9000-0027 Supporting Statement 2018

SUPPORTING STATEMENT

FOR INFORMATION COLLECTION SUBMISSION

9000-0027, VALUE ENGINEERING REQUIREMENTS

A. Justification.

1. Administrative requirements. Per Federal Acquisition Regulations (FAR) Part 48, value engineering is the technique by which contractors (1) voluntarily suggest methods for performing more economically and share in any resulting savings or (2) are required to establish a program to identify and submit to the Government methods for performing more economically. These recommendations are submitted to the Government as Value Engineering Change Proposals (VECP’s).

VECP’s must include such details as (1) a description of the differences between the existing contract requirement and the proposed requirement, and the comparative advantages and disadvantages of each; (2) a list and analysis of contract requirements that must be changed if the VECP is accepted; (3) a detailed cost estimate showing anticipated reductions associated with the VECP; (4) a statement of the time a modification accepting the VECP must be issued to achieve maximum cost reduction, and the effect on contract completion time; and (5) identification of any previous submissions of the VECP; the agencies and contract numbers involved and previous Government actions, if known. FAR clauses 52.248-1, Value Engineering; 52.248-2, Value Engineering-Architect-Engineer; and, 52.248-3, Value Engineering-Construction, are used to evaluate VECP’s. Unless otherwise authorized, these clauses are not applicable to requirements for research and development, engineering services from nonprofit or not-for-profit organizations, personal services, providing for product or component improvement, commercial supplies or services, or with an estimated value not expected to exceed the simplified acquisition threshold.

2. Uses of information. This information is needed to enable the Government to evaluate the VECP and, if accepted, to arrange for an equitable sharing plan.

3. Consideration of information technology. We use improved information technology to the maximum extent practicable. Where both the Government agency and contractors are capable of electronic interchange, the contractors may submit this information collection requirement electronically.

4. Efforts to identify duplication. This requirement is being issued under the FAR, which has been developed to standardize Federal procurement practices and eliminate unnecessary duplication.

5. If the collection of information impacts small businesses or other entities, describe methods used to minimize burden. The burden applied to small businesses is the minimum consistent with applicable laws, Executive orders, regulations, and prudent business practices.

6. Describe consequence to Federal program or policy activities if the collection is not conducted or is conducted less frequently. Collection of information on a basis other than solicitation-by-solicitation is not practical.

7. Special circumstances for collection. Collection is consistent with guidelines in 5 CFR 1320.6.

8. Efforts to consult with persons outside the agency. A 60-day notice was published in the Federal Register at 83 FR 64128 on December 13, 2018. No comments were received. A 30-day notice published in the Federal Register at 84 FR 9522 on March 15, 2019.

9. Explanation of any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees. Not applicable.

10. Describe assurance of confidentiality provided to respondents. This information is disclosed only to the extent consistent with prudent business practices and current regulations.

11. Additional justification for questions of a sensitive nature. No sensitive questions are involved.

12 & 13. Estimated total annual public hour and cost burden. Time required to read and prepare information is estimated at 15 hours per response. It is also estimated that about 1% of the 7,942 unique vendors awarded a Federal Government contract in FY 2018 (from FPDS-NG) for a requirement that is subject to one of the value engineering clauses, had approved VECP’s. The Government conservatively estimates that for each VEPC that was approved, the contractor submitted another VEPC that was rejected by the Government (794 X 2 = 1,588). Factors limiting VECP’s include the relatively small number of VECPs being submitted by vendors, external circumstances which add complexity to VECP processing, and the risk incurred by the contractor until the VECP is approved.

Estimated respondents/yr...............................794

Responses annually x_2

Total annual responses...............................1,588

Estimated hrs/response x15

Estimated total burden/hrs..........................23,820

Average wages*......................................$37.00

Estimated cost to public...........................$881,340

* The hourly rate of $37 is based on the equivalent of a GS-9, Step 5, of $27.48, plus overhead of $9.96 (36.25%), is $37.44, rounded to the nearest dollar. The 36.25% overhead rate reflects OMB Memorandum M-08-13 for use in public-private competitions. The OPM Salary Schedule rates used for the “Rest of the U.S.” includes locality pay of 15.37%. The estimated cost per response is $555.

14. Estimated cost to the Government. Time required for Governmentwide review is estimated at 15 hours per response.

Annual Reporting Burden and Cost

Reviewing time/hr...................................15

Responses/yr..................................x 1,588

Review time/yr..................................23,820

Average wages/hr*...................... x $37.00

Total Government cost .......................$ 881,340

* The hourly rate of $37 is based on the equivalent of a GS-9, Step 5, of $27.48, plus overhead of 36.25%, rounded to the nearest dollar.

15. Explain reasons for program changes or adjustments reported in Item 13 or 14. Based on adjustments to the number of unique vendors awarded a contract during Fiscal Year 2018 in the Federal Procurement Data System Data, the annual estimated reporting burden decreased.

16. Outline plans for published results of information collections. Results will not be tabulated or published.

17. Approval not to display expiration date. Not applicable.

18. Explanation of exception to certification statement. Not applicable.

B. Collections of Information Employing Statistical
Methods. Statistical methods are not used in this information collection.