DEFENSE LOGISTICS AGENCY

THE NATION’S COMBAT LOGISTICS SUPPORT AGENCY

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C&T Value Management 

Program

VECP Breakout

Kelly Floyd, MBA
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OVERVIEW

Value Management:

VE Defined

Contact Information

VECP Rules & Tools

Contractor Guidance & 

References

VECP Explained

Flow Chart
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What is VE? Value Engineering

An organized technique and 

effort to purchase:

An essential function

At the lower cost

At the desired time and place

Without degradation of 

• Performance

• Quality

• Reliability

• Maintainability
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Visualizing Value Engineering
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Contractual method to share savings

• Contractor Initiated

• Improve DoD supplies and/or 

equipment

• Savings shared between Contractor 

and DoD

• Described in FAR Clause 52.248.1

VECP

Value Engineering Change Proposal

Improvements include any price 

savings

• Process

• Materials

• Manufacturing Techniques
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Rules & Tools For VECPs

VECP Clause in 

DLA contracts > 

Simplified 

Acquisition 

Threshold

Typical Share: 50/50

Sharing for 3-5 

years

VECP can only be 

submitted on a 

current contract / 

instant contract

Clause can be 

added by 

Modification
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As a minimum, the Contractor shall include in each VECP the 

information described in paragraphs (c)(1) through (8) of this 

clause. If the proposed change is affected by contractually 

required configuration management or similar procedures, the 

instructions in those procedures relating to format, identification, 

and priority assignment shall govern VECP preparation. The 

VECP shall include the following: 

VECP Clause Preparation
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VECP Point One

• A description of the difference between the existing contract 

requirement and the proposed requirement

• The comparative advantages and disadvantages of each

• A justification when an item’s function or characteristics are 

being altered

• The effect of the change on the end item’s performance

• Any pertinent objective test data
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VECP Point One Continued

• Do:

– Include pictures

– Be descriptive

• Don’t:

– Assume anything is 

common knowledge
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VECP Point Two

• A list and analysis of the 

contract requirements that 

must be changed if the 

VECP is accepted

– Include any suggested 

specification revisions

• Do:

– Cite specific language in 

Spec

– Cite specific language in 

contract

• Don’t:

– Use generalizations

– Forget reference docs
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VECP Point Three

• Identification of the unit to 

which the VECP applies

• Do:

– Include PGC(s) 

– Include NSN(s) 

– Include Part Number(s)

• Don’t:

– Include items not on 

your contract
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VECP Point Four

• A separate, detailed cost estimate for: 

– The affected portions of the existing contract requirement 

and the VECP

– The cost reduction associated with the VECP shall take into 

account the Contractor’s allowable development and 

implementation costs, including any amount attributable to 

subcontracts under the Subcontracts paragraph of this 

clause
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VECP Point Four Continued 

• Do:

– Fixed and variable costs

– Provide details 

• Don’t:

– Forget Contractor’s 

allowable development 

and implementation costs

A separate, detailed cost estimate

Current Process Cost 

Minus

Recommended Process Cost 

Equals

Cost Savings
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VECP Point Five

• A description and estimate 

of costs the Government 

may incur in implementing 

the VECP

– such as test and 

evaluation and operating 

and support costs

• Do:

– Be specific

– Include testing 

• Don’t:

– Be afraid to list costs
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VECP Point Six

• A prediction of any 

effects the proposed 

change would have on 

collateral costs to the 

agency.

• Do:

– Include savings 

otherwise

• Don’t: 

– Just include costs
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VECP Point Seven

• A statement of the time by 

which a contract 

modification accepting the 

VECP must be issued in 

order to achieve the 

maximum cost reduction, 

noting any effect on the 

contract completion time or 

delivery schedule

• Do:

– Try to provide date

– Account for complexity

• Don’t:

– Assume that all 

requirement's will be 

accomplished by date 

provided
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VECP Point Eight

• Identification of any 

previous submissions of the 

VECP

• If there are previous 

submissions include: 

– The dates submitted

– The agencies and 

contract numbers 

involved 

– Previous Government 

actions, if known

• Do:

– Provide as much 

information as possible 

to help in locating file

– Reach out to VM to 

verify previous 

submissions

• Don’t:

– Assume prior denial will 

result in future denial
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DSCP Form 1772

• If you have all 8 points 

covered in your submission 

form should be easy to fill 

out.

• Bare minimum of 

information required for 

processing of VECP
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The Contractor shall submit VECP’s to 

the Contracting Officer

• unless this contract states otherwise

Submission

If the contract is administered by other 

than the contracting office

• The Contractor shall submit a copy 

of the VECP simultaneously to the 

Contracting Officer and to the 

Administrative Contracting Officer
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Flow Chart

CONTRACTOR 

INITIATING VECP

ORIGINAL 

TO PCO

COPY TO 

ACO

VE OFFICE 

TECHNICAL 

SERVICES 

BRANCH

VE OFFICE 

SPECIFICATION 

PREPARING 

ACTIVITY

VE OFFICE

DCMAO/DCAA

COST ANALYSIS

CTDF UPDATE 

TECHNICAL SERVICES 

BRANCH

LETTER OF 

ACKNOWLEGEMENT TO 

CONTRACTOR

CONTRACTOR PCO COPY 

ACO

OFFICE OF 

COUNCIL

TECHNICAL 

SERVICES 

BRANCH

ROYALITY 

PAYMENT 

MODIFICAT

IONS

VE OFFICE 

TRACK AND 

REPORT 

SAVINGS

CONTRACTOR 

INITIATING 

VECP

Full and Final 

Payment 
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Instructions:

• DoDI 4245.14 Value 

Engineering

• DLAI 4245.01 Value 

Management

• DLAD 48.101 

Value Engineering/Management References

FAR (Federal Acquisition Regulation):

• 48.201 Clauses for supply or 

service contracts

Contract Clause

• 52.248-1 Value engineering

• Prescribed by 48.201 

on all contracts over 

SAT (Simplified 

Acquisition Threshold)
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Points of Contact

DLA Troop Support C&T Value 

Management Office

Kelly Floyd: (215) 737-7441

Kelly.Floyd@dla.mil

Alexis Diaz: (215) 737-4878

Alexis.Diaz@dla.mil

http://www.dla.mil/TroopSupport/ClothingandTextiles/Value-Management/