I
103D CONGRESS
1ST SESSION
H. R. 133
To require Federal agencies to apply value engineering, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 5, 1993
Mrs. COLLINS of Illinois (for herself and Mr. CONYERS) introduced the
following bill; which was referred to the Committee on Government Operations
A BILL
To require Federal agencies to apply value engineering, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Systematic Application
of Value Engineering Act of 1993’’.
SEC. 2. VALUE ENGINEERING REQUIREMENTS FOR FED-
ERAL AGENCIES.
(a) IN GENERAL.—Federal agencies shall apply value
engineering consistent with subsection (b)(2) to, at a mini-
mum, identify and implement opportunities to reduce cap-
ital and operation costs and improve and maintain opti-
mum quality of construction, administrative, program, ac-
quisition, and grant projects. The head of each Federal
agency shall require senior management personnel to es-
tablish and maintain value engineering procedures and
processes. Such procedures and processes shall, at a mini-
mum—
(1) utilize qualified value engineering personnel
consistent with paragraphs (1) and (4) of subsection
(b);
(2) provide for the aggressive and systematic
development and maintenance of the most effective,
efficient, and economical arrangement for conduct-
ing the work of the agency; and
(3) provide a sound basis for the reporting of
accomplishments to the Office of Management and
Budget, the President, the Congress, and the public.
(b) AGENCY RESPONSIBILITIES.—To ensure that
systemic value engineering improvements are achieved,
each Federal agency shall, at a minimum, carry out the
following:
(1) Designate a senior management official with
a significant, well-documented background in value
engineering as the value engineering manager within
the agency, to oversee and monitor value engineering
efforts and to coordinate the development of criteria
and guidelines referred to in paragraph (2).
(2) Develop criteria and guidelines for both
agency employees and contractor employees to iden-
tify programs, projects, systems, and products with
the greatest potential to yield savings and benefits
from the application of value engineering methodol-
ogy. The criteria and guidelines should recognize
that the potential savings are greatest during the
planning, design, and other early phases of program,
project, system, and product development. The cri-
teria and guidelines shall include the following:
(A) Consideration of return on the Govern-
ment’s investment in value engineering, deter-
mined by dividing the Government’s cost of per-
forming the value engineering function by the
savings generated by the function.
(B) A dollar amount threshold for requir-
ing the application of value engineering. The
threshold shall be designed to ensure that value
engineering is applied to—
(i) each program, project, system, and
product of the agency that has a dollar
value greater than the threshold; and
(ii) programs, projects, systems, and
products comprising in the aggregate 80
percent of the budget of the agency.
For purposes of applying such a threshold, the
dollar values of various programs, projects, sys-
tems, and products of an agency that have indi-
vidual values below the threshold shall be aggre-
gated if they utilize equivalent planning or de-
sign elements, are jointly administered, or are
functionally equivalent.
(C) Criteria under which the value engi-
neering manager of the agency may, on a case-
by-case basis, waive the requirement of this Act
to conduct value engineering studies, and proce-
dures and requirements for documenting and
maintaining records of the justification for each
such waiver.
(3) Provide training (including practical experi-
ence) in established value engineering methodology
to agency staff responsible for coordinating and
monitoring value engineering efforts and to staff re-
sponsible for developing, reviewing, analyzing, carry-
ing out, changing, and evaluating value engineering
proposals.
(4) Ensure that funds necessary for conducting
agency value engineering efforts are included in an-
nual budget requests to the Office of Management
and Budget.
(5) Document and maintain records of—
(A) programs, projects, systems, and prod-
ucts that meet agency criteria for requiring the
use of value engineering techniques; and
(B) determinations (including the reasons
therefor) that the recommendations resulting
from a value engineering review should not be
implemented.
(6) Except when inconsistent with this Act, ad-
here to the acquisition requirements of the Federal
Acquisition Regulation, including the use of value
engineering clauses in parts 48 and 52 for both
prime and subcontractors.
(7) In the case of discretionary grants awarded
by the agency, establish value engineering require-
ments, such as requiring grant applications to in-
clude a clause requiring the use of value engineering
methodology by qualified value engineering personnel
in the performance of the grant.
(8) Develop annual plans for using value engi-
neering in the agency, which, at a minimum, iden-
tify—
(A) the agency and contractor projects,
programs, systems, and products to which value
engineering techniques will be applied in the
next fiscal year; and
(B) the estimated costs of such projects,
programs, systems, and products.
(9) Report annually to the Office of Manage-
ment and Budget on value engineering activities in
accordance with subsection (c).
(c) REPORTS
TO OFFICE
OF MANAGEMENT
AND
BUDGET.—
(1) IN GENERAL.—The head of each Federal
agency shall submit to the Office of Management
and Budget an annual report on the results of using
value engineering in the agency. The report shall be
submitted by February 15 of each year.
(2) CONTENTS.—The report required by this
subsection shall include the following:
(A) The name, job title, address, telephone
number, and any additional job titles of the
agency’s current value engineering manager.
(B) The Government’s return on invest-
ment in value engineering achieved through ac-
tual implementation by the agency of rec-
ommendations adopted as a result of value en-
gineering, calculated by dividing the amount of
savings achieved through such implementation
by the cost of performing value engineering re-
views.
(C) The Government’s potential return on
investment achievable through value engineer-
ing, calculated by dividing the amount of sav-
ings achievable through the adoption of rec-
ommendations as a result of value engineering
by the cost of performing value engineering re-
views to produce those recommendations.
(D) A description of the application of
value engineering to the agency’s 20 programs,
projects, systems, and products having the
highest dollar value, including the net savings
and quality improvements achieved through use
of 
value 
engineering 
in 
those 
programs,
projects, systems, and products.
(E) A listing of the criteria adopted by the
agency pursuant to subsection (b)(2)(C) for
waiving the application of the value engineering
requirements of this Act, and documentation of
any waivers granted under the criteria.
(d) INSPECTOR GENERAL AUDITS.—The Inspector
General of each Federal agency shall audit the savings re-
ported by the agency in the second annual report submit-
ted under subsection (c). Thereafter, the Inspector Gen-
eral of each Federal agency shall audit the reported sav-
ings every second year.
(e) DEFINITIONS.—For purposes of this Act, the fol-
lowing definitions apply:
(1) The term ‘‘Federal agency’’ has the mean-
ing the term ‘‘agency’’ has under section 551(1) of
title 5, United States Code.
(2) The term ‘‘savings’’ means a reduction in,
or avoidance of, expenditures that would be incurred
if programs, projects, systems, and products were
not evaluated using value engineering techniques.
(3) The term ‘‘value engineering’’ means an or-
ganized effort, performed by qualified agency or con-
tractor personnel, directed at analyzing the functions
of a program, project, system, product, item of
equipment, building, facility, service, or supply for
the purpose of achieving the essential functions at
the lowest life-cycle cost that is consistent with re-
quired or improved performance, reliability, quality,
and safety.
(4) The term ‘‘life-cycle cost’’ means the total
cost of a program, project, system, product, item of
equipment, building, facility, service, or supply, com-
puted over its useful life. The term includes all rel-
evant costs involved in acquiring, owning, operating,
maintaining, and disposing of the program, project,
system, product, item of equipment, building, facil-
ity, service, or supply over a specified period of time.
(f) EFFECTIVE DATE.—This Act shall take effect on
January 1, 1994.
(g) REVIEW.—The Director of Management and
Budget shall review the policies contained in this Act 5
years after the date of the enactment of this Act and shall
report the results of such review to Congress.
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