# Presentation: 416476

## 
Office of Acquisition and Property Management

- Office of Acquisition and Property Management

- Integration of Value Engineering (VE)and the Five-Year Planning Process

## Presentation Overview

- Quick review of Value Engineering (VE) requirements and benefits
- Summarize DOI’s Current VE requirements
- List potential revisions to DOI requirements
- Summarize integration of VE into Five-Year planning process

**Department of the Interior**
- December 2007

## Background – VE Requirements

- Public Law 104-106 (1996) requires all agencies establish 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
- DOI’s requirements are in Department Manual 369

**Department of the Interior**
- December 2007

## Background - Value Engineering Presentation 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 an executive agency, performed by qualified agency or contractor personnel, directed at improving performance, reliability, quality, safety, and life cycle costs.''

**Department of the Interior**
- December 2007

## Background - Value Engineering

- VE applies to all projects, programs, equipment
- Studies can be performed by in-house or contractor personnel
- VE can be applied at any point in project or program life cycle

**Department of the Interior**
- December 2007

## 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

**Department of the Interior**
- December 2007

## DOI’s Current VE Requirements

- VE program is mandatory for all bureaus and offices and programs, projects, and activities
- Applies to:
-    Construction, repair, rehabilitation, and renovation projects with estimated cost $500,000 or greater

**Department of the Interior**
- December 2007

## DOI’s Current VE Requirements

- VE is performed when concept and estimated cost is detailed enough for comparison of alternatives
- Goal is to achieve saving equal to or greater than 4 percent of a bureau’s aggregate annual construction budget

**Department of the Interior**
- December 2007

## Objective of VE Integration

- The two primary objectives of integrating VE and
- the Five-Year planning process are:
- 1) Foster thorough planning and analysis to  complete high quality construction and repair projects at an appropriate cost
- 2) Use VE as a tool to limit project cost and schedule variance

**Department of the Interior**
- December 2007

## Potential Revisions to DOI Requirements

- The below revisions will be discussed by bureau
- VE coordinators.  Additional items may be added.
- Define the project stage at which VE results are reported.
- Clearly define the stage in project development at which VE is performed.

**Department of the Interior**
- December 2007

## Potential Revisions to DOI Requirements

- 3) Ensure construction Capital Planning and Investment Control (CPIC) guide identifies points in project life cycle to perform VE.
- 4) Define application of VE to design/build projects.
- 5) Consider raising the VE threshold to $1 million from $500,000
- 		- $1 million is minimum threshold per A-131

**Department of the Interior**
- December 2007

## Potential Revisions to DOI Requirements

- 6) Define how VE is applied to dam projects
- 7) Acknowledge that sustainable building practices may justifiably increase some project costs to create environmental benefit
- 8) Consider whether VE should be applied more rigorously to non-project work

**Department of the Interior**
- December 2007

## Revision of Appendix Q

- Appendix Q is the VE section of the construction CPIC guide
- Core of the Appendix is Department Manual 369 (VE)

**Department of the Interior**
- December 2007

## Integration Process

- Revise Department Manual Part 369 (VE)
- Goal is for final revision June 1, 2008
- Revise Appendix Q of the Construction CPIC Guide
- Goal is for final revision June 1, 2008
- Bureau VE coordinators will submit proposed revisions to both documents by January 22, 2008

**Department of the Interior**
- December 2007

## Integration Process

- Include revised VE requirements in Attachment G 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 Sheet   included in the FY 2011- FY 2015 Five Year Plan

**Department of the Interior**
- December 2007

## 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

**Department of the Interior**
- December 2007

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Questions, Comments?

- Questions, Comments?

**Department of the Interior**
- December 2007