Environmental Services Cooperative Agreement

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					                    Army Environmental Cleanup
                     Program and Performance
                          Based Contracts



                                                Charlie George
Headquarters Department of the Army
                                                 ACSIM/ODEP
        600 Army Pentagon
                                                 20 June 2007
    Washington, DC 20310-0600



                                      1 of 40                    1130(R)20June07
                  Agenda


• Review the Army’s Cleanup Program
• Performance Based Acquisition Overview




                      2 of 40              1130(R)20June07
                       Overview


• Set the stage
     – Army Environmental Cleanup Strategy & Strategic Plan
•   Army cleanup philosophy
•   Army direction for cleanup
•   Resources
•   Strategy, Strategic Plan, PMP & IAP Relationship
•   Performance-based acquisition
•   Conclusion


                              3 of 40                         1130(R)20June07
    Army Environmental Cleanup
              Strategy

• Provides roadmap to guide the Army in attaining
  its environmental vision
   – “The Army will be a national leader in cleaning up contaminated
     land to protect human health and the environment as an integral part
     of its mission”
• Identifies unified program objectives
   – Ensure consistency and accountability
   – Achieve standardization across programs
• Establishes program areas, drivers and mission
  statements for each program area
• Uses ISO 14001EMS framework
                                  4 of 40                              1130(R)20June07
  Army Environmental Cleanup
            Program
Defense Environmental                 Compliance-Related
 Restoration Program                      Cleanup
       (DERP)
                    Active Installations
                     Excess Installations

                     Special Installations
Military
Munitions   Formerly Used
Response                               Remediation Overseas
            Defense Sites
Program
(MMRP)
               Base Realignment and Closure (BRAC)

 BRAC ’88 BRAC ’91 BRAC ’93 BRAC ’95 BRAC 2005


                            5 of 40                           1130(R)20June07
           Strategic Plan Update

• Objectives
  – From Cleanup Strategy and tailored to each program
    area; not much change
  – Conduct cleanup to sustain the Army mission
• Targets for FY2008 and FY2009
  – Identify specific actions with a time frame
  – Some common to all programs
  – Most are program specific
• Success Indicators
  – How you know if you got there


                            6 of 40                      1130(R)20June07
         Army Cleanup Philosophy


•   Centrally managed cleanup program
•   Standardization across programs
•   Completion of sites and installations
•   Results oriented
•   Performance driven management
•   Recognize and reward achievements




                         7 of 40            1130(R)20June07
        Army Direction for Cleanup


• Identify requirements
   – Maintain supporting documentation
• Conduct semiannual management reviews
• Report financial liabilities
   – Single database of record for each program area
• Use innovative technology and periodic reviews
  to safely and effectively accelerate site closeout



                            8 of 40                    1130(R)20June07
        Requirements Identification

• Applies to all cleanup
   – Defense Environmental Restoration Program
   – Compliance-related Cleanup
• Link environmental liability with real property
  records
   – Involve stakeholders early, agree on exit strategy
• Maintain administrative record
   – Information repository too
• Maintain permanent document repository
   – Protect future Army interests, especially for emerging
     contaminants and changing cleanup goals

                             9 of 40                          1130(R)20June07
           Management Reviews


• Semi-annual with each program manger
• Actual versus planned results as forecast in
  annual program management plan
   – IRP RIP/RC
   – MMRP SIs
   – CC SIs
• Instill pride of ownership, finish cleanup, and
  recognize results



                        10 of 40                    1130(R)20June07
       Financial Liability Reporting

• Qualified audit opinion in FY2010
• Unqualified audit when Army’s revised financial
  system is in place
• Three databases of record
  – AEDB-R
  – AEDB-CC
  – FUDSMIS
• Standardized cost estimates
  – RACER or engineering estimate from Feasibility Study
• Supervisory review
• Quality Control / Quality Assurance

                           11 of 40                        1130(R)20June07
                           Accelerate Site Closeout

                                Cleanup Process Phases and Milestones
                                                                        Sites in Progress

                                            Investigation and                                                                                        Site
                                            Characterization                                                   Cleanup                             Closeout

                          Assessment and
                             Findings for
New                       Determination of
Sites                     Eligibility (AFDE)

          Preliminary Assessment
            (PA)                                                                                                                  Remedy in Place is an
                                                                                                                                important milestone in the
                          Site Inspection                                                                                    cleanup process. At this point,
                                                                                      Decision                              the selected remedy is in place,
Interim Remedial             (SI)                                                     Document                             and remedial operations can begin
Actions (IRAs) or
Removal Actions                                Remedial Investigation
may occur at any                                 (RI)
  time during the
 cleanup process                                                Feasibility Study
                                                                  (FS)                                               Remedy in
                                                                                                                       Place
  If the investigation process reveals that cleanup is not                      Remedial Design                                         Response
                                                                                 (RD)                                                   Complete
required or when cleanup work is complete, a site moves
into the Response Complete (RC) category, i.e. site does                                    Remedial Action Construction
     not have to go through every phase to achieve RC                                                                                                   Site
                                                                                              (RA-C)
                                                                                                                                                      Closeout
                                                                                                            Remedial Action Operation
KEY:                                                                                                          (RA-O)
           Start          Milestone               Complete
                                                                                                                            Long-Term Management
                                                                                                                              (LTM)
   * The Hazard Ranking System evaluation determines
whether a site should be listed on the National Priorities List

                                                                                 12 of 40                                                                     1130(R)20June07
               Resources

• Endless? NO!!!
                    ($M) FY07          FY08
•   Army DERP (IRP)      $376          $389
•   Army DERP (MMRP)       27            46
•   FUDS (IRP)            177           170
•   FUDS (MMRP)            85            80
•   BRAC (IRP)             39            41
•   BRAC (MMRP)            11            14
• Compliance Cleanup              99   110

                       13 of 40               1130(R)20June07
       Strategy, Strategic Plan, PMP
             & IAP Relationship

• Strategy includes vision and objectives
• Strategic Plan is ACSIM’s direction to
  program managers
• Program Management Plan
   – The PM’s plan to tell leadership how they are managing
     their program
• Installation Action Plan (Management Action
  Plan)
   – Presents a plan based on available funding




                            14 of 40                      1130(R)20June07
             Performance-Based
              Acquisition (PBA)

• Another tool for accelerating cleanup and
  achieving site closeout
• Achieved 56% of ER,A $$ on PBA in FY06
• Expecting ~50% of ER,A $$ in FY07, FY08
• PBA Applies to BRAC and FUDS too
• Army Contracting Agency and USACE
  contracts available
  – FFP, FP or Cost-plus w/incentives and/or insurance
• Through FY06, $290M in cost avoidance
  applied to additional cleanup projects

                           15 of 40                      1130(R)20June07
                     Conclusion

• Bottom line
   – Close sites, finish cleanup at installations & for the
     Army
• Management Philosophy
   – Centrally managed cleanup program
   – Completion of sites and installations
   – Performance driven management
• Use Environmental Management System
  [“plan – do – check – act”] to gain continual
  improvement


                              16 of 40                        1130(R)20June07
PERFORMANCE-BASED
   ACQUISITION
    OVERVIEW




       17 of 40     1130(R)20June07
                       Purpose

• Outline Performance-Based Acquisition Initiative for
  Army’s Installation Restoration Program (IRP)
• Discuss why Army is proceeding with PBA
• Discuss roles and responsibilities in PBA implementation




                              18 of 40                       1130(R)20June07
                       Background
•   Performance-Based Acquisition (PBA) is a federal
    government-wide initiative
•   Army began using PBA for environmental cleanup
    projects in 1999
       Use of Guaranteed Fixed Price Remediation
         (GFPR) contracts
       Pilots at both BRAC and active installations
• PBA is an initiative of both DoD and Army
  Business Initiative Councils (BICs)
• US Army Environmental Command is implementing
  the Army’s PBA initiative through use of performance-
  based contracts (PBCs)


                                   19 of 40               1130(R)20June07
               What is PBA?
• Performance-Based Acquisition (PBA) is a mechanism
  that solicits bids on the basis of what RESULTS you want
  achieved rather than what ACTIVITIES you want
  conducted
• General characteristics of Performance-Based
  Acquisition
    Contract for “What,” not “How”
    Clearly define objectives, milestones, and standards
    Use incentives or environmental insurance to enhance
     performance
           Incentives are inherent in PBAs
      Promote flexibility in exchange for accountability
      Generally, use fixed price contracts


   PBCs are monitored to ensure performance is being achieved

                                       20 of 40                 1130(R)20June07
                PBA Contract Types

   Acquisition “Tool Box” for Performance-Based Acquisitions
    includes:
     Fixed Price Remediation with Performance Work Statement (PWS) or
      Statement of Objectives (SOO)
     Fixed Price Remediation with or without Incentives
     Guaranteed Fixed Price Remediation (GFPR)
     With Cleanup Cost Cap Insurance, with or without Pollution Legal
      Liability Insurance
     Large and small business awards


     KEY - Be less prescriptive and contract for objectives and results



                                    21 of 40                          1130(R)20June07
                    Metrics

   Installation Restoration Program PBA goals:
       FY03: 3-5% of total program – achieved 9% ($37M)
       FY04: 30% of total program – achieved 36% ($141M)
       FY05: 50% of total program – achieved 51% ($202M)
       FY06: 60% of total program – achieved 54% ($240M)
       FY07: 60% of total program - $242M Goal
       FY08+: 50% of total program




                             22 of 40                       1130(R)20June07
             Metrics

   BRAC (either PBA or Environmental Services
    Cooperative Agreement):
     FY06: 60% of remaining sites
     FY07+: 70% of remaining sites

   FUDS:
     FY06: 15% of total program
     FY07: 25% of total program
     FY10+: 50 % of total program




                          23 of 40               1130(R)20June07
       Results of the PBA Initiative

   Since 2000, Army has awarded 55 performance- based
    contracts (PBCs) at Active Army Installations
     ~$597 million obligated on PBAs
     Contract values range from $548 K to $52.4 M
     Contracts in 39 states, Puerto Rico, and all 10 EPA Regions




                                24 of 40                            1130(R)20June07
             Army PBA Awards as of 23 Apr 07

Alaska




  Hawaii

           BRAC
           Active
           BRAC & Active                                      Puerto
                                                              Rico
     * Installation locations are approximate
                                                25 of 40   1130(R)20June07
                           PBA Accomplishments (as of 23 Apr 07)
                                                                                                       CTC        IGE       Contract Award   CTC - Contract   IGE - Contract
                Installations                                                       Sites              ($M)       ($M)           ($M)            ($M)             ($M)

 FY01-02        Fort Gordon, Fort Leavenworth                                           50               42.200    42.200          39.391           2.809            2.809

   FY03         Fort Dix, Fort Jackson, Lake City AAP, Ravenna AAP, Sierra
                Army AD                                                                 68              119.998   117.306          98.795          21.203           18.511
                Aberdeen PG - Graces Quarters, Aberdeen PG - Other Aberdeen
                Areas, Fort Detrick, Fort Irwin, Fort Rucker, Holston AAP, Hunter
   FY04         AAF, Iowa AAP, Louisiana AAP, Milan AAP, Reserves,
                Riverbank AAP, Rock Island, Fort Leonard Wood                         143               276.090   203.556         152.738        123.351            50.818

                APG-Bush River, APG – EA Groundwater, APG- Westwood,
                Camp Bullis & Fort Sam Houston, Camp Navajo, Fort Gillem,
                Fort Knox, Fort Meade, Fort Pickett, Hawaii – Tripler/Schofield,
   FY05         Joliet AAP, Longhorn AAP, Camp Crowder & Ft. Chaffee, Los
                Alamitos & Camp Roberts, Ravenna AAP, Red River, Redstone,
                Soldier Systems Center                                                213              242. 558   205.016         172.474          70.084           32.541

                Military Munitions Response Program – Site Inspections                  67                2.171     4.619           0.901           1.270            3.719
                APG G Street, Dugway Proving Ground (DPG) Phase I, DPG
                Phase II, Fort Leonard Wood Phase I, Fort McClellan, Hawaii,
                Hawthorne AD, Picatinny Arsenal, Radford AAP, Volunteer AAP           169               173.465   164.463         108.352          65.113           56.111
   FY06
                Military Munitions Response Program – Site Inspections (2
                awards)                                                               119                12.371     7.829           4.820           7.551            3.009
                Fort Bragg; Fort Campbell; Forts Eustis & Lee; Haines Terminal          37               27.708    31.179          24.724           2.984            6.455
   FY07
Cumulative                                                                            866               902.712   770.017         602.195        300.517          167.822
Cost Avoidance on all PBAs (based on CTC)                                                                 33.3%
Cost Avoidance on all PBAs (based on IGE)                                                                          21.8%




                                                                                            26 of 40                                                          1130(R)20June07
         PBA for Environmental Cleanup


• Goal is for Contractor is to achieve one or more of the
  following performance objectives for each site
  identified in the Performance Work Statement:
    Response Complete
    Remedy in Place
    Remedial Action (Operations)/Long-Term Management
    Successful 5-year Review (or equivalent)
• Environmental Insurance MAY BE used to protect
  against cost overruns above the estimated remediation
  cost



                                27 of 40                    1130(R)20June07
                Why Use PBA?

   Performance-Based Acquisition 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
       Reduces contract reporting and oversight
       Can be aligned to exit strategies or used to optimize systems
       Cost effective / lower remediation costs




                                     28 of 40                           1130(R)20June07
                IRP History

• Significant variation in program performance
    Cost and schedule baselines not uniform
    Progress toward completion lacking
        Cost-to-Complete increasing or unstable
        Schedules slipping
           • Completing only 60-70% of planned versus actual milestones
    Program not incentivized for completion




                CHANGE NEEDED TO GET DONE

                                   29 of 40                               1130(R)20June07
                Safety vs. Speed?

• PBA does not trade safety for speed
• Safety and quality can be incentivized
• Innovation can be incentivized
    Perception is that private cleanup goes faster
    Learn and apply the proven private sector practices




                                 30 of 40                  1130(R)20June07
          Strategy to “Get it Done”
• Increase use of PBA
    Use incentives for innovation and reaching program
     completion
• Streamline Army Cleanup infrastructure
    Get more dollars to the ground doing actual cleanup
• Decrease the number of contract overruns &
  change orders
• Reduce variability in program performance and
  optimize project baselines




                                31 of 40                   1130(R)20June07
                         Approach

• Develop corporate acquisition tools (“Toolbox”) to
  accelerate cleanup/closure
• Increase competition
• Maintain contracting flexibility to improve cost
  effectiveness
    One size does not fit all circumstances
• Contractors must be accountable for their performance




                                   32 of 40               1130(R)20June07
                                 The PBA Process
                                                             Draft and/or refine
                 Initial Planning /                          PWS/RFQ and IGE
                On-Site Evaluation

                                           Is
                                      installation                      Is there
                                         viable       Y
                                          PBA
                                                                      agreement    N*     Seek input on
                                                                         on the
                                       candidate                                        PWS/RFQ and IGE
                                                                      PWS/RFQ
                                            ?                          and IGE?
                                             N*
                                                                            Y
                                         Can
                                      additional                     Release RFQ         Is there a
Conduct additional        Y            activities                                       technically
activities to prepare                                                                   acceptable
                                                                                                       Y
                                         help
 for PBA in future
                                      candidacy                Conduct technical          low-cost
                                           ?                      evaluation             proposal?

                                             N                                                         Award PBA
                                                                                          N
                               Proceed with current
                                  path forward                                                         Post-Award /
                                                                                                         Contract
                                                                                                      Implementation



                                                          33 of 40                                         1130(R)20June07
              Collaboration

• The Army will continue to work with Regulators and
  Communities when considering options for Performance-
  Based Acquisition
• The Army, as the federal lead agency, still remains
  responsible for the cleanup with the same level of
  coordination with EPA and state regulators




                            34 of 40                      1130(R)20June07
             Role of the Installation
         Restoration Program Manager

Little change! Installation RPM still…
•   Oversees contract
•   Interfaces with Regulators, along with Contractor
•   Interfaces with Public
•   Manages and monitors long-term operations
•   Manages contract cost, schedule, and reporting
     Army centrally manages installation restoration program
      and database at the US Army Environmental Command
      for improved data quality and ease of reporting/response
      to out of cycle data calls




                               35 of 40                          1130(R)20June07
                Role of the Regulator
• Beginning with initial scoping meetings, may attend
  information sessions with installation personnel and
  contract team
• Participate in development of performance measures for
  the contract, and may comment on the Performance
  Work Statement
• Participate in Bidders’ conferences to present regulatory
  views to prospective contractors
• After project begins, continue to maintain active role by
  reviewing remedial activities before implementation
    Provides comments on site documents
           GOAL - Concurrence with remedy completion



                                 36 of 40                     1130(R)20June07
           Role of the Restoration Advisory
                     Board (RAB)
    No change! Public retains stakeholder
    involvement in decision-making process and
    still…
•   Provides advice on environmental restoration issues
•   Conducts regular meetings open to the Public
•   Keeps meeting minutes that are available to the Public
•   Reviews, advises, and comments on environmental restoration
    documents
•   Recommends project requirements
•   Recommends site cleanup priorities
•   Provides advice and comments on restoration issues
•   Represents and communicates Community interests and concerns



                                   37 of 40                        1130(R)20June07
             Army’s Responsibilities

•   Army fulfills its program responsibilities by:
        Approving all performance / remedial action objectives
        Maintaining the Administrative Record
        Reviewing & signing agreements / Decision Documents
        Maintaining primary interface with Regulators & Public
        Certifying all deliverables / milestones

•   Army is the final decision authority for award, oversight,
    and payment


        ARMY RETAINS ULTIMATE ENVIRONMENTAL LIABILITY


                                  38 of 40                        1130(R)20June07
                        Summary

• Performance-Based Contracts Responsibilities:
    Army remains responsible for cleanup
    Contractor is accountable to the Army for their performance
• Seeking EPA/State input on contract performance
  measures (objectives and standards)
• Army/EPA/State need to continue to partner to ensure
  performance measures are met – ensures satisfactory
  project completion and closeout
• Army will continue with success achieved in Fiscal Years
  2003, 2004, 2005, 2006 and 2007.



                                 39 of 40                          1130(R)20June07
              Resources


http://aec.army.mil/usaec/cleanup/pbc00.html
Performance-Based Acquisition web page




                    40 of 40              1130(R)20June07

				
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