Value Engineering

DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

23 CFR Part 627

[FHWA Docket No. 94-12]

RIN 2125-AD33

Value Engineering

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The FHWA proposes to issue a regulation on value engineering

(VE) that would require its application to selected Federal-aid highway

projects, when funded under the FHWA's grant-in-aid process. The

proposed regulation would require State highway agencies (SHA) to

establish and administer VE programs; it outlines minimum VE program

requirements and provides guidance in establishing, administering, and

monitoring a VE program. This proposed regulation is considered

necessary to implement 23 U.S.C. 106(d), which provides that, in such

cases as the Secretary deems advisable, the Secretary may require a

value engineering or other cost reduction analysis of plans,

specifications, and estimates for proposed projects on any Federal-aid

highway.

DATES: Comments must be received on or before January 17, 1995.

ADDRESSES: Submit written and signed comments to the Federal Highway

Administration, HCC-10, FHWA Docket No. 94-12, Room 4232, 400 Seventh

Street, SW., Washington, D.C. 20590. All comments and suggestions

received will be available for examination at the above address between

8:30 a.m. and 3:30 p.m., e.t., Monday through Friday, except for

Federal holidays. Those desiring notification of receipt of comments

must include a self-addressed, stamped postcard.

FOR FURTHER INFORMATION CONTACT: Keith Borkenhagen, Office of

Engineering, 202-366-4630, or Wilbert Baccus, Office of Chief Counsel,

202-366-0780, Federal Highway Administration, 400 Seventh Street, SW.,

Washington, D.C. 20590. Office hours are from 7:45 a.m. to 4:15 p.m.,

e.t., Monday through Friday, except Federal holidays.

SUPPLEMENTARY INFORMATION: The FHWA recognizes VE as an effective and

proven technique for reducing cost, increasing productivity, and

improving quality when applied in the development of highway projects.

This document solicits public comments regarding the VE requirements

being considered by the FHWA.

In 1991, the Congress required the FHWA to study its VE program.

Section 1091 of the Intermodal Surface Transportation Efficiency Act of

1991, Public Law 102-240, 105 Stat. 1914 (Dec 18, 1991), required the

Secretary of Transportation to ``study the effectiveness and benefits

of value engineering review programs applied to Federal-aid highway

projects,'' and to ``report to Congress on the results of the study * *

* including recommendations on how value engineering could be utilized

and improved in Federal-aid highway projects.''

The FHWA's evaluation of the effectiveness of its VE program, as

described in a report submitted to Congress in June 1993,1

concluded that the application of VE in the development of highway

projects has the potential to result in substantial cost savings

without adversely affecting any of the highway projects' design,

aesthetics, or construction standards while assuring that environmental

and ecological goals are maintained. During the study made to prepare

this report, the FHWA examined VE data covering fiscal year (FY) 1988

to FY 1991 and found that only a limited number of States had active

and effective VE programs.

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\1\``Value Engineering on Federal-aid Projects,'' a report to

Congress by the Secretary of Transportation is available for

inspection and copying as prescribed in 49 CFR part 7 appendix D. A

copy is in the file for FHWA Docket No. 94-12.

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The study found that FHWA's policy of the past 20 years of

promoting VE through education, encouragement, and technical assistance

has had limited success in persuading all States to implement VE

programs on a continuing basis. This finding is despite overwhelming

evidence that VE can be a very effective way to improve projects and

control costs from States with active VE programs. The FHWA has,

therefore, concluded that in order to improve the effectiveness of the

VE program nationwide, all States need to have active VE programs. As a

result, the FHWA proposes to require the use of VE in all States on

selected Federal-aid highway projects.

This regulation, if promulgated, would significantly improve the

effectiveness of VE in the Federal-aid highway program by requiring VE

to be applied in all States, thereby ensuring that the requirements of

23 U.S.C. 106(d) are met. The regulation would provide nationwide

application of VE to the FHWA's grant program in the same way that the

FHWA's direct federally funded VE program is covered by the Office of

Management and Budget (OMB) Circular A-131 (Revised June 8, 1993, 58 FR

32964 (June 14, 1993)). The OMB Circular A-131 requires ``Federal

Departments and Agencies to use value engineering (VE) as a management

tool, where appropriate, to reduce program and acquisition costs.''

Discussion of Major Sections

The regulation would require States to establish, administer, and

monitor VE programs. Each State would determine the administrative

details of its VE program and institute VE program requirements to

carry out the VE program. States would have up to 1 year from the

effective date of the final rule to establish VE programs.

Section-by-Section Analysis

Section 627.1 Purpose and Applicability

The purpose of this regulation is to improve project quality and

productivity, foster innovation, eliminate unnecessary and costly

design elements, and ensure economical costs by requiring the

application of VE in the design and construction of selected Federal-

aid highway projects. The regulation would apply to contracts for early

project development, design, and construction of selected projects

funded with Federal-aid highway funds and may include studies of

project elements, project procedures, specifications, and standard

plans.

Section 627.3 Definitions

This section would define the VE terms of ``Function,'' ``Life-

Cycle Cost,'' ``Total Quality Management,'' ``Value Engineering,''

``Value Engineering Change Proposal,'' ``Value Engineering Incentive

Clause,'' ``Value Engineering Job Plan,'' and ``Worth.''

Section 627.5 General Principles and Procedures

This section would require States to establish VE programs which

meet minimum VE program requirements and to develop procedures to

administer and monitor their VE programs. This section would require

States to be adequately staffed to effectively manage and monitor their

VE programs, allow States to employ VE consultants to perform VE

studies, and authorize the cost of the VE studies as eligible for

Federal-aid participation. In addition, this section would require VE

program staffs to receive VE training. Value engineering training is

available through courses and workshops offered by the National Highway

Institute (NHI), various VE consulting firms, and some SHAs with active

VE programs.

Section 627.7 Reports

This section would require States to report to the FHWA the yearly

results achieved through the application of VE to projects financed

with Federal-aid highway funds. This information should be readily

available from the SHA's internal tracking and documenting of its VE

program. The FHWA is required to report certain data and other

information about its VE program to the Department of Transportation

(DOT), which then forwards the information to the OMB. The information

provided in the State reports would provide the data and information

needed for FHWA's report and would help the FHWA and States monitor the

effectiveness of State VE programs. The information contained in the

report will be made available to FHWA field offices and State agencies.

Rulemaking Analyses and Notices

All comments received before the close of business on the comment

closing date indicated above will be considered and will be available

for examination in the docket at the above address. Comments received

after the docket closing date will be filed in the docket and will be

considered to the extent practicable, but the FHWA may issue a final

rule at any time after the close of the comment period. In addition to

late comments, the FHWA will also continue to file relevant information

in the docket as it becomes available after the closing date, and

interested persons should continue to examine the docket for new

material.

Executive Order 12866 (Regulatory Planning and Review) and DOT

Regulatory Policies and Procedures

The FHWA has determined that a savings of more than $100 million

per year is likely to occur as a result of the implementation of the

regulation. Therefore, this action is a significant regulatory action

within the meaning of Executive Order 12866 and significant within the

meaning of DOT regulatory policies and procedures. Because it is

anticipated that the economic impact of this rulemaking will be

significant, the FHWA has prepared the following regulatory evaluation.

The FHWA collected and evaluated considerable amounts of VE data in

1992 while preparing and writing its VE Report to Congress. During

FHWA's 1992 evaluation of the effectiveness of its VE program, the FHWA

analyzed data for all SHAs (50 States plus Puerto Rico and the District

of Columbia) describing their VE usage for the 4-year period from

fiscal year (FY) 1988 to FY 1991. The data showed that the SHAs

performed over 1500 VE studies, recommended an accumulative $3.6

billion in VE savings, and implemented VE savings worth $615 million.

The majority (71 percent) of these 1,500 VE studies were made by just

seven States. These seven SHAs, with ``active'' VE programs, averaged

39 studies per year. Nearly all of the remaining VE studies were made

by 27 other SHAs, an average of only 4 VE studies per year, with the 18

remaining SHAs performing only 12 VE studies over the 4-year study

period. The overall results showed the SHAs implementing an average of

$154 million per year in VE savings.

In order to evaluate the reported VE savings, the FHWA analyzed the

FY 1991 bid information reported and published in its Bid Opening

Report (Pub. No. FHWA-PD-92-017). In FY 1991, the SHAs accumulatively

awarded $10 billion worth of Federal-aid highway construction projects.

The seven ``active'' VE States awarded construction contracts worth

$2.5 billion, the 27 ``limited'' VE States awarded construction

contracts worth $5.0 billion, and the 18 ``inactive'' VE States awarded

construction contracts worth $2.5 billion.

The FHWA has concluded that because the seven SHAs (accounting for

25 percent of FHWA's construction program) with ``active'' VE programs

and the 27 States (accounting for 50 percent of FHWA's construction

program) with ``limited'' VE programs were able to save $154 million

per year, that an opportunity exists to save significant additional

Federal-aid highway funds if all SHAs develop ``active'' VE programs.

With 25 percent of FHWA's $10 billion construction program not exposed

to any VE analysis and 50 percent of its program having only a

``limited'' exposure to the VE process, the FHWA believes that

additional savings of more that $100 million would occur by requiring

all States to develop and administer VE programs as proposed in this

regulation.

The additional annual savings that would result from the

implementation of this regulation would remain with the affected SHAs.

The funds saved through VE could then be used to design or construct

additional highway projects, thereby allowing SHAs to get additional

work accomplished each year with the same overall amount of Federal-aid

highway funds. By being able to expand the amount of work accomplished

with their Federal-aid highway funds, SHAs would also be able to save

or free-up State funds for other projects.

Based on more recent VE information collected by FHWA field offices

for FY 1993, the FHWA found that during FY 1993, 27 SHAs had performed

at least 1 VE study, while 18 of these 27 SHAs performed at least 5

studies, and 9 of the 27 SHAs performed 10 or more studies. The FHWA

believes that these States either have VE programs in place or are

familiar with the VE process that would be required under this

regulation.

This rule will not significantly increase the burden upon State

governments. This regulation would require SHAs to develop VE programs

where a sufficient number of projects, representing at least 50 percent

of the Federal-aid highway funds expended by the State, will be

identified for VE studies each year. An average VE study takes 4 to 5

days to complete and requires a 4 to 6 person team. In FY 1993, 349 VE

studies of various highway projects were made by 27 SHAs. According to

the information provided to the FHWA, the average cost per project for

the 349 VE studies was $9,600 while the recommended savings (if all

recommendations were accepted) was $3.4 million per project. Assuming a

recommendation acceptance rate of 25 percent, implementation of the VE

recommendations would result in a cost savings of approximately $0.86

million per study. The VE cost savings should more than offset any VE

study or redesign costs to the agency.

In the past, some State highway agencies have resisted establishing

VE programs for various reasons. Many were concerned about the

additional staffing requirements and potential delays to projects. Some

considered the application of VE to be superfluous in light of the

review processes already applied in developing projects. These concerns

have been considered and addressed in this rulemaking.

Under an established VE program (which operates on a continuing

basis), the application of VE to the highway projects need not

adversely affect or delay any project because the VE studies are

normally performed in the early project development phase, where they

can be integrated into the process. In addition, the overall effect of

employing VE is generally positive, rather than duplicative of the

engineering analysis already completed on any project, because VE uses

a multi-disciplinary team, creative thinking, and functional analysis

to improve quality and productivity, foster innovation, eliminate

unnecessary and costly design elements, and ensure that projects are

cost effective. The regulation may affect staffing levels in SHAs that

do not currently utilize VE. Establishing, administering, and

monitoring a VE program will require each SHA to assign staff to carry

out specific VE functions, although it is expected that staffing

assignments will be minimal. States with existing VE programs probably

already have adequate staff assigned to carry out the VE functions.

Individuals serving as VE study team leaders or members should be

selected from existing SHA staffs that are trained in VE. Agencies may

also hire VE consultants to perform the VE studies. In either case the

study costs are eligible for reimbursement with Federal-aid funds at

the appropriate pro-rata share for the type of project studied.

Historically, any additional costs due to the need to hire or

reassign staff to manage the VE program have been more than offset by

the overall monetary savings resulting from the application of VE

studies to highway projects. In general, States with active VE programs

report return on VE investments of between 30 to 1 and 50 to 1, giving

the opportunity for substantial overall savings. In 1993, California,

Florida, and Massachusetts reported savings in excess of $100 million

as a result of VE study recommendations.

Since VE programs would be geared primarily toward analyzing the

larger and more complex projects, most local agencies (those receiving

small amounts of Federal-aid highway funds) would find themselves

exempt from the process. Large local agencies receiving substantial

amounts of Federal-aid highway funds would have to apply VE to some of

their larger projects in the same manner as the SHAs and would achieve

analogous benefits. Like State highway agencies, local agencies that

are required to perform VE studies may perform the studies themselves

or hire a VE consultant to perform the study. The cost to local

agencies of performing VE studies is project related and is therefore

eligible for reimbursement with Federal-aid highway funds, as stated

above.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-

612), the FHWA has evaluated the effects of this rule on small

entities. Based on the evaluation, the FHWA hereby certifies that this

action will not have a significant impact on a substantial number of

small entities. The FHWA has determined that most small entities (those

receiving small amounts of Federal-aid highway funds) will probably not

perform VE studies because their projects are small and do not fit the

project selection criteria set forth in this proposal for performing VE

studies. Still, due to the many benefits that accrue through applying

the VE process, States should encourage local agencies to use VE in the

development of Federal-aid highway projects.

Executive Order 12372 (Intergovernmental Review)

Catalog of Federal Domestic Assistance Program Number 20.205,

Highway Planning and Construction. The regulations implementing

Executive Order 12372 regarding intergovernmental consultation on

Federal programs and activities apply to this program.

Executive Order 12612 (Federalism Assessment)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612. Under the Federal-aid

highway program, the FHWA reimburses States for costs incurred in

highway construction projects. This regulation would simply provide

that, as a condition of receiving such grants, States must ensure that

project costs are controlled and project quality is maintained. This

regulation recognizes the role of the States in employing VE. It gives

States wide latitude in establishing, administering, and monitoring

their VE programs and in selecting projects to be constructed using VE.

Therefore, the FHWA has determined that this action does not have

sufficient federalism implications to warrant the preparation of a

separate federalism assessment.

Paperwork Reduction Act

This action contains a collection of information for the purpose of

the Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq.

The reporting and recordkeeping requirement associated with this

rule is being submitted to the OMB for approval in accordance with 44

U.S.C. Chapter 35 under DOT NO: ______; OMB NO: ______; Administration:

Federal Highway Administration; Title: Value Engineering; Proposed Use

of Information: Project data and cost information representing the

outcome of the VE studies will be used for determining if the

respondents are in compliance with the legislative requirements and to

report VE savings to the Department of Transportation, which then

forwards the information to the OMB; Frequency: Yearly; Burden

Estimate: 1,248; Respondents: 52; Form(s): Appendix A to Part 627;

Average Burden Hours per Respondent: 24.

FOR FURTHER INFORMATION CONTACT: The Information Requirements Division,

M-34, Office of the Secretary, 400 Seventh Street, S.W., Washington,

D.C. 20590, (202) 366-4735 or the FHWA desk officer, Office of

Management and Budget, New Executive Office Building, Room 3228,

Washington, D.C. 20503, (202) 395-7340. It is requested that comments

sent to the OMB also be sent to the FHWA rulemaking docket for this

action.

National Environmental Policy Act

The agency has analyzed this action for the purpose of the National

Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and has

determined that this action would not have any effect on the quality of

the environment.

Regulation Identification Number

A regulation identification number (RIN) is assigned to each

regulatory action listed in the Unified Agenda of Federal Regulations.

The Regulatory Information Service Center publishes the Unified Agenda

in April and October of each year. The RIN contained in the heading of

this document can be used to cross reference this action with the

Unified Agenda.

List of Subjects in 23 CFR Part 627

Government procurement, Grant programs--transportation, Highways

and roads, reporting and recordkeeping requirements.

Issued on: November 9, 1994

Rodney E. Slater,

Federal Highway Administrator.

In consideration of the foregoing, the FHWA proposes to add part

627 to 23 CFR chapter I to read as follows:

PART 627--VALUE ENGINEERING

Sec.

627.1 Purpose and applicability.

627.3 Definitions.

627.5 General principles and procedures.

627.7 Reports.

Appendix A to Part 627--Annual Federal-aid Value Engineering (VE)

Summary Report

Authority: 23 U.S.C. 106(d), 302, 307, and 315; 49 CFR 18.

Sec. 627.1 Purpose and applicability.

(a) This part will improve project quality and productivity, foster

innovation, eliminate unnecessary and costly design elements, and

ensure efficient investments by requiring the application of value

engineering (VE) to selected highway projects financed with Federal-aid

highway funds. This part requires each State highway agency (SHA) to

establish a VE program, outlines minimum VE program requirements, and

provides guidance on establishing, administering, and monitoring VE

programs. State programs shall be in effect no later than [one year

after the effective date of the final rule].

(b) This part applies to contracts involving the early development,

design, and construction of selected Federal-aid highway projects.

States shall develop VE programs that will apply the VE review process

to selected highway projects. States may exempt certain projects, such

as railroad and utility work, projects financed with highway planning

and research funds, certain projects authorized under the State's

highway safety program, and emergency relief projects from the VE

project selection phase.

Sec. 627.3. Definitions.

Contractor. The individual or firm providing material, supplies,

personal property, nonpersonal services, or professional services as a

party to the design or construction contract.

Function. Any performance characteristic that a product or service

accomplishes.

Life-cycle cost. The total cost of an item's ownership, computed

over its useful life. This includes initial capital costs (right-of-

way, planning, design, construction), user costs, and the cost of

operation, maintenance, modification, replacement, demolition,

financing, taxes, and disposal associated with the facility as

applicable.

Value engineering. The systematic application of recognized

techniques by a multidisciplined team to identify the function of a

product or service; establish a worth for that function; generate

alternatives through the use of creative thinking; and provide the

needed functions, reliably, at the lowest life-cycle cost without

sacrificing safety, necessary quality, and environmental project

attributes.

Value engineering change proposal (VECP). A proposal submitted by a

contractor under a VE incentive clause included in the provisions of a

construction contract that, through a change in the plans, design, or

specifications would yield an improved or equal product and reduce the

project cost (initial and/or life-cycle) to the contracting agency. The

net savings from the proposal are shared with the contractor in

accordance with the distribution provided in the VE or cost reduction

incentive clause.

Value engineering incentive clause. A construction contract

provision which encourages the contractor to propose changes in the

contract plans and/or requirements which will accomplish the project's

functional requirements at less cost (without adversely affecting the

project) and allows the contractor to share in the resultant cost

savings.

Value engineering job plan. An organized plan of action for

accomplishing a VE study that divides the study into a distinct set of

work phases. The phases normally found in a VE job plan include:

Project selection, investigation, speculation, evaluation, development,

presentation, implementation, and audit.

Worth. An estimate of the least expensive way of performing a

function, irrespective of its application to the project.

Sec. 627.5 General principles and procedures.

(a) State VE programs. Applying the VE process to projects will

improve project quality and productivity, foster innovation, eliminate

unnecessary and costly design elements, reduce impact costs on users,

ensure the safe operation of the facility, advance environmental and

ecological interests, and ensure economical construction costs on

selected highway projects financed with Federal-aid highway funds.

State highway agencies shall prepare written procedures establishing

continuing VE programs. These procedures shall be acceptable to the

FHWA and consistent with the American Association of State Highway and

Transportation Officials (AASHTO) ``Guidelines for Value

Engineering.''1

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\1\ AASHTO's ``Guidelines for Value Engineering,'' 1987, is

available for inspection as prescribed in 49 CFR part 7, appendix D

and may be purchased by writing to the American Association of State

Highway and Transportation Officials, 444 N. Capitol Street, NW.,

Suite 225, Washington, DC 20001.

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(1) The VE program shall include procedures to insure that the VE

process is actively applied to applicable Federal-aid highway projects.

The VE procedures shall require the identification of candidate

projects for VE studies early in the development of the State's annual

Federal-aid program. As a minimum, a sufficient number of projects

representing at least 50 percent of the Federal-aid highway funds

expended by the State shall be identified for VE studies each year.

(2) The VE program should establish specific criteria and

guidelines for selecting Federal-aid highway projects for a VE review.

Consideration should be given to projects that have shown recent

substantial cost increases; projects with complex designs or

construction phases; projects involving major structures; projects with

unique specifications, standards, or processes; multi-modal projects;

projects with repetitive work elements; projects with high right-of-way

costs; projects with unique or experimental features; projects with

high maintenance, user impact, or traffic control costs; and projects

specifically requested for review by State agency program offices or

management.

(3) The VE program should establish specific criteria and

procedures for granting waivers of the VE study requirement on certain

types of projects or programs. The agency's procedures may allow for

certain types of projects to be eliminated from consideration for VE

when there is little likelihood that they would yield any opportunity

for improvements or savings.

(4) Value engineering studies should follow the systematic problem-

solving process defined by the VE job plan. Value engineering studies

should be performed using a team consisting of individuals from

different disciplines, such as: Design, construction, environment,

maintenance, planning, right-of-way, and other specialty areas

depending upon the project being reviewed. Individuals from the public

and other agencies may also be included as team members when their

inclusion is found to be in the public interest. The study leader

should be trained in VE, understand the VE process, and be able to

serve as the coordinator and facilitator of the VE team.

(i) Studies should be employed as early as possible in the project

development or design process so that valid VE recommendations can be

implemented without delaying the progress of the project.

(ii) Each study should conclude with a formal report outlining the

study team's recommendations for improving the project and reducing its

overall cost. As a part of the formal report process, a presentation of

the VE team's recommendations should be made to upper management and

documentation of the presentation included with the final report.

(5) The VE program should include procedures to ensure that the VE

recommendation approval process involves appropriate reviews and

concurrences from applicable staff offices, such as: Design,

construction, environment, air quality, safety, materials, traffic

operations, right-of-way, and other offices when the proposed VE change

impacts their specialty areas. All reviews by external staff offices

should be performed promptly to minimize delays to the project.

(6) The VE program should promote the development and submission of

VECPs by construction contractors, provide for their prompt review,

assure their prompt approval or disapproval and, if approved, assure

the implementation of the proposed changes. State highways agencies

shall include a VE or cost reduction incentive clause in their standard

specifications or project special provisions that clearly allows

construction contractors to submit VECPs. This clause should include a

provision allocating, by percentage, the cost savings that is to be

shared between the agency and the contractor. States should retain the

right to accept or reject all VECPs and acquire the rights to use

accepted VECPs in current and future projects without restrictions.

(7) The VE program should include procedures for monitoring the

implementation of the recommendations to ensure that proper

documentation is maintained for accepted and rejected VE and VECP

recommendations, the projected or actual cost savings associated with

the recommendations, and the total costs involved in performing the VE

studies. The monitoring procedures should also include a mechanism to

assure that applicable VE alternatives employed on one projects are

included in other similar projects.

(b) State VE coordinators. Each State highway agency shall be

adequately staffed with individuals knowledgeable in VE to effectively

coordinate and monitor its VE efforts. Individuals assigned to

administer and monitor the VE program should have sufficient authority

to insure the vigorous implementation of the VE program and be actively

involved in all phases of the VE program including the development of

the agency's annual VE plan.

(c) VE training. The VE program should include procedures for

identifying formal VE training needs and for coordinating training

efforts to ensure that an adequately trained staff is available to

perform the number of VE studies required in the annual VE plan and to

assure a continuing VE program. Key VE program managers, VE team

leaders and members, and individuals involved in the VECP review and

approval process shall receive VE training.

(d) Use of consultants. Consultants that have experience in VE may

be retained by SHAs to conduct VE studies on Federal-aid projects or

elements of Federal-aid projects. Members of consultant VE study teams

should be experienced in VE, have completed a recognized VE course or

workshop, and have participated in previous VE studies. A consultant

firm should not be retained to conduct a VE study of its own design

unless the firm maintains separate and distinct organizational

separation of its VE and design sections.

(e) Funding eligibility. The cost of performing VE studies is

project related and is therefore eligible for reimbursement with

Federal-aid highway funds at the appropriate pro-rata share for the

project studied.

Sec. 627.7 Reports.

Each SHA shall report yearly the results it achieved through the

application of VE to selected highway projects financed with Federal-

aid highway funds. States should report data for the Federal fiscal

year, the twelve month period beginning October 1 and ending September

30. States should submit these reports to the FHWA division office by

November 10 of the calendar year. This information may be transmitted

to the FHWA electronically. The suggested report format is provided in

appendix A of this part.

(Approved by the Office of Management and Budget under control

number 2125-______.)

Appendix A to Part 627.--Annual Federal-Aid Value Engineering (VE)

Summary Report

[Report only Federal-aid funded projects--State: __________ Fiscal year:

__________ ]

1. Total dollars invested in VE Studies by the SHA

this fiscal year (include in-house costs only, such

as, VE coordinator and staff salaries; study costs;

salary, travel and incidental costs for persons

making studies)..................................... $________M

2. Total dollars paid to VE contractors for

performing VE Studies this fiscal year (include such

costs as VE staff salaries for monitoring contractor

and VE study costs)................................. $________M

3. Total dollars invested in VE Training by the SHA

this fiscal year (include in-house costs for VE

coordinator and staff salaries for organizing and

monitoring; NHI training costs; salary, travel and

incidental costs for persons attending training).... $________M

4. Total dollars paid to VE contractors for VE

Training usedthe SHA this fiscal year (include

training costs; salary, travel, and incidental costs

for persons attending training)..................... $________M

5. Total number of individuals trained in VE during

this fiscal year.

Over 8 hours FHWA ______ State ______ Other

______

Under 8 hours FHWA ______ State ______ Other

______

Project Development and Design Phase

6. Total number of VE studies completed this fiscal

year................................................ ________

a. Total number of VE recommendations made....... ________

b. Total number of VE recommendation approved.... ________

7. Total estimated construction cost of all the

projects before the VE studies were performed....... $________M

a. Total dollar value of the VE recommendations

made............................................ $________M

b. Total dollar value of the VE recommendations

approved for implementation..................... $________M

8. Total estimated construction cost of all the

projects after the VE studies were performed and the

VE recommendations were approved for implementation. $________M

Project Construction Phase

(Value Engineering Change Proposals)

9. Total number of VECP received this fiscal year.... ________

10. Total value of VECP received this fiscal year.... $________M

11. Total number of VECP approved this fiscal year... ________

12. Total value of VECP approved this fiscal year.... $________M

13. Total amount of VECP approved savings provided to

contractors......................................... $________M

Life-Cycle Cost Savings

14. Total estimated value of life-cycle (cost

avoidance) cost savings for approved VE and VECP

recommendations this fiscal year.................... $________M

[FR Doc. 94-28290 Filed 11-15-94; 8:45 am]

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