[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR48]



[Page 914]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 48_VALUE ENGINEERING--Table of Contents

 

                  Subpart 48.1_Policies and Procedures

 

48.101  General.





    (a) Value engineering is the formal technique by which contractors 

may (1) voluntarily suggest methods for performing more economically and 

share in any resulting savings or (2) be required to establish a program 

to identify and submit to the Government methods for performing more 

economically. Value engineering attempts to eliminate, without impairing 

essential functions or characteristics, anything that increases 

acquisition, operation, or support costs.

    (b) There are two value engineering approaches:

    (1) The first is an incentive approach in which contractor 

participation is voluntary and the contractor uses its own resources to 

develop and submit any value engineering change proposals (VECP's). The 

contract provides for sharing of savings and for payment of the 

contractor's allowable development and implementation costs only if a 

VECP is accepted. This voluntary approach should not in itself increase 

costs to the Government.

    (2) The second approach is a mandatory program in which the 

Government requires and pays for a specific value engineering program 

effort. The contractor must perform value engineering of the scope and 

level of effort required by the Government's program plan and included 

as a separately priced item of work in the contract Schedule. No value 

engineering (VE) sharing is permitted in architect-engineer contracts. 

All other contracts with a program clause share in savings on accepted 

VECP's, but at a lower percentage rate than under the voluntary 

approach. The objective of this value engineering program requirement is 

to ensure that the contractor's value engineering effort is applied to 

areas of the contract that offer opportunities for considerable savings 

consistent with the functional requirements of the end item of the 

contract.



[48 FR 42443, Sept. 19, 1983, as amended at 54 FR 5057, Jan. 31, 1989]