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PART 1848

VALUE ENGINEERING

TABLE OF CONTENTS

SUBPART 1848.1 POLICIES AND PROCEDURES

1848.102 Policies.

1848.103 Processing value engineering change proposals.

1848.104 Sharing arrangements.

1848-104-2 Sharing collateral savings.

SUBPART 1848.2 CONTRACT CLAUSES

1848.201 Clauses for supply or service contracts.

PART 1848

VALUE ENGINEERING

Subpart 1848.1--Ppolicies and Pprocedures

1848.102 Policies.

(a) The Associate Administrator for Procurement (Code HS) is the approval authority for e

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

(a) The exemptions permitted under FAR 48.102(a) are granted on a case-by-case basis, or for specific classes of contracts, by the Associate Administrator for Procurement.

(b) Profit or fee shall be excluded when calculating instant or future contract savings, except that in (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.

(c) The FAR requires agencies to establish procedures for funding and payment of the contractor's share of collateral savings and future contract savings. Therefore, the contracting officer shall notify the responsible technical official of the potential for awarding the contractor future or collateral savings if the submitted value engineering change proposal (VECP) is accepted. (See 18-48.103.) Upon acceptance, the contracting officer shall obtain the concurrence of the program office and amend the instant contract to reflect payment of future or collateral savings.

18-48.103 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:, indicating--

(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.

(a) The date the VECP was received;

(b) The date by which the contractor must be informed of the Government's acceptance or rejection of the VECP unless additional time is required for evaluation;

(c) The date by which the contracting officer must know of the technical officer's decision in order to timely accept or reject the VECP;

(d) The need for information required to inform the contractor if the VECP is to be rejected or if additional time is needed for evaluating the VECP;

(e) The potential for awarding concurrent, future, or collateral savings to the contractor if the VECP is accepted;

(f) That if the VECP is accepted, precise information will be needed with regard to the type of savings, Government costs, etc., that can be expected from its acceptance;

(g) The need for a procurement request setting forth the specification changes to be used in any contract modification accepting the VECP in whole or in part; and

(h) The need for additional funds if acceptance of the VECP results in negative instant contract savings.

18-48.104 Sharing arrangements.

18-48.104-2 Sharing collateral savings.

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

Subpart 18-48.2--

Contract Clauses

18-48.201 Clauses for supply or service contracts.

18-48.201-70 NASA conditions.

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

(a) General. The Associate Administrator for Procurement may exempt a contract or a class of contracts from the requirements of FAR Part 48.

(b) Value engineering incentive. Unless the chief of the contracting activity authorizes its inclusion, the contracting officer shall not include the VE incentive clause in solicitations and contracts that fall under the exemptions at FAR 48.201(a)(1) through (5). With respect to the sixth exception (FAR 48.201(a)(6)), the procurement officer may not authorize inclusion of a VE clause in a contract or class of contracts exempted by the Associate Administrator for Procurement.

(b) The contracting officer shall not insert the clause at FAR 52.248-1, 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) Value engineering program require- ment. NASA Except as prescribed in paragraph (b) of this section, the contracting officers shall insert the VE program requirement clause (the clause at FAR 52.248-1 used with its Alternate I or II) in (1) initial production

contracts for major systems, and (2) major systems R&D contracts for full-scale development, unless the contracting officer determines in writing that its use is inappropriate. and documents the file to reflect that determination. The VE program requirement clause (FAR 52.248-1, Value Engineering, used with its Use of Alternate I or II) is appropriate for an R&D major systems contract only if the contract specifications contain detailed requirements that, in the contracting officer's judgment, 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.

Research and development. The contracting officer may not insert either the VE incentive clause (FAR 52.248-1, Value Engineering) or the VE program requirement clause (FAR 52.248-1, Value Engineering, used with its Alternate I or II) 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 profit from or be improved by application of VE techniques, the contracting officer shall consider inserting the VE incentive clause (FAR 52.248-1, Value Engineering) or VE program requirement clause (FAR 52.248-1, Value Engineering, used with its Alternate I or II), to refer to that part.

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