DIRECTOR'S ORDER #90:
Fran Mainella, Director
Effective Date: October
Sunset Date: October
NPS Guideline 90, "Value Engineering," (Release No. 1, July
29, 1994) is superseded and replaced by this Director's Order and Reference
Manual 90, the Value Analysis Handbook.
Table of Contents
2. Purpose and Scope
5. Instructions and Requirements
A. Value Analysis Program
B. Value Analysis Thresholds - Construction Related
C. Value Analysis Thresholds - Non-construction Related
D. Value Engineering Change Proposal Program - Construction and Non-construction
E. Annual Report
F. Plan of Action
A. Directorate Level
B. Program and Field Staff
Value analysis is an organized team effort directed at analyzing the
functions of facilities, processes, systems, equipment, services, and
supplies for the purpose of achieving essential functions at the lowest
life-cycle cost consistent with required performance, reliability, quality,
safety, and achievement of NPS mission priorities such as resource protection,
sustainability and quality visitor experience. As used herein, value
analysis includes value analysis, value engineering, value planning,
value management, value methods, and value control (see definitions
in section 4), performed by qualified personnel (i.e., those with Society
of American Value Engineers certification, or its equivalent).
The National Park Service (NPS), as steward of many of America's most
important cultural and natural resources, is charged to preserve them
for the enjoyment of present and future generations. The NPS must achieve
this mission in a cost-effective and environmentally responsible manner,
ensuring value returned for every agency expenditure and action. Management
decision-making and activities throughout the national park system should
utilize value analysis, which is mandatory for all Department of the
Interior (DOI) bureaus, to help achieve this goal.
Value analysis will be informed by consideration of all (1) statutory
and regulatory requirements, for example, those imposed by the National
Environmental Policy Act of 1969 (NEPA) and the National Historic Preservation
Act (NHPA), and (2) additional requirements or standards imposed as
a matter of NPS policy, such as National Fire Protection Association
(NFPA) codes. Value analysis in and of itself, however, cannot ensure
compliance with such requirements.
2. PURPOSE AND SCOPE
The purpose of this Director's Order is to set forth the policy and
required procedures necessary to establish and maintain a productive
value analysis program.
Value analysis is mandatory for all DOI bureaus, and the NPS value
analysis program will apply to all NPS programs, projects, and activities.
Consistent with the thresholds established in sections 5.B and 5.C,
the following are subject to value analysis:
- All construction programs (as defined in section 4), including but
not limited to, line item, recreation fee demonstration, Federal highways,
donations/partnerships, fire protection, housing, repair/rehabilitation,
and park pass; and
- All administration and management programs (such as administration,
supervision, labor, procurement, operations and maintenance).
This Director's Order is not intended to document all relevant procedures
and requirements. For a comprehensive compilation, employees must refer
to Reference Manual 90, the Value Analysis Handbook.
Authority to issue this Director's Order is contained in the NPS Organic
Act (16 USC 1 through 4), and delegations of authority contained in
Part 245 of the DOI Manual (DM). Other specific authorities and requirements
governing NPS value analysis operations are found in 41 USC 432, OMB
Circular No. A-131, 369
DM 1, and Executive Order No. 13148 (Greening the Government through
Leadership in Environmental Management). Sections
9.1.1, 9.4.2, 126.96.36.199, and 10.2.6.1 of Management Policies (2001)
address value analysis.
Choosing by Advantages (CBA). A system of concepts and methods
to structure decision-making. CBA quantifies the relative importance
of non-monetary advantages or benefits for a set of alternatives and
allows subsequent benefit and cost consideration during decision-making.
CBA may be used as an evaluation method during the evaluation phase
of the value analysis job plan, in lieu of the more traditional weighted-factor
analysis. CBA is the preferred evaluation method where critical non-monetary
benefits need to be evaluated.
Construction Program. Comprises planning, design, construction,
maintenance, alteration or repair of buildings, structures, or other
real property, and includes all preparatory pre-design design activities.
Structures include but are not limited to, buildings, pavement, bridges,
dams, irrigation systems, water supply and sewer systems, power generation
and transmission systems, hatcheries, recreation facilities, and installation
of fixed equipment.
Function Analysis. A process that defines the goal or objective
to be achieved by a project, program, concept, system or system component.
A basic function reflects basic needs, the primary reasons for the existence
of the project, system or component. A secondary function reflects desires
or wants beyond basic needs.
Life-cycle cost (LCC). The total cost of a system, facility,
or other product, computed over its useful life. It includes all relevant
costs involved in acquiring, owning, operating, maintaining, and disposing
of the system or product over its useful life or other specified period
of time, including environmental and energy costs. Economic analysis
is used in determining LCC.
Modeling. An analysis of a design or its alternatives in terms of square
footage, cost, life-cycle cost, time, or risk, with the objective of
identifying opportunities for reducing costs or improving benefits or
performance. For example, a cost model would look for areas of high
cost or poor value where a value study team's effort might be most effectively
focused to improve or reduce the cost of the project.
Program/Project/Activity (PPA). Any item specifically identified
in tables or written material set forth in the Interior and Related
Agencies Appropriations Act or accompanying reports.
Value Analysis/Value Engineering/Value Management/Value Planning.
In general usage, these terms may be used interchangeably.
- Value analysis is typically applied at facility programming and
pre-design stages of construction.
- Value planning is most often used when value methods are applied
on general management or similar planning activities.
- Value engineering most typically relates to using value methods
during design and construction phases.
- Value management is often used when conducting a value engineering
study of administrative procedures, organizational structures, or
Value Methods. Methods used in value analysis include (1) function
analysis, (2) cost modeling and analysis, (3) project modeling (quality,
square footage, risk, etc.), (4) life-cycle costing, (5) creative techniques
to expand alternatives, such as brainstorming, and (6) structured evaluation
methods using benefit/cost comparisons, such as Choosing by Advantages
5. INSTRUCTIONS AND REQUIREMENTS
5.A. Value Analysis Program
5.A.1 In accordance with Part 369, Chapter 1 of the DOI Manual
(369 DM 1):
(a) All NPS programs, projects, and activities will use value analysis
as a management and decision-making tool in (1) "performing or
contracting for the planning, design, construction, repair and rehabilitation/renovation
of facilities," and (2) "administrative and management programs
to improve operations, identify and remove nonessential capital and
operating costs, and improve and maintain optimum quality of program
and acquisition functions."
(b) Programs, projects, and activities that "administer Federal
grant programs involving construction, repair and rehabilitation of
facilities, will encourage grantees to implement value analysis wherever
5.A.2 The NPS value analysis program will comply with the
substantive and procedural requirements of OMB Circular No. A-131,
369 DM 1, and Executive Order No. 13148.
5.A.3 The NPS will meet or exceed its DOI-imposed fiscal year
cost-savings (costs avoided and saved) goal of four percent of the
aggregate value of all construction, repair, rehabilitation, and renovation
projects with estimated costs of $500,000 or more. The NPS will use
value analysis studies and contractor-generated proposals to meet
its savings goal.
5.A.4 Programs, projects, and activities requiring value analysis
study pursuant to this Director's Order will be the subject of value
analysis workshops, multi-disciplinary team efforts conducted by NPS
and/or contractor personnel, varying in duration according to the
complexity of the subject and the decisions to be reached.
5.B Value Analysis Program Thresholds - Construction Related
5.B.1 Projects below the $500,000 (estimated net construction
costs) threshold will be subject to value analysis at the request
of the Director, a Deputy Director, or any Associate or Regional Director
with line authority over the project or program.
5.B.2 Projects between $500,000 and $1,000,000 (net construction)
will be subject to value analysis. Such projects will only be excluded
when it can be shown that estimated value analysis savings, considering
life-cycle costs, do not justify study and redesign costs. Requests
for exclusion will be reviewed by the NPS Value Analysis Program Coordinator
(VAPC) in the Washington Office - Construction Program Management
Division (WASO-CPM), prior to being forwarded to the NPS Development
Advisory Board (DAB) for disposition. Any exclusion will be reported
to the DOI Value Engineering Program Manager (MRPS-VEPM).
5.B.3 All projects with estimated net construction costs of
$1,000,000 or more, without exception, will be subject to at least
one value analysis workshop, typically at the pre-design stage. All
projects with estimated net construction costs of $10 million or more
will, at a minimum, utilize value analysis at both the (1) pre-design
stage, and (2) design stage (during design development and final design).
5.C Value Analysis Thresholds - Non-construction Related
5.C.1 Non-construction programs, projects, and activities
with estimated initial costs of $1 million or more will be subject
to value analysis to improve operations and reduce cost. Such programs,
projects and activities include, but are not limited to, general management
planning, implementation planning, major Service-wide standards, administrative
support systems, major Service-wide procurements, major office reorganizations,
and major projects related to park operations and management (e.g.,
resource inventories, fire management, ecological restoration, artifact
conservation, interpretive exhibit development and installation).
Value analysis may also be required when a program, project, or activity
is estimated to incur major life-cycle costs exceeding $1 million.
5.C.2 Non-construction programs, projects, and activities
below the $1 million threshold will be subject to value analysis at
the request of the Director, a Deputy Director, or any Associate or
Regional Director with line authority over the program, project or
activity. Programs, projects and activities below the $1 million threshold
that are not subject to formal value analysis study are nonetheless
encouraged to apply the value analysis methods identified in section
4 of this Director's Order.
5.D Value Engineering Change Proposal Program - Construction and
A Value Engineering Change Proposal (VECP) is a proposed change submitted
by a contractor which, through a change in a project's plans, designs,
or specifications, would lower the project's cost or improve project
benefits to the NPS while maintaining required function and design objectives.
Savings are then shared by the contractor and the government.
5.D.1 All programs, projects, and activities having contractual
authority for procurement and/or construction will implement contractor
VECP programs, in accordance with Title 43, Part 12, Subpart C and
Title 48, Parts 31 and 48, of the Federal Acquisition Regulation (FAR),
and Part 48 of the DOI Acquisition Regulation.
5.D.2 The NPS will encourage contractor participation in the
VECP program sufficiently to meet a goal of one VECP for every contract
over $1 million. VECPs will be reviewed by the design team and procuring
office for equivalency of quality, function, and value (initial and
life-cycle costs). Contract value engineering incentive clauses permit
a contractor to retain 55% of the net savings resulting from an adopted
VECP. The remaining savings will be retained by the NPS, in accordance
with section 1.7(C) of 369 DM 1. Standard contract clauses can be
found at FAR 52.248-1, -2, and -3.
5.D.3 A value engineering incentive clause will be included
in all subcontracts of $500,000 or more, and may be included in any
subcontract of lesser value. A contractor may establish any arrangement
for subcontractor value engineering incentive payments, provided that
such payments will in no way reduce the NPS share of the savings resulting
from the adoption of a VECP.
5.D.4 All NPS programs, projects, and activities will notify
the VAPC of any contract modification submitted under the VECP contract
clauses, and the disposition thereof. Notification will include a
description of the proposed modification, design team evaluation of
the contractor's proposal, the design team recommendation and rationale
for the decision. Upon acceptance of a VECP by the contracting officer,
a copy of the final modification will be forwarded to WASO-CPM documenting
the final allocated savings.
5.E Annual Report
5.E.1 The NPS will prepare an annual value analysis program
report (Annual Report) containing data on program savings (costs avoided
and saved), project improvements and value added, study costs, and
program costs. The Annual Report will be submitted to MRPS-VEPM and
the Assistant Secretary, Fish and Wildlife and Parks, for review prior
to final transmission to OMB.
5.E.2 All NPS programs, projects, and activities will submit
copies of all value analysis study reports to WASO-CPM (2 copies)
and the Denver Service Center's Technical Information Center (1 copy).
Where DAB review is required, value analysis reports should be submitted
with or before the board submission. Such submissions should include
data on (1) study savings (costs avoided and saved), (2) increases
in project benefits and enhanced implementation of NPS policies on,
e.g., resource protection, sustainability, accessibility, etc., and
(3) study costs.
5.F Plan of Action
The NPS will prepare and implement an annual value analysis plan of
action (Plan of Action) which clearly lists and prioritizes specific
projects and programs for value analysis study. The Plan of Action will
be submitted to MRPS-VEPM and the Assistant Secretary, Fish and Wildlife
and Parks, for their review.
6.A Directorate Level
6.A.1 The Director will:
(a) Ensure that the NPS value analysis program has adequate trained
staff (such as Certified Value Specialists and study team leaders),
with funding necessary to conduct requisite studies, provide technical
assistance, and review all value analysis proposals. The budget will
also include funds necessary to cover training, travel and professional
activities related to value analysis.
(b) Appoint the VAPC.
(c) Review and forward the Annual Report submitted by the VAPC to
the Assistant Secretary and MRPS-VEPM.
(d) Submit the Plan of Action to the Assistant Secretary and MRPS-VEPM,
and ensure that it is implemented.
(e) Review value analysis study results through the DAB or the WASO-CPM,
which will make recommendations as to (a) the adequacy of value analysis
study, and (b) implementation of specific value analysis proposals.
6.A.2 The Associate Director, Park Planning, Facilities and
Lands, will develop and issue Reference Manual 90, the Value Analysis
Handbook, to further implement Management Policies (2001) and this
Director's Order. The Value Analysis Handbook will contain standards
and other requirements, consistent with Federal law and regulation,
with which NPS managers must comply in carrying out their responsibilities.
In the interval between issuance of this Director's Order and the
Value Analysis Handbook, NPS
Guideline 90 may be used to provide necessary interim guidance.
The DOI Value Engineering Guidance Handbook (VE-1), copies of which
may be obtained from the DOI Office of Managing Risk and Public Safety
(MRPS), may also be used for guidance.
6.B Program and Field Staff
6.B.1 The VAPC will:
(a) Promote value analysis throughout the Park Service and provide
technical assistance to construction and non-construction-related
programs, projects, and activities.
(b) Review and approve value analysis study reports for technical
adequacy and provide staff support concerning value analysis to DAB.
(c) Develop and implement Service-wide value analysis training programs.
(d) Conduct selected value analysis studies.
(e) Prepare the Annual Report and submit it to the Director for review
prior to its presentation to MRPS-VEPM and the Assistant Secretary.
The Report will be submitted so as to reach MRPS-VEPM within 90 days
following the end of the fiscal year.
(f) Prepare the Plan of Action and submit it to the Director for
review prior to its presentation to MRPS-VEPM and the Assistant Secretary.
(g) Assist the Associate Director, Professional Services in developing
the Value Analysis Handbook.
(h) Attend all meetings of DOI bureau/office value analysis coordinators
arranged by MRPS-VEPM.
(i) Represent the NPS within the Society of American Value Engineers,
International (SAVE, International) and other associations concerned
with value analysis and value-based decision-making.
(j) Promote collaboration and the exchange of technical advice between
the NPS and the Society of American Value Engineers and other associations
concerned with value analysis and value-based decision-making by actively
participating in such organizations.
(k) Prepare and submit such additional reports as may be requested
by the Director or MRPS-VEPM.
6.B.2 All NPS managers will assure that the programs, projects,
and activities for which they are responsible, comply with all value
analysis procedures, requirements, and standards.
end of Director's Order ---------------