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Federal Requirements

Requirements in general

In brief, Reclamation is required to:

  1. Identify all projects, programs, systems, and products with the potential to yield significant savings or best value from the application of Value Studies

  2. Perform indicated Value Studies

  3. Maintain files on what has been studied, what has not been studied and why, what value study proposals have been made, implemented or not implemented, and why.

  4. Encourage, evaluate and process Value Engineering Change Proposals (VECPs) from contractors in accordance with FAR Parts 31, 48, and 52.
Reclamation is audited in compliance with OMB Circular A-131 every three years. Reclamation is audited in compliance with OMB Circular A-131 and DM 369 which states, in part, "Meeting Value Program goals shall be a performance measure of bureau/office heads and appropriate managers responsible for the mandatory program.

Applying requirements to specific programs

Follow the table below for all programs, projects, or activities (PPAs) where there are Federal funds or the U.S. government is fiscally responsible for executing or operating the program in case the funding entity defaults. (If this isn't the case, then use VE incentive clauses.)

Funding Type Project Type Cost Return on investment for a value study Requirement
Non-Reclamation       Use other agency's Value Program procedures. Determine client desire for use of value study and offer / provide study services.
Grant       Encourage use of Value Studies (DM 369.1.1.2).
Reclamation Supply or service contract     May be exempt from mandatory Value Study (DM 369.1.1.7B; FAR 48.201(a)). Should be examined for possible benefits of a Value Study (DM 369.1.1.8B). If potential benefits warrent, arrange for a Value Study.
Reclamation Construction, repair, rehabilitation, or renovation (CRRR) CRRR is over $100,000 but below $1,000,000   Value study not required. VECP Clause required (DM 369.1.1.8.B; FAR 48).
Reclamation Construction, repair, rehabilitation, or renovation (CRRR) CRRR is over $1 million   Value Engineering study is required (OBM Cir A-131; DM 369.1.1.7.A)
VECP Clause required
Reclamation Construction, repair, rehabilitation, or renovation (CRRR) CRRR is over $10 million   Value Engineering and Value Planning studies are required (OBM Cir A-131; DM 369.1.1.7.A)
VECP Clause required
Reclamation Other (not construction or supply)   >5.1 Value study should be performed (DM 369.1.1.8B).
Reclamation Other (not construction or supply)   >1.1 or a value study could provide benefits that are not measured by an ROI. Seriously consider performing a value study (DM 369.1.1.8B).

Specific requirements

The National Defense Authorization Act for Fiscal Year 1996 included 41USC401 subpart 36 (PL 104-106), requiring "Each executive agency shall establish and maintain cost-effective value engineering procedures and processes."

This general requirement is addressed more specifically in the Office of Management and Budget (OMB) Circular A-131. This circular has been in existence for many years, but was not given the force of law until PL 104-106 was enacted. The Circular defines several Value Method terms, sets broad policy, sets minimum agency responsibilities, and requires reporting of results of using Value Study processes.

Value Studies are also mandated in the Federal Acquisition Regulations (FARs), Title 48, Part 48, in contract clauses in Part 52, and in Part 31 Contract Cost Principles and Procedures.

The Department of Interior has supplemented Pl 104-106, OMB Cir A-131, and the FAR Part 48 with Departmental Manual (DM) Part 369-1. DM 369-1 further defines roles and responsibilities for Reclamation (and all other DOI Services, Bureaus, and agencies).

Reclamation has further defined roles and responsibilities in the Reclamation Manual with Policy CMP P05 (PDF) and Directives and Standards CMP 06-01 (PDF).

 

Last updated: 6/17/14