How does the value engineering change proposal (VECP) benefit both the government and the contractor?

Since the government creates the VECP, all cost savings are retained by the government.

Any savings resulting from the VECP are typically shared between the Government and the contractor as defined in the specific sharing arrangement

Contractor proposed changes that result in cost savings for the government do not change the contractor's profit

The contractor is encouraged to innovate and while the government retains all cost savings