Purpose: Cost Control, Project Development and Evaluation, Efficient Resource Allocation 

Target Participants or Users: Project Managers, Procurement Officers, Budget Officers and Policy Analysts, Engineers and Architects, Planning Officers 

About the Tool

Value analysis is a structured technique used to identify and improve the “value” of a project by examining its functions. The process focuses on achieving the required performance at the lowest possible cost without compromising quality or reliability. Originating during World War II in response to resource constraints, the technique was pioneered by Lawrence W. Miles at General Electric. Miles introduced a systematic approach to reassess product functions and eliminate unnecessary costs, a concept that later evolved into what is now known as value engineering. Over the decades, this methodology has been adopted across various industries—including the public sector—to drive efficiency, foster innovation, and improve overall project outcomes. In the Philippine government, VA/VE is aligned with the Republic Act No. 9184 (Government Procurement Reform Act), encouraging cost-effectiveness and efficiency in public projects. 

n the Philippines, value analysis (VA), or value engineering (VE) as it is also called, is applied to government undertakings to maximize efficiency and cost effectiveness. The Department of Economy, Planning, and Development (DEPDev)   has been a major player in the institutionalization of VA/VE methodologies in different infrastructure projects. For example, DEPDev  partnered with SYSTRA Philippines to provide on-the-job training and VE/VA capacity building for infrastructure projects. This partnered training intended to prepare selected representatives from the DEPDev Regional Offices and the Department Public Works and Highways (DPWH) to perform the VE/VA processes as described in the ‘2009 VA Handbook of NEDA’ and as per SAVE International standards. The training was focused on the six phases of job plan – Information, Function Analysis, Creativity, Evaluation, Development, and Presentation – covering all aspects of project assessment and improvement. This effort demonstrates the government’s resolve to adopt VE/VA practices in achieving efficient management of projects and resources. 

Benefits of Value Analysis in the Public Sector

  1. Cost Reduction without Sacrificing Quality – VA systematically identifies unnecessary costs in government projects and services, ensuring that expenditures align with essential functions and public needs.
  2. Improved Resource Utilization – By analyzing functions and alternatives, VA helps government agencies maximize limited resources, reducing waste and redundancy.
  3. Enhanced Service Delivery – VA leads to process improvements that result in faster, more effective, and higher-quality public services for citizens.
  4. Transparency and Accountability – The structured approach of VA promotes evidence-based decision-making, reducing inefficiencies and increasing public trust in government expenditures.
  5. Innovation and Creativity – By encouraging alternative solutions and brainstorming, VA fosters innovative approaches to public sector challenges, leading to better project outcomes.
  6. Sustainability and Environmental Benefits – VA encourages eco-friendly and sustainable options by considering the long-term impacts of government projects.
  7. Risk Reduction – By thoroughly analyzing functions and alternatives, VA helps identify potential risks in projects and mitigates them before implementation.
  8. Faster Project Implementation – VA streamlines project planning and execution by eliminating unnecessary processes, leading to quicker completion of government initiatives.

How to use the Technique

Phases of Value Methodology

Value Analysis principles consist of key questions, techniques, and procedural tasks used in pursuing the objective of the value analysis job plan. The objective is to achieve design excellence by completing each of the following phases:

1. Information Phase
The objective of the information phase is to acquire knowledge of the design to be studied and to assess its major functions, cost, and relative worth. In this phase, there are three important actions to take to fully understand the value analysis study that needs to be done: (1) gather all types of information, (2) get the facts, and (3) get all available costs.

2. Creativity Phase The objective of the creativity phase is to “brainstorm” the functions of the design elements identified in the information phase and develop an alternative to each. There are several techniques available for use during the creativity phase. Some commonly used techniques are free association techniques and brainstorming.

3. Evaluation Phase The objective of the evaluation phase is to analyze the results of the creativity phase and thoroughly review the various alternatives, select the best ideas for further expansion. There are several techniques used to evaluate alternate ideas such as advantageous versus disadvantageous techniques, ranking technique, probabilities technique, and estimating alternatives. Among these, the most common method used for the evaluation process is that of comparing each criterion against the other and assigning a measure of importance. For an actual project, the weighted matrix should incorporate the project’s actual data.


Sample Weighted Matrix
        Source: DPWH Guidelines On Value Engineering (2015)

4. Development Phase The objective of the development phase is to collect additional data, analyze thoroughly the best alternatives selected during the evaluation phase, and prepare cost estimates and initial designs that will ensure acceptability and ultimate project implementation. In this phase, the most promising alternatives selected during the evaluation phase will be further developed into detailed alternatives. There are also several techniques which could be used in the development phase. Some of these are search techniques, consideration of alternate products and materials, and consulting specialists and suppliers.

5. Presentation Phase
The objective of the presentation phase is to put the recommendations before the decision-makers with sufficient information that the decision-makers will accept the proposal. The initial presentation of a recommendation must be concise, factual, accurate and conducted in a manner that creates management’s desire to implement the change.

6. Implementation Phase
The objective of the implementation phase is to ensure that the approved proposals are rapidly and properly translated into action to achieve savings or project improvements that were proposed.

Sample Value Analysis

References :

  1. Miles, L. W. (1972). Techniques of Value Analysis. https://archive.org/details/techniquesofvalu0000mile_2nded
  2. NEDA (n.d.). Value Engineering/Value Analysis (VE/VA): The Philippine Experience. https://www.oecd.org/content/dam/oecd/en/events/2023/10/7th-oecd-southeast-asia-policy-network-meeting-on-sustainable-infrastructure/Session%202_Roderick%20Planta.pdf/_jcr_content/renditions/original./Session%202_Roderick%20Planta.pdf
  3. NEDA (2009). VALUE ANALYSIS
    Handbook. https://www.scribd.com/document/288453520/NEDA-Value-Analysis-Handbook-pdf
  4. DPWH (2015). DPWH Guidelines on Value Engineering. https://www.scribd.com/document/340671363/DPWH-Guidelines-on-Value-Engineering-pdf