Accession Number : ADA018526

Title :   The Impact of Required Contractual Clauses on System Acquisition Policies: The Case of Value Engineering.

Descriptive Note : Interim rept.,

Corporate Author : RAND CORP SANTA MONICA CALIF

Personal Author(s) : Baumbusch,Geneese G.

Report Date : SEP 1975

Pagination or Media Count : 55

Abstract : This study examines the role that value engineering (VE) clauses may be expected to play in design-to-cost contracting. Encouraged by Armed Services Procurement Regulations incentives, contractor VE efforts are supposed to result in proposals for contract changes that reduce some aspects of the cost associated with developing, producing, or operating a particular item. While VE clauses have produced some savings, there have also been certain costs associated with the use of a complex contractual device. This report suggests that cost saving will be much more likely to occur with increased use of fixed-price contracting for discrete phases of development and production, along with more competition. Based on an analysis of past experience with VE clauses, the central conclusion of this study is that while the cost-saving intent of value engineering should be an essential ingredient in design-to-cost strategy, the contractural clauses themselves will at best be marginally effective and may even hinder implementation of design-to-cost programs.

Descriptors :   *VALUE ENGINEERING, *DESIGN TO COST, *CONTRACTS, *GOVERNMENT PROCUREMENT, MILITARY PROCUREMENT, COST ANALYSIS

Subject Categories : Administration and Management
      Logistics, Military Facilities and Supplies

Distribution Statement : APPROVED FOR PUBLIC RELEASE