(Editor’s Note. We have been reporting in the GCA REPORT recent rule changes covering value engineering change proposals (VECP) as well as the government’s interest in encouraging expanded use of value engineering as a means of lowering its costs. We thought it would be a good idea to provide some basic practical information about how to take advantage of this opportunity. We put the question to a colleague of ours, Katherine Szymkowics, who has extensive experience as a contracting officer and source selection official in numerous government agencies and is currently a principle in The Acquisition Network. Kathy can be reached at (415) 861-0556.)

Value Engineering (VE) is one of the best and least used opportunities the government offers contractors. Long associated with construction and architect-engineering contracts the VE program has become more and more prominent under service and supply contracts exceeding $100,000. They offer not only significant monetary benefits but also can become highly effective methods to boost contractors past performance ratings.

The VE Program can take one of two methods of implementation: (1) the voluntary program, where a contract will contain the appropriate clause from FAR Part 52.248 where is up to the contractor to initiate and submit a VECP or (2) a mandatory program where the government funds the program implementation and shares savings with the contractor should savings be realized. FAR Part 48 provides the regulations of the program and the FAR clause identified in the solicitation details the full requirements for sumitting a VECP.

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