52.248-3 — Value Engineering—Construction.

FAR 52.248-3 — Value Engineering—Construction.. This clause is part of the Federal Acquisition Regulation and may be included in government contracts as a solicitation provision or contract clause.

52.248-3 Value Engineering—Construction. As prescribed in 48.202, insert the following clause: Value Engineering—Construction (OCT 2025) (a) General. The Contractor is encouraged to develop, prepare, and submit value engineering change proposals (VECP's) voluntarily. The Contractor shall share in any instant contract savings realized from accepted VECP's, in accordance with paragraph (f) below. (b) Definitions. Collateral costs, as used in this clause, means agency costs of operation, maintenance, logistic support, or Government-furnished property. Collateral savings, as used in this clause, means those measurable net reductions resulting from a VECP in the agency's overall projected collateral costs, exlcusive of acquisition savings, whether or not the acquisition cost changes. Contractor's development and implementation costs, as used in this clause, means those costs the Contractor incurs on a VECP specifically in developing, testing, preparing, and submitting the VECP, as well as those costs the Contractor incurs to make the contractual changes required by Government acceptance of a VECP. Government costs, as used in this clause, means those agency costs that result directly from developing and implementing the VECP, such as any net increases in the cost of testing, operations, maintenance, and logistic support. The term does not include the normal administrative costs of processing the VECP. Instant contract savings, as used in this clause, means the estimated reduction in Contractor cost of performance resulting from acceptance of the VECP, minus allowable Contractor's development and implementation costs, including subcontractors' development and implementation costs (see paragraph (h) below). Value engineering change proposal (VECP) means a proposal that— (1) Requires a change to this, the instant contract, to implement; and (2) Results in reducing the contract price or estimated cost without impairing essential functions or characteristics; provided, that i

• The Contractor shall share in any instant contract savings realized from accepted VECP's, in accordance with paragraph (f) below.
• Contractor's development and implementation costs, as used in this clause, means those costs the Contractor incurs on a VECP specifically in developing, testing, preparing, and submitting the VECP, as well as those costs the Contractor incurs to make the contractual changes required by Government acceptance of a VECP.
• Value engineering change proposal (VECP) means a proposal that— (1) Requires a change to this, the instant contract, to implement; and (2) Results in reducing the contract price or estimated cost without impairing essential functions or characteristics; provided, that it does not involve a change— (i) In deliverable end item quantities only; or (ii) To the contract type only.
• As a minimum, the Contractor shall include in each VECP the information described in subparagraphs (1) through (7) below.
• If the proposed change is affected by contractually required configuration management or similar procedures, the instructions in those procedures relating to format, identification, and priority assignment shall govern VECP preparation.
• The VECP shall include the following: (1) A description of the difference between the existing contract requirement and that proposed, the comparative advantages and disadvantages of each, a justification when an item's function or characteristics are being altered, and the effect of the change on the end item's performance.
• (2) A list and analysis of the contract requirements that must be changed if the VECP is accepted, including any suggested specification revisions.
• The cost reduction associated with the VECP shall take into account the Contractor's allowable development and implementation costs, including any amount attributable to subcontracts under paragraph (h) below.
• (6) A statement of the time by which a contract modification accepting the VECP must be issued in order to achieve the maximum cost reduction, noting any effect on the contract completion time or delivery schedule.
• The Contractor shall submit VECP's to the Resident Engineer at the worksite, with a copy to the Contracting Officer.
• If additional time is required, the Contracting Officer will notify the Contractor within the 45-day period and provide the reason for the delay and the expected date of the decision.
• The Contracting Officer may require that the Contractor provide written notification before undertaking significant expenditures for VECP effort.
• Until a notice to proceed is issued or a contract modification applies a VECP to this contract, the Contractor shall perform in accordance with the existing contract.
• Payment of any share due the Contractor for use of a VECP on this contract shall be authorized by a modification to this contract to— (i) Accept the VECP; (ii) Reduce the contract price or estimated cost by the amount of instant contract savings; and (iii) Provide the Contractor's share of savings by adding the amount calculated to the contract price or fee.
• The Contractor shall include an appropriate value engineering clause in any subcontract of $90,000 or more and may include one in subcontracts of lesser value.
• In computing any adjustment in this contract's price under paragraph (f) above, the Contractor's allowable development and implementation costs shall include any subcontractor's allowable development and implementation costs clearly resulting from a VECP accepted by the Government under this contract, but shall exclude any value engineering incentive payments to a subcontractor.
• The Contractor may choose any arrangement for subcontractor value engineering incentive payments; provided, that these payments shall not reduce the Government's share of the savings resulting from the VECP.
• The Contractor may restrict the Government's right to use any part of a VECP or the supporting data by marking the following legend on the affected parts: “These data, furnished under the Value Engineering—Construction clause of contract ____, shall not be disclosed outside the Government or duplicated, used, or disclosed, in whole or in part, for any purpose other than to evaluate a value engineering change proposal submitted under the clause.
• This restriction does not limit the Government's right to use information contained in these data if it has been obtained or is otherwise available from the Contractor or from another source without limitations.” If a VECP is accepted, the Contractor hereby grants the Government unlimited rights in the VECP and supporting data, except that, with respect to data qualifying and submitted as limited rights technical data, the Government shall have the rights specified in the contract modification implementing the VECP and shall appropriately mark the data.