The Price of Value Engineering

What do you do when you’re the construction management firm overseeing construction of the Essex County Correctional Facility in Newark, N.J.-the largest prison project east of the Mississippi-and you’ve discovered it’s virtually impossible to stay within the already enormous $250 million budget? For the people at Gilbane Building Company of Lawrenceville, N.J. who found themselves in this situation, the answer was to employ value engineering suggestions and techniques. The company was able to propose savings of more than $120 million; strategies saving approximately $50 million were employed.

An Eye on the Bottom Line

The project team knew that successful value engineering required solid teamwork and Gilbane spearheaded efforts to bring architects Daniel Mann Johnson & Mendenhall of New York, the Essex County Improvement Authority (ECIA), and several public agencies together early in the planning stages to make it happen. The project team participated in partnering sessions to identify problems within the budget and find ways to reduce material and service costs without compromising quality.

The team members established a log and documented every item that could be eliminated and then tried to assign a budget figure to it. They discussed possible changes and then categorized the suggestions and prioritized them.

They conducted an extensive cost evaluation study on the differences between precast concrete and steel cells, finally choosing precast cells not only because they were cost-efficient, but also because they were durable and easy to install. Gilbane adopted a design/build process where they were bidding packages to keep the work progressing while the design of subsequent work was still in progress. Other items under scrutiny were the security and detention equipment package, originally estimated at $37 million but ultimately costing just $21.7 million, and precast concrete corridors, estimated at $6.6 million, but costing just $2.23 million.

Johnny Vernon, Gilbane project executive, said every wall, every piece of glass, and every item was examined to determine its integral necessity to the project. “If it was going into that jail, we looked at it,” he stated. “We asked, ‘Do we really need this?’ We had to examine every piece and find a way to do it more economically. Nothing was sacred in this job.”

In all, Gilbane and the project team proposed more than $120 million in value engineering suggestions; more than $50 million were employed ultimately reducing the budget from $250 million to $200 million. According to Vernon, without the cooperation of the ECIA and the county, none of these savings would have been possible. “They were very flexible and cooperative. They had confidence we could do it and were willing to work with us,” he said.

Site and safety concerns

The building itself wasn’t the only part of the project on which the team had to concentrate. They coordinated environmental site management because the complex sits on the 35-acre site of a former chemical plant in an industrial area near a large sewage treatment center.

“We heard the county’s concerns about the site and talked about how we would deal with all of this,” Vernon explained. Together, the team devised a safety program and assigned dedicated safety personnel on site. Careful planning, safe practices, and extensive communication among Gilbane, the ECIA, and the county minimized worker risks. Chemical cleanup required more than nine months of work at a cost of about $7 million.

Building a city

The facility itself-its sheer size and scope-sounds as staggering as the process of value engineering the complex and site. When completed in 2002, it will have 924,000 square feet and 2,106 beds. “It’s like building a small city,” says Vernon.

The housing units occupy one maximum- and two medium-security buildings, while a four-story support building includes seven minimum-security dorms; a support building also will have an intake and booking area, a courtroom, a kitchen that accommodates 3,500 people, a full medical ward, a gymnasium, and classrooms. The housing areas are designed for direct supervision, but manned control center pods have closed-circuit television monitors and state-of-the-art touch screen technology. All utilities-such as steam, electricity, and chilled water-are provided for the facility through an on-site co-generation plant.

Staff facilities include a cafeteria, lockers, training areas, exercise rooms, and an armory. The facility also will house the Newark Police Department; the sheriff’s department; a municipal court; and visiting, administration, and holding areas.

A visitors’ parking lot is accessible to the support building via a pedestrian bridge, and a staff parking area is located across the street from the facility.

The new complex also will take inmates currently housed in West Caldwell, N.J., and downtown Newark-facilities so old and antiquated that the county faced more than $300 million in fines if they remained operational. “The new facility will help us address a big problem for Essex County,” said Lisa Gomez-Rivera, executive director of the ECIA. On the right track “I think the project is going very well,” Gomez-Rivera said. “We need to keep our goals in focus, and we’re doing that quite well.” .