Value Engineering: Usefulness Well Established When Applied Appropriately

GAO discussed proposed legislation that would require value engineering reviews for certain types of federal contracts. GAO noted that: (1) value engineering can provide cost and other benefits in construction, weapons, and systems programs; (2) federal procurement regulations and the Office of Management and Budget (OMB) provide guidance to federal agencies on the use of value engineering, and these policies allow some flexibility in its use; (3) OMB requires agencies to designate a single entity to manage and monitor their value engineering efforts, include funds for value engineering programs in their budget requests, actively elicit value engineering change proposals from contractors, and use value engineering requirement clauses in certain contracts; (4) while value engineering should be encouraged, a value engineering review can be expensive and will not always recover its costs; (5) the proposed legislation might not allow agencies the flexibility to avoid wasting money on inappropriate value engineering reviews; and (6) requiring value engineering reviews of agencies might conflict with other operations improvement methodologies, such as total quality management.