48.202
Clause for construction contracts
Include the Value Engineering-Construction clause in construction contracts above the simplified acquisition threshold, except for incentive contracts, and use Alternate I when tracking collateral savings is not cost-effective.
Overview
FAR 48.202 requires contracting officers to include the Value Engineering-Construction clause (FAR 52.248-3) in construction contracts and solicitations when the estimated contract value exceeds the simplified acquisition threshold, except for incentive-type contracts. The clause encourages contractors to propose cost-saving changes. For contracts below the threshold, the clause may be included if significant savings are anticipated. If tracking collateral savings is not cost-effective, the clause's Alternate I should be used. This section ensures that value engineering principles are applied appropriately in construction contracts to promote efficiency and cost reduction.
Key Rules
- Mandatory Clause Inclusion
- Insert FAR 52.248-3 in construction contracts exceeding the simplified acquisition threshold, unless it is an incentive contract.
- Optional Clause Inclusion
- May include the clause in contracts below the threshold if significant savings are possible.
- Exclusion for Incentive Contracts
- Do not include the clause in incentive-type construction contracts.
- Use of Alternate I
- If tracking collateral savings is not beneficial, use the clause with Alternate I as determined by the head of the contracting activity.
Responsibilities
- Contracting Officers: Ensure proper inclusion or exclusion of the clause based on contract type and value, and use Alternate I when appropriate.
- Contractors: Comply with the requirements of the Value Engineering-Construction clause if included in the contract.
- Agencies: Oversight to ensure correct application and documentation of clause usage and any determinations regarding collateral savings.
Practical Implications
- This section promotes cost savings and efficiency in construction contracts through value engineering.
- Contractors should be aware of the clause's requirements and opportunities for proposing value engineering changes.
- Common pitfalls include misapplying the clause to incentive contracts or failing to use Alternate I when required.