AIR FORCE SPACE COMMAND UTILITY PRIVATIZATION

1. AIR FORCE SPACE COMMAND UTILITY PRIVATIZATION Introduction to Federal Contracting For Utilities Privatization (UP)

2. Overview The Process Milestones Source Selection Assistance Procurement Integrity Conclusion Questions

3. ROLES & RESPONSIBILITIES: - INSTALLATION - pursue potential, identify, justify, assess - MAJCOMs - primary execution responsibility; develop, evaluate and submit projects; assess impact - USAF/ILE - program management, policy development, funds advocacy, and guidance - SAF/IEI - approval authority for transfers, Congressional notification - AFCESA - provide contract/technical support to analysis of privatization candidates - AFCEE - provide tech support to environmental requirements including baseline survey - DESC - MOU for contracting support for Texas Regional Demo--potentially moreROLES & RESPONSIBILITIES: - INSTALLATION - pursue potential, identify, justify, assess - MAJCOMs - primary execution responsibility; develop, evaluate and submit projects; assess impact - USAF/ILE - program management, policy development, funds advocacy, and guidance - SAF/IEI - approval authority for transfers, Congressional notification - AFCESA - provide contract/technical support to analysis of privatization candidates - AFCEE - provide tech support to environmental requirements including baseline survey - DESC - MOU for contracting support for Texas Regional Demo--potentially more

8. This is the roadmap which an acquisition follows in the source selection process for a negotiated best value contract. I will discuss each of these steps in more detail. Before starting this, however, I should first highlight some of the recent changes which affect this process. AFPSC developed streamlined processes using single documents for all AFSPC sites including Request for Information Acquisition Strategy Panel Acquisition Plan Source Selection Plan Core group of SSET and PRAG participants to minimize learning �ramp-up� time plus augmentees from bases Helpful if same base personnel are involved through entire process Using Median Source Selection Procedures This is the roadmap which an acquisition follows in the source selection process for a negotiated best value contract. I will discuss each of these steps in more detail. Before starting this, however, I should first highlight some of the recent changes which affect this process. AFPSC developed streamlined processes using single documents for all AFSPC sites including Request for Information Acquisition Strategy Panel Acquisition Plan Source Selection Plan Core group of SSET and PRAG participants to minimize learning �ramp-up� time plus augmentees from bases Helpful if same base personnel are involved through entire process Using Median Source Selection Procedures

9. Source Selection Organization--AFSPC A typical source selection is organized similar to this slide. The ultimate decision maker is the source selection authority; the single individual empowered to make the final selection. He is supported by a source selection advisory committee, a matrixed body of relatively high ranked experts who will oversee the process and prepare its findings for the SSA. The Source Selection EvaluationTeam is the matrixed body that does the real nuts and bolts evaluations of the proposals. It is broken down into functional specialty areas that look at the key discriminating factor and subfactors, cost and risk. The number of members is based on the type of acquisition and need for support. Advisors may augment the core team on an ad hoc basis. Wing (Base) Participation after RFP closes: Performance Risk Assessment Group (PRAG) Wing Representative to Command the week prior to Source Selection Evaluation Team (SSET); Training SSET Initial Wing Representatives to Command for initial evaluation and discussions Initial SSET Begins SSET Discussions continue as needed SSET Final Wing Representative to Command Final SSET Begins Source Selection Advisory Council (SSAC) Representation AFSPC and Wing Representatives Wing CE participate in Evaluating technical proposals and past performance information of offerors Writing evaluation assessments and evaluation notices Discussions with offerors Provide data for SSET report Provide data for Decision slides Debriefings to offerors Wing FM (Finance) will Certify the Government Cost Estimate Must understand the Economic Analysis Model Work with AFSPC/FM on POM for contract costs beyond initial award and transition Wing JA (Legal) will provide to AFSPC JA: Base specific information regarding water, wastewater, natural gas, and electricity issues Federal/state/local environmental issues Provide advice/assistance during process where requested A typical source selection is organized similar to this slide. The ultimate decision maker is the source selection authority; the single individual empowered to make the final selection. He is supported by a source selection advisory committee, a matrixed body of relatively high ranked experts who will oversee the process and prepare its findings for the SSA. The Source Selection EvaluationTeam is the matrixed body that does the real nuts and bolts evaluations of the proposals. It is broken down into functional specialty areas that look at the key discriminating factor and subfactors, cost and risk. The number of members is based on the type of acquisition and need for support. Advisors may augment the core team on an ad hoc basis. Wing (Base) Participation after RFP closes: Performance Risk Assessment Group (PRAG) Wing Representative to Command the week prior to Source Selection Evaluation Team (SSET); Training SSET Initial Wing Representatives to Command for initial evaluation and discussions Initial SSET Begins SSET Discussions continue as needed SSET Final Wing Representative to Command Final SSET Begins Source Selection Advisory Council (SSAC) Representation AFSPC and Wing Representatives Wing CE participate in Evaluating technical proposals and past performance information of offerors Writing evaluation assessments and evaluation notices Discussions with offerors Provide data for SSET report Provide data for Decision slides Debriefings to offerors Wing FM (Finance) will Certify the Government Cost Estimate Must understand the Economic Analysis Model Work with AFSPC/FM on POM for contract costs beyond initial award and transition Wing JA (Legal) will provide to AFSPC JA: Base specific information regarding water, wastewater, natural gas, and electricity issues Federal/state/local environmental issues Provide advice/assistance during process where requested

13. Assistance Sources for Assistance: Air Force Source Selection Policy http://www.safaq.hq.af.mil/contracting/index.html Air Force Civil Engineering Support Agency http://www.afcesa.af.mil Air Force Federal Acquisition Regulation (FAR) site http://farsite.hill.af.mil (All Clauses) http://www.arnet.gov/far (FAR Clauses only)

14. 10 USC 2688 � Congress wants the best value What is best value? Do we have separate FAR authority for Utilities Privatization? Could we do it for less than 50 years? What are the 3 bid amounts? 3 bid amounts 1 � monthly credit for purchase price, amortizing over a number of months at the proposed annual % 2- fixed monthly charge: cost of providing services, O&M, overhead 3 � monthly credit to gov for non-performance: routine, urgents, emergency when contractor is unable to perform as required. Can change for items beyond contractor control: fuel adjustments 10 USC 2688 � Congress wants the best value What is best value? Do we have separate FAR authority for Utilities Privatization? Could we do it for less than 50 years? What are the 3 bid amounts? 3 bid amounts 1 � monthly credit for purchase price, amortizing over a number of months at the proposed annual % 2- fixed monthly charge: cost of providing services, O&M, overhead 3 � monthly credit to gov for non-performance: routine, urgents, emergency when contractor is unable to perform as required. Can change for items beyond contractor control: fuel adjustments

15. Conclusion DoD emphasis on AFSPC fully evaluating UP systems for privatization AFSPC doing everything possible to minimize workload on Wing (Base) personnel Success is defined as SSA decision for Competitive RFPs by 30 Sep 05

16. Questions Questions?

18. Milestones Key Dates are established by AF/ILEXO and AFCESA for each specific location and include dates: Kickoff Meeting (Begin RFP) briefings include: Wing senior leadership on entire UP program; Wing Civil Engineers, Finance, Legal, and Contracting briefed on entire source selection process and needed support Issue RFPs to Industry Site Visit, Pre-Proposal Conference, One-On-One Discussions Questions from offerors and Government answers posted to FedBizOpps Close RFPs (RFP deadline dates for proposal submission) Source Selection Authority (SSA) Decisions briefed to AF UP Executive Steering Group

21. Mission Capability Subfactor Rating Six Subfactors: Service Interruption/Contingency Quality Management Capital Upgrades and Renewals & Replacements Operational Transition Financial Capability Small Business

22. Proposal Risk AFFARS 5315.305 (a)(3)(ii) Identification and assessment of Risk Associated with an offeror�s proposal approach Rated as:

23. Past Performance Assessment of offeror�s present and past work record

24. The goal of the cost evaluation is to arrive at an evaluated price for each offeror. Whether the contract type will be fixed price or cost reimbursement, the evaluated price is always assessed to ensure it is reasonable. Generally, this is a go no-go factor for purposes of award-not a comparative selection factor. Cost realism is essentially a risk assessment tool use to assess an offeror's ability to perform the contract at the offered price, given an offeror's unique approach and methods of performance. The structured review of cost ensures they are consistent with the technical approach and reflect good understanding of the complexity of the effort. The aim is to ensure costs are neither greatly exaggerated nor understated and that we don't run the risk of a large cost overrun. Evaluating cost realism also helps develop the most probable cost estimate which adjusts proposed costs upward or downward to reflect the probable ultimate cost to the Government.The goal of the cost evaluation is to arrive at an evaluated price for each offeror. Whether the contract type will be fixed price or cost reimbursement, the evaluated price is always assessed to ensure it is reasonable. Generally, this is a go no-go factor for purposes of award-not a comparative selection factor. Cost realism is essentially a risk assessment tool use to assess an offeror's ability to perform the contract at the offered price, given an offeror's unique approach and methods of performance. The structured review of cost ensures they are consistent with the technical approach and reflect good understanding of the complexity of the effort. The aim is to ensure costs are neither greatly exaggerated nor understated and that we don't run the risk of a large cost overrun. Evaluating cost realism also helps develop the most probable cost estimate which adjusts proposed costs upward or downward to reflect the probable ultimate cost to the Government.

25. Discussions Negotiations conducted in a competitive environment after determination of competitive range Objective: To maximize the Government�s ability to get the best value; to fully understand what was proposed; and share cost comparison with GCE Evaluation Notices are issued to offerors in competitive range Means to clarify and discuss proposals Change Pages to Impacted Proposal Data Requested Once discussions concluded, complete file must be reviewed by MAJCOM Contracting Personnel and Clearance granted prior to requesting Final Proposal Revisions Reference: FAR 15.306(d) Deficiency requests are issued when a requirement is not met. The effect of the deficiency should be documented in the narrative. (BB-306(a)) There are two type of CRs, significant CRs and Minor CRs. (BB-307) Minor clarifications are just that. They give the offeror the opportunity to correct minor informality or irregularities such as clerical mistakes. MCRs do not constitute discussion and the offeror does not have the opportunity to revise its proposal. SCRs are truly clarifications. These are used when there are areas of the proposal where there is not enough information to determine if the standards have been met or where there are contradictions in the proposal needing clarification. SCRs constitute discussions. MCRs can be sent prior to the competitive range subject to legal concurrence. (BB-307(a)(2)) However, this should only be done it award without discussion is anticipated. (AFSPC BB-307(a))Deficiency requests are issued when a requirement is not met. The effect of the deficiency should be documented in the narrative. (BB-306(a)) There are two type of CRs, significant CRs and Minor CRs. (BB-307) Minor clarifications are just that. They give the offeror the opportunity to correct minor informality or irregularities such as clerical mistakes. MCRs do not constitute discussion and the offeror does not have the opportunity to revise its proposal. SCRs are truly clarifications. These are used when there are areas of the proposal where there is not enough information to determine if the standards have been met or where there are contradictions in the proposal needing clarification. SCRs constitute discussions. MCRs can be sent prior to the competitive range subject to legal concurrence. (BB-307(a)(2)) However, this should only be done it award without discussion is anticipated. (AFSPC BB-307(a))

26. Awardability Other aspects of the proposal Proposed Terms and Conditions Pre-Award Surveys Required Certifications Responsibility Determination (FAR 9) Must Be Below Government Cost Estimate (GCE) IAW 10 U.S.C. 2688