Value Engineering versus Cost Cutting: What Separates Them

Value engineering has a formal definition, a published method and a test of admission: a study qualifies only if it performs function analysis and follows a defined job plan. Cost cutting has none of these, and the Indian public record shows the consequence — the Comptroller and Auditor General found that NHAI, having approved a detailed project report for road over bridges whose design drawings did not exist, de-scoped one bridge entirely and cut another from six lanes to four, removing ₹90.34 crore of cost, and with it the grade separation at the bridge that went. This report sets out the function-to-cost definition, the job plan as codified in IS 11810:2003 and the SAVE Value Methodology Standard, where value engineering is and is not mandated in India, and what the evidence supports about timing.

Part of AECS Research Global's publications programme — drawing on ARG's work across cost management, EPC advisory and integrated project delivery. Download the full report below.