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Army Environmental Army Environmental Cleanup Program and Cleanup Program and Performance Based Performance Based

ContractsContracts

Charlie GeorgeACSIM/ODEP20 June 2007

Headquarters Department of the Army

600 Army Pentagon

Washington, DC 20310-0600

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AgendaAgenda

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

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OverviewOverview

• 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

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Army Environmental Army Environmental Cleanup StrategyCleanup 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

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Defense Environmental Restoration Program

(DERP)

Compliance-Related Cleanup

Formerly Used Defense Sites Remediation Overseas

Base Realignment and Closure (BRAC)

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

Active Installations

Excess Installations

Special InstallationsMilitary Munitions Response Program (MMRP)

Army Environmental Army Environmental Cleanup ProgramCleanup Program

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Strategic Plan UpdateStrategic 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

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Army Cleanup Army Cleanup PhilosophyPhilosophy

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

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Army Direction for Army Direction for CleanupCleanup

• 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

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Requirements Requirements IdentificationIdentification

• 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

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Management ReviewsManagement 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

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Financial Liability Financial Liability ReportingReporting

• 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

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Accelerate Site Accelerate Site CloseoutCloseout

Sites in Progress

Cleanup SiteCloseout

Investigation andCharacterization

Assessment andFindings for

Determination ofEligibility (AFDE)

NewSites

Preliminary Assessment (PA)

Feasibility Study (FS)

Site Inspection (SI)

Remedial Investigation (RI)

Remedial Design (RD)

Remedial Action Construction (RA-C)

Remedy inPlace

Remedial Action Operation (RA-O)

Remedy in Place is animportant milestone in the

cleanup process. At this point,the selected remedy is in place,

and remedial operations can begin

Long-Term Management (LTM)

SiteCloseout

Interim RemedialActions (IRAs) orRemoval Actionsmay occur at anytime during the

cleanup process

If the investigation process reveals that cleanup is notrequired or when cleanup work is complete, a site movesinto the Response Complete (RC) category, i.e. site does

not have to go through every phase to achieve RC

KEY:

Start Milestone Complete

* The Hazard Ranking System evaluation determineswhether a site should be listed on the National Priorities List

Cleanup Process Phases and Milestones

DecisionDocument

ResponseComplete

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ResourcesResources

• 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

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Strategy, Strategic Plan, Strategy, Strategic Plan, PMP & IAP RelationshipPMP & 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

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Performance-Based Performance-Based Acquisition (PBA)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

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ConclusionConclusion

• 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

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PERFORMANCE-BASEDPERFORMANCE-BASED

ACQUISITIONACQUISITION

OVERVIEWOVERVIEW

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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

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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 ArmyBusiness Initiative Councils (BICs)

• US Army Environmental Command is implementingthe Army’s PBA initiative through use of performance-based contracts (PBCs)

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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

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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

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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

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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

Metrics

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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

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Army PBA Awards as of 23 Apr 07

BRACActiveBRAC & Active

Hawaii

* Installation locations are approximate

Puerto Rico

Alaska

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PBA Accomplishments (as of 23 Apr 07)

 Installations Sites

CTC

($M)

IGE

($M)Contract Award

($M)CTC - Contract

($M)IGE - Contract

($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

FY04Aberdeen PG - Graces Quarters, Aberdeen PG - Other Aberdeen Areas, Fort Detrick, Fort Irwin, Fort Rucker, Holston AAP, Hunter 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

FY05

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, 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

FY06

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

Military Munitions Response Program – Site Inspections (2 awards) 119 12.371 7.829 4.820 7.551 3.009

FY07Fort Bragg; Fort Campbell; Forts Eustis & Lee; Haines Terminal 37 27.708 31.179 24.724 2.984 6.455

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%      

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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

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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

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IRP History

• Significant variation in program performance Cost and schedule baselines not uniform Progress toward completion lacking

Cost-to-Complete increasing or unstableSchedules slipping

• Completing only 60-70% of planned versus actual milestones

Program not incentivized for completion

CHANGE NEEDED TO GET DONE

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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

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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

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• 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

Approach

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The PBA Process

Initial Planning / On-Site Evaluation

Conduct additional activities to prepare

for PBA in future

Draft and/or refine PWS/RFQ and IGE

Seek input on PWS/RFQ and IGE

Release RFQ

Conduct technical evaluation

Proceed with current path forward

Is installation

viable PBA

candidate?

Can additional activities

help candidacy

?

Is there agreement

on the PWS/RFQ and IGE?

Is there a technically acceptable

low-cost proposal?

Award PBA

N*

N

N*

N

Y

Y

YY

Post-Award / Contract

Implementation

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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

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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

Role of the Installation Restoration Program Manager

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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

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Role of the Restoration Advisory Board (RAB)

• 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

No change! Public retains stakeholder involvement in decision-making process and still…

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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

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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.

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Resources

http://aec.army.mil/usaec/cleanup/pbc00.html

Performance-Based Acquisition web page