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Frequently Asked Questions

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USACE adopted Value Engineering (VE) as a cost savings tool in 1964 based on the success of the Navy’s Ship Building Program with using value engineering.  When USACE first began using VE, it was implemented by contractors to identify and offer cost savings opportunities on projects during construction.  In the early 1970’s, the Environmental Protection Agency (EPA) realized that greater savings could be achieved for the government, if the Value Engineering was performed during the design process of construction related projects.  Further, they recognized the need to use multidisciplinary teams led by individuals qualified as experts in the Value Engineering process.  EPA approached the Society of American Value Engineers (SAVE; now SAVE International) to establish a certification process so federal agencies could better ensure that the Value Engineering was conducted in accordance with the established process.  This was the genesis of the Certified Value Specialist (CVS).  EPA’s approach to Value Engineering became the standard for federal construction type projects.  As such, this approach was adopted by USACE in the 1970’s while still maintaining the contractor Value Engineering Program.  At that time, USACE established Value Engineering as a program level requirement within USACE and assigned Value Engineering Officers to oversee the program as direct reports to the District Commanders.

While the application of Value Engineering achieved significant results for the federal government in general and USACE specifically, its use was sporadic.  However, even with the limited implementation of Value Engineering on federal construction programs, the successes caught the attention of federal law makers.  In 1986, the Water Resources Development Act (WRDA), PL 99-662 was enacted. Within this law was added Title IX, Section 911 which requires Review of Cost Effectiveness of Design on all USACE water resource projects over $10 million.  While not specifically stated, it was understood that the intent of this law was to ensure the use of Value Engineering on the larger water resource projects. 

Circular A-131(1988) was issued in 1988 and again in 1993 by the President’s Office of Management and Budget (OMB). This Circular requires all federal agencies to apply Value Engineering/Value Management procedures to all projects/procurements with an estimated cost of $1 million or more. Additionally, it specifies the execution of nine (9) federal agency responsibilities to ensure that VE is fully implemented.  It is important to understand that these requirements are not limited to USACE, but are applicable to all federal agencies as well as non-federal entities that utilize federal funding.

Continued interest by law makers in the success of Value Engineering efforts culminated in a second law being enacted that would require the use of Value Engineering across the entire federal government.  The Office of Federal Procurement Act 41 USC 432, Public Law 104-106, was enacted in 1996.  This law requires each Executive agency to “establish and maintain cost effective Value Engineering procedures and processes”.

While USACE was nominally 20 years ahead of the federal laws and the presidential directive, this further substantiated the need for a Value Engineering Program to oversee the execution of Value Engineering across the USACE programs and to ensure compliance with the law.

In response to OMB Circular A-131’s agency responsibilities, USACE has developed the policies and criteria necessary to implement the Value Engineering Program, for all programs executed within USACE, regardless of funding source or customer.  Originally, the USACE implementation policy for OMB Circular A-131 was provided in Engineering Circular EC 11-1-114, Army Programs Value Management (VM)/Value Engineering (VE).  In 2003, a major re-write for clarification of this regulation was conducted resulting in a draft regulation for review.  This resulted in ER 11-1-321, Army Programs Value Engineering being implemented in 2005. In 2010, a legal review was performed by Headquarters USACE and the Chief Office of Counsel. That review specifically looked at what is the legal requirement for conducting Value Engineering, who has the authority to change or waive those requirements, and who is responsible for the interpretation of those requirements.  This legal review in 2010 concluded that there were some errors in the ER 11-1-321 (2005). In response to this legal review, ER 11-1-321, Change 1, Army Programs, Value Engineering, was issued in January 2011 stipulating the current Value Engineering Program requirements. This regulation requires Value Engineering studies on all projects executed by USACE with a procurement cost greater than or equal to $1 million.

Additionally, new guidance from the Office of Secretary of Defense (OSD) and OMB is currently in progress to clarify areas of confusion that have been identified over the last couple decades.  It is also expected that these revisions will also increase the emphasis on Value Engineering programs in response to Presidential executive orders on reduction in program costs and elimination of non-effective programs.

The Corps of Engineers requires the use of Value Engineering because it is the law.  However, it is important to recognize that the Corps of Engineers was using Value Engineering for over 20 years before it became required by law.

Because of the success of Value Engineering in the government sphere, its use became a legal requirement in 1986.  The legal basis for the USACE VE requirement resides in two laws.  The first enacted in 1986, is the Water Resources Development Act (WRDA), PL 99-662.  Specifically, Title IX, Section 911 requires Review of Cost Effectiveness of Design on all USACE water resource project designs over $10 million. Conference Report 99-1013, Title IX, page 222 (1986) further clarifies that this cost effectiveness study is commonly known as Value Engineering.  The second law is the Office of Federal Procurement Act 41 USC 432, Public Law 104-106, Section 4306 enacted in 1996, which requires each Executive Agency to “establish and maintain cost effective Value Engineering procedures and processes”. Pub. L. 111–350, §3, Jan. 4, 2011, 124 Stat. 3718 recodified by 41 USC 1711 - Value Engineering, Jan. 4, 2011.

Circular A-131 was re-issued by the President’s Office of Management and Budget in in 1993. This Circular requires all federal agencies to apply Value Engineering/Value Management procedures to all projects and procurements with an estimated cost of $1 million or more. Additionally, it specifies the execution of nine (9) federal agency responsibilities to ensure that VE is achieved.  It is important to understand that these requirements are not limited to the USACE, but are applicable to all federal agencies as well as non-federal entities that utilize federal funding.

Currently, this Circular is under review by the Office of Secretary of Defense (OSD) and OMB.  The purpose of the review is to further clarify and invigorate Value Engineering Programs throughout the federal government in response to recent executive orders targeting efficiencies in government and reductions in government spending.  One such executive order is named Delivering an Efficient, Effective, and Accountable Government.

In response to the OMB Circular A-131’s agency requirements, USACE developed the specific criteria necessary to implement Value Engineering processes and procedures for application to all programs executed by USACE regardless of the funding source or customer. This is now codified in ER 11-1-321 Change 1 which was initially issued as a draft engineering circular in 2003 and was eventually implemented as an engineering regulation in 2005.  This regulation requires that Value Engineering studies be conducted on all projects with a cost of $1 million or more. Additionally, legal compliance with Water Resources Development Act (WRDA), PL 99-662, requires VE studies to be performed on any projects with a cost of $10 million or more.  Failure to comply with ER 11-1-321 Change 1 will prevent the project from legally being awarded for construction.

In 2010, the Chief’s Office of Counsel at Headquarters USACE performed a legal review of ER 11-1-321 Change 1 with the intention of determining both the chain of authority for the interpretation of the requirements and changing or waiving those requirements.  This legal review confirmed that there were some errors in the original ER.  To correct these errors and to add clarity, ER 11-1-321 Change 1 was issued 01 January 2011.

Public Law 104-106 and the implementation directive for that law in OMB Circular A-131 as well as Public Law 99-662 (1986) are very clear that Value Engineering is a federal requirement on all federal procurements/projects.  OMB Circular A-131 directs all federal programs to establish and maintain a viable Value Engineering Program and that Value Engineering studies shall be conducted on all projects with a procurement cost greater than or equal to $1 million.  This is a requirement of federally funded projects by Executive Order and Executive Directive requiring all federal programs to comply with the Value Engineering requirement.  Further, the OSD and USACE have made the determination that the executing agency, regardless of the funding agency, is responsible for the execution and compliance with the Value Engineering requirements of Public Law and OMB Circular A-131.  Therefore, the USACE, as the executing agent of the planning, design, or construction is the responsible party for ensuring that Value Engineering is completed on all projects in accordance with ER 11-1-321 Change1, and other USACE Value Engineering Program documentation.

Furthermore, the USACE policy on Project Management Business Process (PMBP) integrates VE as a standard practice and service provided to USACE customers. The USACE VE requirements are clearly defined in the PMBP manual (Value Management Plan - REF8023G), as are the roles and responsibilities of the Project Delivery Team (PDT) and other stakeholders.

The USACE Campaign Plan defines the agency’s goals and translates those to USACE Consolidated Command Guidance (CCG).  This Execution Guidance for the VE/VM Program is issued each year establishing the requirements for the different programs, specific requirements for the execution of the VE/VM Program, and reporting requirements.  As part of the standard PMBP, VE is required by direct order through the Consolidated Command Guidance.

Therefore, USACE is required by law, by regulation, and by standard business processes to implement Value Engineering on all federally funded projects/procurements with a cost of $1 million or more, regardless of customer, source of funding, or project location.

OMB Circular A-131 has established a threshold requiring Value Engineering to be performed on all projects/procurements of $1 million or greater.  That threshold was established in 1993 and it is still unchanged.

In 2010, HQUSACE requested a legal review of ER 11-1-321, which provides the implementation guidance for OMB Circular A-131.  The purpose of this review was to obtain an interpretation of when Value Engineering must be applied and who, if anyone, has the authority to deviate from these requirements.

From that legal opinion, the HQUSACE Office of Counsel indicated that the $1 million threshold, established by OMB Circular A-131, had been modified by USACE to increase the threshold to $2 million.  However, there is no documentation to support this change from the OMB Circular requirements.  Therefore, the legal opinion is that the USACE requirement for conducting Value Engineering is $1 million and above.  This threshold can only be changed, as deemed appropriate, by the agency’s Senior Management Official (SMO) for Value Engineering.  The Chief of Engineers has assigned that authority to the Chief Value Engineer.

ER 11-1-321 Change 1, establishes the $1 million threshold as a mandatory threshold; however, this regulation also delegates SMO authority for Value Engineering to the MSC VE Program Managers for programs and procurements between $1 million and $10 million.  This provides the flexibility for professional development of District VE Program Managers.  Further, this transfers waiver authority for these programs and procurements between $1 million and $10 million to the MSC VE Program Managers.

OMB Circular A-131 requires each federal agency to identify a qualified individual to serve as the Senior Management Official (SMO) to monitor and coordinate the agency’s Value Engineering activities.  In the mid-1990’s, the Chief of Engineers responded to this requirement by assigning this responsibility to the HQUSACE Chief Value Engineer.  In 2010, HQUSACE Office of Counsel provided a legal opinion validating that the Senior Management Official is responsible for the interpretation of the OMB Circular A-131 requirements and the execution of the Corps of Engineers’ Value Engineering Program. In 2012, Memorandum for Assistant Secretary of Defense from MG Temple, USA, Acting Commander, subject: Value Engineering (VE) Obtaining Greater Efficiency and Productivity in Defense Spending designated Mr. Jeffery T. Hooghouse, Chief, Office of the Value Engineer (OVE), HQ, U.S. Army Corps of Engineers for the assigned mission area per OMB Circular A-131.

The Chief of Engineers has assigned the responsibilities of the Senior Management Official (SMO) for Value Engineering within USACE to the Chief, Office of the Value Engineer at HQUSACE.  There are additional SMO’s for each agency within the Department of Defense (DoD) as well as other federal agencies.  Within the Army there are two SMOs: the Army Materiel Command (AMC) and USACE. AMC has the SMO responsibility for Value Engineering procurement for weapons systems and other non-construction related programs. USACE has been delegated the SMO responsibility for Value Engineering of all engineering and construction related mission areas that are assigned to the Chief of Engineers.  Additionally, for the civil works program, USACE has Value Engineering authority assigned directly from OMB.  For all USACE mission areas, the SMO responsibilities have been assigned to the Chief, Office of the Value Engineer at HQUSACE.

The Chief of Engineers is responsible and accountable to OMB for executing and maintaining an effective Value Engineering Program, per PL 104-106. At USACE, The Chief of Engineers has assigned responsibility for the execution guidance and management of the VE Program to the Chief of Value Engineering. The responsibility travels from the Chief of Engineers by direct order through the military command chain within the Corps.  Responsibility for the implementation of the VE Program resides with the senior level executives within Headquarters USACE, such as the Chief of the Program Integration Division, the Chief of Engineering Construction, etc.

The responsibility also moves through the military chain of command at a division, where the division commanders are responsible for the success or failure of a program within their AOR.  At the district level, the responsibility and accountability resides with the district commander for the success of his VE program within his AOR.

Public Law 104-106, Federal Procurement Policy Act re-codified by 41 USC 1711 Value Engineering Jan. 4, 2011 states "Each executive agency shall establish and maintain cost-effective procedures and processes for analyzing the functions of a program, project, system...performed by qualified agency or contractor personnel...".  USACE has adopted the SAVE International Value Methodology Standard, which stipulates that a Certified Value Specialist (CVS) is the appropriate "qualified" professional to lead value studies.  These authorities require that the use of Value Methodology be facilitated by a CVS-qualified individual, or equivalent.  The CVS certification requires that: 1) this individual meet the certification standards established by SAVE, 2) the SAVE standard for executing a Value Engineering study are followed, and 3) the Value Methodology produces the results and moves in a direction that is intended by statutory and regulatory requirements. Furthermore, changes to dollar thresholds introduced by ER 11-1-321 Change 1, allow for a USACE (not A/E) Associate Value Specialist (AVS) to facilitate studies, on projects with construction costs between $1 million and $10 million to gain experience towards full certification as a VE Technical Specialist. Oversite by Value Engineering Program Managers at Divisions is required. These smaller studies are intended to grow the USACE VE skills and increase capacity by helping USACE staff advance from an intern-level certification such as AVS, to a subject matter expert and industry recognized fully Certified Value Specialist (CVS). 

The CVS is a certification that an individual has the requisite knowledge of the Value Methodology and demonstrated competency in the application of this methodology to products, processes, or projects.  The CVS is required by the certifying organization, SAVE International, to follow the Value Methodology Standard in the execution of any Value Engineering studies.  In addition to mastery of the formal VE process, a CVS is expected to have the following specialized skills: 1) Team building and organization; 2) Problem solving and integration; 3) Conflict resolution and communication and 4) Strong interpersonal skills.

OMB Circular A-131 establishes Value Engineering requirements for all federal programs and projects and requires agencies to designate a senior management official (SMO) to monitor and coordinate agency VE efforts. The SMO for VE has the authority to waive the requirement to conduct VE studies on certain programs and projects. For the U.S. Army Corps of Engineering (USACE) the SMO is the Chief, Office of the Value Engineer (OVE), HQ USACE.  This responsibility may be delegated to other appropriate officials.

In 2010, a legal review further clarified USACE VE policy to reflect OMB Circular A-131 requirements for waivers. The review was initiated based on errors and inconsistencies found in the 2005 ER 11-1-321.  One error identified was that authority for waiving a VE study for a military project was stated to reside with the office that issued the Release Code to the Corps. For example, the authority ACSIM would have waiver authority for Military Construction Army (MCA) projects. Whereas in Appendix D, waiver authority was stated to reside with the MSC or Engineering Center Commander. Based on the legal review ER 11-1-321 Change 1 was issued in 2011. Change 1 solidified the findings of an intermediate document, Engineering and Construction Bulletin 2010-1, FY10 Value Management/Engineering Program Execution Guidance signed by the Chiefs, Programs Integration Division, Directorate of Military Programs and Directorate of Civil Works and the Chief, Engineering and Construction, Directorate of Civil Works, Headquarters USACE.

Public Law 99-662 Water Resources Development Act (WRDA) 1986, Section 911 requires a review of the cost effectiveness of the design of each water resources projects which has a total cost in excess of $10,000,000. Conference Report 99-1013 clarified that the type of study required for cost effectiveness review is commonly known as value engineering.

Per ER 11-1-321, Change 1, for projects between $1 million and $10 million, the Chief, OVE, HQ USACE, has delegated waiver authority to MSC VE Program Managers who then recommends disposition to the MSC and Engineering Center Commanders for signature. Since Public Law 99-662 requires VE studies for each water resources project with total cost in excess of $10M, VE studies for civil works projects and procurements valued at over $10 million cannot be waived.  The Chief, OVE, HQ USACE has waiver authority for military projects and procurements greater than $10 million.

For Military projects, regardless of funding source or customer, the MSC Value Engineering Program Manager (MSC VPM) has the authority to approve waivers on projects with an estimated procurement cost between $1 million and $10 million.  For projects with an estimated procurement cost greater than $10 million, regardless of funding source or customer, the Chief Value Engineer at HQUSACE, designated as the Senior Management Official for Value Engineering for the Corps of Engineers, has the waiver authority.  A project is defined as any single procurement action.

For Civil Works projects, regardless of funding source or customer, the MSC Value Engineering Program Manager (MSC VPM) has the authority to approve waivers on projects with an estimated procurement cost between $1 million and $10 million.  For projects with an estimated procurement cost greater than $10 million, regardless of funding source or customer, the Value Engineering requirements cannot be waived, according to Public Law 99-662.  A project is defined as any single procurement action.

In order to obtain a waiver, the project manager must initiate the waiver request in writing, in coordination with and approval of the Chief of Programs and Project Management (PPM) and the Value Engineering Officer (VEO) at the District or Engineering Center.  This request must substantiate the rationale for waiving these requirements for the specific project or procurement.  Inadequate planning, funding, or schedule constraints will not be considered sufficient justification for the waiver.  It is the responsibility of the Project Manager in cooperation with the District or Engineering Center Value Engineering Officer (VEO) to ensure the Value Engineering effort is properly planned, funded, and scheduled at the initiation of the project.  Therefore, the waiver request must clearly explain why conducting a Value Engineering study on the specific project would not be in the best interest of the government given that the objectives of value studies are to optimize project cost and schedule.  This justification must be able to meet the scrutiny of an audit on the sufficiency of the Corps of Engineers Value Engineering Program compliance with the OMB Circular A-131.

Once the waiver request has been adequately supported and coordinated with the Chief PPM and VEO, the request needs to be staffed through the District/Engineering Center Commander for review.  With the Commander’s endorsement, it is submitted to the MSC Value Program Manager for review.  If the project procurement cost exceeds the MSC VPM’s waiver authority, the request is staffed through the MSC Commander for endorsement before submitting it to the Chief Value Engineer at HQUSACE for a determination.  That determination will be appropriately staffed back through the chain of command to the project manager and District/Engineering Center VEO.  If the project procurement cost is within the MSC VPM’s waiver authority the determination will be made by the MSC VPM.  That determination will be appropriately staffed back through the chain of command to the project manager and District/Engineering Center VEO with a copy to the Chief Value Engineer at HQUSACE.

The MSC VPM’s waiver determination can be appealed to the Chief Value Engineer at HQUSACE.  The Chief Value Engineer’s waiver determination can be appealed to the Chief of Engineers.

If the waiver is granted, the documentation must be included in the record files for the project in the event of an oversight agency audit. If the waiver is not granted, a Value Engineering study report, in compliance with ER 11-1-321. Change 1, should be included in the record files for the project.

The VEAC is the Value Engineering Advisory Council, which advises the Chief of Value Engineering for USACE. In addition to the deputy special assistants to the Chief of VE, the Council includes the senior VE Program Managers from each MSC or Division as well as special appointees.

VEAC members run their own Value Engineering Program in their AOR.  They are also the voice for those in their Community of Practice regarding career planning, career management, standards application, policy and procedures. The VEAC is the forum in which discussion of these topics moves forward. The VEAC makes recommendations to the Chief Value Engineering regarding adjustments to the VE program. Additionally, the Council revises VE policy, leads task forces in the various directorates such as application of VE in planning, civil works and real estate and is the vetting board for all awards programs. Nominations for awards in DOD, SAVE or USACE such as VE Professional of the Year are referred to the Council for evaluation and ranking. The Council’s recommendations for awards are forwarded to the Chief Value Engineer for final decision.

VE studies are most effective when applied early in the procurement process. Early application of VE produces alternatives that can be implemented with minimal influence on design cost or project schedule. VE should be applied early in the design planning procurement strategy or at the earliest possible point in the development of an execution document.  In civil works, engineering regulations require VE studies during feasibility and planning phases where multiple alternatives are under evaluation.  Civil works projects must also be studied once the preferred alternative is selected and entered into planning and execution documentation. VE studies must be performed at each procurement level. For military procurement VE must be completed prior to the 35% milestone.

Based on a review of studies performed in FY10, VE studies for the Corps can be sorted into four categories of distinctly different value. Level 1 studies are planning level charrettes or recon level studies, which are generally low cost studies with the potential for a very high influence on the outcomes of the project and an especially high return on investment. Level 2 studies occur at the plan formulation stage in civil works projects and at up to the 35% design level for military projects. Studies at this level also have good potential for a high return on investment. Level 3 studies are further along and are at approximately 35-60% design for a military program or during the DDE stages of civil works. Implementing major alternatives at this level becomes problematic because of schedule constraints and consequently the likelihood of high return on investment is reduced. Level 4 studies, occurring in the plans and specs stage for civil works and 60-90% design for military projects are strongly discouraged. Conducting a VE study at such a late date makes implementation of significant value improvements very difficult and is tantamount to failing to meet the regulatory requirement. To summarize, the earlier the study is performed the bigger bang for the buck you will receive, it will cost you less and give you a larger impact.  The later you go the less impact you will have on the study or improvements and the greater the cost of that study will be.

If a VE study is not performed on a project, one of two consequences will occur.  If a VE study was not required either by virtue of project size or of a granted waiver, the approved waiver should be placed in the project file and the project may proceed. However, if a project has a budget in excess of $1 million and has neither an approved waiver nor a completed VE study and it proceeds to RTA, it cannot be advertised. In accordance with ER 11-1-321, Change 1 Value Engineering, as well as the procurement construction letter per contracting officer warrants, no contract shall be entered into unless the contracting officer ensures that all requirements of law, executive orders, regulations and all other applicable procedures, including clearances and approvals have been met.

The Value Engineering study is described within ER 11-1-321 Change 1 and refers to the guidance within the adopted ASTM standards and the value standard of the SAVE International body of knowledge. SAVE International defines a VE study as comprising six distinct steps: information gathering, function analysis, creative idea generation, evaluation of ideas, alternative development, and alternative presentation. The scope and scale of a VE workshop should be carefully matched to the project under study. The workshop itself should be a minimum of three days to accomplish the job plan described above. Large or complex projects require a correspondingly longer workshop to address the expanded work scope. In addition to the workshop, a VE study includes pre- and post-workshop tasks. Pre-workshop tasks include determining the study scope, schedule, team size and composition, and retrieving pre-study project data and documents for team review including project scope, cost, schedule, and risk management plans. Post-workshop tasks include report review and comment, scheduling and holding implementation meetings, resolution of outstanding technical issues, and preparation and distribution of the final report.

In today’s environment of escalating costs, VE can be an essential cost control tool for the design and construction process. It is the most effective tool available to achieve the required functions at a minimum cost without sacrificing quality. The strength of VE comes from the use of function as the key criterion for the consideration of alternatives to design issues, the power of the structured team dynamics, and the experience of the team members.

An effective VE study will result in:

  • Validating key project decisions
  • Keeping the project within budget
  • Reducing operation and maintenance activities and their costs
  • Improving project performance, function, and quality
  • Reducing design and construction problems
  • Insuring that client needs are given top priority throughout the project

The Community of Practice in VE includes both management and practitioner functions as described in DOD Handbook 8023.  One of the management functional areas is the Value Engineering Officer (VEO) which is at the execution level.  Each Corps District has a VEO who is the special assistant to the Commander for VE.   The duties of the VEO include organizing, managing, and overseeing the contracting for VE studies on behalf of project managers. A VEO who is a Certified Value Specialist (CVS) fills both practitioner and managerial functions. A CVS conducts VE studies and leads the VE team through the job plan. Practicing VE and managing a VE program are both important but they are distinctly different functions.  The Community of Practice also includes the Value Engineering Program Manager function, and there are approximately ten Value Engineering Program Managers at the major support and command level or at the division level.  These individuals manage the programs at their divisions.  At Headquarters the Chief of the VE program is the highest-level function in the VE program at the Corps. This position is a GS-15 level.  There are also deputy positions assigned to assist the Chief of Value Engineering. These positions may be a multi-grade level virtual support provided from the field therefore not physically resident at Headquarters.

Residing at their respective Divisions, VE Program Managers are experienced individuals with VE training and certifications which qualify them to execute the Value Engineering programs within their AOR.  They also manage the career programs for the different VE offices.  These grade levels can be at a level GS-13 or GS-14 based on MSC grade structure.

Ideally, Value Engineering Officers at each District are experienced in construction and engineering disciplines. Their grade currently varies from GS-11 top GS-13 level.  The goal is for an entry level VE professional to obtain an Associate Value Specialist (AVS) certification within the first year of holding the position of VEO. Further advancement may be available to VEOs who are subject matter experts or who become Certified Value Specialists (CVS). Extensive experience and meeting the certification requirements by SAVE international is required for Certified Value Specialist.  A CVS acts as subject matter experts within their AOR and within the Community of Practice across the Corps of Engineers.

Annual VE goals are established by the Office of the Secretary of Defense (OSD) which issues directive letters requiring that the Corps of Engineers and all other federal agencies provide several items. These include: 1) annual reports from the prior year,  2) annual plans for the coming year, 3) notable progress or quality level achieved on projects that are worthy of recognition or use as examples for the DOD program.  In this same memorandum the OSD issues the requirement for annual goals for the following year. From 2005 through 2011 this annual goal has remained at 1.5%of the total obligation authority of the Corps of Engineers or the federal agency within DoD. This established our monetary goal for cost avoidance/cost savings for the Corps of Engineers annual budget.

Program coverage goals or milestones within the CCG refer to information related to our workload, which establishes those projects that must be studied to ensure that we are compliant with law or regulation at the end of the fiscal year. More importantly, it allows us to track the number of projects available for study and the rate at which we are accomplishing the studies. For example, one district may have 50 projects being executed within their AOR that require VE studies. If by mid-year, only 20 projects have been scheduled for studies, the District Commander and VEO know that they may not meet their statutory and regulatory requirements without corrective action. Completing all of the necessary studies ensures that the cost avoidance will more than meet the required goal of 1.5% established by the OSD.

In the early 2000’s, USACE adopted a protocol for the Project Management Business Process (BMBP).  The PMBP designates the Project Manager as the lead for all project level efforts within the Corps Of Engineers. Consolidated Command Guidance and other project management documents identify how to apply, initiate, and establish the full project work level.  The Project Manager is responsible for including the Project Delivery Team (PDT) and the District VEO.  The Project Manager is also responsible for establishing the value management plan in the project level documentation and then scheduling and resourcing the VE study within the Corporate database P2.

ER 11-1-321 Change 1 includes a discussion of baseline cost and functions for a Value Engineering study.  The estimate was generated by averaging overall costs and durations of studies completed around the publication date of Change 1. The rough cost average was $65,000 for a 3-5 day Value Engineering study.  This average should be used as a baseline or as a starting point. The budget and duration should be adjusted depending on the complexity, schedule, and other project aspects to ensure adequate funding to support compliance with the VE standard.  Of equal importance, the study must be properly resourced to achieve the desired return on investment.

Initially the project manager is responsible for ensuring that VE is accomplished as required to comply with the Consolidated Command Guidance (CCG).  The project manager is responsible for scheduling and resourcing the level of effort for the Value Engineering study in accordance with the required VE thresholds. Additionally the Value Engineering Officer is responsible for managing this effort, making sure the project is completed and that the reporting occurs prior to or according to the project manager’s schedule.

Prior to RTA, during the COE certification, and at the end of the project effort, the Project Manager is responsible for certifying that the project has met all statutory and regulatory requirements for performing Value Engineering or that an approved waiver by the appropriate approval authority has been obtained and is in the Project Manager’s file.  This certification must be signed and included in the COE.  The VEO also signs this document certifying concurrence with the Project Manager’s certification.  This certification is then included in the file brought to RTA and with this certification the contracting officer can advertise the project.

It is the sole responsibility of the Project Manager to ensure that the Value Engineering study as required has been completed or waived by the appropriate official.

The Office of Management and Budget (OMB) requires that the Corps of Engineers and all other federal agencies execute a Value Engineering Program within the required thresholds. Corps regulations include specific guidance for executing the VE program in full compliance with public law, OMB Circular A-131 and directives from the Office of the Secretary of Defense. The Chief of Engineers reports annually to the Office of the Secretary of Defense and OMB on the Corps progress toward their goals as well as on compliance with statutory and regulatory requirements.

It is imperative that the studies are accomplished and that the certifications are made by the Project Manager; the contracting officer is now required to ensure that the certification occurred.  The certification indicates full compliance with statutory and regulatory requirements. Procurement Instruction Letter (PIL) 2007-05 indicates the policy for issuing contracting officer warrants.  In paragraph 3 of this PIL it states that no contract shall be entered into unless the contracting officer ensures that all requirements by law, executive orders, regulations, and all other applicable procedures including clearances and approvals have been met.

OMB Circular A-131 paragraph 8 -Agency Responsibilities, sub paragraph F, requires that all federal agencies maintain files on projects, programs, systems and products that meet the agency’s criteria for requiring Value Engineering studies. These files must include the rationale for granting waivers of VE studies on projects, procurements, or programs, which the agency has determined meet their criteria as interpreted by the Senior Management Official of VE for that agency.  Additionally the documentation must include the rationale for not implementing a recommendation made in VE proposals that are documented on each project.  Furthermore, the Corps of Engineers policy requires records be maintained within the project record itself. These include reporting documents, project study reports, disposition of study proposals, and any waivers or documentation related to a specific project. These documents must be kept in the project records and with the Project Engineering Officer for five to ten years depending on the complexity of that project.  ER-11-1-321 has additional information regarding record requirements.  It is Corps policy to upload and maintain records in the VE reporting system or the VE Community of Practice SharePoint site. All reports, abstracts and documentation for projects must be uploaded in that SharePoint site in order to be considered a complete program record.  All records, including waivers, must be in place so that the Corps provides accurate annual reports to OMB and the system can successfully withstand an audit.

A VEP (Value Engineering Program) is a highly structured set of operational goals, functions, and responsibilities, established to manage the implementation of the Value Engineering (VE) methodology for an organization or project. The Corps of Engineers formally defines VE as the organized study of functions to satisfy user needs with a quality facility at the lowest life cycle cost through applied creativity.  VE involves developing fresh ideas for delivering a quality product at a lowered total life cycle cost thus giving best value for the dollars spent.  

It is important to understand that VE is not simply reducing cost by eliminating features specified in the contract or by substituting inferior quality. Further, it is not a matter of accidentally stumbling on to a way to reduce a construction project’s cost, but it is a proven systematic approach to problem solving which is implemented by a Value Engineering study. The Value Engineering study is described within ER 11-1-321 Change 1 and refers to the guidance within the adopted ASTM standards and the value standard of the SAVE International body of knowledge. SAVE International defines a VE study as comprising six distinct steps: information gathering, function analysis, creative idea generation, evaluation of ideas, alternative development, and alternative presentation.

In today’s environment of escalating costs, VE can be an essential cost control tool for the design and construction process. It is the most effective tool available to achieve the required functions at a minimum cost without sacrificing quality. The strength of VE comes from the use of function as the key criterion for the consideration of alternatives to design issues, the power of the structured team dynamics, and the experience of the team members.

A VECP (Value Engineering Change Proposal) is a mechanism used on construction projects to incentivize contractors to initiate, develop, and present to the Corps of Engineers for consideration, cost reduction proposals conceived by the contractor involving changes in the drawings, designs, specifications, or other requirements of the contract. These proposed changes should provide the needed functions to accomplish the original purpose of the project reliably, without sacrificing safety, quality, life cycle cost, and environmental attributes of the project. The Corps also benefits from improved flexibility to fund additional projects, institution of a process for continuous improvement, and adoption of approved concepts for potential savings on future projects.