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04145 - (B321475]
Department of Defense Value !p aring fr :au Voed: To.
Management Support. PUD-787-- .65167. 0.vosb 'i6, M7. 0
pp. + 2 appendices (1 pr.).
Report to the Zouqress; by Eler B. L Stats, Comptrellex General.
Issue Area: Federal Prokurame'nt of (oeds and Sjrvics (1900i.
Federal Procureent of cOds an- 6- ca: Noti.4yng the
Corress of Status of 12portnnt Procurement Progzabs (1905).
Contact: Procurement a 0 Systsus acguisition Di-1
Budget Function: Natioc-l Defense: Meap Systews (057);
National Defense: Department of Defense - Procuremeht S
Contracts (058).
Organization Concerned: Department ot Defense.
Congressional Relevance Rouse Committee on Armed Services;
Senate committee on kra. d Services; ongress.
The Department of Defense (DOD) value engineering
proqran for contractors was set up to stimulate contractors to
develop and propose cost saving changes to contracts requiring
unnecessary expense. Although savings on scme major programs
have been impressive and show that costs for major Dffensi
weapon systems can be cut down considerably, few systems have
active value enqineering programs findings/Conclusions: The
program has alr.e.4y saved over $700 million, but savings have
declined sharply since 1971, and the program baa fallen far
short of its potential. savings for 1975 and 1976 were the
lowest since 1967. Bost major programs being developed and
produced during 1976 had no savings at all, inciuding many with
very high price tags. The lack of Defense management acceptance
2nd support has been the basic and most critical factor impeding
the performance of the value evaluation program, and correction
of this weakness is the most essential need of the progra&. The
lack of management support has been the most pronounced in the
Kavy and the Air Force. Savings of $1 killion in the Leit 4
years can be achieved if DOD's assessment of the Frogram's
minimum savings potential is realized, Reconmendaticns: The
Secretary of Defense should take steps to guarantee aggressive
support and active promotion of the valne engimeering program by
service secretaries and managers and# in conjunction with
congressional Appropriations Committee hearings on major weapon
systems, inform the Congress of value engineering rrcgran
savings on those systems. (Author/SC)](ViewImageLocal?handle=hein.gao/gaobaawgg0001&div=1&collection=&method=preview&ext=.png&size=3)