Value engineering originated in the 1940s with Lawrence Miles, an engineer for General Electric Company. Miles wanted to bulk up GEC’s production during that time of particular demand—it was war time, and the company needed to produce more turbo superchargers for the B24 bombers. He hoped to increase weekly manufacturing from 50 to 1000. Miles had to buy the materials, and often found himself unable to afford what he needed in terms of materials. Thus, he found different materials which would serve the same function at the right price. The alternative materials, Miles found, worked as good, if not better, than those previously used. Value engineering was born.
Liquidated Damages Defined
What are liquidated damages for a delay in construction? The idea of liquidated damages refers to the money paid by the party—in this case, the construction worker or company—who has failed to fulfill the terms outlined in a contract. This, of course, assumes that the contract was made in good faith, and is valid by all legal standards.
What is a penalty? A penalty in this case, as in any contractual agreement, is the money that the contract-breaking person(s) will pay. The word penalty does not refer to the actual losses, per se, but to a sign of the failure itself—a fine, much like a fine for a library book or traffic ticket.
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