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Integration of Value Engineering (VE) and the Five-Year Planning Process

This presentation provides a quick review of VE requirements and benefits, summarizes DOI's current VE requirements, and lists potential revisions to DOI requirements. It also highlights the integration of VE into the Five-Year planning process.

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Integration of Value Engineering (VE) and the Five-Year Planning Process

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  1. Integration of Value Engineering (VE)and the Five-Year Planning Process Office of Acquisition and Property Management

  2. Presentation Overview • Quick review of Value Engineering (VE) requirements and benefits • Summarize DOI’s Current VE requirements • List potential revisions to DOI requirements • Summarize integration of VE into Five-Year planning process Department of the Interior December 2007

  3. Background – VE Requirements • Public Law 104-106 (1996) requires all agencies establish a VE program • OMB Circular A-131 requires VE to reduce nonessential procurement and program costs • Threshold is $1 million for projects and programs • DOI submits annual VE accomplishment report submitted to OMB by December 31 of each year • DOI’s requirements are in Department Manual 369 Department of the Interior December 2007

  4. Background - Value Engineering Presentation Overview • Public Law 104-106 defines VE as: “An analysis of the functions of a program, project, system, product, item of equipment, building, facility, service, or supply of an executive agency, performed by qualified agency or contractor personnel, directed at improving performance, reliability, quality, safety, and life cycle costs.'' Department of the Interior December 2007

  5. Background - Value Engineering • VE applies to all projects, programs, equipment • Studies can be performed by in-house or contractor personnel • VE can be applied at any point in project or program life cycle Department of the Interior December 2007

  6. Background - Value Engineering • Construction projects • VE usually applied at conceptual and design stages • May be applied more than once on an individual project • Objective is to: • Ensure all viable alternatives have been examined • Avoid cost and realize cost savings • Improve quality of completed project • Facilitate the government receiving best value Department of the Interior December 2007

  7. DOI’s Current VE Requirements • VE program is mandatory for all bureaus and offices and programs, projects, and activities • Applies to: Construction, repair, rehabilitation, and renovation projects with estimated cost $500,000 or greater Department of the Interior December 2007

  8. DOI’s Current VE Requirements • VE is performed when concept and estimated cost is detailed enough for comparison of alternatives • Goal is to achieve saving equal to or greater than 4 percent of a bureau’s aggregate annual construction budget Department of the Interior December 2007

  9. Objective of VE Integration The two primary objectives of integrating VE and the Five-Year planning process are: 1) Foster thorough planning and analysis to complete high quality construction and repair projects at an appropriate cost 2) Use VE as a tool to limit project cost and schedule variance Department of the Interior December 2007

  10. Potential Revisions to DOI Requirements The below revisions will be discussed by bureau VE coordinators. Additional items may be added. • Define the project stage at which VE results are reported. • Clearly define the stage in project development at which VE is performed. Department of the Interior December 2007

  11. Potential Revisions to DOI Requirements 3) Ensure construction Capital Planning and Investment Control (CPIC) guide identifies points in project life cycle to perform VE. 4) Define application of VE to design/build projects. 5) Consider raising the VE threshold to $1 million from $500,000 - $1 million is minimum threshold per A-131 Department of the Interior December 2007

  12. Potential Revisions to DOI Requirements 6) Define how VE is applied to dam projects 7) Acknowledge that sustainable building practices may justifiably increase some project costs to create environmental benefit 8) Consider whether VE should be applied more rigorously to non-project work Department of the Interior December 2007

  13. Revision of Appendix Q • Appendix Q is the VE section of the construction CPIC guide • Core of the Appendix is Department Manual 369 (VE) Department of the Interior December 2007

  14. Integration Process • Revise Department Manual Part 369 (VE) • Goal is for final revision June 1, 2008 • Revise Appendix Q of the Construction CPIC Guide • Goal is for final revision June 1, 2008 • Bureau VE coordinators will submit proposed revisions to both documents by January 22, 2008 Department of the Interior December 2007

  15. Integration Process • Include revised VE requirements in Attachment G for the FY 2011- FY 2015 Five Year Plan • This guidance will be issued in FY 2008 • Add a VE data field to the Project Data Sheet included in the FY 2011- FY 2015 Five Year Plan Department of the Interior December 2007

  16. Bureau VE Program Coordinators DOI – Bill Hamele BIA – Alan Roit BLM – Linda Force, Ed Giagni BOR – Norman Hyndman FWS – Marshall Wright NPS – Rich Turk USGS – Clarence (Bill) Fulk Contact your coordinator with questions Department of the Interior December 2007

  17. Questions, Comments? Department of the Interior December 2007

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