“Solid Waste Management: Line Item Expense or Resource Management“ Presented by Mike Carnes Vice President Solid Waste Solutions Corp April 12-14 2005 • Tampa, FL In this time of budgetary shortfalls, installations such as yours are looking for ways to properly manage waste disposal. Today we are going to talk about the four parts of waste minimization and recycling. These 4 parts include, the current problems encountered with waste and recycling, solutions for better waste and recycling, successful ways to get started and finally we’ll talk about “best practices” as they relate to a well-run waste and recycling program.

Typical Perception Just Another Line Item Expense It’s Only Garbage! It’s Minor Compared To The Big Picture If It’s Not Broken, Don’t Fix It Three Bids, “What More Do We Need?”

Hard Costs vs. Soft Costs Budgetary Constraints Number One Challenge Today Hard Costs vs. Soft Costs Get Invoice  Pay Bill Time, Space And Labor

Back to Basics Waste Audit Remember Unique Requirements and Mission Setting Goals High (100%) Making Waste and Recycling A Priority

Patience 3-5 Year Commitment From Management Long Term Success Depends On Holistic Approach Culture Change Training And Education

Elements of Successes Comprehensive Insight Into Your Current Waste And Recycling Program “Waste” As An Asset – NOT A Liability Baseline For Measuring Success Success does not arrive after implementing one well thought out plan. Ongoing maintenance, tweaking, handholding, and piloting of new ideas are cornerstones to ensuring long-term success. Key to buy-in of management Building confidence within organization Performance based contracting Shared Savings

Best Practices (Performance Based Contracting) Proactive Vs. Reactive Resource Management Down Stream And Up Stream Management

OFPP Policy Letter 91-2 Dated April 9, 1991 Agencies shall use performance-based contracting methods to the maximum extent practicable when acquiring services Statement of Work Describe the work in terms of “what” is to be the required output rather than “how” the work is accomplished Quality Assurance Develop formal, measurable performance standards and surveillance plans to facilitate assessment of a contractor’s performance Preference for using performance incentives and deduction schedules

Further Guidance Memo, dated Oct. 25, 1999, Under Secretary of Defense Acquisition and Technology - Training for Performance Based Service Acquisitions Memo, dated April 5, 2000, Under Secretary of Defense Acquisition and Technology Performance Based Service Acquisitions - Requires 50% of the service acquisitions to be performance based by the year 2005 – measured both in dollars and contract actions Memo, dated March 9, 2001, Office of Management and Budget, - Directed all other agencies to use PBC on at least 20% of all service contracts > $25,000 in FY 2002

Waste Management and Recycling Performance-Based Waste Management and Recycling Task Task 1 Reduce annual waste Costs Task 2 Increase recycling Standard Waste costs will not exceed the previous 12-month baseline thus the client will receives a reduction in annual waste expenditures To meet or exceed waste diversion MOM AQL None Method Monthly waste bill Review contractor prepared measurement reports Periodic inspections to ensure compliance with baseline audit Tonnage reported by QRP Incentives Contractor receives % of savings from 12-month Baseline See above (Acceptable Quality Level)

Implementation Build Slowly Towards Goals Incentives Work With / Involve Key People And Departments Communicate Upfront That Change Is Coming And Why Provide Basic Information To All

Case study: Evanston, IL Northwestern Healthcare Hospitals 3 Locations Type Contract – Performance Based Services Provided Waste Audit After Consultation With Client Implemented Changes Changed Processes And Practices In Waste Disposal Services And Recycling Right Sized And Optimized Waste Disposal And Recycle Services Provided Education And Training For Staff Of Over 4K Savings – Over $400,000 Per Year

Case study: Metcalf Federal Building GSA, Chicago, IL Type Contract – Fixed Price Services Provided Waste Audit After Consultation With Client Implemented Changes Changed Processes And Practices In Waste Disposal Services And Recycling Right Sized And Optimized Waste Disposal And Recycle Services Provided Education And Training For Staff Of Over 2K Hard Cost Savings – Over $25,000 Per Year Soft Costs Savings – Over $100,000 Per Year As A Result Won White House Closing the Circle Award

Summary Back To Basics Buy-in Of Command Key To Success Building Confidence Within Organization Culture Change Performance Based Contracting

For more information, please contact Thank You For more information, please contact MIKE CARNES Solid Waste Solutions 1560 Sherman Avenue Suite 860 Evanston, IL 60201 270-369-0006 C 270-319-2045 mcarnes@wasteaudit.com