[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR48]

[Page 900]
 
            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]

[[Page 901]]