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VALUE ENGINEERING STUDY

Design DevelopmentDecember 24 - 26, 2007

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Design Development

TABLE OF CONTENTS

SECTION DESCRIPTION

Executive Summary

1 Facility Economics

Otaishan Group Value Engineering Program

VE Workshop Team Assignment (Figure 1-1)VE Attendee List (Figure 1-2)

Value Engineering Agenda (Figure 1-3)

VE Implementation Schedule of Activities (Figure 1-4)

2 Project Description

General

Project Budget/Cost Summary

Selected Drawings

3 Value Enhancement Procedures



VE Study Workshop

Information Phase

Function Phase

Creativity Phase

Evaluation Phase

Recommendation Phase

Post Study/Implementation Procedures

VE Task Flow Activity

Function Analysis Worksheets

VE Idea Listing/Ranking Worksheets

4 Summary of Recommendations

General

Summary of Potential Cost Savings

VE Proposals

Architectural

Mechanical

Electrical



modules and strategies will be fine tuned and serving requirements to these modules

clearly defined.The total site area is 2,508m2 which will accommodate the Multi Story Tower and Parking

associated parking basements required. The total gross build up area of this project

excluding basements parking area of 7,500 m2 approximately is 16,301m2 while total

usable office area is 11,347m2 which results in building space efficiency of 70%. The

total estimated construction cost as prepared by the SBCM is 48,000,000 Million Saudi

Riyals including contingencies, escalation and preliminaries costs approximately as

detailed in the updated estimate/ BOQ unit prices that was available during this workshop

for this value engineering study conducted on this project.

The task of the value engineering team for this project includes conducting a 3 days (24

hours) Value Engineering (VE) workshop following SAVE International job plan. This VE

study was conducted on this project at its current final design document stage without

studying the structural systems due to project construction and start working on the

foundation and the structural system in the field. This constitutes a big challenge to the

Value Engineering team and limits the proposals to those which do not impact the

construction schedule or create any major change in the design systems based on the

information available to the VE team during the workshop.

The value engineering team reviewed the engineering documents available with focus on

ways to reduce construction cost without major impact on project schedule, enhanceengineering systems project overall quality to make the best use out of each Saudi Riyal

spent on the project. In addition, the VE team’s task was to value engineer and reduce

project total life cycle cost and generate a large quantity of ideas that could enhance

project quality and reduce costs then develop those high ranked ideas to improve quality

and further reduce first and total life cycle costs of engineering systems while meeting the

project’s schedule, program, quality and budget requirements through utilization of the l

Value Methodology Functional Approach.

The VE Workshop Objectives:

Reduce Initial cost

Reduce O&M \ LCC costs

Increase project revenues



To meet these objectives, Dr. Khaled Obeid, PE, CVS- Life the Director of ValueManagement at Otaishan Group and the Certified Value Specialist (CVS for Life) has led

this VE study throughout all phases of the Value Engineering Job Plan as per SAVE

International including information, function analysis, creativity, evaluation,

recommendation and proposal development phases.

The overall cooperation demonstrated by the top management representatives of SBCM

namely Eng. Mahmoud Shabban, General Manager, and Eng. Motasem M. Alnusairat,

Area Manager was very helpful during this workshop. The cooperation and valuable

participation of all VE team members was the key to the success of this VE study. They all

have demonstrated team work, excellent cooperation and group dynamic effectiveness

throughout this Value Engineering workshop.

The total potential savings, considering only those proposals, which are mutually

exclusive, were calculated and noted below. In addition, quality and design suggestion

items are recommended even though some of which have the potential to “add” cost to the

project as “value-added” Design Suggestions (DS) could be considered for further review.

The total potential life cycle cost savings developed by the VE team where appropriate are

illustrated in the proposal sheets of VE recommendations. The total potential savings after

subtracting some value added cost items without applying any mark up factor because the

estimated unit costs used include the applicable contingencies and contractor’s mark up.

The summary of VE recommendations could be summarized by disciplines as follows:

VE Potential Savings Summary

Discipline # I # P I.C. Net Savings LCC Savings Total Savings

Architectural 30 27 SR 4,465,006 SR 2,787,260 SR 7,252,266

Mechanical 13 5 SR 1,918,992 SR 1,080,176 SR 2,999,168

Electrical 22 6 SR 980 860 SR 649 531 SR 1 630 391



In summary, the value engineering effort has generated some ( 65 ) ideas and developedsome ( 38 ) proposals along with design suggestions that help establish the design criteria

for engineering systems specially structural, electrical and mechanical systems. These

ideas and associated design suggestions when implemented would result in achieving the

project objectives stated earlier and should bring total project cost below 48 MSR

estimated construction cost for this project.

Also, it is recommended to explore the ideas and the design suggestions listed on thecreativity sheets for further value improvement and quality enhancement opportunities.

Some selected VE proposals with the greatest impact on cost savings and quality

improvements are listed by disciplines as indicated below:

ARCHITECTURAL IDEAS

Eliminate Emulsion paints to interior plaster in offices areas as core and shell

building

Use 15 cm CMU in lieu of 20 cm for interior partitions

Optimize usage of marble cladding for interior wall finishes

Use High Quality porcelain in lieu of granite tiles for elevator lobbies flooring

Use standard cut 20mm thick natural stone mechanically installed in lieu of

40mm thick Italian marble in elevation façade

Eliminate plaster base skirting 30mm thick and 10cm high in offices and let to be

done by tenants .

Minimize the usage of terrazzo tiles at roof level

Eliminate wall mounted hand rails.

Optimize area of tinted double glazed curtain wall in elevations

Use cast in situ terrazzo in lieu of Italian marble for internal stairs finishes



Dr. Khaled Obeid, PE, CVS - Life

4,516,96 7,364,858

VE Implementation

VIEW TOWER RIYADH, SAUDI ARABIA

Initial Cost Savings

CONSTRUCTION COST without Structural = 32,524,130 SR

LCC Cost Savings




For



Design Development

SECTION 1 – FACILITY ECONOMICS

OTAISHAN GROUP VALUE ENGINEERING PROGRAM

The basic goal of Otaishan Group Value Engineering Program as administered by Dr.

Abdulaziz Al-Otaishan, President and CEO- is to assist in controlling and managing Saudi

project costs while maintaining essential functions, operational integrity, and an

appropriate project quality. This is accomplished by conducting regular project reviews

and preparing recommendations for each project at selected milestones. These

milestones could include:

Design Program

Schematic Design

Design Development

Construction Documents

Construction

Post Occupancy

The value management techniques utilized may include estimating, value engineering, life

cycle costing, design programming, and post occupancy evaluation, depending on the

stage of the project.



Energy Conservation

Fire ProtectionConstructability

Contracting Methods

Operational Considerations

Proposals for the recommended changes are prepared, and forwarded to the client for

scrutiny and consideration for actual implementation. The implementation of any of the

recommendations to the project under study is strictly by determination of the client.

VALUE ENGINEERING TEAM

The Value Engineering Team leadership for this project was organized by Otaishan Group

- Value Engineering Section to provide experience in VE methodology while the multi

disciplined VE team members were provided by Sabbagh Engineering Consultants in

different systems design. The VE team reviewed the plans, design criteria note book, and

other preliminary data and information available for the current project design stage. The

Value Engineering team participants and their team assignments are listed in Figure 1-1.

The VE attendance list with the corresponding addresses and phone/fax numbers is

indicated on Figure 1- 2.

VALUE ENGINEERING AGENDA

Figure 1- 3 presents the 5-day agenda, which was generally fulfilled during the course of

the VE study. It is consistent with the VE Job Plan as per SAVE International, which is

explained in the VE procedures in Section 3 of this report.

VE IMPLEMENTATION PLAN

Figure 1- 4 presents the Value Engineering schedule of activities. A draft report was

presented at the end of the workshop after the VE team presentation in the last day of

workshop for the design team and the owner representatives to review. The design team

then responds to the owner with their recommendations for acceptance or rejection of VE

proposals The owner reviews these comments and gives final guidance as to




For



Design Development

VE TEAM MEMBER ASSIGNMENTS

VE Team Leader

Dr. Khaled A. Obeid, PE, CVS- Life

Team # 1 Architecture

Abd Al Nasr Mahmoud

Magdy Abd Al SamieMohamed A. Essa

Team #3 Mechanical

Mohamed A. Hussain, AVSSamir Anany

Team #4 Electrical Mohamed A. Hussain, AVS

Samir Anany

Team #4 Civil/ Cost

D Kh l d A Ob id PE CVS Lif




For



Design Development

OTAISHAN GROUP- VALUE MANAGEMENT

VALUE ENHANCEMENT (VE) WORKSHOP

THREE DAY AGENDA

Day 1

8:00 a.m. INTRODUCTION TO WORKSHOP/INFORMATION PHASE

Welcome & Opening Remarks

Team Member Introductions

Objectives of Workshop

Workshop Organization & Agenda

9:15 VALUE ENGINEERING BRIEFING

10:00 PROJECT DESIGN PRESENTATION (By Design Team)

Project Goals

Site and Building Layout

Building Systems (Architectural, Structural, Mechanical, Electrical)Project Budget

Wish List

"Value Listening" Exercise

11:00 QUALITY & COST MODELS



Day 3

8:00 a.m. REVIEW STATUS AND PROGRESS OF TEAMS

8:15 LIFE CYCLE COST ANALYSIS

Estimates of Maintenance, Energy, Replacements

Present Worth Life Cycle Cost Calculations

Sensitivity Analyses (as required)

10:00 RECOMMENDATION PHASE

Written Proposals (Present, Proposed, Discussion)

Finalize Sketches of Present & Proposed Design

Complete Value Summary Sheets

12:30 p.m LUNCH

2:30 VE PRESENTATION

Opening Remarks

Summary of VE Process (Steps, Models, Function Analysis, etc.)

VE Proposals & Cost Savings (Team Leaders)

Summary of Value Enhancement and Potential Cost Savings

Comments & Discussion

Next Steps (VE Implementation Plan)Closing Remarks

5:30 ADJOURN/CELEBRATION!

Figure 1- 2




For



Design Development

VE SCHEDULE OF ACTIVITIES

FOR IMPLEMENTATION

Task Date Responsibility

VE Study Workshop Dec. 24- 26, 2007 OGVM/ SEC

Develop VE Recommendations Dec. 25- 26, 2007 OG/ VE Team

Review VE Recommendations Jan. 6, 2008 Client/ OGVM

Final VE Report January 9, 2008 OGVM

(Includes Client Comments)

VE Implementation Through out Design Client/OG (Optional)

And Construction




For



Design Development

SECTION 2 – PROJECT DESCRIPTIONGENERAL:

The project includes a 8 story Tower including 8 floors of offices and support spaces, inaddition to three basements as a parking garage, ground floor, mezzanine and penthouse.

The VIEW TOWER, commissioned by ABDUL MOHSEN BIN TURKY BIN AHMED AL

SUDAIRY for Construction and development in 2006, presents a unique opportunity to

develop an iconic building on a site which has wonderful development potential. The site

characteristics for this area of Riyadh City are:

• Up market location in an area developing as one of Riyadh’s premiere real estatevalue.

• Location near to 2 of Riyadh’s up market Hotels, affording the opportunity to

capitalize on business visitors.

• Well served by major traffic arteries being

1. on the King Fahad Road

2. Bordered by the Maka Road

This ensures the site is adequately served by roads to ensure good traffic flow to the

building. This should cater for the traffic loads which will be generated by the anticipated

members of office owners and their staff. From inception, it has been clear that the

building is to be designed to have its floor space rent to individual owner occupiers



approximately as detailed in the updated estimate/ BOQ available during the workshop for

this project.

Internal Finishes:

Flooring:

• Good quality of stone, porcelain, granite and Marble for entrances, corridors and

public spaces, generally:

• Adequate skirting for each type of flooring shall be used• Concrete with epoxy paint and marked for parking area

Walls:

• Marble cladding for entrances, lobbies, corridors, Public areas used.

• Paint on cement plaster for service areas and similar spaces

• Full height ceramic wall tiles for public toilets.

Ceilings:

• Painted gypsum board.

• Exposed grid acoustic tiles on metal suspension system for administration

corridors, offices & similar spaces may be used.

• Exposed concrete for electro-mechanical rooms & utilities area. Types of ceilings

will be selected considering the types and suitable lighting for each space.

Doors:

Doors shall comply with Gulf code.

Door leaf size dimension shall be selected according to space and code requirements.

Code fire rating requirements shall be complied strictly to all doors

Door hardware shall be complied with the code, and to be selected to suit the use

Weather proofing devices shall be used for external doors to achieve maximum thermalefficiency.

Steel insulated fire resistance doors including steel frame

Hard wood solid core door and frame

Electro static powder coated aluminum and double clear insulated glass doors



MECHANICAL & PLUMBING SYSTEMS

Mechanical Services

Air conditioning

Mechanical ventilation

Domestic cold water services

Domestic hot water services

Above Ground drainageBelow Ground drainage

Fire protection systems

Irrigation System

Fully integrated controls/ Building Management System (BMS)

HVAC

Ducted split unit with supply diffusers and return diffuser the return air through planum,

The condenser units placed on the roof (Nineth floor) and the evoprative units ceiling

mounted with duct and supply diffuser the evoprative and condenser unit is connected

through the refregent pipe return and supply through mechanical shafts.The fresh air duct

and return air duct, Damper in supply, return and fresh air duct are existing in the system.

Plumbing

UPVC pipe class-4 used for drainage with three risers (ventilation, waste and soil) and for

water supply UPVC class-5 pipe is used.

Building Management System (BMS)

A stand alone Building Management System (BMS) will be provided for the building.

For additional detailed information about the architectural and engineering systems please

refer to the Schematic Design Report September 2007. Some selected drawings

describing project plans, elevations and engineering systems are are included at the end

of this section for you review




For


VALUE ENGINEERING STUDYDesign Development

SECTION 3 - VALUE ENGINEERING PROCEDURES

GENERAL

Value Engineering (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. VE is a systematic,organized approach to obtain optimum value for each dollar spent. Through a systematic

investigation, using experienced, multi-disciplined teams, value and economy are

improved by the study of alternate design concepts, materials, and methods.

Management of the VE study is performed through the leadership of a Certified Value

Specialist (CVS) having extensive experience in performing VE studies. Experience has

shown that project studies performed by a team with limited VE leadership will tend tosteer in the direction of a design review. A design review normally concentrates on

identifying errors in the documents, while a VE study focuses on function analysis in order

to reduce the total cost of ownership. Application of the VE methodology and coordination

of the study activities significantly increases the implementation of recommendations.

This approach has been used successfully applied on projects of all types and magnitudes

and allows the VE team to maintain a responsive turn-around while producing meaningfulresults. The approach also encourages owner and designer participation in the study

effort in order to take advantage of their experience and knowledge. A multi-disciplined

team is formed to analyze the project utilizing the value engineering job plan. It is the

team's objective to analyze the project to find high cost areas, recommend alternatives

f f f



Project ApproachProject Approach Value Engineering MethodologyValue Engineering Methodology

Figure 3 - 1

Pre-Workshop

1-4 Man days 1-3 Team Members 2-5 Calendar Days

Workshop 10-25 Man days 5-12 Team Members

2-5 Calendar Days • Project Coordination • Data Preparation

• Modeling

• Quality • Program

• Cost

• Risk • Environmental

• Information Phase • Function Phase • Creativity Phase • Evaluation Phase

• Recommendation Phase • Final Report

• Implementation • Project Follow-Up

Post-Workshop 2-5 Man days 1-2 Team Members 2-5 Calendar Days

VIEW TOWERVIEW TOWER

VE Job Plan:VE Job Plan:




For



Design Development

VALUE ENHANCEMENT - TASK FLOW ACTIVITIES

Pre-Study

Project Coordination: Distribute plans, specifications, notes & project cost estimate

Data Preparation: Prepare agenda, attendance list, function

analysis, FAST diagram

Modeling: Quality (if applicable), Cost

Study Workshop (phases)

Information: Secure facts, determine cost, fix costs on specific requirements.

Function: Verb/noun definitions of function, value function relationships (function

logic diagrams) and cost these functions.

Creativity: Establish positive thinking and develop creative ideas in a team

setting.

Evaluation: Refine and combine ideas, establish costs on as many ideas as

possible, develop function alternatives and evaluate by comparison.



Pre-Study Preparation

The success of the VE study is largely dependent on proper preparation and coordination.

Information and documents are furnished by the owner and are distributed to the team to

prepare them for their area of study. All participants are briefed on their role and

responsibility during the study. The pre-study effort includes the following activities:

Identification of constraints to the VE studyReview of project documentation and distribution of information

to team members

Finalization of team and team assignments

Preparation of space

Preparation of cost model

Preparation of other models as appropriate i.e (energy, quality,

LCC, time, risk, etc.)Finalization of arrangements for workshop

The VE team relies on the owner for the completeness and organization of the material to

be furnished. The following data is normally provided for the study:

Facility Program and Objectives (Basis of Design)

Design Standards & CodesMaster Site Plan (including Site Analysis)

Design Calculations (as appropriate)

Soil Borings

Design Drawings and Preliminary Specifications

Estimate of Construction Cost (including back-up)

Architectural and Engineering Concepts Description

Quality Model

The quality model, shown in Figure 3 - 3, serves as the basis of the design process that

follows Attitudes and expectations once defined serves as the sensitive measure by



at the preliminary design submittal stage. A Space Model was not developed for this

project due to lack of space program available during the workshop.

Cost Model

Cost information used during the study is normally prepared by the design team’s

estimators and was handed to the VE team leader on the first day of this study. A cost

model could be prepared from this information. The cost model distributes costs by

function and is used by the VE team to help identify areas of potential savings. For thisproject, the detailed cost estimate was available; therefore, the function cost\ worth model

was developed for the preliminary design submittal. A functional cost analysis approach

was employed during the VE workshop.

Risk Model

The risk model identifies the areas of high, medium and low risk within the project. Thiswill make the VE team focus on high and medium risk areas and generate ideas to

mitigate and minimize risk within the project. A risk model was developed for this project

with participation of owner and construction manager representatives.

Energy Model

This model diagrams one of the key production annual expenditures, energy consumption,for potential cost control. This model provides backup data for the LCC Model. This

model is normally prepared at the 35% design development stage when LCC data is

available. An Energy Model was not developed for this project due to lack of LCC data.

LCC Model

The life cycle cost model depicts the annual cost to produce and distribute the products

being marketed as well as the cost of all supporting plant, equipment, and overhead

operations. An LCC spread sheet model was used to calculate the LCC savings

associated with some VE recommendations for this project.



Inflation Approach: Constant dollars approach

Differential Escalation Rates:

Electrical Energy: 0%

Natural Gas 0%

Other 0%

Present Worth Annually (PWA) Factors:

Electricity 11.2578

Oil 11.2578

Maintenance, Staffing 11.2578

Single Amount Present Worth PW Factors:

Year 5 0.6806

Year 10 0.4632

Year 15 0.3152

Year 20 0.2145

Year 25 0.1460

Year 30 0.0994

Periodic Payment (PP) Factor:

0.08883



RISK MODEL

VIEW TOWER

A. MANAGEMENT, FINANCIAL

& ADMINISTRATIVE RISKS Public and political perspectives

Budget limitations, approvals process, & other constraints

Site acquisition

Permitting delays

Agency jurisdictions and conflicts

Project mgt., organization, decision-making processes, information flow

Labor issues

Other: Finacing of Project

B. ENVIRONMENTAL, Inclement weather, storms, floods

GEOTECHNICAL RISKS Hazardous waste disposals, site remediation

Environmental restrictions (air quality, noise, toxic mat., etc.)

Contaminated soils remediation

Groundwater remediation

Underground cavities

Inadequate subgrade geotechnical testing

Unanticipated archaeological or historical findings

Other: Underground Water

C. TECHNICAL RISKS Systems, processes, and material

New, unproven systems, processes and materials

Other:

D. IMPLEMENTATION RISKS

1. Design Design approvals and changesDesign errors and omissions

Untested and unproven design features and innovations

Other:

2. Contractor Availability of qualified contractors or skills

RISK AREASELEMENTS

OGVM

H I G H

M E D I U M

L O W

N / A



RISK MODEL

VIEW TOWER

RISK AREASELEMENTS

OGVM

H I G H

M E D I U M

L O W

N / A

5. Project Controls Planning

Scheduling

Estimating

Other: Training for smart building equipment

6. Logistics, Transportation Laydown areas limitations

Traffic congestion at site or access to site

Transportation difficulties for construction mat'ls

Other:

7. Interference and Interference with other work

Maintenance of Services Maintenance of certain essential services during construction

Tie-ins/cutovers with utilities

Other:

8. Condition of Existing Condition of existing structure and material

(For renovation, rehab. Tie-ins

repair projects) Removals or restoration

Other:

9. Safety and Hazards Safety to contractor and project personnelDuring Construction Safety to owner and non-project personnel

Other: Pedestrian safety

10. Process start-up and Testings and test planning and scheduling

Commissioning Malfunctions and failures

Indequate documentation and/or training

Other: Security




VIEW TOWER

Total COST

48,000,000 SR

0.39

0.49

0.76

0.86

0.88

1.10

1.39

3.90

7.15

7.95

8.76

14.38

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00

EQUIPMENTS

SPECIALIST

THERMAL & MOISTUREPROTECTION

CONVEYING SYSTEM

MASONRY

SITE CONSTRUCTION

METAL

DOORS AND WINDOWS

FINISHES

MECHANICAL

ELECTRICAL

CONCRETE

Millions SR



Dr. Khaled Obeid, PE, CVS-Life

COST/WORTH

0.35

0.44

0.68

0.77

0.79

0.99

1.25

3.51

7.15

7.95

8.76

14.38

6.44

7.15

7.89

12.94

0.39

0.49

0.76

0.86

0.88

1.10

1.39

3.90

0 2 4 6 8 10 12 14 16

EQUIPMENTS

SPECIALIST

THERMAL & MOISTURE

PROTECTION

CONVEYING SYSTEM

MASONRY

SITE CONSTRUCTION

METAL

DOORS AND WINDOWS

FINISHES

MECHANICAL

ELECTRICAL

CONCRETE

SR Millions

VIEW TOWER




0.81%

1.01%

1.58%

1.78%

1.83%

2.29%

2.89%

8.13%

14.90%

16.56%

18.26%

29.95%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%

EQUIPMENTS

SPECIALIST

THERMAL & MOISTURE PROTECTION

CONVEYING SYSTEM

MASONRY

SITE CONSTRUCTION

METAL

DOORS AND WINDOWS

FINISHES

MECHANICAL

ELECTRICAL

CONCRETE

VIEW TOWERStytems % to Total Cost




23.91

29.87

46.67

52.45

53.84

67.39

85.15

239.44

438.80

487.50

537.60

881.99

0 100 200 300 400 500 600 700 800 900 1,000

EQUIPMENTS

SPECIALIST

THERMAL & MOISTURE

PROTECTION

CONVEYING SYSTEM

MASONRY

SITE CONSTRUCTION

METAL

DOORS AND WINDOWS

FINISHES

MECHANICAL

ELECTRICAL

CONCRETE

VIEW TOWERSquare Meter Cost

SR



VE Study Workshop

During the actual workshop portion of the VE study, the Job Plan is followed. The Job

Plan is an organized approach for searching out high cost areas in the design and

developing alternate solutions for consideration. The workshop session uses a multi-

disciplined team following an Agenda which details the Job Plan to arrive ultimately at

recommendations for implementation.

The VE Job Plan follows five key steps:

Information Phase

Function Phase

Creativity Phase

Evaluation Phase

Recommendation Phase

Information Phase

At the beginning of the VE study, it is important to understand the background and

decisions that have influenced the development of the design. For this reason, the

Owner/Designer normally presents orally, the building and process designs to the VE

team. The site, building layout, process flows, and process equipment, architectural,

structural, mechanical and electrical systems are discussed.

The information phase also includes further refinement of the cost, space and other

models that are prepared before the workshop session. These models are updated based

on information received during the Owner/Designer's initial presentation. These models

also form the basis of the VE team function analysis, which follows.

The following information is normally provided to the certified value specialist (CVS) twoweeks prior to the value engineering study:

a. Economic Data

1 Desired return on investment (ROI)



B. Other Data

1. Project goals and objectives2. Project constraints

3. Special requirements or criteria (i.e. flexibility, O&M

cost effectiveness, capital cost effectiveness,

safety, security, environmental, etc.)

C. Building Data

1. Plans2. Specifications

3. Equipment Lists

4. Project Cost Estimate

5. Geotechnical Report

6. Systems Design Calculations

Function PhaseThe required functions of the project are the controlling elements in the overall VE

approach. This procedure is beneficial to the VE team because it forces the participants to

think in terms of function, and the cost associated with that function.

This VE Study utilized the data collected from the information phase to produce several

new ideas and proposals unique to this type of study.

1. Function Logic Diagram - In order that the team might better understand the overall

functions of the project, a "Function Logic Diagram" is prepared. Reading from left to right,

it is used to help explain how the designer chose to solve the functions. The function logic

diagram, when read from right to left, also helps answer why these functions are important

to the owner.

This diagram normally translates production goals, objectives and tasks into a hierarchiallogic diagram of functions for a better in-depth understanding of the owner needs. The

FAST diagram which was prepared by the VE team leader just prior to this VE workshop

was used as a baseline for this VE study. The diagram was reviewed by the VE team and

the owner representatives and was amended as appropriate The FAST diagram is



OTAISHAN GROUP- VALUE MANAGEMENT

OGVM VIEW TOWERRiyadh, Saudi Arabia Date: 01/03/2008

Function Logic Diagram

Criteria WHY ?

How do we_? Why do we __?Meet Maximize OptimizeOwner Operational Site All Time Functions

Requirements Effectiveness Usage

Consolidate Secure

Operations Site & AssureMeet Design & Safety

Codes Minimize Facilities Maximize Use House Construct

Requirements Facility of Existing Tenant Staff & Parking Procure

Expenditures Site Utilities Visitors Parking Floors & Materials &

Basement Equipment

Define

Achieve Continually Increase Satisfy Assure Owner Achieve Market Maximize House Construct Prepare/ Design Owner Needs

Investor's Improve Market Tenant's Special Leadership in "World Class" Business Office Space Layout Offices & Multi- Story Excavate View Tower & Facility

Business Profit Shares & Needs & Office Quality in Spaces Efficiency Rentable Spaces Office & Develop Business Scope

Mission Margin Value Requirments Business Office Facility Site Facility Program

Business Manage House Quality& Cost

Multi- Story Management Conduct

Be Competitive Tower Facilities Offices VE

In Market Place Attract & Keep Studies

& Satisfy High Quality Develop New HouseMarket Needs Managers & Marketing Prayer

Tenants Strategies Halls

Attract Attract

Very Good Tenants HouseTenants & & Visitors Electrical &

Impress Mech'l Rooms

Visitors Store

Needed HouseSupplies Staff Aminities &

Storage Space

Improve Enhance HouseEmployee Employee Health Club &

Notes: Productivity Health& Comfort Facility Support

- Functions are the objectives of the projects expressed in active verbs and measurable nouns Development

- Reading the function logic diagram from right to left explains why each function is necessary Accommodate

- Reading the function logic diagram from left to right explains how each function could be achieved. Facility Support

(Mech./Elect.)

HOW ?

1 Dr. Khaled A. Obeid, PE, CVS- Life



FUNCTION ANALYSIS WORKSHEET

PROJECT: VIEW TOWER

LOCATION: Riyadh, Saudi Arabia

Dr. Khaled A. Obied, PE, CVS-Life

FunctionComponent Description

Verb Noun

Kind Cost

(x1000)

Worth

(x1000)

Cost/

Worth

Comments

B = Basic Function S = Secondary Function RS = Required Secondary Function

Foundation Support Load B

Substructure Support Load B

Superstructure Support Load B

Exterior Closure Enclose Space B

Roofing Protect Building B

Interior Construction Finish / Divide Space RS

Conveying System Transport Weight RS

Plumbing Convey Fluids B

HVAC Control Temperature B

Fire Protection ProtectBuilding/

PeopleRS

Special Mechanical Control System S

Service & Distribution Distribute Power RS

Lighting & Power Power Space B

Site works Prepare Site RS

General Condition & Profit Generate Profit S

Site Utilities Support Buildings/Site B



Field analysis and the Brainstorming activities. A listing of the functions of the most critical

or questionable building systems was made, attempting to generate more ideas.

Creativity Phase

This step in the value engineering study involves the listing of creative ideas. During this

time, the value engineering team thinks of as many ways as possible to provide the

necessary functions within the project at a lesser cost to the owner. During this creative

session, judgement of the ideas is not permitted. Ideas to enhance the best features and

ideas to improve on the weakest features are then generated. The best and weakest

features are contained in this section of the VE report. The value engineering 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. The creative ideas generated during the workshop are included in this

section of the VE report on the Creativity / Evaluation Worksheet.

Evaluation Phase

In this phase of the project, the value engineering team judges the ideas resulting from the

creative session. The advantages and disadvantages of each idea are discussed. Ideas

are ranked based on savings potential, redesign time and client acceptability. Ideas found

to be not worthy of additional study are ranked low and those ideas that represent the

greatest potential are ranked high, then were developed further. A weighted evaluation isapplied in some cases to account for impacts other than costs. Ideally, the value

engineering team would like to develop all ideas, but time constraints usually limit the

number that can be prepared. The ideas ranked highest by the value engineering team

are selected for further review with members of the design team for their input.

During this phase many of the ideas are expanded into workable solutions. This

development of these ideas consists of preparing estimated initial and life cycle costs, adescriptive evaluation of the advantages and disadvantages and engineering calculations

as appropriate proposed recommendations. It is important that the value engineering

team convey the concept of their recommendation to the owner/design team. Therefore,

each recommendation is prepared with a brief narrative to compare the original design



Post Study ProceduresThe post study portion of the VE study includes preparation and submittal to the

owner/design team, the Final Value Engineering Report incorporating the

recommendations developed in the workshop. The owner/design team responds by either

incorporating the recommendations into the design or presenting reasons for rejection. A

summary of the cost savings resulting from the study is normally included in the

owner/designer's response report.

This post study effort also requires continued project follow-up to resolve any questions

remaining with the VE proposals. Either the value engineering team leader or the

appropriate VE team member responsible for the proposal in question works directly with

the owner/design team to finalize implementation.

Evaluation Criteria:

• Meet functions required• Potential initial cost savings

• Life cycle cost savings

• Schedule impact

• Maintaining floor layout

• Simplify construction

• Time and ease of implementation

• Owner’s acceptability

• Construction time savings

• Brings additional revenue to owner

• Cost of implementation

• Improve safety

• Enhance quality

• Improve reliability and durability• Meet design and code requirements



CREATIVITY / EVALUATION WORKSHEET

PROJECT: VIEW TOWER


ARCHITECTURAL IDEAS

A1Eliminate Emulsion paints to interior plaster in offices areas as core and shellbuilding 8

A1-bEliminate Emulsion paints and interior plaster in offices areas as core and shellbuilding 10

A2 Use 15 cm CMU in lieu of 20 cm for interior partitions 8

A3 Optimize usage of marble cladding for interior wall finishes 9

A4 Use High Quality porcelain in lieu of granite tiles for elevator lobbies flooring 8

A5

Use standard cut 20mm thick natural stone mechanically installed in lieu of

40mm thick Italian marble in elevation facad 8

A6Eliminate plaster base skirting 30mm thick and 10cm high in offices and let to bedone by tenants . 10

A7 Minimize the usage of terrazzo tiles at roof level 10

A8 Eliminate wall mounted hand rails. 8

A9 Optimize area of tinted double glazed curtain wall in elevations 9

A10 Use cast in situ terrazzo in lieu of Italian marble for internal stairs finishes 8A10-b Use Saudi bianco granite in lieu of Italian marble for internal stairs finishes 9

A11 Use PROTECRETE/ Water proofing admixture in liue of membrane 9

A12Use fare face finish concrete for basement walls and ceiling without plaster &paint finish 10

A13 Eliminate external water feature and utilize green grass area 8

A14Optimize the size of curved shape information counters at main entrance lobbyand public area 8

A15 Provide promotional spaces where appropriate DS

A16 Provide provision for ATM machines for additional revinue DS

Rank Item NO Description




PROJECT: VIEW TOWER



A22 Eliminate Pre-cast curb stone from parking floors and utilize wheel stopper only 9

A22-bEliminate Pre-cast curb stone from parking floors except elevators entrance andutilize wheel stopper only 9

A23Replace stainless steel ladder for water tank with galvanized steel water baseepoxy paint 8

A24 Add toilet near prayer hall area DS

A25 Reduce door height from 2.20 m to 2.1 m 5

A26Replace stainless steel external louvers fixing at elevations with powder coatedmetal louvers 8

A26-b Eliminate stainless steel external louvers at back elevation 9

A27 Eliminate finishes for Kitchen and WC in offices let it be done by tenants. 8

A28 Use local Saudi fixures for toilets. Done

A29 Change gym. Floor finishes to mormelum/ Vinyle floor f inish 7

A30 Use tappered insulation for roofing in lieu of concrete screed DS

MECHANICAL IDEAS

M1 Optimize HVAC Load 8

M2 Use package units 8

M3 Replace ducted split units with split unit without duct 9

M4 Optimize the number of sprinklers 9

M5 Single riser for sewer (waste & soil) pipe and ventilation pipes 8

M6Use powder coated fire hose cabinets in lieu of stainless steel cabinets (40%savings) Done

M7 Use NOVAC system for fire protection in lieu of FM200 system DS




PROJECT: VIEW TOWER



ELECTRICAL IDEAS

E1 Optimize fire alarem system 8

E2 Optimize Number of CCTV 9

E3 Telephone system without telephone instrument. 8

E4 Delete Master Anttena net work 8

E5 Optimize LV cable size 8

E6 Optimize Illumination load 10

E7 Use energy saving lamps instated of condensate lamps 10

E8 Optimize number of speakers 7

E9 Optimize electric load design criteria DS

E10 Optimize emergency load DS

E11Use power system 380 Volts / 60 Hertz 3 phase system instead of 220 V/ 60 Hzthree phase DS

E12Consider HVAC tonnage reduction in calculating electrical loads, number of

transformers, switch gear and panels capacity and cable sizes

7

E13 Use T5 type fluorescent in lieu of T8 for all usable areas 6

E14 Reduce number of light fixtures in basement 7

E15 Optimize number of smoke/ heat detectors in lobby and coridoors 7

E16 Optimize capacity of panel board circut breakers DS



It is important when reviewing the results of the value enhancement workshop to examine

each part of the recommendation on its own merits. Quite often there is a tendency to

disregard a recommendation because of a small disagreement about one small portion of

the recommendation. Therefore, consideration should be further given to the areas within

a recommendation that are acceptable and supply those to the final design of the project.

Estimates of savings should also be studied thoroughly. These estimates were developed

by the VE team based on the cost data provided. Any disagreement with these estimates

should be stated by the owner and/or design team for further refinement. In all, there are

some proposals with calculations and appropriate sketches where applicable. In addition,an estimate of the associated savings or additional costs resulting from these proposals is

also included.

ADDITIONAL COST SAVINGS IDEAS

Both the Owner and Designer should carefully review the idea listing provided in the

Creativity/Evaluation Worksheet. The VE team attempted to develop the most significant

items but, due to time limitations, could not quantify and prepare each recommendationsfor every initial cost or life cycle cost saving item possible.

Therefore, the Owner/Designer is invited to review these idea listing and design

suggestions, then select those noteworthy of acceptance or modification for

implementation to optimize savings and enhance project overall quality.

BASIS OF COSTThe designer estimating staff of SBCM has prepared the final construction cost estimate

for this project. The estimated total construction cost was approximately 48 MSR before

conducting this value study, the VE recommendations resulted in reducing the estimated

construction cost by 7.3 MSR in initial cost savings and 4.5 MSR in life cycle cost

savings approximately without cost cutting any of the functions or scope of the project and

still meeting project schedule. However, the estimated project cost only considered most

current labor and material pricing and taking into account the local market conditions and

considering design contingency or escalation factor. This SBCM cost estimate was the

basis of cost to be used by the VE team to quantify the potential savings of the proposals.



VE I l i



VE Implementation CONSTRUCTION COST EXCLUDING STRUCTURAL COST 32,524,130

Project: VIEW TOWER INITIAL COST SAVINGS (SR) 7,364,858

Location: Riyadh, KSA LCC SAVINGS (SR) 4,516,967

Date: 24-26 December 2007 PERCENTAGE OF INITIAL COST SAVINGS 22.6%

Idea Initial Cost Life Cycle Cost Changes Required

No. Savings (SR) Savings (SR) Major Minor Material

Design Design Change

ARCHITECTURAL IDEAS

A1 Eliminate Emulsion paints to interior plaster in offices areas as core and shellbuilding * 252,000 √ A

A1-bEliminate Emulsion paints and interior plaster in offices areas as core and shell

building812,000 A

A2 Use 15 cm CMU in lieu of 20 cm for interior partitions 68,000 √ AA3 Optimize usage of marble cladding for interior wall finishes (120cm height) 204,464 √ A

A4 Use High Quality porcelain in lieu of granite tiles for elevator lobbies flooring * 437,250 √ R

A5Use standard cut 20mm thick natural stone mechanically installed in lieu of

40mm thick Italian marble in elevation façade940,000 √ A

A6Eliminate plaster base skirting 30mm thick and 10cm high in offices and let to be

done by tenants .162,000 √ A

A7 Minimize the usage of terrazzo tiles at roof level * 85,500 √ F.SA8 Eliminate wall mounted hand rails. 151,300 202,399 √ AA9 Optimize area of tinted double glazed curtain wall in elevations 700,000 2,109,258 √ AA10 Use cast in situ terrazzo in lieu of Italian marble for internal stairs finishes * 29,400 √ R

A10-b Use Saudi bianco granite in lieu of Italian marble for internal stairs finishes 27,300 AA11 Use PROTECRETE/ Water proofing admixture in liue of membrane * 150,270 √ F.S

A12Use fare face finish concrete for basement walls and ceiling without plaster &paint finish

291,200 373,157 √ A

A13 Eliminate external water feature and ut ilize green grass area 182,000 102,446 √ A

A14 Optimize the size of curved shape information counters at main entrance lobbyand public area

282,323 √ A

RemarksDescription

1 Dr. Khaled Obeid, PE, CVS -Life

VE I l t ti










RemarksDescription

A19 Replace double leaf offices doors 150cm wide by one leaf doors 110cm wide 87,920 √ A

A22 Eliminate Pre-cast curb stone from parking floors and utilize wheel stopper only * 195,000 √ R

A22-bEliminate Pre-cast curb stone from parking floors except elevators entrance and

utilize wheel stopper only130,000 A

A23Replace stainless steel ladder for water tank with galvanized steel water base

epoxy paint or PVC coated147,000 √ A

A26Replace stainless steel external louvers fixing at elevations with powder coatedmetal louvers * 162,500 √ A

A26-b Eliminate stainless steel external louvers at back elevation 279,500 AA27 Eliminate finishes for Kitchen and WC in offices and to be done by tenants. * 742,500 √ R

Sub-total Architectural 4,465,006 2,787,260

MECHANICAL IDEAS

M1 Optimize HVAC Load 1,668,492 939,176 √ A

M2 Use package units * 14,210 * 9,735,342√

RM3 Replace ducted split units with split unit without duct * 672,210 * 972,589 √ RM4 Optimize the number of sprinklers * 361,564 * 203,520 √ RM5 Single riser for sewer (waste & soil) pipe and ventilation pipes 250,500 141,000 √ A

Sub-total Mechanical 1,918,992 1,080,176

ELECTRICAL IDEAS

E1 Optimize fire alarem system * 460,000 * 258,929 √ F.S


VE I l t ti










RemarksDescription

E2 Optimize Number of CCTV 102,000 57,415 √ AE3 Telephone system without telephone instrument. 378,860 592,116 √ AE4 Delete Master Anttena net work * 29,000 * 45,323 √ F.SE5 Optimize LV cable size 500,000 √ AE6 Optimize Illumination * 1,239,274 * 697,574 √ F.S

Sub-total Electrical 980,860 649,531

Total VE Potential Savings 7,364,858 4,516,967

* Items Not Included in Summary of Potential Savings

A : Accepted

F.S : Further Study

R : Reject
