Value Engineering and Service Contracts
Final rept. Jun 2008-Jun 2009
INSTITUTE FOR DEFENSE ANALYSES ALEXANDRIA VA
Pagination or Media Count:
Value Engineering VE generates more than a billion dollars in savings and cost avoidance annually for the Federal Government. Most VE savings, especially contractor-initiated savings, accrue from the acquisition of hardware. However, the Government now predominantly spends its contract dollars on services ranging from routine commercial purchases to highly skilled technical, scientific, and engineering services. This document provides background on VE and illustrates how and why its use in both hardware and service contracts, including performance-based logistics contracts, benefits the government and industry. The document also gives examples of difficulties in applying VE to service contracts, demonstrates that work-arounds are possible, and recommends ways to improve the use of VE for service contracts.
- Administration and Management
- Economics and Cost Analysis