1 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 USACE PERSPECTIVES ON CONTRACTING PROGRAMS FUDS FOCUS Robert F. Lubbert, P.E. 14 April 2005 Chief, Environmental Support Team HQ, US Army Corps of Engineers (CEMP-DE) (202) JOINT SERVICES ENVIRONMENTAL MANAGEMENT CONFERENCE

2 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Topics Army Cleanup Program PBC Definition and Army Cleanup Active Army Goals Other Programs Goals Role Change for Government PBC and FUDS Focus

3 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Army Cleanup Program Significant changes in cleanup program –Transformation of Installation Management –Army Environmental Cleanup Strategy/Plan –Performance Based Contracting (PBC) initiative All of above provide opportunity for major change in cleanup program management –Potential existed for major impact to US Army Corps of Engineers (USACE)

4 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Standardization Across Programs Cleanup is cleanup –CERCLA, RCRA, SDWA, etc., etc. Army saw a need to standardize guidance –Formerly Used Defense Sites (FUDS) –Army active installation restoration –Army BRAC cleanup –Army compliance-related cleanup Army also standardized program management

5 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Army Goals for Active Installations Reduce the number of contracts and contract actions at an installation from many today to about 3 contracts in the future –Firm Fixed Price w/Incentive for characterized sites –Guaranteed Fixed Price Remediation w/Insurance for lesser known sites –Incentivized contract for long-term management Support transition to PBC for 30% of the program in FY04 and escalate until Army reaches its 80% target in FY07

6 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 PBC Definition Performance-Based Contracting (PBC) is a mechanism that solicits bids on the basis of what RESULTS you want achieved rather than what ACTIVITIES you want conducted –Contract for “What,” not “How” Characteristics of PBC: –Clearly defined performance expectations and measures –Clearly defined due dates & milestones Reference, FAR, Subpart

7 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Army Cleanup Program Definition of PBC Acquisition “Tool Box” for PBC includes… –Fixed Price Remediation using Statement of Objectives –Fixed Price Remediation using Incentives –Guaranteed Fixed Price Remediation (GFPR) Cost Cap Insurance and/or Pollution Liability Insurance No option for other than “Fixed Price”

8 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Performance Measures Performance is measured by facility construction, product recovery, reduction of mass, etc Performance can also be measured by other means, e.g., customer satisfaction surveys; Performance is rewarded by faster payments once reduction milestones are reached

9 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 PBC by Programs Army - FY04 – 30% (stretch 40%) FUDS - FY04 – 3 sites nominated (KC, Omaha and HNC) ESFO - EPA Researching Air Force - ACC to perform all work using PBC

10 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Role Change for Government Since the contractor assumes most risk (including cost risk), the Government must be less directive. Role of Government Representative changes from giving direction to ensuring the designated contract outcomes are met. Government evaluates the final outcome not the method used to reach that outcome.

11 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Sample Environmental Contract Toolbox: Omaha District Environmental Remediation Services (ERS) Contracts –9 Regional Contracts (including Hubzone) $300 M total capacity. –Support various customers including Army, Air Force, EPA, and other civilian customers nationwide. –Include both FFP (with or without incentives) and CR. TERC V –Will include Cost Reimbursement with Incentives (and PBC features). Fixed Price Remediation w/Insurance Contracts: –Nationwide Contracts, $500 M total capacity –1 ERS/Construction Contract. –2 Multiple Award Remediation Contract (MARC) Pools. Up to 3 unrestricted contracts for ERS. Up to 3 small business contracts for ERS.

12 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Pacific Ocean North Atlantic Northwestern Southwestern South Pacific South Atlantic LRD LEGEND: Division HQ location Division boundary District boundary State boundary LEGEND: Division HQ location Division boundary District boundary State boundary Pacific Ocean Division FUDS PROGRAM BOUNDARIES * Huntington District remain as Project Manager for all FUDS Projects in WV in LRD * 7

13 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 FUDS POM $ $34* 30 $30* $70.6* $221 $283 $265.9 $228 $234 *Plus up by Congress $50 FY05 PBC for FUDS 7.5%

14 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 FUDS Goals for Performance Based Contracting FUDS PBC goals in FUDS PMP to support of Army Cleanup Strategy ODEP policy for active installations defining PBC as Fixed Price Remediation with Task Order competition FUDS Funding Goals for PBC: FY %, FY %, FY07 – 25%, FY08 – 25% FUDS policy being developed FY05 workplan – 7.5% fixed price for new remediation tasks Consider performance-based criteria with other contract types Reevaluate FUDS goals after reviewing results 21

15 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Fixed Price Remediation w/ Insurance (FPRI) FPRI Contracts are a subset of Performance-Based Contracts FPRI Contracts should be used where uncertainties exist (within reason) The insurance policy allows the contractor to transfer risk to the insurance company via the policy

16 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Fixed Price Remediation w/ Insurance (FPRI) $250M shared capacity contract awarded to CH2M Hill, Tetra Tech FW, and Weston Solutions by Huntsville – Sept. 17, 2004 $4.6M task order awarded to CH2M Hill for work at former Lowry Bombing and Gunnery Range Bombing, Target #5 The award is one two-year base and three one-year options

17 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 FUDS Military Munitions Remediation Program Site Inspections (SIs) OSD Goal: SIs to be completed by 2010 for approximately 1200 FUDS Acquisition Strategy –Utilize HNC 1.5B IDIQ contracts –Task Order award to be Performance Based and Fixed Price –Award to be Best Value –Scope of Work/Performance Work Statement to follow CERCLA and ER –Funding: $8M for FY05, $20M for FY06-FY09 and $12M for FY10 FY05 Schedule –Performance Work Statement Request For Proposals issued 7 March 05 –Proposals due 15 April 05 –Task Order Award 26 May 05

18 U.S. Army Corps of Engineers – Environmental Community 4/27/2015 Summary USACE is Committed to Use of PBCs The FY06 FUDS Workplan Includes Increased Use of the PBCs in Support of the Army Strategy

19 U.S. Army Corps of Engineers – Environmental Community 4/27/2015