Army Implementation of Performance-Based Contracting

1. Army Implementation of Performance-Based Contracting 29 Jun 05 Mr. Jim Daniel Chief, Cleanup Division, USAEC

2. Army Implementation of PBC Why Use PBC? • Performance-Based Contracting is intended to improve cost and schedule performance without compromising cleanups that are protective of human health and the environment • Lower risk of cost growth • Accelerates cleanup / property transfer • Can be aligned to exit strategies or used to optimize systems • Cost effective / lower remediation costs

3. Army Implementation of PBC PBC for Environmental Cleanup • Goal is for Contractor to achieve one or more of the following performance objectives for each site identified in the PWS: • Remedy in Place with successful 5-year review • Response complete • Long-term monitoring with successful 5-year review • Operating and performing successfully (OPS) • Implementation of ramp down and/or exit strategy

4. Army Implementation of PBC Metrics • Installation Restoration Program PBC goals: • FY03: 3-5% of total program – achieved 9% ($37M) • FY04: 30% of total program – achieved 36% ($141M) • FY05: 50% of total program  GOAL ~$200M • FY06: 60% of total program • FY07+: 70% of total program

5. Army Implementation of PBC Results of the PBC Initiative • Since 2000, Army has awarded more than 30 PBCs • $300 million in contract capacity • Range in value from $700,000 to $52.4 million • In FY04, 36% of Army’s restoration program was put on performance-based contracts (~$140 million) • Contracts in 24 states and all 10 EPA Regions • FY05 Summary: • $130M applied to PBC through May 05 • 9 new PBC awards through May 05 • 16 others at some stage of procurement

6. Army Implementation of PBC Army PBC Awards to Date* Hawaii BRAC Active * Installation locations are approximate

7. Army Implementation of PBC The Army PBC Process Preliminary Screening / On-Site Evaluation Draft and/or refine PWS/RFQ and IGE Is installation good PBC candidate? Is there agreement on the PWS/RFQ and IGE? Y Seek input on PWS/RFQ and IGE N N Can additional activities help candidacy? Is there a technically acceptable proposal? Y Release RFQ Conduct additional activities to prepare for PBC in future Y Y Bidders Site Visit Award PBC N N Proceed with current path forward Conduct technical evaluation Post-Award / Contract Implementation Regulator Involvement

8. Army Implementation of PBC The Future of the Army Initiative • Continue current path for active and BRAC sites • Nearly 30 evaluations or procurement actions on-going • Evaluate viability for use in other areas • Military Munitions Response Program • SI pilot • Regional Long-term Management Contracts • Slow to develop (demand has to mature) • Continue to learn from awarded contracts

9. Army Implementation of PBC Observations and Challenges from the Past Four Years • Project planning needs to be a team effort • Clearly defined endpoints and objectives are required • Including regulators throughout the process significantly increases acceptance • Knowledgeable Contracting Officer and Contracting Officer Representative are required • Timely input of evaluations of contractor performance into database is essential

10. Army Implementation of PBC Observations and Challenges from the Past Four Years • Competition is key to a fair price • Contractor transition is critical • There is a short-term impact to the installation program during the transition to a PBC

11. Army Implementation of PBC Continuing Challenges • Balancing contractor risk, cost for the work, and desire to achieve site closeout against the uncertainties • Ensuring sufficient contractor pool • Determining appropriate performance objectives

12. Army Implementation of PBC Resources Performance-Based Contracting web pagehttp://aec.army.mil/usaec/cleanup/pbc00.html

13. Army Implementation of PBC BACKUP SLIDES

14. Army Implementation of PBC PBC Accomplishments

15. Army Implementation of PBC FY05 Planned Procurements • Aberdeen Proving Ground, MD (3 procurements) • Alaska installations (Fort Richardson / Haines Terminal) (2 procurements) • Camp Bullis / Fort Sam Houston, TX • Camp Crowder, MO / Fort Chaffee, AR • Dugway Proving Ground, UT • Fort Drum, NY • Camp Navajo, AZ (Awarded) • Fort Gillem, GA • Fort Knox, KY • Fort Meade, MD • Fort Pickett, VA • Joliet Army Ammunition Plant, IL • Hawaii installations (Tripler / Schofield Barracks) (Awarded) • Longhorn AAP, TX • Los Alamitos / Camp Roberts, CA • Picatinny Arsenal, NJ • Ravenna AAP, OH • Redstone Arsenal, AL • Soldier System Center, MA