Value Engineering

Value engineering involves a systemic search for less costly alternatives to traditional ways of doing things. Under this approach to evaluating equipment, services, and facilities, a more expensive heating system might be judged desirable because its energy efficiency makes it less expensive over the long run. Proposed legislation before Congress would require value engineering reviews for some federal architectural and engineering services contracts. GAO recognizes the cost savings associated with this technique but believes that use of value engineering should proceed carefully. Value engineering, while often useful in improving productivity and cutting costs, may not be appropriate in every instance. To minimize the chance of wasting money on unnecessary, unsuccessful, or inappropriate value engineering reviews, agency discretion and flexibility are needed. Congress may want to await the issuance of revised Office of Management and Budget guidance on value engineering, which is being strengthened, before deliberating the proposed legislation. GAO sugggests that, as an alternative, the bill be amended to allow agencies to waive the requirements for value engineering reviews in appropriate circumstances.