Value Engineering Change Provisions

摘要

Last year, the Year in Review discussed a case affirming an earlier Armed Services Board of Contract Appeals (ASBCA) decision concerning a value engineering change proposal (VECP). On reconsideration, the ASBCA determined that because the contractor failed to prove it was entitled to additional cost savings resulting from a VECP, the contractor was not entitled to additional compensation. The contractor appealed the ASBCA decision to the Court of Appeals for the Federal Circuit (CAFC) and the CAFC affirmed the ASBCA decision. While last year's Year in Review discussed the contractor's (Applied) contract appeal to the ASBCA, this article addresses only the CAFC appeal. The CAFC case arose from two contracts the Army awarded to Applied in 1985 for horizontal air conditioning units. Both contracts contained a VECP clause encouraging Applied to present the government with cost savings measures by permitting the government to compensate Applied for any savings realized as a result of the VECP. After Applied submitted a VECP to the government, Applied disputed the amount the government owed it, resulting in an appeal to the ASBCA and then another appeal to the CAFC.