Greater Use of Value Engineering Has the Potential To Save Millions on Wastewater Treatment Projects

Gao ID: RCED-85-85 July 16, 1985

GAO reported on whether value engineering (VE) could be used to achieve cost reductions for wastewater treatment plants funded by the Environmental Protection Agency (EPA) by extending VE to: (1) design plans of projects costing from $1 million to $10 million; and (2) construction through the use of construction incentive clauses. VE is a method of analyzing a product or service so that its function can be performed at the lowest possible cost without sacrificing overall quality.

GAO found that: (1) EPA requires VE design reviews only for projects costing more than $10 million and does not require VE during project construction; (2) increased use of VE on wastewater projects could save EPA from $25 million to $57 million annually; (3) EPA and other agencies have achieved cost savings by using VE on smaller projects, including wastewater projects, during both design and construction; and (4) an EPA staff study recommended VE design reviews for all projects costing more than $1 million. GAO also found that: (1) out of 2,750 EPA-funded projects costing less than $10 million under construction during 1983, state officials reported that only 7 had been value engineered; (2) few grantees are likely to use VE voluntarily because project cost savings are passed back to the states and project study costs are paid by grantees; and (3) many state officials are opposed to the use of construction incentive clauses because of concern that such clauses might increase administrative work, reduce project reliability, and fail to generate enough savings to justify the effort.


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