U.S. flag
          An official website of the United States Government  Main navigation
  

        

              Data Initiatives
                              Regulations
                                                                        Row 1
                                              FAR FAR
                              Smart Matrix Smart Matrix
                              Chapter 99 (CAS) Chapter 99 (CAS)
                              Row 2
                                              DFARS DFARS
                              DFARSPGI DFARSPGI
                              AFARS AFARS
                              DAFFARS DAFFARS
                              DAFFARS MP DAFFARS MP
                              DARS DARS
                              DLAD DLAD
                              NMCARS NMCARS
                              Row 3
                                              SOFARS SOFARS
                              TRANSFARS TRANSFARS
                              AGAR AGAR
                              AIDAR AIDAR
                              CAR CAR
                              DEAR DEAR
                              DIAR DIAR
                              DOLAR DOLAR
                              Row 4
                                              DOSAR DOSAR
                              DTAR DTAR
                              EDAR EDAR
                              EPAAR EPAAR
                              FEHBAR FEHBAR
                              GSAM/R GSAM/R
                              HHSAR HHSAR
                              HSAR HSAR
                              Row 5
                                              HUDAR HUDAR
                              IAAR IAAR
                              JAR JAR
                              LIFAR LIFAR
                              NFS NFS
                              NRCAR NRCAR
                              TAR TAR
                              VAAR VAAR
                              Tools
                                                                        Archives
                              Smart Matrix
                              Regulations Search
                              Acquisition Regulation Comparator (ARC)
                              Policy Network
                                                                        CAOC
                              CAAC
                              FAR Council
                              ISDC
 Breadcrumb
        Home
                            Regulations
                            FAR
                            48.102 Policies.
        
                  FAR
FAR
FAC Number: 2024-03 Effective Date: 02/23/2024
PartPart 1Part 2Part 3Part 4Part 5Part 6Part 7Part 8Part 9Part 10Part 11Part 12Part 13Part 14Part 15Part 16Part 17Part 18Part 19Part 20Part 21Part 22Part 23Part 24Part 25Part 26Part 27Part 28Part 29Part 30Part 31Part 32Part 33Part 34Part 35Part 36Part 37Part 38Part 39Part 40Part 41Part 42Part 43Part 44Part 45Part 46Part 47Part 48Part 49Part 50Part 51Part 52Part 53
Subpart48.048.148.2
Section48.10148.10248.10348.10448.105
Leave this field blank
        
                  

                                
                  
        « PreviousNext »
48.102 Policies.48.102 Policies.       (a) 						            As required by   41 U.S.C. 1711, agencies shall establish and maintain cost-effective value engineering procedures and processes. Agencies shall provide contractors a substantial financial incentive to develop and submit VECP’s. Contracting activities will include value engineering provisions in appropriate supply, service, architect-engineer and construction contracts as prescribed by  48.201 and  48.202 except where exemptions are granted on a case-by-case basis, or for specific classes of contracts, by the agency head.                                          (b) 						            Agencies shall-                                                         (1) 								                Establish guidelines for processing VECP’s,                                                            (2) 								                Process VECP’s objectively and expeditiously, and                                                            (3) 								                Provide contractors a fair share of the savings on accepted VECP’s.                                                                             (c) 						            Agencies shall consider requiring incorporation of value engineering clauses in appropriate subcontracts.                                          (d)                                                         (1) 								                Agencies other than the Department of Defense shall use the value engineering program requirement clause ( 52.248-1, Alternates I or II) in initial production contracts for major system programs (see definition of major system in  34.001) and for contracts for major systems research and development except where the contracting officer determines and documents the file to reflect that such use is not appropriate.                                                            (2) 								                In Department of Defense contracts, the VE program requirement clause ( 52.248-1, Alternates I or II), shall be placed in initial production solicitations and contracts (first and second production buys) for major system acquisition programs as defined in DoD Directive 5000.1, except as specified in subdivisions (d)(2)(i) and (ii) of this section. A program requirement clause may be included in initial production contracts for less than major systems acquisition programs if there is a potential for savings. The contracting officer is not required to include a program requirement clause in initial production contracts-                                                                           (i) 										                    Where, in the judgment of the contracting officer, the prime contractor has demonstrated an effective VE program during either earlier program phases, or during other recent comparable production contracts.                                                                              (ii) 										                    Which are awarded on the basis of competition.                                                                                                                            (e) Value engineering incentive payments do not constitute profit or fee within the limitations imposed by                         10 U.S.C. 3322(b)                                          and   41 U.S.C.3905 (see  15.404-4(c)(4)(i)).                                          (f) 						            Generally, profit or fee on the instant contract should not be adjusted downward as a result of acceptance of a VECP. Profit or fee shall be excluded when calculating instant or future contract savings.                                          (g) 						            The contracting officer determines the sharing periods and sharing rates on a case-by-case basis using the guidelines in  48.104-1 and  48.104-2, respectively. In establishing a sharing period and sharing rate, the contracting officer must consider the following, as appropriate, and must insert supporting rationale in the contract file:                                                         (1) 								                Extent of the change.                                                            (2) 								                Complexity of the change.                                                            (3) 								                Development risk (*e.g.,* contractor’s financial risk).                                                            (4) 								                Development cost.                                                            (5) 								                Performance and/or reliability impact.                                                            (6) 								                Production period remaining at the time of VECP acceptance.                                                            (7) 								                Number of units affected.                                                                             (h) 						            Contracts for architect-engineer services must require a mandatory value engineering program to reduce total ownership cost in accordance with  48.101(b)(2). However, there must be no sharing of value engineering savings in contracts for architect-engineer services.                                          (i) 						            Agencies shall establish procedures for funding and payment of the contractor’s share of collateral savings and future contract savings.    **Parent topic:**  Subpart 48.1 - Policies and Procedures
« PreviousNext »
FavoriteX

      Far Parts
            Regulations FAR Menu
  

        
      Index
                              List of Sections Affected
                              DOD Deviations
                              CAAC Deviations
                              1
                              2
                              3
                              4
                              5
                              6
                              7
                              8
                              9
                              10
                              11
                              12
                              13
                              14
                              15
                              16
                              17
                              18
                              19
                              20
                              21
                              22
                              23
                              24
                              25
                              26
                              27
                              28
                              29
                              30
                              31
                              32
                              33
                              34
                              35
                              36
                              37
                              38
                              39
                              40
                              41
                              42
                              43
                              44
                              45
                              46
                              47
                              48
                              49
                              50
                              51
                              52
                              53
                              Chapter 99 (CAS)Definitions
    Toggle
FAC Changes
    Toggle
Style Formatter
    Toggle

      ×
        Data Initiatives
                                                              Regulations
                                                              Tools
                                              Archives
                                                              Smart Matrix
                                                              Regulations Search
                                                              Acquisition Regulation Comparator (ARC)
                                                              Policy Network
                                              CAO.gov
                                                        CAO Home
                                                              Council Member
                                                                    Large Agencies
                                                              Small Agencies
                                                              Council Defining Documents
                                                                    CAOC History
                                                              CAOC Charter
                                                              Civilian Agency Acquisition Council (CAAC)
                                                              Federal Acquisition Regulatory Council
                                                              Interagency Suspension and Debarment Committee (ISDC)
                                                              Search
 ˄ Top Sign up for FAR News

                            Share the FAR
                        Upper Footer Menu
  

        
      Useful Links
                              FAR Resources
                              Training
                              Acquisition Systems
            
                            **Contact Us/FAQs**
                        **Privacy and Security Notice**
                        **Accessibility Aids**
                        **Last Updated 03/29/2024**
 ACQUISITION.GOV
                An official website of the General Services Administration About GSA
                Accessibility support
                FOIA requests
                No FEAR Act data
                Office of the Inspector General
                Performance reports
                Privacy policy Looking for U.S. government information and services?
            Visit USA.gov
 «
    
    Tt