48.202 Clause for construction contracts
Source: FAR 48.202 on acquisition.gov
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.
The contracting officer shall insert the clause at 52.248-3, Value Engineering-Construction, in construction solicitations and contracts when the contract amount is estimated to exceed the simplified acquisition threshold, unless an incentive contract is contemplated. The contracting officer may include the clause in contracts of lesser value if the contracting officer sees a potential for significant savings. The contracting officer shall not include the clause in incentive-type construction contracts. If the head of the contracting activity determines that the cost of computing and tracking collateral savings for a contract will exceed the benefits to be derived, the contracting officer shall use the clause with its AlternateI.