Overview
This section prescribes the mandatory and discretionary requirements for including the Value Engineering (VE) clause in federal construction solicitations and contracts.
Key Rules
- Mandatory Inclusion: The contracting officer must insert clause 52.248-3, Value Engineering-Construction, in construction contracts estimated to exceed the simplified acquisition threshold (SAT).
- Mandatory Exclusion: This clause must not be used in incentive-type construction contracts.
- Discretionary Inclusion: The clause may be included in contracts valued below the SAT if the contracting officer identifies a potential for significant cost savings.
- Alternate I Usage: This alternate version must be used if the head of the contracting activity determines that the administrative cost of tracking collateral savings exceeds the potential benefits.
Practical Implications
- Contracting officers must proactively evaluate the administrative burden of tracking collateral savings to determine if Alternate I is necessary to protect the government's interests.
- The regulation ensures that Value Engineering incentives are standard in most large construction projects while preventing "double-dipping" or conflict in contracts that already utilize incentive-based fee structures.