Performance Based Contracting A USACE Perspective Presented by Michael W. Sydow, PE Chief, Environmental and IIS Management Branch USAED Savannah

Why PBC Government Performance and Results Act of 1993. Federal Acquisition Streamlining Act of 1994. Utilized successfully in private sector since the 70’s. DOD Business Initiatives Council adopts concept in 2002. ACSIM/ODEP deploy PBC as a matter of Army policy in 2003. Defense Planning Guidance Army Environmental Strategic Cleanup Plan FUDS Program Policy (ER 200-3-1) 80% Goal from the Army Environmental Cleanup Strategy (dated 5/27/2003) 30Nov00same.ppt

Why PBC Current process employed to date is inherently phase focused and process driven. Not viewing the problem in a holistic manner. PBC is based on achieving an Exit Strategy Incorporates Life Cycle Project Management. Incorporates future land use planning. Affords greater flexibility in meeting changing project requirements. 80% Goal from the Army Environmental Cleanup Strategy (dated 5/27/2003) 30Nov00same.ppt

It is simply a new Business Process! What PBC Does Not Do! Does not change applicable laws or regulations. Does not relieve DOD of it’s liability. Does not negate Federal Facilities Agreements or Cooperative Agreements. Does not eliminate the Partnering Concept. Does not mean the contractor is turned loose with no technical or administrative oversight. It is simply a new Business Process! 80% Goal from the Army Environmental Cleanup Strategy (dated 5/27/2003) 30Nov00same.ppt

PBC Defined Objective is to define the “What” not the “How” Focus on the End Point and not the Process. Army Policy Fixed Price Contracts only. Incentives and Insurance may be applied based upon the amount of risk and uncertainty. Competitive bid process with a minimum of three qualified vendors. Can be used for all project phases, from RI through RAO and LTM. 30Nov00same.ppt

FUDS Programmatic Goals Funds Obligation FY05 7.5% FY06 15% FY07 25% FY10 50% DPG Goals for Responses in Place (RIP) and Response Complete (RC) FY07 High Relative Risk Sites FY11 Medium Relative Risk Sites FY20 Low Relative Risk Sites Water Resource Development is quickly becoming a major issue in the Southeast. -consideration of desalination use by southern coastal states Water Security is in response to the Bioterrorism Act of 2002 -SDWA Amendment -Civilian: Systems that serve greater than 3300 consumers -Military: Systems that serve greater than 25 consumers 30Nov00same.ppt

FUDS Challenges Budget Limitations Private Property Owners Averages $250M per FY. Number of States and Territories competing for funds. Number of eligible sites competing for funds. Private Property Owners Potentially Responsible Party (PRP) Issues Competition for Regulatory Agency resources New Business Process 30Nov00same.ppt

USACE Initiatives Developed and deployed PBC Training Established USACE Contract Acquisition Working Group Developing national contract strategies. Share Lessons Learned. Leverage resources from across USACE. Obtained Industry input. Developing After Action Reports for established contracts Participate in Interagency Forums 30Nov00same.ppt

How Do We Make It Work? Proper Project Planning Site selection. Sound Performance Work Statement with Measurable Performance Standards. Development of Transition Plan from current contract actions to PBC. Engage the Regulatory Community Includes Planning and Contract Acquisition phases. Educate the entire Team What changes, what doesn’t, and what are the impacts? Roles and Responsibilities. 30Nov00same.ppt

How Do We Make It Work? Communication must be open and continuous Need a well developed Project Management Plan that clearly identifies Exit Strategies and Major Milestone Dates. May require frequent Project Meetings and/or Teleconferences. Allows all Team Member organizations to determine and plan resource requirements. Seek process efficiencies Number, type and format of submittals. Concurrent reviews. Authority for approval. 30Nov00same.ppt

Questions?