FAR and DFARS › FAR Part 48: Value Engineering › Subpart 48.1

FAR 48.103 Processing value engineering change proposals.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section explains how the Government processes a Value Engineering Change Proposal (VECP) submitted by a contractor. The contracting officer must promptly evaluate the VECP and generally accept or reject it within 45 days of receipt, notifying the contractor in writing if more time is needed. Until any VECP is incorporated by contract modification, the contractor must keep performing under the existing contract.

Applies to: Contracting officers and contractors involved in Value Engineering Change Proposals under FAR Part 48

What it requires

The contracting officer or designated official shall promptly process and objectively evaluate the VECP and document the contract file with the rationale for accepting or rejecting it.
The contracting officer is responsible for accepting or rejecting the VECP within 45 days from its receipt by the Government.
If more time is needed, the contracting officer shall promptly notify the contractor in writing with reasons and the anticipated decision date.
Until the effective date of a contract modification incorporating an accepted VECP, the contractor shall perform in accordance with the existing contract.

Key terms: VECP · contracting officer · contract modification · sharing rate · collateral costs

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) Instructions to the contractor for preparing a VECP and submitting it to the Government are included in paragraphs (c) and (d) of the value engineering clauses prescribed in subpart 48.2. Upon receiving a VECP, the contracting officer or other designated official shall promptly process and objectively evaluate the VECP in accordance with agency precedures and shall document the contract file with the rationale for accepting or rejecting the VECP.

(b) The contracting officer is responsible for accepting or rejecting the VECP within 45 days from its receipt by the Government. If the Government will need more time to evaluate the VECP, the contracting officer shall notify the contractor promptly in writing giving the reasons and the anticipated decision date. The contractor may withdraw, in whole or in part, any VECP not accepted by the Government within the period specified in the VECP. Any VECP may be approved, in whole or in part, by a contract modification incorporating the VECP. Until the effective date of the contract modification, the contractor shall perform in accordance with the existing contract. If the Government accepts the VECP, but properly rejects units subsequently delivered or does not receive units on which a savings share was paid, the contractor shall reimburse the Government for the proportionate share of these payments. If the VECP is not accepted, the contracting officer shall provide the contractor with prompt written notification, explaining the reasons for rejection.

(1) The decision to accept or reject a VECP.

(2) The determination of collateral costs or collateral savings.

(3) The decision as to which of the sharing rates applies when Alternate II of the clause at 52.248-1, Value Engineering, is used.

(4) The contracting officer's determination of the duration of the sharing period and the contractor's sharing rate.

Sections it refers to

52.248-1 Value Engineering.

← 48.102 Policies. · 48.104 Sharing arrangements. →

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.