Entitlement to Payment on a Value Engineering Change Proposal

B-194319: Published: Apr 10, 1979. Publicly Released: Apr 10, 1979.

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Baltimore Electronics Associates, Inc. (BEA) claimed entitlement to payment on a Value Engineering Change Proposal (VECP) under an Army contract. BEA questioned whether the Army may implement the ideas contained in BEA's VECP by simply initiating its own VECP containing slight variations and thereby avoid having to share 50 percent of the cost savings achievable with BEA on contracts in the future. GAO, declining to consider the issue, stated that a factual dispute is within the jurisdiction of the agency board of contract appeals. The contract contained an express provision covering value engineering change proposals. The question concerning the contracting officer accepting BEA's value engineering change proposal is subject to the contract dispute procedure, since it is not clear whether the contracting agency actually had implemented BEA's proposed change or whether the change originated in the agency.

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