HIGHWAY CONSTRUCTION SAVINGS TOP $750 MILLION IN FISCAL YEAR 1998 |
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Federal Highway Administration
January 15, 1999
FOR IMMEDIATE RELEASE
Friday, January 15, 1999
Contact: Karen Whitney
Telephone: 202-366-0660
FHWA 2-99
State highway and transportation departments saved taxpayers a record $750 million by taking a second, commonsense look at highway infrastructure projects in fiscal 1998, U.S. Secretary of Transportation Rodney E. Slater today announced.
The savings are a direct result of the Federal Highway Administration (FHWA) working with state and local governments to implement "value engineering" (VE) on federally funded highway projects.
"Value engineering demonstrates President Clinton’s commitment to commonsense government," Secretary Slater said. "Federal programs like this allow DOT to work with states to build roads that are safe, to stretch the buying power of federal dollars and, in some cases, to complete roadway projects ahead of schedule—ultimately every taxpayer benefits. Value engineering is beginning to pay off—literally, and states that have developed active programs are finding the results well worth the investment."
Money saved through VE enables states to get more value from its highway construction dollars. For example, if a state has $100 million to spend on federal-aid highway construction and plans to distribute it among ten, $10 million projects, a VE savings of $500,000 on each project would yield $5 million in total savings. Savings can be re-directed to help pay for other necessary highway work.
"We have been actively promoting value engineering as an effective technique for reducing costs, increasing productivity and improving quality without adversely affecting a highway projects’ design, aesthetics or environmental goals," FHWA Administrator Kenneth R. Wykle said.
Under the VE concept, states review the features of a highway project and analyze opportunities for better, less expensive means of completing the project. The program is designed to improve project quality and productivity, foster innovation, eliminate unnecessary and costly design elements, and ensure overall economical costs. States may conduct the reviews in-house or through the use of consultants.
In fiscal 1998, 421 VE studies were completed. Based on these studies, 735 alternatives and recommendations were approved, resulting in a cost savings of over $750 million, the largest in the program’s history and a 47 percent increase over fiscal 1997 savings. State DOTs spent $6.23 million to administer their VE programs for a return of $121 dollars on every dollar spent.
Value engineering has been in use in the highway industry for over 20 years. Its use has increased substantially in recent years because of additional emphasis on the program at the state level, increased VE training and technical assistance provided by FHWA, and a 1995 Congressional mandate requiring VE on all federal-aid projects of $25 million or more. States with active VE programs continue to experience significant savings.
Additional information on the program is available on the FHWA’s VE website, http://www.fhwa.dot.gov/ve/vehome.htm.