Integration of Value Engineering

7/31/2019 Integration of Value Engineering

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Office of Acquisition and Property Management

Integration of ValueEngineering (VE)

and theFive-Year Planning Process


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Background VE Requirements

Public Law 104-106 (1996) requires all agenciesestablish a VE program

OMB Circular A-131 requires VE to reduce nonessential

procurement and program costs Threshold is $1 million for projects and programs

DOI submits annual VE accomplishment report

submitted to OMB by December 31 of each year

DOIs requirements are in Department Manual 369

Department of the InteriorDecember 2007


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Background - Value EngineeringPresentation Overview

Public Law 104-106 defines VE as:

An analysis of the functions of a program,

project, system, product, item of equipment,building, facility, service, or supply of anexecutive agency, performed by qualified

agency or contractor personnel, directed atimproving performance, reliability, quality, safety,and life cycle costs.''



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Background - Value Engineering

VE applies to all projects, programs,equipment

Studies can be performed by in-house orcontractor personnel

VE can be applied at any point in projector program life cycle



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Background - Value Engineering

Construction projects

VE usually applied at conceptual and design stages

May be applied more than once on an individual

project

Objective is to:

Ensure all viable alternatives have been examined

Avoid cost and realize cost savings

Improve quality of completed project

Facilitate the government receiving best value



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DOIs Current VE Requirements

VE program is mandatory for all bureausand offices and programs, projects, andactivities

Applies to:

Construction, repair, rehabilitation, and

renovation projects with estimated cost$500,000 or greater



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DOIs Current VE Requirements

VE is performed when concept andestimated cost is detailed enough forcomparison of alternatives

Goal is to achieve saving equal to orgreater than 4 percent of a bureaus

aggregate annual construction budget



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Objective of VE Integration

The two primary objectives of integrating VE and

the Five-Year planning process are:

1) Foster thorough planning and analysis tocomplete high quality construction and repairprojects at an appropriate cost

2) Use VE as a tool to limit project cost andschedule variance



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Potential Revisions to DOI Requirements

The below revisions will be discussed by bureau

VE coordinators. Additional items may be added.

1) Define the project stage at which VE resultsare reported.

2) Clearly define the stage in project developmentat which VE is performed.



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3) Ensure construction Capital Planning andInvestment Control (CPIC) guide identifies pointsin project life cycle to perform VE.

4) Define application of VE to design/buildprojects.

5) Consider raising the VE threshold to $1 millionfrom $500,000

- $1 million is minimum threshold per A-131



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6) Define how VE is applied to dam projects

7) Acknowledge that sustainable buildingpractices may justifiably increase someproject costs to create environmentalbenefit

8) Consider whether VE should be appliedmore rigorously to non-project work



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Revision of Appendix Q

Appendix Q is the VE section of theconstruction CPIC guide

Core of the Appendix is DepartmentManual 369 (VE)



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Integration Process

Revise Department Manual Part 369 (VE)

Goal is for final revision June 1, 2008

Revise Appendix Q of the Construction CPICGuide

Goal is for final revision June 1, 2008

Bureau VE coordinators will submit proposedrevisions to both documents by January 22,2008



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Integration Process

Include revised VE requirements in AttachmentG for the FY 2011- FY 2015 Five Year Plan

This guidance will be issued in FY 2008

Add a VE data field to the Project Data Sheetincluded in the FY 2011- FY 2015 Five Year

Plan



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Bureau VE Program Coordinators

DOI Bill Hamele

BIA Alan Roit

BLM Linda Force, Ed Giagni

BOR Norman Hyndman

FWS Marshall Wright

NPS Rich Turk

USGS Clarence (Bill) Fulk

Contact your coordinator with questions



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Questions, Comments?


Documents

Integration of Value Engineering