Summary

In response to a congressional request, GAO provided an update to a prior report to determine how the Department of Defense (DOD) has improved the contractor component of its value engineering program.

GAO found that DOD recently increased management attention to value engineering. In fiscal year (FY) 1982, through Defense contractor activity under the program, DOD reported savings of almost $145 million. Despite this increase, DOD was still more than $300 million short of its FY 1982 savings goal, and most major weapon systems did not report any value engineering savings. GAO found that the Army and the Air Force have improved their program guidance, increased value engineering training, sponsored conferences for contractors, and pursued other alternatives for encouraging contractor involvement. However, no system exists within DOD to ensure that value engineering activity is sufficiently monitored at a high level. GAO found that the Navy has not established value engineering savings goals at the command or field activity level, issued sufficient program guidance, or provided sufficient training. The Navy has achieved the lowest level of results both in reported savings and in the number of major weapon systems with active value engineering programs because of the Navy's poor performance under the contractor component of the value engineering program. Finally, GAO found that some contractors or subcontractors do not understand the value engineering program, or they do not believe that the change proposals they submit will receive fair and expeditious treatment.