VECP -- Saving Money through Innovation
September 26, 2012
The Value Engineering Change Proposal program is a legacy cost saving program used in government contracting for many years and the Army Contracting Command-New Jersey and General Dynamics Armament and Technical Products haves used it to save $38 million with additional saving to follow.
Mariah Hazlett, contract specialist, ACC-NJ, Picatinny Arsenal, N.J., learned about VECP when she was assigned as an intern for the Bradley Reactive Armor Tile Program.
"The initial VECP proposal from GDATP was submitted to us in 2009. However, a final valid proposal that we used to negotiate the VCEP action was submitted in June 2011," said Hazlett.
According to Hazlett, the VECP proposal submitted by GDATP requested to change the tile box material from titanium to aluminum for more than 800 reactive armor tile sets for the Bradley armored fighting vehicle. This change would decrease the production cost substantially and cut the lead time required to produce the tile kits. More importantly, she said the aluminum must perform just as well or better than titanium to support the demands of the Soldier.
She said a technical team that included contracting officers, engineers and personnel from the requiring activity performed an extensive analysis of the proposal and continued to work with GDATP to determine if the material switch serves the form, fit and function specified in the technical data package. Prototypes were developed by GDATP and samples were provided to the technical team for analysis and testing to determine if the initiative was worth pursuing.
"Through implementing the VECP, we were able to keep the performance of the Bradley reactive armor tiles the same while reducing the overall production cost and lead time. By switching the material from titanium to aluminum, we were able to reduce production time and field the systems quicker to the Soldiers," Hazlett said.
After extensive audits and negotiations with GDATP, a savings of $38 million was achieved for this firm fixed price contract - $19 million for both the government and GDATP. This is the biggest cost saving VECP achieved by ACC-New Jersey.
According to Hazlett, this may have been a long process but a very rewarding one.
"With budgets being reduced, there has been a push to reduce cost and pursue more competitive actions. VECP gives us another tool to reduce costs for the government and taxpayers," said Hazlett.