1. I n t e g r i t y - S e r v i c e - E x c e l l e n c e Headquarters U.S. Air Force Base Conversion Directorate Presented by Lt. Col. Daniel Welch AFCEE/BC 19 Aug 2004

2. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 1 Overview  Base Conversion Directorate  Performance Based Cleanup (PBC) Acquisition Strategy for the Air Force Real Property Agency (AFRPA)

3. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 2 Base Conversion Directorate (AFCEE/BC) Geri Lira Directorate Secretary Geri Lira Directorate Secretary LtCol Daniel L. Welch Director Maj William J. Gooden Technical Assistant LtCol Daniel L. Welch Director Maj William J. Gooden Technical Assistant West Division George Gauger Division Chief Staff of 14 West Division George Gauger Division Chief Staff of 14 East Division Dennis Lundquist Division Chief Staff of 13 East Division Dennis Lundquist Division Chief Staff of 13

4. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 3 AFCEE Piece of the AF BRAC Pie Dollars in Millions

5. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 4 Services  Environmental Restoration at Closure Bases for Air Force Real Property Agency (AFRPA)  Cradle-to-Grave Environmental Restoration Services  Assistance in Project & Program Definition and Development  Environmental Project Execution Site Investigations/Studies Site Remediation Long Term Monitoring Remedial Process Optimization Quality Control/Quality Assurance

6. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 5 Services (continued)  Participation in Regulatory / Community Interface  Performance Based Contracting  Evaluate and Educate on Innovative Technologies

7. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 6 Contract Capabilities  Environmental A&E Contracts (4P-AE)  Worldwide Environmental Restoration and Construction (WERC)  Support Contractors Global Engineering Integration and Technical Assistance (GEITA) Independent Systems Engineering & Acquisition Support (ISE&AS)

8. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 7 Performance Based Cleanup (PBC) Acquisition Strategy for AFRPA

9. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 8 PBC Objectives and Goal  Objectives Protection of Human Health and the Environment Accelerates closeout and/or reduces lifecycle costs Shift risk from the Government to private sector Harnesses innovations/creativity of the private sector Includes a full suite of contract tools  Goal is to match the “problem” with the best solution

10. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 9 What is PBC?  Performance Based Contracting (PBC) – Focus on results, rather than methods Set measurable performance objectives Set quality standards Identify incentives, when appropriate  PBCs vary depending on project objectives and risk, e.g. Guaranteed Fixed Price Remediation (includes insurance) Firm Fixed Price (without insurance) Firm Fixed Price with incentives

11. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 10 Developing an AFCEE Strategy  Initial Strategy: Categorize sites using decision logic framework Embraces lessons learned from Army & private sector PBC efforts Will site achieve SC within 9 yrs? Will site achieve RC within 5-9 yrs? Active remediation, alternate technology? Active IRP Site Evaluation FFP PBC Candidate Yes No FFP & FFP w/ Incentives PBC Candidate Yes GFPR Candidate No Optimization

12. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 11 PBC Assumptions  Contracts will be competitively solicited among WERC contractors  Period of Performance will be up to 5 years, plus 4 option years  Activities will be funded during first 5 years only Profile for annual funding Fund options in year five  Target: one contract per base, group bases where appropriate  Exclude chemical warfare materials, radiological, munitions/explosives handling from scope

13. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 12 Site Closeout Category  Site closure scheduled within the next 9 years*, in general: Lock-in planned closure date Less risk, insurance not recommended Recommended Firm Fixed Price PBC  Considerations: Ensure contractors meet or beat site closure milestones Cost savings through competition and economies of scale *Based on 5-year PoP and 4 option years; subject to change

14. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 13 Response Complete Category  Response complete scheduled in the next 9 years*: Lock-in response complete by planned date – no slippage! Increased contractor risk  Recommended approach: Firm Fixed Price to achieve response complete milestones Incentives to achieve accelerated site closure  Considerations: Savings resulting from competition and innovation Opportunity for reduced schedules Consider incentives for accelerated response complete *Based on 5-year PoP and 4 option years; subject to change

15. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 14 Alternate Technology Category  Active remediation with response complete >10 years and alternative technology available Performance objectives tailored to site Higher contractor risk Example: Pump and treat  Recommended approach Guaranteed Fixed Price Remediation PBC Use pre-solicitation process to determine if alternative technology exists Consider shared savings for cost reduction  Considerations: Affords greatest opportunity for significant lifecycle savings Cost/ benefit analysis to evaluate funding profile Increased regulator interaction/negotiation High early investment requirements – budget limitations

16. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 15 Optimization Category  If site closure or response complete >10 years and alternative technology not available Performance objective is reduced costs Low contractor risk Examples: Landfill cap; LTM  Recommended approach Firm Fixed Price with incentives to reduce lifecycle costs Share cost savings  Considerations: No special considerations

17. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 16 Bases for PBC  AFRPA Div A Griffiss Grissom Homestead Loring Pease Plattsburg  AFRPA Div B Gentile Newark Rickenbacker KI Sawyer Wurtsmith  AFRPA Div D Castle George March Mather Norton Group Ohio Group Michigan Group

18. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 17 Implementation  Total PBC Initiative Contract Value First Year Total $20-30 Million for 16 Bases Total Contract Value Up To $200 Million  Verify Site and Funding Data  Fine Tune Strategy to Site/Base  Develop briefing/education materials for all the players  Form implementation teams (e.g., AFRPA, BEC, AFCEE, regulator, LRA)  Develop Statement of Objectives (SOO)

19. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 18 Implementation  Contracting schedule – 5 1/2 months to contract award from scoping effort Pre-Solicitation Package (Draft SOO) On-Site and Regulator Meetings Shorten timeframe where feasible Contractor selection: best value evaluation  Ohio Bases Expedited as Prototype  PBC Phasing Phase 1: Gentile, Newark & Rickenbacker (Ohio Group); Grissom; Homestead; Mather; and Castle Phase 2: Loring & Pease; K.I Sawyer & Wurtsmith; Plattsburgh, Norton; and George Phase 3: March  Develop/execute contract transition plans

20. I n t e g r i t y - S e r v i c e - E x c e l l e n c e 19 ISSUES  Contractor/regulator/Air Force interface  Contract oversight  FY05 budget limitations