Army MMRPArmy MMRPSite InspectionsSite Inspections

Performance-Based Contract Performance-Based Contract Lessons LearnedLessons Learned

Gaby A. Atik, P.E.g.atik@fpm-group.com

FPM groupAugust 2007

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OutlineOutline

PBC BackgroundMMRP OverviewFPM’s Active Army MMRP SIs PBCLessons Learned

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PBC BackgroundPBC Background

President’s Management Agenda (2001/2002)◦ “Government likes to begin things – to declare grand new programs and causes and

national objectives. But good beginnings are not the measure of success. What matters in the end is completion. Performance. Results. “

President George W. Bush

Federal Acquisition Regulation (FAR) 2.1.0 defines PBC◦ “…structuring all aspects of an acquisition around the purpose of the work to be

performed with the contract requirements set forth in clear, specific, and objective terms with measurable outcomes as opposed to either the manner by which the work is to be performed or broad and imprecise statements of work.”

Similar discussions in FAR 36 and 37

PBC = Paying for results◦ Based on clear definition of scope◦ Approach affords flexibility to Contractor in developing solutions◦ Minimizes likelihood of cost growth – CTC fidelity◦ Typically considered for post-RI phases◦ Transfers risk from government to contractor

◦ PBC ≠ Business as Usual

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PBC ScreeningPBC Screening

UN

CER

TA

INTY

KNOWN END-STATE

SIT

E G

RO

UPIN

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FLEXIBILITY

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MMRP OverviewMMRP Overview

MMRP Established by FY02 Defense Authorization Act as a DERP Program

MMRP Policy◦Follows CERCLA Process◦Applies to releases prior to 30 Sep 2002◦Does not apply to:

Operational Areas Operating Storage/Manufacturing Facilities Permitted Treatment or Disposal Facilities

◦Munitions Response Site Prioritization Protocol (MRSPP) (32 CFR Part 179) - Promulgated in October 2005

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MMRP OverviewMMRP Overview

Active Army MMRP◦Centrally Managed by USAEC◦Executed by USACE Military Munitions Design

Centers◦ Baltimore◦ Omaha◦ Sacramento

◦Supported by Huntsville USACE Military Munitions Center of Expertise

◦Over 800 MRSs at approximately 165 Installations representing ± 3 Million Acres

◦MMRP PAs completed in 2003 ahead of 2007 goal◦MMRP SIs on-track for completion prior to 2010 goal

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FPM MMRP SIs PBC – OverviewFPM MMRP SIs PBC – Overview

Competitively Awarded FFP PBC◦2-Step Process

1. Qualify2. Low-bid

PBC Awarded to Complete MMRP SIs in Central & Western Regions◦Teaming Partner – URS◦19 Installations◦± 100 MRSs◦Average Cost per Installation ≈$150K◦8 Installations awarded in FY06◦11 Installations awarded in FY07◦Performance Period = 2 years

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FPM MMRP SIs PBC - LocationFPM MMRP SIs PBC - Location

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FPM MMRP SIs PBC - StakeholdersFPM MMRP SIs PBC - Stakeholders

Installations

Regulators

NGB USAEC

USACE

FPM/URSTeam

Others

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SI PBC ObjectivesSI PBC Objectives

Key Objectives/Milestones◦Historical Records Review < 12 months◦SI Report < 24 months

Other Milestones◦Project Management Plan◦Technical Project Planning (TPP) Meetings◦Quarterly Quality in Progress Reviews (QIPRs)

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SI PBC PROCESS SI PBC PROCESS

TECHNICAL PROJECT PLANNING (TPP) PROCESS

QUARTERLY QUALITY IN PROGRESS REVIEWS (QIPRs)

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SI PBC Performance StandardsSI PBC Performance Standards

Unacceptable Performance Superior Performance

Acceptable Performance

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Lessons Learned – CoordinationLessons Learned – Coordination

Challenge: Scheduling Meetings 19 Installations X 3 TPP meetings + 4 QIPRs/year

◦Average 2 meetings /month Minimum 5-6 stakeholders / meeting 6 Other Active Army Contractors with similar

requirements also trying to schedule with USAEC and USACE PMs

Communication protocol varies

Installations

Regulators

NGB USAEC

USACE

FPM/URS Others

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Lessons Learned – CoordinationLessons Learned – Coordination

Lessons Leverage USAEC, USACE & NGB resources to identify

Installation POCs Contact Installation POC and establish stakeholder

communication protocol early-on Initiate meeting scheduling efforts as early as possible

◦NLT 30 days but preferably 45 days prior to meeting Stakeholders participation at TPP meetings ensures

project success Communicate with the stakeholders to ensure

attendance Communicate with the stakeholders to ensure

attendance

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Lessons Learned – DeliverablesLessons Learned – Deliverables

Challenge: Deliverables Consistency◦Key Deliverables: HRR, WP, SI Report

Iterations: Army Draft, Stakeholder Draft & Final 19 Installations

57 Key deliverables / year

Lessons:◦Leverage USAEC’s central management of Active

Army MMRP to streamline deliverables◦Ensure that pilot deliverable is approved prior

submitting simultaneous deliverables◦Optimize # of personnel involved to ensure

consistency and timeliness

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Lessons Learned – UncertaintyLessons Learned – Uncertainty

Challenge: Uncertainty in SI Scope◦CTT/Phase 3 Site Inventory (PA) findings current

validity◦Operational areas variation◦Regulatory acceptance

Lessons:◦HRR is Errors & Omissions Policy for CTT◦Operational area variations require flexibility by all

parties to ensure that SI MRSs are valid◦USAEC’s consistent management of Active MMRP

facilitates regulatory acceptance

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Lessons Learned – RiskLessons Learned – Risk

Challenge: How to manage SIs PBC risk?Lessons:

◦Regional contract provides inherent diversification◦Further risk diversification is achieved through

teaming◦Continuously evaluate need for improvements◦Staggering of awards provides opportunities for

implementing lessons learned◦Keep in mind that while you get paid for getting to

the Finish line, you get rated for how you get there

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Lessons Learned – Cash FlowLessons Learned – Cash Flow

Challenge: Key deliverables/milestones are not achieved till ≈1 and 2 years following award

Lessons:◦Include as many measurable Interim Milestones

as reasonably possible◦Finish early◦Diversify contracts portfolio

Best-value PBC Low-bid PBC Traditional Contracts

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TO PBC OR NOT TO PBC?TO PBC OR NOT TO PBC?