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Value Engineering (VE) Regulation Final Rule Questions and Answers

Q1. Where can I access the published version of the VE Final Rule?

A1. The VE Final Rule was published on March 15, 2012 in the Federal Register, Docket No. FHWA-2012-0046) and can be accessed at: http: http://www.fhwa.dot.gov/ve/vepolicy.cfm.

Q2. When does the VE Regulation go into effect?

A2. The VE Regulation is effective on April 16, 2012, which is 30 days after the final rule was published in the Federal Register.

Q3. Why did FHWA modify the VE regulations?

A3. This Final Rule amended the existing VE regulations (as specified in 23 CFR 627) to be consistent with several prior statutory changes contained in Title 23 U.S.C. 106, and the Office Management and Budget Circular A-131. These revisions also addressed certain findings contained in a 2007 Office of Inspector General report where they recommended certain changes to these regulations and FHWA's VE policies. These revisions do not otherwise impose any new burdens on States.

The regulations were also revised to enhance the consistency of VE analyses that are conducted and to improve FHWA's stewardship and oversight of the State VE Program. These revisions will advance the integration of VE analysis into the planning and development of Federal-aid projects. Furthermore, these revisions will facilitate enhancements to the VE analyses agencies conduct which will foster the use of innovative technologies and methods while eliminating unnecessary and costly project elements, delivery techniques or contract provisions, thereby improving the project's performance, value, and quality, while reducing project delivery costs.

Q4. Was there a change in the threshold or requirements for when a VE analysis is required to be conducted on projects utilizing Federal-aid highway program funding?

A4. The thresholds for conducting a VE analysis on Federal-aid Highway Program (FAHP) projects were statutorily codified in law in Title 23 U.S.C. 106. The FHWA does not have the authority to modify these thresholds, therefore, this rulemaking did not change the thresholds for applicable projects for which a VE analysis is required.

Q5. What were some of the changes or clarifications that were made to the VE regulation?

A5. The following is a section by section summary of the key changes made to the VE regulation.

627.1 Purpose and Applicability. This section was amended to clarify the requirements for State Transportation Agencies (STA) to establish the policies and procedures to plan, conduct, monitor, assess, and report on the VE program, VE analyses conducted, and VE Change Proposals (VECP) accepted. This section also clarified that STAs shall ensure that sub-recipients conduct VE analyses in compliance with the provisions of this part.

627.3 Definitions. This section was amended to clarify the requirements associated with conducting VE analyses and to define a Project, a Bridge Project, Total Project Costs, VE Job Plan, and VECPs.

627.5 Applicable Projects. This section was changed from General Principles and Procedures to Applicable Projects to clarify when a VE analysis is required by FHWA. The section was amended to clarify that VE analyses are to be conducted prior to completion of final design and all approved recommendations are to be incorporated into the projects Plans, Specifications and Estimate prior to construction. Section 627.5(b) clarifies when a VE analysis shall be conducted on projects that utilize FAHP funding and when a change in scope warrants a VE analysis. Section 627.5(d) identifies the need for STAs policies and procedures to indentify when any additional VE analysis should be considered in the planning and development of federal-aid transportation projects.

627.7 VE Programs. This section clarifies the requirements associated with developing and sustaining a VE program including the identification of a program coordinator responsible for leading the STA VE program. This section clarifies the responsibilities of STAs to ensure that the required VE analysis is monitored, planned, conducted, documented, reported, and approved recommendations incorporated into the designs of all applicable projects within their State including those administered by local agencies. STAs shall establish and document policies, procedures and contract provisions to control the conduct, review and acceptance of VECPs.

627.9 VE Analysis. This section clarifies the specific requirements associated with conducting a VE analysis including the use of an independent, multidisciplinary team, effective planning and timing of the VE analysis, the use of the VE Job Plan, preparing and documenting the formal written report, incorporating approved recommendations into the design of projects, and encouraging the use of VECPs in the construction phase of projects. Section 627.9(e) clarifies the VE requirements specific to bridge projects. Section 627.9(f) clarifies the use and qualification requirements of consultants leading a VE analysis.

Q6. What actions should a State DOT take to be in compliance with the VE Final Rule?

A6. FHWA division offices should review their stewardship plans and procedures to ensure they are consistent with the revisions that were made to the VE regulations. State DOTs are encouraged to develop or review their VE programs, policies and procedures to ensure VE analyses are conducted on all applicable projects, to ensure all approved VE recommendations are incorporated into projects prior to completion of the final design, to ensure processes are in place to document, report monitor and assess the results and performance of the VE Program.

Q7. Where can I find additional information for the FHWA VE program?

A7. The VE Final Rule, other resources and information on VE is located at: http://www.fhwa.dot.gov/ve/.