessary to increase the socialization of VE to various stakeholders so there will be an increase in the understanding and interest in its implementation; (2) it is necessary to increase VE training and certification considering the limited number of VE expert in Indonesia.