Value management: A tool for cost management in the building industry in Kenya

Abstract

This research project is an evaluation of the application of value management as a tool for cost management in the building industry in Kenya. The construction industry is a key sector of the economy. It involves large investments and developers would like to get value for their money. The problem of projects exceeding their life cycle economic budget depletes the returns on investments. Another problem is functional failure of a project to perform as intended. The research looked at value management as one way of improving cost performance. The research sought to establish the extent of application, awareness and the challenges of practicing value management in the building industry in Kenya. The research concentrated on architects and quantity surveyors in the private sector based in Nairobi. This is where most of the consultants are located and who handle projects all over the country (Githaiga, 2006). The study also interviewed the Ministry of Public Works to seek policy position regarding application of value management by the government. Data was analysed using Statistical Package for Social Sciences. The findings of the study are that the level of application of structured value management is low. Various challenges were identified which include, lack of policy by the government, lack of legal framework, low level of awareness, lack of interest, and lack of effective demand among other reasons. The study however found that there are aspects of value engineering which are carried out though without identifying it as value engineering or management. The study recommends that the consultants in the building industry be sensitized and encouraged to embrace value management through Continuous Professional Development, workshops and seminars. Developers must also be sensitized about importance and benefits of value management through their trade and welfare associations. Another way is to encourage practice of value management through policy guidelines for public buildings and construction projects. This has been one way of promoting its practice in other countries.