Common use of Value Engineering Proposals Clause in Contracts

Value Engineering Proposals. The Design-Builder may submit to the Department written Value Engineering Proposals (VEP) for modifying the requirements of Contract Documents for the purpose of reducing the total Contract Price or Contract Times without reducing the design capacity or quality of the finished product. If the VEP is accepted by the Department, the net savings or reduction of Contract Times will be equally divided by the Department and the Design-Builder. Each VEP shall result in a net savings over the Contract Price or Contract Times without impairing essential functions and characteristics of the item(s) or of any other part of the Project, including, but not limited to, service life, reliability, economy of operation, ease of maintenance, aesthetics, and safety. At least the following information shall be submitted with each VEP: • Statement that the proposal is submitted as a VEP • Statement concerning the basis for the VEP benefits to the Department and an itemization of the contract items and requirements affected by the VEP • Detailed estimate of the cost under the existing Contract and under the VEP • Proposed specifications and recommendations as to the manner in which the VEP changes are to be accomplished • Statement as to the time by which a contract Work Order adopting the VEP must be issued so as to obtain the maximum cost-effectiveness The Department will process the VEP in the same manner as prescribed for any other proposal that would necessitate issuance of a Work Order. The Department may accept a VEP in whole or part by issuing a Work Order that will identify the VEP on which it is based. The Department will not be liable to the Design-Builder for failure to accept or act on any VEP submitted pursuant to these requirements or for delays in the Work attributable to any VEP. Until a VEP is put into effect by a Work Order, the Design-Builder shall remain obligated to the terms and conditions of the existing Contract. If an executed Work Order has not been issued by the date on which the Design-Builder’s proposal specifies that a decision should be made or such other date as the Design-Builder may subsequently have specified in writing, the VEP shall be deemed rejected. The Work Order effecting the necessary modification of the Contract will establish the net savings agreed on, provide for adjustment of the contract prices, or contract time, and indicate the net savings. The Design-Builder shall absorb all costs incurred in preparing a VEP. Costs for reviewing and administering a VEP will be borne by the Department. The Department may include in the agreement any conditions it deems appropriate for consideration, approval, and implementation of the VEP. The Design-Builder’s 50 percent share of the net savings or contract time shall constitute full compensation to him for effecting all changes pursuant to the agreement. Unless specifically provided for in the Work Order authorizing the VEP, acceptance of the VEP and performance of the work thereunder will not change the Contract Time. The Department may adopt a VEP for general use in contracts administered by the Department if it determines that the VEP is suitable for application to other contracts. VEPs identical with or similar to previously submitted VEPs will be eligible for consideration and compensation under these provisions if they have not been previously adopted for general application to other contracts administered by the Department. When a VEP is adopted for general use, compensation pursuant to these requirements will be applied only to those awarded contracts for which the VEP was submitted prior to the date of adoption of the VEP. Proposed changes in the basic design of a Bridge or pavement type or those changes that require different right-of-way limits will not normally be considered an acceptable VEP. If a VEP is based on or is similar to a change in the Contract Documents prior to submission of the VEP, the Department will not accept the VEP. The Department will be the sole judge of the acceptability of a VEP. The requirements herein apply to each VEP initiated, developed, and identified as such by the Design-Builder at the time of its submission to the Department. However, nothing herein shall be construed as requiring the Department to approve a VEP. Subject to the provisions herein, the Department or any other public agency shall have the right to use all or part of an accepted VEP without obligation or compensation of any kind to the Design- Builder.