Value-Engineering Proposal

Published by the Government Accountability Office on 1971-11-18.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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    Dear Mrs. Heckler:

         This is in response to your request of September 16, 1971, that we
    consider a value-engineering proposal submitted by Mr. Louis S. Alongi,
    Attleboro, Massachusetts.

         Value -engineering is an extremely worthwhile program designed to
    achieve savings in the cost of acquiring, operating, and logistically
    supporting items or systems in the defense arsenal. Also, although
    the Department of Defense has made significant savings since the incep-  J'
    tion of its value-engineering program, there is no doubt that there is
    room for further improvement. In this regard we issued a report on
    August 25, 1969, on the opportunities for increased savings by improving
    management of the value engineering performed by contractors. One of the
    points we made was a need for development of new techniques to stimulate
    the interest of, and participation by, contractors in value engineering.

         Mr. Alongi suggested that annual savings of $500 million (2.5 per-
    cent of the applicable defense production of $20 billion a year) could
    be achieved through wider distribution of a periodic Department of De-
    fense publication that presents examples of successful value-engineering
    proposals. Mr. Alongi recommended that copies of the publication
    "Manufacturing-Cost Control Digest" be furnished to all employees of con-
    tractors performing defense contracts.

         Although Mr. Alongi's objective is commendable, there appears to be
    no way to estimate accurately what additional savings may accrue from
    wider distribution of the "Manufacturing-Cost Control Digest." At present
    copies are being distributed to about 9,500 defense contractors, and other
    steps are being taken by the Department of Defense for the purpose of ed-
    ucating contractors in the latest techniques available for reducing costs
    through value engineering.

         It is, of course, the responsibility of the Department of Defense to
    determine the extent of distribution of the "Manufacturing-Cost Control
    Digest" in administering the value-engineering program. In this case the
    Department has concluded that wider distribution is not warranted at this
    time. During our review we did not find a basis to question the Department
    of Defense's decision.

                              50TH ANNIVERSARY 1921- 1971

     In accordance with your request, we are returning the correspondence

                                     Sincerely yours,

                                     Comptroller General
                            Deputy   of the United States

Enclosures - 2

The Honorable Margaret M. Heckler
House of Representatives