ASBCA Allows Contractor To Recover For "Constructive" VECP

On May 9, 2024, the Armed Services Board of Contract Appeals ("ASBCA" or "Board") allowed a contractor to recover for a "constructive" value engineering change proposal ("VECP"). In Appeal of Herman JCG Co. JV, ASBCA No. 63235, the contractor had submitted a VECP pursuant to FAR 52.248-3, which allows contractors to share with the government savings occasioned by an accepted change to the project documents. In this case, the contractor proposed eliminating trailers required to relocate government personnel during a renovation project by phasing the project. The government acknowledged the benefit of the proposal but rejected the VECP. The very next day, the government issued a unilateral modification which adopted the proposed phasing plan and sought a credit in the full amount of the contract savings from the contractor. The contractor disagreed, asserting that it was entitled to 55% of the credit obtained through use of the contractor-proposed phasing plan.