The State Department’s inspector general recently called out the agency for failing to perform value engineering studies on numerous new programs worth more than $5 million as required by Office of Management and Budget‘s Circular A-131.
The inspector general said in an August 13 report that the State Department had, as of June 7, engaged in “532 procurement actions related to… contracts” that exceeded the $5 million threshold without conducting the requisite VE analysis, according to USASpending.gov.
OMB Circular A-131 describes value engineering as “a methodology for analyzing functions of an item or process” to determine “the lowest life-cycle cost while maintaining acceptable levels of performance and quality.”
The circular instructs agencies to carry out VE studies “to ensure realistic budgets” as well as “identify and remove nonessential capital and operating costs.”
The inspector general attributed the State Department’s lack of a VE program in part to the absence of a senior accountable official, whose appointment is also mandated by the OMB circular.
The government watchdog subsequently recommended that the agency appoint an SAO “with sufficient authority to… ensure the appropriate consideration and use of value engineering” and consult with the same official to implement an agency-wide VE program.