Valuing VE under clause 16.1 of the NEC4 contract is for the Contractor to put forward a proposal and for the PM to accept or not accept that proposal. it does not go into detail on how the Contractor prices the proposal, other than the fact that if it is not accepted then the proposed VE will not go ahead and the Contractor will not get any proportion of the saving and will just have to work to the original Scope.
In practice I think the proposal should be assessed the same way you would assess a compensation event. For that you do NOT use activity schedule rates, unless by agreement. You otherwise build up from first principals what the original works you now know would have cost, less the cost of the new works both considering risk. That is how the proposal should be built up.
The idea though with NEC4 is that this VE is offer/acceptance. It is not like a CE where the PM gets to assess themselves if they do not agree with the works.
This will be now further complicated no doubt if they have already instructed this VE works to go ahead, without first agreeing the cost of the saving.
What ever the saving is, the Prices are reduced by the value engineering ratio stated in contract data if this is option A/B, or will fall out of the gainshare under option C/D (where the target is not changed but the forecast cost will go down with the VE meaning more gainshare)
In practice I think the proposal should be assessed the same way you would assess a compensation event. For that you do NOT use activity schedule rates, unless by agreement. You otherwise build up from first principals what the original works you now know would have cost, less the cost of the new works both considering risk. That is how the proposal should be built up.
The idea though with NEC4 is that this VE is offer/acceptance. It is not like a CE where the PM gets to assess themselves if they do not agree with the works.
This will be now further complicated no doubt if they have already instructed this VE works to go ahead, without first agreeing the cost of the saving.
What ever the saving is, the Prices are reduced by the value engineering ratio stated in contract data if this is option A/B, or will fall out of the gainshare under option C/D (where the target is not changed but the forecast cost will go down with the VE meaning more gainshare)