Clients currently or anticipating contracts with U.S. Government agencies, DoD, DoE, Corps of Engineers, etc., have excellent opportunities to share in savings identified in the products or services they provide to that government agency through a Value Engineering Change Proposal (VECP). The Federal Acquisition Regulation, PART 48 and the clause at 52.248-1, -2 or –3 provides the foundation for the sharing of identified savings. In general, the submitter of a change that generates a net savings retains up to 75% of the savings. Other contracts that incorporate the change generate additional royalties for the submitter for up to a five-year period.
Clients without government contracts but who are large suppliers or have a large supplier base may achieve similar savings and sharing objectives through their own VECP equivalent contract clause. The clause should be used to incentivize suppliers to improve the value of their products or services through cost reductions or technology insertion. For the buyer, sharing of savings generated by suppliers will enhance the final product and create a win-win situation.
Ball Associates, Inc. is a recognized expert in VECP development and settlements. Clients may expect to receive a typical return in excess of 10:1 on their investment. These returns can provide a continuous contribution to the bottom line.
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Ball Associates, Inc.
3630 Tahoma Place W.
University Place, WA 98466-2143
Ph/Fx: 253.460.3753
E-mail:
HankBall@drizzle.com
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http://www.BallAssociates.com
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