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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.
OMB Circular A-131 Value Engineering (2013) was issued in 1988, 1993 and again in 2013 by the President’s Office of Management and Budget (OMB). This Circular requires all federal agencies to apply Value Engineering procedures to all new agency projects and programs when the project cost estimate is at least $5 million or such lower dollar threshold as determined by the Senior Accountable Official (SAO) and identified in the agencies VE guidelines and supported by Agency workload data. 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. In 2013, HQ USACE Chief Value Officer released a Memorandum raising the minimum threshold to $2 million.
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 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.
OMB Circular A-131 was updated by the President’s Office of Management and Budget in 2013. This Circular requires all federal agencies to apply Value Engineering/Value Management procedures to all new agency projects and programs whenthe project cost estimate is at least $5 million or such lower dollar threshold as determined by the Senior Accountable Official (SAO) and identified in the agency's guidelines. Additionally, it specifies the execution of six (6) 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.
The purpose of updating the Circular was 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. Chief Value Officer (CVO) Memorandum dated February 2013 revised the mininum threshold for VE study from $1 million to $2 million. Failure to comply with ER 11-1-321 Change 1 and CVO Memorandum 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 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 $5 million or such lower dollar threshold as determined by the Senior Accountable Official (SAO) and identified in the agency's VE guidelines. 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 Program is issued each year establishing the requirements for the different programs, specific requirements for the execution of the VE 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 $2 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 at least $5 million or such lower dollar threshold as determined the by Senior Accountable Official (SAO) and identified in the agency's VE guidelines.
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. This threshold can only be changed, as deemed appropriate, by the agency’s SAO for Value Engineering. The Chief of Engineers has assigned that authority to the Chief Value Officer.
ER 11-1-321 Change 1, establishes the $1 million threshold as a mandatory threshold. Subsequent memorandum issued by HQ USACE CVO raised the minimum threshold to $2 million. The regulation delegates SAO authority for Value Engineering to the MSC VE Program Managers for programs and procurements between $1 million and $10 million (revised to $2 million and $10 million). This provides the flexibility for professional development of District VE Program Managers. Further, waiver authority and designation of Low Opportunity for VE for these programs and procurements between $2 million and $10 million was transferred to the MSC VE Program Managers.
OMB Circular A-131 requires each federal agency to identify a qualified individual to serve as the Senior Accountable Official (SAO) to coordinate, oversee, and ensure the appropriate consideration and use of VE. In the mid-1990’s, the Chief of Engineers responded to this requirement by assigning this responsibility to the HQUSACE Chief Value Officer. In 2010, HQUSACE Office of Counsel provided a legal opinion validating that the Senior Accountable 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 Value Officer (CVO), 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 Accountable Official (SAO) for Value Engineering within USACE to the Chief Value Officer at HQUSACE. There are additional SAO’s for each agency within the Department of Defense (DoD) as well as other federal agencies. Within the Army there are two SAOs: the Army Materiel Command (AMC) and USACE. AMC has the SAO responsibility for Value Engineering procurement for weapons systems and other non-construction related programs. USACE has been delegated the SAO 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 SAO responsibilities have been assigned to the Chief Value Officer 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 Value Officer. 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 $2 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 accountable official (SAO) to monitor and coordinate agency VE efforts. The SAO 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 SAO is the Chief Value Officer (CVO), 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.
Per ER 11-1-321, Change 1, for projects between $1 million and $10 million (revised to $2 million and $10 million), the HQ USACE CVO, has delegated waiver authority to MSC VE Program Managers who then recommends disposition to the MSC and Engineering Center Commanders for signature. The HQ USACE CVO has waiver authority for all projects and procurements greater than $10 million.
For all 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 $2 million and $10 million. For projects with an estimated procurement cost greater than $10 million, regardless of funding source or customer, the HQUSACE CVO, designated as the Senior Aanagement Official for Value Engineering for the Corps of Engineers, has the waiver authority. 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 Division (PPMD) 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 PPMD 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 Officer 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 VPgM’s waiver authority the determination will be made by the MSC VPgM. 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 Officer at HQUSACE.
The MSC VPgM’s waiver determination can be appealed to the Chief Value Officer at HQUSACE. The Chief Value Officer’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 Value Officer (CVO) for USACE. In addition to the deputy special assistant to the CVO, 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 CVO regarding adjustments to the VE program. Additionally, the Council revises VE policy, leads task force efforts 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 CVO for final decision.
Per OMB A-131 paragraph 1. Purpose, Agencies should maintain policies and procedures to ensure VE is considered and integrated, as appropriate, into the planning and development of agency programs, projects, activities, as well as contracts for supplies and services, including performance based, architect-engineering, and construction contracts. Further, paragraph 7. Agency Responsibilities state that Agency guidelines shall include a process for determining the level of effort (scale) for VE studies of agency projects and programs, based on factors such as the cost or complexity of the project, the stage in the project lifecycle, and project schedule. Factors should take into account that potential savings from VE are likely to be greatest when applied to the highest dollar value programs for the agency during the feasibility, planning, design, and other early phases of development.
As is commonly known in the industry and required by ER 11-321, 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 planning process or at the earliest possible point in the development of an execution document. In civil works, ER 11-1-321 requires VE studies during feasibility/planning phases where multiple alternatives are under evaluation. Civil works projects must also be studied once the preferred alternative is selected and progresses to design 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 coupled with USACE primary challenge in meeting VE statutory and regulatory requirements being adherence to policy for the preparation and inclusion of the Value Management Plan (VMP) in the Program and Project Management Plans (PgMP/PMP), HQ USACE held two enterprise level VE workshops in early FY13. The primary outcome of these workshops was the development of an automated VE Screening/Strategy Selection/Value Management Plan process and tool which results in determination of either “Opportunity for a VE workshop” or “Low Opportunity for VE”. The process/tool allows selection of the level of effort most appropriate if “Opportunity for VE” is determined or selection of Low Opportunity (LO), Low Opportunity Bridge (LOB) or Low Opportunity Scan (LOS) if "Low Opportunity for VE" is determined, and documents the decisions made in the VMP. The difference between Low Opportunity and Level of Effort being whether a VE workshop that complies with USACE VE workshop standards will be performed or not. If opportunity for a VE workshop is determined, the VEO in concert with the Program/Project Delivery Team will use the Strategy Selection Process to determine the level of effort recommended: Value Planning (Level 1), Abbreviated Study (Level 2), Standard Study (Level 3), Problem Resolution (Level 4), Programmatic (Level 5) or Enterprise (Level 6), a recommended team strategy, and guidance as to when to perform multiple value activities. Refer to VE Screening and Strategy Selection Process Map located on the HQ USACE VE website (http://www.usace.army.mil/ValueEngineering.aspx under Policy Menu then Process Maps) and VE Program Guidance for description of the six Levels of Effort. If Low Opportunity for VE workshop is selected, there are three subparts to this category: Low Opportunity (LO), Low Opportunity Bridge (LOB) and Low Opportunity Scan (LOS). Selection of LO/LOB/LOS requires a narrative description/justificaton as to why this option was slected and approval from the appropriate authority.
If a VE study is not performed on a project, one of two consequences will occur. A VE study workshop may not be required either by virtue of project size, determination of Low Opportunity for VE Workshop (LO) or granted waiver. The approved waiver or approved determination of LO should be placed in the project file and the project may proceed. However, if a project has a budget in excess of $2 million and has neither an approved waiver or determination of LO 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.
USACE has adopted industry accepted practices (i.e. ASTM E1699 and SAVE International® Value Methodology Standard) to implement the statutory intent to utilize the Value Methodology to reduce program and acquisition costs, improve performance, enhance quality, and foster the use of innovation. In addition, the USACE VE Workshop Standard and Evaluation Index were developed to establish the expectations of what must be accomplished in order to meet and demonstrate compliance with the statutory and Federal requirements for VE. Please refer to the HQ USACE VE website for the USACE VE Workshop Standard, USACE VE Evaluation Index and HQ USACE FAST 1 and 2 Workshop Proceedings that developed these standards.
The USACE VE workshop standards requires a multidisciplinary workshop format; performed by agency or contract personnel qualified in the Value Methodology (i.e. CVS) with the expert application of continuous function analysis; utilization of the Standard Value Methodology Job Plan and focus on expanding the solution-set, analyzing functions, and supplementing the knowledgebase of the project delivery team (PDT). The USACE VE Evaluation Index evaluates compliance with policy, management procedures, workshop (including pre- and post-workshop effort), and outcomes.
The SAVE International® VM Standard defines the six step Job Plan (Information, Function Analysis, Creativity, Evaluation, Development, and Presentation phases), the requirement to have a multidisciplinary team, led by a qualified team leader with expertise in the application of this process, and in a workshop environment. The USACE VE Standard recognizes, accepts, and adopts industry standards as being essential components that create the framework for success; however, what is accomplished within this framework is what is truly most important. Merely stepping through the Job Plan does not guarantee the desired outcome is achieved. The intent of the USACE VE Workshop Standard supplement to the industry standards is to improve the outcome and consistency of USACE VE workshops.
The scope and scale of a VE workshop should be carefully matched to the project under study. The workshop itself should allow sufficient time 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 accomplishment of VE studies, that may or may not include contracting for A/E services, on behalf of project managers. A VEO who is a Certified Value Specialist (CVS) may fill 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 (VPgM) function at the Major Subordinate Command (MSC) or division level. These individuals manage the programs in their respective Areas of Responsibilities (AORs). At Headquarters the Chief Value Officer (CVO) is the highest-level function in the VE program at the Corps. This position is a GS-15 level. There is also a deputy position assigned to assist the HQ USACE CVO. 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, VPgMs 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 to 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 with the ultimate goal of obtaining the Certified Value Specialist (CVS) certification within four (4) years of assignment as VEO. 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 establishes our monetary goal for cost avoidance/cost savings for the USACE annual budget.
Program coverage goals or milestones within the CCG refer to information related to USACE 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 as a protocol the Project Management Business Process (PMBP). The PMBP designates the Project Manager as the lead for all project level efforts within the USACE. 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 District VEO in the Project Delivery Team (PDT). The Project Manager is also responsible for establishing the value management plan in the project level documentation and then scheduling and resourcing the VE activies within the Corporate P2 database.
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 in 2005. The budget and duration of workshop should be adjusted depending on the selected level of effort (Levels 1-6) that includes consideration of 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. USACE 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 USACE 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 7. Agency Responsibilities, sub paragraph e, requires that all federal agencies maintain files on projects and programs that meet threshold and/or criteria for the required use of VE. Documentation should include reasons for granting waivers of VE studies on new projects and programs which met the threshold identified in the Circular, or such lower threshold as the agency established, on any existing projects and programs where VE is required by agency policy. Reasons for not implementing recommendations from VE studies should also be documented. 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 in accordance with USACE Records Holding requirements. ER-11-1-321 has additional information regarding record requirements. It is USACE policy to upload and maintain records in the VE reporting system (VERS) and the VE Community of Practice SharePoint site. All reports, abstracts and documentation for projects must be uploaded to the VE Library SharePoint site in order to be considered a complete program record. All records, including waivers, must be in the records so that USACE provides accurate annual reports to OMB and the system can successfully withstand an audit.