PART 1848

VALUE ENGINEERING

**TABLE OF CONTENTS**

**SUBPART [1848.1](#OLE_LINK1) POLICIES AND PROCEDURES**

1848.102 Policies.

1848.103 Processing value engineering change proposals.

1848.104 Sharing arrangements.

1848-104-3 Sharing collateral savings.

**SUBPART [1848.2](#OLE_LINK2) CONTRACT CLAUSES**

1848.201 Clauses for supply or service contracts.

PART 1848

VALUE ENGINEERING

**Subpart** []{#OLE_LINK1 .anchor}**1848.1\--Policies and Procedures**

**1848.102** **Policies.**

\(a\) The Assistant Administrator for Procurement (Code HS) is the
approval authority for exemptions.

\(f\) In calculating instant or future contract savings on
firm-fixed-price contracts when the parties have not set out a specific
figure for profit, the contracting officer shall use the total contract
price as the basis for calculating the savings.

**1848.103 Processing value engineering** **change proposals.**

\(a\) Upon receipt of a VECP, the contracting officer shall promptly
forward it to the technical officer responsible for the contract with
the following information:

**(i)** Date of VECP receipt;

**(ii)** Date for notifying the contractor of VECP acceptance or
rejection;

**(iii)** Notification of the potential for awarding concurrent, future,
or collateral savings to the contractor if the VECP is accepted;

**(iv)** Request for a technical evaluation, with complete rationale for
recommended acceptance or rejection, to include if acceptance is
recommended:

**(A)** An estimate of the type of savings, Government costs, etc., that
can be expected from its acceptance;

**(B)** A procurement request setting forth the specification changes to
be used in any contract modification accepting the VECP in whole or in
part; and

**(C)** Additional funds if acceptance of the VECP results in negative
instant contract savings.

**(v)** Technical evaluation due date.

**1848.104 Sharing arrangements.**

**1848.104-3** **Sharing collateral savings.**

\(a\) The contracting officer is authorized to make the determination
that the cost of calculating and tracking collateral savings will exceed
the benefits to be derived.

**Subpart 1848.2\--Contract Clauses**

**1848.201 Clauses for supply or service** **contracts.**

(a)(6) The Assistant Administrator for Procurement (Code HS) is the
approval authority for exemptions.

\(b\) The contracting officer shall not insert the clause at [**FAR
52.248-1**](http://www.arnet.gov/far/current/html/52_248_253.html#1066644),
Value Engineering, either with or without its Alternates, in an R&D
contract where the statement of work is essentially an incorporation by
reference of the prospective contractor\'s proposal. If any other part
of the statement of work in such a contract reflects a Government
specification that might benefit from application of VE techniques, the
contracting officer shall consider inserting the VE incentive clause at
FAR 52.248-1 with any applicable Alternate(s), and establish the
applicability of the clause to that part.

\(c\) Except as prescribed in paragraph (b) of this section, the
contracting officer shall insert the clause at FAR 52.248-1 with its
Alternate I in initial production contracts for major systems, and major
systems R&D contracts for full-scale development, unless the contracting
officer determines in writing that its use is inappropriate. Use of
Alternate I is appropriate for an R&D major systems contract only if the
contract specifications contain detailed requirements that lend
themselves to VE.

\(d\) The contracting officer shall insert the clause at FAR 52.248-1
with its Alternate II under the conditions prescribed in paragraph (c)
of this section.