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Hosts Tom Temin and Emily Kopp bring you the latest news affecting the federal community each weekday morning, featuring interviews with top government executives and contractors. Listen live from 6 to 9 a.m. or download archived interviews below.
Defense recognizes value in value engineering
Monday - 4/19/2010, 10:40am EDT
Senior Internet Editor
The Department of Defense is putting innovation and creativity into their engineering efforts. They have announced the winners of the Defense Value Engineering Achievement Awards that recognize the best value innovations that government and business develop to create cost-effective program solutions.
Nick Torelli, Deputy Director for Mission Assurance within the Systems Engineering Directorate, Office of the Director, Defense Research and Engineering, Office of the Under Secretary of Defense told Federal News Radio, Value Engineering (VE) boils down the two terms: value and engineering.
It really is our approach to improving the value of contracts, both contracts within the government in terms of construction and things and also contracts on major things like weapons systems and services, to find ways to technically, using engineering, improve the value of the contract.
So a systematic, organized way of thinking about ways to improve.
The VE process then breaks down contracts in two ways:
- Value Engineering Proposal - like construction on bases, and
- Value Engineering Change Proposal (VECP) - where contractors are given the incentive to propose changes to reduce costs. "The neat part about the VECPs," said Torelli, "is that the companies get to share in the financial savings that are, in fact found out of these contracts."
So contractors "get a part back. Everybody wins."
According to a Defense press release, across DoD during fiscal 2009, "3,347 in-house VE proposals and 43 contractor-initiated VE change proposals were accepted with actual and projected savings/cost avoidance in excess of $1.94 billion."
As a part of the program, last month Defense announced the "2009 Department of Defense Value Engineering Achievement Awards" to recognize "outstanding achievements through the application of Value Engineering." Additional "special" awards are given to recognize innovative applications or approaches that expand the traditional scope of value engineering use.
Torelli gave two examples of award winning efforts and what they were able to accomplish:
Littoral Combat Ship Mission Modules Program - "They actually went and saved around $8 million dollars on this and this was a project inside of the Navy itself in terms of finding the right facility to go do this Littoral Combat Ship. A mission-module specific type of a ship. So you can pull in, change out something, and go from an anti-submarine warfare type of a ship to an anti-surface warfare type of a ship, or something like that." By using VE, the Navy came up with some concepts that saved the government about $8 million dollars, said Torelli.
Mine Resistant Ambush Protected Vehicles - The award recognizes the Logistics Support Project, Defense Supply Center Columbus. Torelli said as part of a quick stand up of the MRAP program, Defense found they needed a way to catalog the part numbers "because if you look at several different contractors building MRAPs, they're going to generate their own part numbers." The Logistics Support Project "found a way to standardize on the national stock numbers so that we didn't go buy the same part five different time for five different vehicles." Cost savings on this was about $30 million dollars.
A ceremony will be held on May 12th to celebrate the winners and their accomplishments.