FAR 48.2—Subpart 48.2

Clauses for supply or service contracts.

FAR 48.201 explains when and how contracting officers must use the Federal value engineering clause in supply and service contracts, and when they must not use it. It covers the basic rule for inserting the Value Engineering clause at 52.248-1, the exceptions for certain contract types such as research and development, nonprofit engineering services, personal services, product or component improvement, certain commercial products, and exempted contracts, and the circumstances in which the clause may be used in lower-dollar contracts. It also addresses when to use the clause’s alternates for a mandatory value engineering program requirement, for both an incentive and a program requirement together, and when collateral savings are not cost-effective to compute and track. In addition, it covers the special architect-engineer clause at 52.248-2, which must be used instead of 52.248-1 when the Government requires and pays for a specific VE effort in A-E contracts. Finally, it requires special clause modifications for engineering-development, low-rate-initial-production, early production, and extended-production contracts so that savings sharing is calculated against the correct production quantities. In practice, this section determines whether value engineering is optional, incentivized, mandatory, or excluded, and it affects pricing, line-item structure, savings sharing, and contract administration.

Clause for construction contracts.

FAR 48.202 tells contracting officers when to include the Value Engineering-Construction clause at 52.248-3 in construction solicitations and contracts. It covers four main topics: the default requirement to use the clause when the estimated contract amount exceeds the simplified acquisition threshold, the discretionary use of the clause in smaller construction contracts when meaningful savings are possible, the prohibition on using the clause in incentive-type construction contracts, and the special use of Alternate I when the head of the contracting activity decides that tracking collateral savings would cost more than the expected benefit. In practice, this section is about deciding whether a construction contract should include a mechanism that encourages contractors to propose cost-saving changes after award. It matters because the clause can generate savings for the Government, but it also creates administrative work to evaluate proposals and track savings. The rule helps contracting officers balance potential value engineering benefits against contract type, contract size, and the burden of administering the program.