Question

1. For federal contracts, what are the differences between a Value Engineering Proposal (VEP) and a Value Engineering Change Proposal (VECP)? In your response, discuss what they entail and the profit share to both parties under the VECP.

2. What are the advantages to the owner, if his/her A/E value engineers every bit of design done in his/her offices? What other recourse does the owner have to optimize costs and what could be the consequences to the A/E if he/she refuses to value engineer his/her design?

please help ASAP

Answer 1

Value Engineering Proposal:

Value = Function / Cost

Value engineering is a systematic method to improve the “value” of a product or service.

Which would lower the project’s life-cycle cost. It’s intended to reduce costs, increase quality, and improve service.

Whereas according to Federal Acquisition Regulation (FAR) (FAR Part 48), Value Engineering Change Proposal (VECP) is a proposal submitted by a contractor seeking changes in the contract observed by provisions of value engineering.

Profit gained by both the parties are

1. Incentives to the owner by providing decent and valuable engineering expertise which further reduces costs and improve serviceability

2. Relationship between both the parties enriches

3. Optimisation of high-cost development by following subsequent cost of production and cost of operation and supports.

4. Obsolescence can be reduced

5. Scrap value is intended to increase of the materials.

6. Increases financial production by cost saving

7. Provides business opportunities by modernisation and optimum cost charges with high-end technology

8. Increasing competition by enhancing aesthetic value, structural value and establishing a reputation as cost effective supplier

9. Customer satisfaction is achieved and ensured

2. Advantages to the owner

1. · building scope for the same budget can be achieved
2. · the same building scope for a reduced budget can be achieved.
3. · less building scope for an even more reduced budget can be achieved.
4. · Initial capital construction costs, without detriment to costs of operations and maintenance and/or income can be achieved
5. · Prediction of follow-on costs, for example facility staffing, operations, and maintenance.
6. · Reduction of the cost of an expensive item and replace an obsolescent item)
7. · Assurance that the final product will meet all the requirements
8. · Good savings and increased capability and serviceability

If owner refuses to exercise value engineering in his design, cost of the project may increase without ensuring structural and economical stability. The project may not be good in the point of view of high end engineering and aesthetic value. Chnaces are there that the contractor may charge more without providing proper evidences, building scope and requirements may not meet. Risk involvement is increased if value engineering is not practised.