Office of Acquisition and Property Management

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

• Office of Acquisition and Property Management

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Presentation Overview

• Quick review of Value Engineering (VE)
  requirements and benefits
• Summarize DOIs Current VE requirements
• List potential revisions to DOI requirements
• Summarize integration of VE into Five-Year
  planning process

Department of the Interior December 2007
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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
• DOIs requirements are in Department Manual 369

Department of the Interior December 2007
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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
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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
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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
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DOIs 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
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DOIs 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 bureaus aggregate annual
  construction budget

Department of the Interior December 2007
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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
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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
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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
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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
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Revision of Appendix Q

• Appendix Q is the VE section of the construction
  CPIC guide
• Core of the Appendix is Department Manual 369
  (VE)

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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
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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
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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

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• Questions, Comments?

Department of the Interior December 2007