Haw. Code R. § 3-56-2 - Value engineering incentive clause

Current through February, 2022

The following language relating,to the value engineering incentive clause shall be inserted in all State public works contracts for amounts in excess of $100,000:

Value Engineering Incentive Clause

(a) This clause applies to all VECP initiated and developed by the contractor for changing the drawings, designs, specifica-tions, or other requirements of this contract. This clause does not, however, apply to any VECP unless it is identified as such by the contractor at the time of its submission to the contracting officer.
(b) All VECP shall:
1. Result in a savings to the State by providing less costly items than those specified herein without impairing any . of their essential functions and characteristics such as service life reliability, economy of operation, ease of maintenance, and desired appearance; and
2. Require, in order to be applied to this contract, a change order to this contract.
(c) The VECP shall be processed expeditiously -and in the same manner as prescribed for any other proposal which would likewise necessitate issuance of a contract change order. As a minimum, the following information shall be submitted by the contractor with each proposal:
1. A description of the difference between the existing contract requirement and the VECP, and the comparative advantages and disadvantages of each;
2. An itemization of the requirements of the contract which must be changed if the VECP is adopted and a recommendation as to how to make each change;
3. An estimate of the reduction in performance costs that shall result from adoption of the VECP taking into account the coats of implementation by the contractor, including any amounts attributable to subcontracts, and the basis for the estimate;
4. A prediction of any effects the VECP would have on other costs to the state, such as state-furnished property costs, costs of related items, and costs of maintenance and operation;
5. A statement of the time by which a change order adopting the VECP shall be issued so as to obtain the maximum cost reduction during the remainder of this contract, noting any effect on the contract time; and
6. The dates of any previous submissions of the VECP, the numbers of any government contracts under which submitted and the previous actions by the government, if known.
(d) The State shall not be liable for any delays in acting upon, or for any failure to act upon any proposal submitted pursuant to this clause. The decisions of the contracting officer as to the acceptance of any VECP under this contract shall be final. Unless . and until a change order applies a VECP to this contract, the contractor shall remain obligated to perform in accordance with the terms of the existing contract. The contracting officer may accept in whole or; in part any VECP submitted pursuant to this clause by issuing a change order which will identify the VECP on which it is based.
(e) If a VECP submitted pursuant to this clause is accepted under this contract, an equitable adjustment in the contract price and in any other affected provisions of this contract shall be made in accordance with this clause and the "changes" clause of this contract. The equitable adjustment shall first be established by determining the effect on the contractor's cost of performance, taking into account the contractor's cost of implementing the change (including any amount attributable to subcontracts). The contract price shall then be reduced by the total estimated decrease in the cost of performance minus fifty per cent of the difference between the amount of such total. estimated decrease and any ascertainable costs to the State which must be incurred to apply the, VECP to this contract.
(f) cost reduction proposals submitted under the provisions of any other contract also may be submitted under this contract for consideration pursuant to the terms of this clause.
(g) The contractor may restrict the government's right to use any sheet of a VECP or of the , supporting data, submitted pursuant to this clause, in accordance with the terms of the following legend if it is marked on such sheet. "This data furnished pursuant to a value engineering incentive clause shall not be disclosed outside the government, or be duplicated, used, or disclosed, in whole, or in part, for any purpose other than to evaluate a value engineering change proposal submitted under said clause. This restriction does not limit the government's right to use information contained in this data if it is or has been obtained from another source, or is otherwise available, without limitations If such a proposal is accepted by the State by issuance of a change order under the "changes" clause of said contract after the use of this data in such an evaluation, the government shall have the right to duplicate, use and disclose any data pertinent to the proposal as accepted, in any manner and for any purpose whatsoever and have others so do". If the value engineering proposal is accepted, the contractor hereby grants to the government all rights to use, duplicate or disclose in whole or part, in any, manner and for any purpose, and to have or permit others to do so, any data reasonably necessary to fully utilize such proposal. Contract modifications made as a result of this clause will state that they are made pursuant to it.


Haw. Code R. § 3-56-2
[Eff, MAR 30 1981] (Auth: HRS § 103-49) (Imp: HRS § 103-49)

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