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1994) is superseded and replaced by this Director's Order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
E. Annual Report
F. Plan of Action
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
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
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,
220.127.116.11, and 10.2.6.1 of Management Policies (2001) address value
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
- 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
- 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 (CBA).
5. INSTRUCTIONS AND REQUIREMENTS
5.A. Value Analysis Program
5.A.1 In accordance with Part 369, Chapter 1 of the DOI Manual (369
(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 possible."
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
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,
(b) Review and approve value analysis study reports
for technical adequacy and provide staff support concerning value analysis to
(c) Develop and implement Service-wide value analysis
(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 ---------------