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U.S. Department of Energy			                 POLICY
	Washington, DC


							Approved: 1-7-04	

Subject:  VALUE ENGINEERING


PURPOSE 

To establish Department of Energy (DOE) value engineering policy that meets the requirements 
of Public Law 104-106, Section 4306 as codified by 41 United States Code 432.  This law states 
that each agency shall establish and maintain cost-effective value engineering (VE) procedures 
and processes.  Additionally, Office of Management and Budget (OMB) Circular A-131, Value 
Engineering, requires that all Federal agencies use VE as a management tool, where appropriate 
and using a graded approach, to ensure realistic budgets, identify and remove nonessential 
capital and operating costs, and improve and maintain optimum quality of program and 
acquisition functions.  

SCOPE

This policy applies to all DOE Elements, including the National Nuclear Security Administration 
(NNSA).  

POLICY

It is the policy of the DOE that a VE program, that meets the intent and criteria set forth in 
Public Law 104-106 (Value Engineering) and OMB Circular A-131, dated May 21, 1993, be 
established and implemented for all Departmental Elements.  It is the policy of the Department to 
adhere to the acquisition requirements of the Federal Acquisition Requirements (FAR), including 
the use of VE clauses as set forth in Parts 48 and 52, as modified in any DOE Acquisition 
Regulation requirements or other Departmental specific guidance.

DOE Order 413.3, Program and Project Management for the Acquisition of Capital Assets, and 
DOE Order 430.1B, Real Property Asset Management, provide specific requirements to 
implement this policy.

IMPLEMENTATION

To implement this policy, the Deputy Secretary, the Under Secretary for Energy, Science and 
Environment and the Administrator, NNSA will:



*	Designate a senior management official(s) who has responsibility to establish, 
coordinate, maintain, and document a viable VE program for programs and projects 
under their cognizance, and who will develop criteria and guidelines for both in-house 
personnel and contractors to identify programs/projects with the greatest potential to 
yield savings from the application of VE techniques.

The designated official(s) will establish and maintain VE programs, procedures and processes 
that provide a systematic effort directed at analyzing the functional requirements, where 
appropriate and using a graded approach, of DOE and NNSA systems, equipment, facilities, 
procedures, and supplies for the purpose of achieving the essential functions at the lowest total 
cost, consistent with the needed performance, safety, security, reliability, quality assurance, and 
maintainability requirements.  The designated official(s) will also provide a sound basis for 
identifying and reporting VE accomplishments in accordance with OMB Circular A-131.

To support these efforts, the Director, Office of Engineering and Construction Management 
(OECM), within the Office of Management, Budget and Evaluation/Chief Financial Officer 
(OMBE/CFO), will coordinate and compile the annual DOE VE progress report that is required 
by OMB Circular A-131.  The DOE program offices have line responsibility and DOE functional 
offices such as management, budget, chief information officer, legal, safety, security, and 
contracting have staff responsibility for effective implementation and documentation of this 
policy.

CONTACT

Questions concerning this policy should be addressed to the Office of Engineering and 
Construction Management, Office of Management, Budget and Evaluation, at (202) 586-1784.

BY ORDER OF THE SECRETARY OF ENERGY:




KYLE E. MCSLARROW
Deputy Secretary