PROJECT MANAGEMENT Project Termination

1. PROJECT MANAGEMENTProject Termination edlund.carl@epa.gov

2. Key Topics • Project Completion: • Confirmation with client that objectives met • File review and correction • Process considers: • legal, • technical, • administrative, • client, • your own organization’s future

3. Key Topics • Control of Finances: • Ways to ensure payment: • accurate/timely invoices, • personal contacts, • discounts for early payment • Contract terms; areas of greatest importance to a supplier: • Indemnification, • Insurance, • Payment terms

4. Key Topics • Sources: • Private Sector • Financing: • Public Sector • Foreign • Verification of Finances Why is it important to verify finances? To avoid a lein on the project or property or … your business!

5. Key Topics • Checklist for Project Management • A&E Contract Provisions: • Deliverables defined • Responsibilities of Client and Contractor • Payment • Termination • Insurance, Liability, Indemnification • Timetable

6. HOMEWORK #3Preparation of a Proposal • Situation: • Spilled: • 250 gal H2SO4 , • 4,000 gal gasoline • Recovered: 2,000 gal mixed • Discharged to King River: 50 gal? • In ground: 2,2000 gal? • GAG and SEA unhappy • ERU needs assessment, cost proposal ASAP

7. HOMEWORK #3Preparation of a Proposal • To adequately respond you need to: • first know the client, and • second understand the scope of work • Critical aspects to selling a proposal: • Timeliness, • simplicity, • understanding of scope, • sensitivity to cost, • presentation of alternatives, • [unique] qualifications

8. General Terminology • Contract: • Agreement between two or more parties [written] • Mutually binding • Legally enforceable Is it worth a trillion a year? Model for State, local, private sector Why study federal government contracting??

9. General Terminology • Acquisition (government term) • Goods or services obtained through contract • appropriated $ • ‘Acquisition Contracting’ • Purchasing (Not the kind of contracts we’ll discuss): • Small ($2,500 - $25,000) • Very Small (<$2,500)

10. Federal Contracting Authority • TWO DRIVING PRINCIPLES: • 1. Stewardship of Appropriated Funds • Full and open Competition • 2. Procurement ‘Above Reproach’: • Minimize: • Fraud • Waste • Abuse

11. Federal Contracting Authority • PL 93-400 Federal Procurement Policy Act: • Goal: full and open competition to the extent possible • Use of competitive procedures where practical • Sealed bids are ‘best’ • Competitive proposals if sealed bids are not possible • Non-competitive relationships are least desirable [e.g. sole source contracts] • Single Uniform regulation [Federal Acquisition Regulations- ‘FAR’]

12. Federal Acquisition Regulations • All federal procurements, all agencies • Maintained by: GSA, DoD, NASA, and EPA • Procurement Authority issued by GSA to each agency, subsequent delegations within each

13. Federal Acquisition RegulationsDifferent people you want to get to know • Contracting Officer (CO) • Authority to issue and cancel contracts • Personal signature • Contracting Specialist (CS) • Administers the contract. • Works directly for the CO • Contracting Officer’s Technical Representative (COTR) • Evaluates technical specifications and deliverables, • Monitors work progress Why do these people work in different offices ?

14. Federal Acquisition Regulations • Specifications are for ‘things’: • Technical attributes • Clear language • Avoid trademark or commercial description • Statement of Work (SOW) is for ‘services; • Task oriented • Meaningful measures • May be ambiguous [e.g. research] Performance-Based verses Specifications-Based Contracts … a growing trend [?]

15. Contract Types • Sealed Bid Contracts • FFP - Firm Fixed Price • Maximum risk for contractor • Minimum contract administration • FPE - Fixed Price with Economic Price Adjustments • Contingencies related to economy • Reduces contractor risk .. but … • FPI - Fixed Price Incentive • Profit adjustment • Shared risks/benefits • Performance incentive

16. Contract Types • Negotiated Contracts: • CPFF - Cost Plus Fixed Fee • Frequently used for R&D and environmental assessments • FF range: 5 to 15 percent • CPIF - Cost Plus Incentive Fee • Fee based on negotiated formula • General services use this • CPAF - Cost Plus Award Fee • Subjective evaluation of fee • Partial payment

17. Contract Types • Negotiated Contracts: • T & M - Time and Materials • Frequent for A & E and environmental services • Hourly rates • Materials at cost • T & M * Indefinite Delivery T/M • Flexibility for scheduling and levels of effort • Bounds set on agency obligations • SSC - Sole Source Contracts • Uniquely qualified contractor .. Unique product or service • Limited component of overall project • Misery to administer

18. Contract Types • Negotiated Contracts: • C%C - Cost Plus Percent of Cost • A ‘no - no’ … why? • Letter Contracts • No bidding/competition at all • Time of war, national emergency Q: Which form of contracting is most wanted by contractors, and why? A: Sealed bid FFP! This has the most potential for profit.

19. Balancing: Stewardship and Integrity HIGH FPI FFP FPE CPFF CPAF CPIF T&M SSC INTEGRITY REPROACH C%C LOW HIGH LOW STEWARDSHIP

20. Soliciting for Contracts • Commerce Business Daily • Prime vehicle but other advertising is also done • www.cbdweb.com • Types of announcements • Sources Sought • Notice of Intent • Pre-solicitation Notice • Timing: • 15 days before solicitation • at least 30 day notice period

21. Soliciting for Contracts • Sealed Bid Process • Basic • Two Step • Negotiated Contracts • RFP/RFQ

22. Bid Protests • Timing: • w/I 10 days • Made to: • Awarding Agency • GAO • Courts

23. SIKES

24. SIKES • HISTORY: • 1940’s sand pit mining • 1950’s Girl Scout camp at Tank Lake; tragedy. • 1960’s Sikes family homesteads the land • Sikes’ enterprises: • deer leases • dumping

25. SIKES • 1967 • Riverdale Community telegram to LBJ • Texas Dept of Water Resources issues / retracts water permit. • Sikes dump closed • 1982 • Floods • sampling shows widespread toxics

26. SIKES • 1983 SITE ADDED TO NPL • Sikes family temporarily relocated [after fight] • TDWR & EPA start the RI/FS • 1986 RI/FS COMPLETED: • 80,000 cubic yds contaminated soils, • 80,000 cubic yds contaminated sludges • 13,000,000 gallons contaminated water

27. SIKES • OPTIONS: • $ 0.4 M No Action • $ 23.4 M L/F sludges and soils on site • $ 56.0 M L/F sludges off site, soils on site • $ 53.4 M Incinerate only sludges on site • $ 111.3 M Incinerate sludges on site; L/F soils off site • $ 92.9 M Incinerate sludges and soils on site

28. SIKES • PUBLIC COMMENT PERIOD: 7/30/86 TO 8/20/86 • PUBLIC MEETING [130 PEOPLE] 8/7/86 • PRINCIPAL CONCERNS: • Import waste from other sites? • Killer inversions? • Test innovative, cost saving, technologies? • Guarantee permanence? • Property devaluation?

29. SIKES • Record of Decision (9/86): • Incinerate soils and sludges on site (est. $93 million) • Temporary incinerator, on quickly … off quickly. Estimated operation: 1988 - 1990. • Only Sikes waste. • Public fully informed of each step.

30. SIKES • REMEDIAL DESIGN: 10/86 TO 10/89 • $139 M allocated [150% of ROD] • 2 step bidding process • 5 technically qualified contractors • SOLICITATION: 10/89 problem !

31. SIKES • Single bid submitted: • $134 million [close, but under, $139 million allocated]. • Self insured and bonded • Extremely competent firm with international reputation • Other qualified bidders: • Lacked insurance • Did not lodge a protest [but were unhappy!]

32. Elected Rep’s Agency Leaders Community State Agency Bidding contractor Other contractors Insurers Need results! Want results Restless @ delay 10% matching $ Over $500K invested Bummed by insurers Spooked by newness SIKESDifferent, Conflicting, InterestsPARTYDESIRE

33. SIKESAS PROJECT MANAGER, SHOULD YOU PROCEED? • Option A: Proceed because: • Fair and square bidding. • Just about everyone wants results. • We’ll get sued if we don’t. • Option B: Retract and re-do solicitation: • May be savings in cost [then again ..] • Right thing to do • We’ll get sued if we don’t • Option C: ? • Partial award? Give to USACE? Move to different occupation? Others?

34. SIKES • MARCH 1990: RESOLICITATION: • Phase A- ‘construction’ of berms, incinerator, water treatment, access roads, clearing, etc. • Phase B- Operation of cleanup equipment, removal. • SUCCESSFUL RESPONSES: • 4 different firms, joint ventures • Bids ranged from $92 to $99 million

35. SIKES • OCTOBER ,1990- • Mobilization to field • JANUARY, 1992- • $32 million Phase A completed, • APRIL, 1992- • Trial Burn successful, operations started. • JANUARY, 1995- • Phase B completed [$85 vs $60 million but volume was 360,000 vs 160,000 cu yds]

36. SIKES • Re-solicitation for Bids • Delayed project one year • Complied with FAR • Saved $24 to $41 million • Sikes cleanup: • 1 billion pounds of contaminated soil detoxified • 3 billion pounds of water cleansed • All for $.30 a pound … a bargain?

37. Socioeconomic Programs • Small Business • Set-asides • Competitiveness demonstration • Labor Surplus Area Set-aside • Minority and Woman's Business Enterprise [MBE/WBE] • Davis-Bacon Act

38. A&E Contracts • Special Problems lead to 1972 Brookes Act • Qualifications Based Selection • Fair price [industry ‘standard’] • Announced in CBD • Panel selection

39. Contract Modifications • Administrative vs Substantive • Unilateral vs Bilateral • The ‘Changes Clauses’ • Computation and negotiation difficult

40. Contract Termination • ‘Near termination’ remedies: • stop payment • reduce price • assess damages • Termination for default • Termination for Convenience

41. Ethics in Contracting • BASIC DRIVING FACTORS: • 1. ABOVE REPROACH • 2. STEWARDSHIP