Value Engineering at the Wrong Time: A Path to Failure and The Re-Baseline Imperative
Do you know and/or have the expertise to recognize when a multi-discipline clean tech project definition is completed? Are you having to justify scope removal instead of inclusion, freezing scope too early without proper project definition? This is a classic example of "value engineering" applied at the wrong time and for the wrong reasons, often driven by top-down financial pressure rather than technical rigor. This time, too early. There are times value engineering is too late in the game leaving behind a trail of sunk cost. Competent project professionals know the right time for value engineering based on the specific project interacting technical dynamics and what it is meant to achieve. It is not a cost cutting tool.
Any piece of equipment in scope that cannot answer affirmatively the "Fundamental Engineering Question": What is its specific function in meeting the project's operational and safety objectives? If it can't be answered, it's a candidate for removal from project scope. You may be living in the catastrophic effect of incomplete project definition resulting from incompetent technical project leadership with too early value engineering. A systemic failure in project governance and front-end loading (FEL).
Such project foundation are set up to fail because it violates fundamental principles of project management. Turning it around requires a deliberate, structured, and often difficult intervention. There needs to be an immediate triage to stop the bleeding and erosion of Capex. This is about stabilizing the project and preventing further misguided decisions. Continuing on the current path carries a high risk of major cost overruns (50-100%+), significant schedule delays, and operational failures (safety incidents, production shortfalls). The perceived money being saved now will be multiplied and lost later.
This project is a candidate for immediate intervention, pause all scope-related and financial commitment activities, get competent experts perform project health assessment & re-baseline project using the Basis of Design document. Implement Robust Governance for the Future and Institute Rigorous Change Control. Turning this around is about stopping, rewinding, and doing the work that was skipped. It requires:
The mindset must shift from "How can we cut corners to meet an arbitrary budget and schedule?" to "What is the right way to execute this project to deliver a safe, reliable, and profitable asset, and what is the true cost and timeline to do so?" This is the hard, professional work of engineering management that separates successful projects from catastrophic failures and addressing it head-on is the only path to success. This Re-Baseline Playbook, will get it back from ‘Set-Up-to-Fail’ to ‘Set-Up-to-Succeed’.
Recommended by LinkedIn
From Oil & Gas to today’s clean tech and energy transition projects, I’ve seen that value engineering only works when front-end engineering is done properly. A complete project scope, design basis, and specification upfront minimizes late-stage redesigns and wasted capital. On one project, I had to counter pressure to “copy-paste” a FEED to meet schedule demands - instead, we delivered a proper FEED with risk reviews and HAZOP inputs within half the time, avoiding what could have been a costly failure. The lesson applies across sectors: rigorous FEED is the foundation for reliable, safe, and profitable assets.