On Friday, September 5, 2014, the Federal Highway Administration (“FHWA”) published its final rule for Value Engineering (“VE”) for road and bridge projects.  The new rule implements changes made to VE requirements under Moving Ahead for Progress in the 21st Century (“MAP-21”), the last surface transportation authorization law that was signed into law in July 2012.

The FHWA’s final rule for VE increases the project thresholds that trigger a VE analysis, eliminates the VE analysis requirement for design-build projects, and defines the requirements for a state Department of Transportation (“DOT”) to establish and sustain a VE program.  Particularly, the prior project thresholds that prompted a VE analysis included federal-aid highway projects on the National Highway System (“NHS”) costing $25 million or more (as established in the National Highway System Designation Act of 1995) and bridge projects with an estimated total cost of $20 million or more and any other projects as determined by the Secretary of Transportation (as established in SAFETEA-LU in 2005).  Under the new rule, the project thresholds for VE are $50,000,000 or more for projects on the NHS that use federal-aid highway program funding assistance and $40,000,000 or more for bridge projects on the NHS that receive federal assistance.

In addition, the new rule eliminates the requirement for VE on design-build projects.  It should be noted, however, that under the new rule the FHWA continues to “encourage” a VE analysis for design-build projects on or off the NHS with an estimated cost of $25 million or more.

Finally, the new rule establishes the requirements for state DOTs to create VE programs for all applicable projects.

The final rule for VE goes into effect on October 6, 2014.