Value engineering as a procurement tool was pioneered by the federal government and has spread to other public works contracting. The idea is that a contractor in the field may conceive changes in the contract design that will save the government money in constructing the project and then submit a value engineering change proposal (VECP). If the government accepts the proposal, the government shares the resulting cost savings with the contractor.
The federal VECP clause requires detailed information regarding changes in the contract documents, resulting cost savings and extra-contractual cost impacts. Because the government wants to encourage these cost-saving proposals, the requirements are liberally construed in favor of the contractor. In the first case, a contractor that never submitted a comprehensive, compliant VECP could meet the requirements piecemeal through a series of submittals and communications.
The second case involves expert testimony regarding an architect’s standard of care during the administration of a construction contract. A court allowed a licensed professional engineer to offer such testimony. In the area of contract administration, there is considerable overlap between the two professions.
The third case addresses a performance bond surety’s recovery of its attorney fees from the project owner. While the owner’s demand against the bond proved unfounded, the surety could not recover its fees because it had never stepped into the contractor’s shoes in a take-over capacity.
