Clauses · FAR · Administration and definitions
FAR 52.248-3 Value Engineering-Construction
Does the regulation require it to flow down?
Yes
Paragraph (h), quoted: 'The Contractor shall include an appropriate value engineering clause in any subcontract of $90,000 or more and may include one in subcontracts of lesser value.' The mandate bites at $90,000 and above (raised from $75,000 effective 2025-10-01) and is permissive below it. This is a genuine regulatory flow-down — one of the few in this batch — but it is conditioned on the prime contract being a construction contract in the first place, which is exactly the condition two of the three corpus templates handle badly.
- Form
- substance — paragraph (h) requires 'an appropriate value engineering clause', not this clause verbatim; the prime chooses the instrument, the duty to insert one is the mandate
- Reaches
- all tiers — self-perpetuating: once a sub holds a value engineering clause it is itself the 'Contractor' for purposes of (h) and owes the same insertion duty downward
Checked against acquisition.gov on 2026-08-05 · edition OCT 2025 (Basic; Alt I APR 1984) · base v0.9.3 Read the text ↗
What it makes you produce
2 items for your checklist, slowest first.
Something you write2
Days to weeks, and nobody outside your company has to agree to it.
A value engineering change proposal for the construction work, developed, prepared and submitted voluntarily
FAR 52.248-3(a)- FAR 52.248-3(h)
An appropriate value engineering clause written into your own lower-tier subcontracts
Owed for a lower-tier subcontract of $90,000 or more; below that it may be included at your option
When it is used
FAR 48.202, quoted: the CO 'shall insert the clause at 52.248-3, Value Engineering-Construction, in CONSTRUCTION solicitations and contracts when the contract amount is estimated to exceed the simplified acquisition threshold' ($350k since 2025-10-01), 'unless an incentive contract is contemplated.' Below the SAT the CO MAY include it where there is potential for significant savings; in incentive-type construction contracts the CO SHALL NOT include it. Alternate I (Apr 1984) is used when the head of the contracting activity determines that the cost of calculating and tracking collateral savings will exceed the benefits — it deletes paragraph (g) and redesignates. Supplies and services take 52.248-1 under 48.201 instead, and 48.201(a)(5) carves commercial products out of the value engineering clause altogether unless they involve packaging specifications or other special requirements. The construction restriction is the whole trigger and it is the one primes drop: see changes2025_26.
Read closely
(a) encourages a proposal and requires none; the development cost comes back only through the share on one that is accepted. (h) is the real mandate and it bites at $90,000, raised from $75,000 on 2025-10-01. The clause belongs to construction work — on supplies or services 52.248-1 governs instead — and any value engineering payment you promise a lower tier comes out of your share rather than the Government's.
The 3 templates that name it, with the line
Source: acquisition.gov, FAR 52.248-3, FAR 48.202 and FAR 48.201(a) (verified 2026-08-05); threshold change confirmed against the Federal Register inflation-adjustment final rule of 2025-08-27 (FAC 2025-06, FAR Case 2024-001) and against rtx-usg-flowdown-nov-2024 / rtx-usg-flowdown-updates-nov-2025
This is research, not legal advice. It states what the regulation says about this clause and cites the paragraph behind it. It does not rule on your order, and it does not rule on whether a prime's markings are correct.