Presentation is loading. Please wait.

Presentation is loading. Please wait.

United States Department of Energy Value Engineering CONTRACTOR PERSPECTIVES Bruce Lenzer, CVSL, FSAVE Richard Harrington, CVSL, CH2MHill.

Similar presentations


Presentation on theme: "United States Department of Energy Value Engineering CONTRACTOR PERSPECTIVES Bruce Lenzer, CVSL, FSAVE Richard Harrington, CVSL, CH2MHill."— Presentation transcript:

1 United States Department of Energy Value Engineering CONTRACTOR PERSPECTIVES Bruce Lenzer, CVSL, FSAVE Richard Harrington, CVSL, CH2MHill

2 HISTORICAL PERSPECTIVE  1980 – 1987 Programs started at Field Office Levels, little or no central coordination or reporting  Some contractor initiated VE due to VE Clauses in contracts  1987 – 1992 Program expanded with HQ coordination and support  1990 Some Field Offices implemented VE policy, procedures, and requirements with their prime contracts  1992 High visibility at the Superconducting Super Collider, invigorated focus of VE use in Scientific R&D

3 HISTORICAL PERSPECTIVE  1993 – 1996 Office of Field Management, (now Office of Engineering and Construction Management) issues DOE Orders:  413.3B “Program and Project Management for Acquisition of Capital Assets” (includes requirement to perform VE as part of Stage Gate Process at Critical Decision 2)  DOE O 430.1A “Life Cycle Asset Management”  DOE P “Value Engineering Policy”  For implementing PL

4 HISTORICAL PERSPECTIVE  1996 – 2000  Energy Facilities Contractors Group (EFCOG) published Value Management guide  HQ VE website developed for DOE Office of Engineering and Construction Management  Website included links of project reports and cost savings or avoidance summary data  A DOE HQ Champion utilized CVS VE Specialist to gather historical reports from 5 – 7 years  ~ $750M Savings & ~ $2B in LLC cost avoidance  Several high visibility and successful VE studies  Al Gore Golden Hammer Award  Customer Partnering Awards from Deputy Secretary for Facility Management

5 HISTORICAL SUCCESS  Hanford Nuclear Reservation:  1990 – 1996  Average 48:1 ROI  Completed VE Projects contributed to ~$30M additional contractor award fees  1996 – 2002  Completed VE Projects contributed to ~$1B additional contractor award fees

6 HISTORICAL SUCCESS  VE Applications:  Design and Construction  New and Existing Facility & Systems Renovations/Upgrades  Scientific Equipment, Decision Analysis, R&D

7 HISTORICAL SUCCESS  VE Applications – Continued -:  Processes (Soft VE) including:  Contract Requirements  Supply Chain  Configuration Management  QA – Corrective Action Management  Calibration Program  Engineering & Design Processes & Standards  Information Systems  Project Delivery Systems  Work Management  Maintenance  Fabrication  Materials Management  Telecommunications

8 8 SOFT VE – BUSINESS PROCESS RESULTS  Supply Chain Optimization 2000$ 58M (5yr)  Supply Chain Validation 2001$ 14M/Year  Integrated:  Materials & Supply Chain Mgmt.$ 100M/(5yr)  Work Management & Work Control $ 10M (5 yr)  Predictive, Preventive Maint. & Calibrations $ 30M (5yr)  Quality Corrective Action Mgmt. $ 20M (5yr)  Contract Requirements Value Analysis$ 53M (18yr)  Contract Cost Avoidance ALL RIGHTS RESERVED  2004 Synergy Value Solutions, LLC

9 HISTORICAL SUCCESS  VE Applications – Continued -:  Hybrid Function Diagram:  FH MATERIALS MGMT COMBINED.pdf FH MATERIALS MGMT COMBINED.pdf

10 PROGRESSIVE STATUS  1996 – Present  Decline in VE contract requirements and reporting & use except:  …..for use on projects subject to DOE O 413.3B “Program and Project Management for Acquisition of Capital Assets”  VE Process watered down to punch the ticket  Example….one project used VE on Civil & Facility Engineering, but not technical components. Tech. components comprised 80% of project cost  Required by some contracts, but not as much  Few if any voluntary uses

11 PROGRESSIVE STATUS  Perception of Project Managers that projects will lose budgets if VE used  Fewer VE professionals around the complex  1996 Sunset of OMB Circular  OMB Auditing stops  Diminished HQ support  Untrained, unqualified, uncertifed personnel have allowed VE to become synonymous with cost cutting  1997 – 2011 VE became synonymous with other improvement techniques  Non-certified consultants are performing similar processes, but not VE….Some titled the work as VE

12 PROGRESSIVE STATUS  Focus on using flavor of the month e.g. SixSigma  Cases where certified VE consultants not using function analysis  Performing 1 and 2 day studies doing brainstorming and evaluation only ….. Not true VE Studies  DOE Office of Engineering and Construction Management eliminated VE Website  Loss of champion at DOE HQ and Field Offices…. No succession planning to continue VE program

13 FUTURE OF DOE VE/VM PROGRAM  2006 EFCOG Executive & DOE Management awarded DOE Complex Best in Class VE Study & Results  2012 recent VE success in DOE Department of Environmental Management has drawn attention to the need re-educate DOE Complex on how VE can make a difference to reduce schedule risk, reduce worker exposure, and saving $millions  Re-issuing VE expectations in Public Law  Re-establishment of OMB A-131  Leverage Federal Acquisition Regulation  Part 48 & 52

14 FUTURE OF DOE VE/VM PROGRAM  Federal Budgets are tight, and expected to be tight, for the foreseeable future  These facts give impetus for resurrecting a complex wide DOE VE program  Timing is good for DOE to reestablish an effective program

15 FUTURE OF DOE VE/VM PROGRAM  Lawrence D. Miles Value Foundation  New Website   DOE Process Example


Download ppt "United States Department of Energy Value Engineering CONTRACTOR PERSPECTIVES Bruce Lenzer, CVSL, FSAVE Richard Harrington, CVSL, CH2MHill."

Similar presentations


Ads by Google