Maybe get a few friends together (or else just them and you) and either cook or take them out to dinner to celebrate, and toast their engagement then. It's still so new, maybe a little bride-and-groom fuss over them will mean more than a gift right now.

If you prefer a gift -- well, he is your good friend; we don't even know him -- so you are in a better position than we are to know what they might like as a gift. The only suggestion I can think of is a scrapbook or album to collect souvenirs of their wedding planning. I was really glad I kept one; I think I like it even better than the wedding albums, because it reminds me of all the very little things that were so much fun that I probably would have forgotten over the years (e.g. -- correspondence with my mom about decisions, a photo of us getting our marriage license (next to a "NO REFUNDS" sign), a napkin from a celebratory lunch out with a friend, snapshots of gown and tuxedo fittings).

Most often engagement parties are hosted by one set of parents and they invite family and close family friends so it is possible that the couple has had, or will have, an engagement party to which work associates may not be invited. And the party may not be held in your community.

A bottle of wine or champagne or something the couple can use in their planning would be an appropriate gift. I like Gellchom's idea of the scrapbook. I made a similar one for my daughter's wedding. It includes photos from her showers, decorating for the reception, the rehearsal dinner - everything leading up to the wedding.