Attachment 1 - Air Force Contracting Construction Guide.pdf

Air Force Contracting Construction Guide

Oct 1, 2019

TABLE OF CONTENTS

Introduction

Chapter 1: Independent Government Estimates

1.1. Introduction

1.2. Types of Independent Estimates

1.3. Sources of Estimate Details

1.4. Developing the Cost Estimate

1.5. Delivery Orders

1.6. Protection of the IGE

Attachment 1-A Construction Cost Estimate Breakdown (template)

Chapter 2: Acquisition Planning

2.1. Preface

Attachment 2-A Construction Acquisition Planning Matrix

Chapter 3: Simplified Acquisition Base Engineer Requirements

3.1. Scope

3.2. Definitions

3.3. Purpose of the SABER Program

3.4. Limitations to the Use of SABER

3.5. Acquisition Planning

3.6. SABER Execution and Contract Administration

Attachment 3-A Sample Clause for Saber Economic Price Adjustment (EPA) Attachment 3-B Task Order File Checklist Attachment 3-C Sample Hold Harmless Agreement Attachment 3-D SABER Delivery Order (DO) Tracking Tool

Chapter 4: Multiple Award Construction Contracts (MACC) & Task Order Negotiation

4.1. Introduction

4.2. MACCs - What Are They?

4.3. MACC vs. SABER

4.4. Acquisition Planning

4.5. Bundling and/or Consolidation?

4.6. How Many Contracts Should Be Awarded?

4.7. Task Orders and Task Order Competition

4.8. Section L&M Considerations

4.9. Design /Build Process

4.10. Lessons Learned

Attachment 4-A Langley AFB MACC & TO Attachment 4-B Ellsworth AFB MACC & TO Attachment 4-C Scott AFB MACC Attachment 4-D Langley AFB Solicitation Attachment 4-E Ellsworth AFB Solicitation Attachment 4-F Scott AFB Solicitation Attachment 4-G Sample MACC Task Order Request for Proposal

Chapter 5: Evaluating Unit Prices- IDCs

5.1. Introduction

5.2. What is the Problem?

5.3. Where to Start

5.4. What Is A Unit Price Evaluation Tool?

5.5. What is the Process?

5.6. What to Look For?

5.7. When is “Enough” Enough?

Attachment 5-A Comparative Pricing Analysis Tool

Chapter 6: Labor Requirements

6.1. Application of the Construction Wage Rate Requirements statute

6.2. Are there any exemptions to application of the Wage Rate Requirements statute?

6.3. How Do I Obtain a Wage Determination?

6.4. Does the CO have any responsibilities required by the Wage Rate Requirements statute?

6.5. Where Can I Get Help?

Chapter 7: Construction Contract Management

Section 1: Contract Requirements

7.1. Introduction

7.2. Performance and Payment Bonds

7.3. Insurance When Work is Being Performed on A Government Installation

7.4. Pre-Construction Conference

7.5. Materials and Workmanship

7.6. Labor Compliance Requirements

7.7. Warranties

Section 2: Contract Oversight and Management

7.8. Monitoring Progress

7.9. Quality Management

7.10. Value Engineering Change Proposals (VECP)

7.11. Payments

Section 3: Changes and Delays

7.12. Principal Changed Conditions Clauses

7.13. Constructive Changes

7.14. Types of Delays

7.15. Schedule Analysis

7.16. Delay Analysis

7.17. Methods for Computing Overhead

7.18. Termination

7.19. Liquidated Damages

7.20. Final Contract Completion

7.21. Contract Closeout

Acronyms

Tools

INTRODUCTION

The purpose of this Air Force Construction Guide is to address key areas, which assist the contracting officer and stakeholders in acquiring construction. This Guide focuses on critical processes and strategies to prepare a construction acquisition.

The Independent Government Estimate chapter explains the elements of a government estimate and provides the “how to” to develop an estimate. It also includes tips and best practices.

The Acquisition Planning chapter emphasizes the importance of planning for construction. It includes an acquisition plan matrix and template.

The Simplified Acquisition Base Engineering Requirements (SABER) chapter includes examples and a discussion of SABER pricing strategies.

The Multiple Award Construction Contract (MACC) provides a comprehensive explanation of a MACC and clearly distinguishes it from a SABER contract. This chapter provides insight into task orders and competition.

Evaluating Unit Prices - Indefinite Delivery Contracts (IDC) discusses the need for line item rather than bottom-line pricing and provides a Comparative Price Analysis Tool to save valuable evaluation time.

The Construction Labor Requirements chapter demonstrates the impact of labor laws on AF construction contracts. This chapter explains the laws and the role of the contracting officer in labor checks, and labor law violations.

The Construction Contract Management chapter discusses the unique processes associated with construction contract management to ensure a quality end product that conforms to contract requirements.

CHAPTER 1

Independent Government Estimates

1.1. Introduction

1.1.1. An Independent Government Estimate (IGE) is a cost estimate based upon the specifications and without the influence of any contractor’s marketing effort or input. The IGE is generally prepared by either the Government’s own design engineer or estimator, or by the architectural and engineering firm that prepared the design in the Air Force construction environment.

1.1.2. FAR 36.203 requires preparation of an IGE when the anticipated total contract or modification is expected to exceed the simplified acquisition threshold. An IGE may still be required for actions less than the simplified acquisition threshold at the discretion of the contracting officer. The contracting officer still has a responsibility to determine the price of construction as fair and reasonable;

therefore, the customer may be required to provide supporting documentation as needed to support the estimated cost of the project. FAR 36.203 further requires the IGE be prepared in as much detail as though the Government were competing for award. The purpose of a construction IGE is three-fold:

1.1.2.1. It is the basis for budgeting and reserving funds for the contract;

1.1.2.2. It is the basis for comparing costs or prices proposed by any offeror(s); and,

1.1.2.3. It is the basis for determining price reasonableness when only one proposal is received.

1.1.3. The key to development of a good independent cost estimate is to approach it from a prospective contractor’s viewpoint. This means the estimate should include (1) the direct costs incidental to the construction; (2) an allowance for indirect or overhead costs; and (3) an allowance for a reasonable amount of profit at a minimum.

1.1.4. CE and/or the customer must ensure that the cost estimate is fully funded and covers the amount of the developed IGE.

1.2. Types of Independent Estimates. There are many methods available for developing IGEs. This chapter will discuss three of the most common estimates – parametric cost estimates, engineering cost estimates, and construction cost estimates.

1.2.1. Parametric Cost Estimates.

1.2.1.1. Many construction contractors use a rule of thumb, or parametric cost estimating, to prepare their estimates. It is particularly useful when full design details are not available. Government estimators often use this method to develop programming or budgetary cost estimates.

1.2.1.2. For example, if the requirement is for a brick two-story house with a basement, the contractor might use $60/square foot (or whatever value is currently reasonable for the application based on historical data) to estimate the price of the house: $60/sq. ft. x 2200 sq. ft. = $132,000 house price.

1.2.1.3. In this example the estimate relates floor space to finished construction cost. A contractor can use this relationship to estimate the total construction price or cost (i.e., plus up or down scope) once a general structural design is determined - excluding the cost of land. Utilizing this http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/36.htm technique is considered relatively reliable and produces similar results to more detailed estimation tools.

This method of construction estimation saves the contractor and Government estimation costs, as well as time, however this is considered the most risky due to the lack of detail used for cost approximation.

1.2.2. Engineering Cost Estimate. Engineering estimates analyze significant work elements in a construction project to develop a labor and material cost approximation. For example, if the requirement is for a concrete patio, the engineer might estimate $70 a cubic yard in place for material and $20 a cubic yard for labor costs multiplied by the number of cubic yards to be poured. Instead of dividing the estimate for concrete into its major components, as the contractor might do, the engineer will estimate a certain cost for materials and a certain cost for labor. An engineer utilizing this method of estimation would base the construction cost on the major element of work being concrete placement. The overall cost would be estimated on the materials and the direct labor required to place the concrete. This price would include the cost of cement, aggregate, reinforcing steel, as well as forms, but it usually excludes all overhead and profit.

1.2.3. Construction Cost Estimate. The basis for a full construction cost estimate, frequently referred to as a brick and mortar estimate, includes a detailed analysis of all construction methods, materials, and labor, which will be used to complete the project. Typically, the estimates by the Government estimators and A-E contractors are commonly prepared to this level of detail. First, the required work is divided into its major components. Each component is then separated into constituent elements such as cement, aggregate, reinforcing steel, additives, form lumber and hardware, form fabrication, form erection and stripping, placement of reinforcing steel, placing concrete, and finishing concrete surfaces. Next, the estimated unit cost of labor and material for each element is created based on the quantities needed for the project. Additionally, any necessary on site plant erection, equipment rental, and overhead costs are added. Lastly, home office general and administrative costs are added to the overall cost along with profit to develop the total construction price. This method of construction estimation is considered to be the most accurate, however it is also the most labor intensive and time consuming.

1.3. Sources of Estimate Details. There are at least three sources available for obtaining details to support the IGE for Government construction contracts and modifications.

1.3.1. Previous Similar Contracts.

1.3.1.1. Pricing from recent similar contracts can be a valuable source of information in formulating the IGE. For example, the requirement is for the establishment of an indefinite delivery-indefinite quantity (IDIQ) contract for various paving requirements. Six offerors were part of an IDIQ contract which contained 200 individual line items for paving showing competition and established current market pricing. In this scenario, the competitive pricing of the six offerors may be used in the development of the IGE for the follow-on paving contract along with an adjustment for any estimated consumer price index adjustments for the following year.

1.3.1.2. Use caution and recognize certain extenuating circumstances may invalidate the data despite it being an excellent source of information. For example, consideration needs to be given in the estimate for how those prices were determined to be fair and reasonable if the IGE is based on unit prices from a previous requirement, IDIQ, or sole source contract. These are pertinent questions to ask:

1.3.1.2.1. Were individual unit prices analyzed?

1.3.1.2.2. How old is the data?

1.3.1.2.3. Do the prices paid in a previous requirement need adjustment for special site conditions, changes in labor rates, special material requirements, urgency of need, or seasonal price fluctuation?

1.3.2. Architect-Engineers (A-E) Estimates. A-E firms must provide comprehensive and up-to-date estimates for projects they design for the Government because of the use and far-reaching impact of the estimate,. These firms are fully equipped to prepare accurate cost estimates for their designs utilizing the latest computerized estimating technology, programs, commercial pricing guides, and knowledge of the latest construction trends to build a comprehensive construction estimate. A-E firms must keep pace with the relative economics of different structures, the materials required for its construction, and any changing trends in building construction which influences its costs.

A-E design projects are usually placed on hold a period of time so it is extremely important to investigate how recent it was developed and the amount of time which has passed since the finished 100% estimation was completed. Adjustments may need to be made to the cost estimate to cover increases, or decreases, based on changes to the consumer price index or price of materials as time has passed since the full design was finished. Minor changes to the original design by the current facility occupants can also cause price changes which must be included for budgetary purposes.

1.3.3. Commercial Pricing Sources. These sources might include commercial pricing guides and/or software such as:

• RSMeans® Construction Cost Data

• WinEstimator®

• DoD Facilities Pricing Guide

• Parametric Cost Engineering System (PACES)

• Tri-Service Cost Model (for Housing Projects)

Many of the commercial software programs allow adjustments for local site conditions, labor rates, and material prices. These programs also provide pricing for construction specialties, such as square footage cost, Americans With Disabilities Act (ADA) compliance pricing, assemblies cost data, concrete/masonry, electrical, and commercial facilities (versus residential).

1.4. Developing the Cost Estimate.

1.4.1. Tips and Best Practices. The following tips and best practices may be useful in developing the IGE:

1.4.1.1. Team Approach. It is wise to assemble a team made up of the project stakeholders

(i.e., facility users, contracting, resource managers, design engineers, price analyst, and other technical experts) to go over the estimate during the acquisition planning phase. This will help answer the “who, what, where, and when” regarding development of the estimate which can help flush out the “gray” areas affecting price. The right mix of team members can be a valuable source of historical data by providing functional expertise.

1.4.1.2. Structure. Define and document a structured approach to size the acquisition: Work

Breakdown Structure (WBS), Cost Element Structure (CES), models, analogies with other acquisitions, market survey plans, etc., or combinations of these. This structure provides the baseline for many future acquisition decisions. Statements of Work (SOW), IGEs, tradeoff decisions, funds reallocations, contract negotiations, value engineering change proposals (VECP), as well as spend plans will all rely on this structure and its related cost elements.

http://www.rsmeans.com/ http://www.winest.com/ https://www.wbdg.org/ffc/dod/unified-facilities-criteria-ufc/ufc-3-701-01 http://www.aecomassetmanagement.com/paces/ http://www.hnc.usace.army.mil/Media/Fact-Sheets/Fact-Sheet-Article-View/Article/482084/tri-services-automated-cost-engineering-system/

1.4.1.3. Format. The emphasis is on information and not necessarily the format. Most construction projects do not call for a unique combination of skills, materials, and equipment as one may initially think. A logical approach, standard spreadsheets, or common application software allow IGEs to be easily developed and transferred electronically. The following information should always be included:

1.4.1.3.1. Standard program information and coordination:

1.4.1.3.1.1. Program Title

1.4.1.3.1.2. Action Officer (Acquisition Manager/End User)

1.4.1.3.1.3. Phone/E-mail address

1.4.1.3.1.4. Activity Code (Organization)

1.4.1.31.5. IGE Preparer/Phone/Signature/Date

1.4.1.3.1.6 Resource Manager/Phone/Signature/Date

1.4.1.3.1.7. Construction Project Number(s)

1.4.1.3.1.8. Description of Project (short)

1.4.1.3.2. Use standard cost elements (tailored to fit the acquisition):

1.4.1.3.2.1. Direct Labor Cost (DLC)

1.4.1.3.2.2. Other Direct Costs (ODC): Materials & Supplies, Equipment, Travel, IT

1.4.1.3.2.3. Overhead Costs (OVHD)

1.4.1.3.2.4. General & Administrative Costs (G&A)

1.4.1.3.2.5. Profit

1.4.1.3.3. A Construction Cost Estimate Breakdown template is available for use.

1.4.1.4. Market Research. Using cost/price data from a single source, without scrutiny, invalidates the "independence" that makes the IGE useful in a price analysis or during contract negotiations. This might be a serious problem if competition is limited to one or only a few contractors.

Refer to FAR Part 10 for Market Research techniques.

1.4.1.5. Currency of Data. Revalidate a cost estimate where more than two years has past to reflect the current design, requirements of the end user, and the schedule needed for proper completion of the construction project.

1.4.2. Cost Elements. The following are standard cost elements, which should be included in the

IGE if applicable.

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1.4.2.1. Direct Labor Cost (DLC). Direct Labor Cost is the cost of labor directly applied to producing the requirement. There are two types of DLC:

1.4.2.1.1. Unburdened rates which includes only the salary of the direct workforce actually doing the onsite work. This method of cost estimation does not include any additional cost allocation.

1.4.2.1.2. Burdened rates simplify the cost estimating process because they include the salaries of the onsite workforce plus an allocation of costs for any price escalations, contractor overhead, profit, as well as general and administrative costs. The accuracy of this method may depend on the availability of recent and competitively negotiated burdened rates that have similar skill requirements as your acquisition. Labor burden rates vary considerably depending on the contractor’s organization size and facilities, as well as the type of work being performed.

1.4.2.2. Other Direct Cost (ODC). These are all costs (other than labor and materials) used to satisfy the requirement and are not necessarily direct construction labor. Materials, supplies, equipment, travel, and construction bonds should be considered. Do not use "Lump sum" for these estimates.

1.4.2.2.1. Contractors’ Equipment Ownership and Operating Expense. Construction equipment is normally defined as a contractor’s tool costing more than several hundred dollars. It is necessary to know if the contractor will be using rented or personally owned construction equipment so an accurate estimate can be created.

1.4.2.2.1.1. If the contractor is using equipment they own, FAR 31.105(d)(2)(i) states actual ownership and operating expenses are used if they can be determined from the contractor’s financial records for each piece of equipment. If actual expenses cannot be determined from the contractor’s records, check the Civil Works Engineer Pamphlets for the appropriate Construction Equipment Ownership and Operating Expense Schedule.

1.4.2.2.1.2. If the contractor is using rented or leased construction equipment, refer to

FAR 31.105 (d)(2)(ii) and FAR 31.205-36. Current rental rates should be checked from local suppliers of construction equipment or through the use of an estimation tool like RS Means Construction Cost Data.

1.4.2.3. Overhead Costs (OVHD). These are the regular operating expenses of a business such as rent, utilities, facility maintenance, and taxes. Overhead rates generally vary from one contractor to another. Overhead rates can be actual indirect cost rates or DCAA audited rates. In either case, the purpose is to determine overhead rates based on costs that are allowable, allocable, and reasonable.

1.4.2.4. Profit. Profit is an allowable cost and should be considered as part of the overall price for any construction project. IAW DFARS 215.404-4, contracting officers shall use a structured approach for developing a prenegotiation profit or fee objective on any negotiated contract action when certified cost or pricing data is obtained. A structured approach is highly recommended to analyze profit for all acquisitions regardless of the need for Certified Cost or Pricing Data. The most common of the structured approach is the Weighted Guidelines Method (DD Form 1547, Record of Weighted Guidelines Application) which focuses on three profit factors:

1.4.2.4.1. Performance Risk (Technical, Managerial & Cost Control)

1.4.2.4.2. Contract Type Risk

http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/31.htm http://www.publications.usace.army.mil/USACE-Publications/Engineer-Pamphlets/u43545q/436F6E737472756374696F6E2045717569706D656E74204F776E65727368697020616E64204F7065726174696E6720457870656E7365205363686564756C65/ http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/31.htm http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/31.htm http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/dfars/dfars215.htm https://www.esd.whs.mil/Portals/54/Documents/DD/forms/dd/dd1547.pdf https://www.esd.whs.mil/Portals/54/Documents/DD/forms/dd/dd1547.pdf

1.4.2.4.3. Working Capital Adjustment and Facilities Capital Employed

1.5. Delivery Orders. Pre-priced Indefinite Delivery Contract’s (SABER, paving, roofing, fencing, painting contracts): A delivery order is issued by the Government to the contractor to order work under an existing Indefinite Delivery Contract. In these instances, the IGE should consist of the specific quantities of the various line items ordered.

1.6. Protection of the IGE. Classify IGEs as “FOR OFFICIAL USE ONLY.” Do not reveal Government estimates to the public under any circumstances unless the Contracting Officer deems it necessary. The Contracting Officer is the only person who has the authority to disclose Government cost estimates because disclosure may put the Government at a disadvantage in dealing with contractors.

FAR 36.203(c) permits disclosure of information concerning the Government estimate during contract negotiations to allow the Contracting Officer to identify a specialized task and the associated cost breakdown figures ONLY to the extent deemed necessary to arrive at a fair and reasonable price.

CHAPTER 2

Acquisition Planning

2.1 Introduction. Acquisition planning is the single most important phase of the procurement process because the decisions made during this phase shape the direction, eventual outcome and success of the procurement. An Acquisition Plan (AP) is a permanent record, or roadmap, of the decisions bearing on the strategy undertaken. It answers the "who-what-when-where-why-how" of the planning process by providing the facts and rationale supporting the technical and business judgments. We developed the Construction Acquisition Planning Matrix (Appendix 2-A) to assist the acquisition team in asking the “right questions.” Good planning involves developing an approach that includes how the contract will be administered after award. Therefore, the matrix reflects both pre-award and post-award. The matrix is not intended as a checklist, but as a guide to planning.

The Construction Acquisition Planning matrix contains many questions that apply to the design phase of the project. We recommend addressing these questions at the Title I A-E design phase or the In-House design phase. When acquisition planning involves A-E services, review the requirements for any inherently governmental functions and proceed in accordance with FAR 7.5 and DFARS 207.5.

FAR Part 7 advocates that acquisition planning begins as soon as the agency identifies its need. In some instances, this may be as early as the turnover of the 100% design and in others; it may be when funding availability is confirmed. Meet and talk with the stakeholders responsible to get all the acquisition and execution issues on the table. The group of stakeholders should include the contracting officer, Small Business Office (and possibly the Small Business Administration), technical representative/engineer/inspector, contracting officer’s representative (COR), the facility occupant, and might include legal as well as environmental personnel.

An Acquisition Plan template is located at the AFFARS Library, Part 5307.

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CHAPTER 3

Simplified Acquisition of Base Engineer Requirements (SABER)

3.1 Introduction.

3.1.1. Simplified Acquisition of Base Engineer Requirements (SABER) contracts provide a streamlined means to complete minor construction projects estimated at less than $1M (10 U.S.C.

2805). Contracting personnel and civil engineers are encouraged to adapt their SABER-like acquisitions and processes to meet their local needs or local environment.

3.2. Definitions

3.2.1. A SABER contract generally means a fixed-price, indefinite-delivery/indefinite-quantity

(ID/IQ) contract which orders are placed. Each order includes detailed task specifications which encompass most types of real property maintenance, repair, and construction work. The features of a SABER contract are:

3.2.1.1. Unit Price Guides (UPG). UPGs are commercial pricing tools such as computer cost databases and libraries of hard copy books. In a rare occasion they might also include Government-developed unit price books. UPGs list construction tasks as line items by a unit of measure and a unit price. The estimating team must tailor the UPG line item pricing to a specific location because they are listed as a national average. This step is called “localization” which is critical to the success of an accurate SABER Program. Government and commercial software is available for line item selection which simplifies the ordering process. Examples of commercially available UPGs are those published by WinEstimator Inc®, Timberline Software®, and R.S. MEANS, Inc®. Validate the accuracy of the software tools before issuance of the Request for Proposal (RFP).

3.2.1.2. Coefficients. Coefficients are factors applied to the standard unit prices in the UPG to calculate the overall task order pricing. Awardees of SABER contracts have coefficients which increase or decrease the order costs for areas such as overhead, profit, minimum design costs, G&A expenses, bond premiums, and gross receipt taxes.

3.2.1.2.1. The team can decide how many coefficients to use. Coefficients may include bands or ranges based on dollar levels, standard and non-standard hours, range or isolated site work, or work in secured areas. Air Force experience with SABER has shown that a good approach is to use tiered coefficients with break points at cumulative dollars awarded thresholds over the life of the contract, including options. This approach recognizes a contractor’s overhead decreases as workload increases. For example, the RFP and resultant contract might establish coefficients for <$3M, $3-6M, and so on.

3.2.1.2.2. An offeror's proposed coefficients provide insight into their experience and knowledge of the local construction market. Typically, we expect proposed coefficients of less than 1 in a strong competitive market. The acquisition team should consider requesting a rationale for each coefficient to aid in the analysis of any proposed coefficients. Do not consider this information as certified cost or pricing data in the context of FAR 15.

3.2.2. Minimum Design.

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3.2.2.1. Under the SABER program a minimum design of 35% is required as part of the awarded task order. It is considered to be outside the parameters of minimum design if it requires the services of a registered architect or engineer. The contractor is responsible for submitting documentation that substantiates the proposed approach.

3.2.2.2. Supporting documents are requested from the contractor which may include a

Statement of Work (SOW), Program Evaluation and Review Technique (PERT) chart, cost estimates, justification for non-pre-priced items (NPI), verified as-built drawings, manufacturer’s or technical drawings/schematics for fabrication and assembly of structural elements, form, fit and attachment details for installation of materials/equipment, and design calculations to substantiate proposed layout or sizing of utilities with their structural elements (i.e. HVAC loads, lighting, platform supports, etc.).

3.2.3. SABER Task Order (TO) Pricing. The Task Order price is the product of all required tasks, quantity, unit of issue, UPG price per unit, and the coefficient plus the negotiated price for any non-priced items (NPIs). NPIs are tasks which have not been identified or pre-priced in the UPG and are required as an item of performance under the construction task order. NPIs are negotiated separately before issuance of the TO.

3.3. Purpose of the SABER Program

3.3.1. SABER contracts expedite the award of civil engineering (CE) requirements by reducing the overall CE design work and acquisition lead-time. SABER contracts can either be a single or multiple award contract. AFFARS MP5316.504(a)(2) mandates that, upon execution of the contract, an obligation shall be recorded based upon the issuance of a delivery or task order for the cost/price of the minimum quantity specified. The contractor manages projects from an office, or in close proximity to the base since the relationship is long-term. SABER is generally best suited for non-complex, minor construction, and maintenance and repair projects which require minimal design. Typical SABER projects range from $50K-$500K.

3.3.2. SABER task orders are priced based on a UPG, therefore, the Government may realize substantial cost savings by reserving smaller projects for SABER and utilizing Multiple Award Construction Contracts (MACC) for larger construction projects.

3.3.3. A successful SABER program provides:

3.3.2.1. Improved customer service and responsiveness. After IDIQ contract award, the time required to estimate, propose, negotiate, and issue TOs for individual projects is four weeks, or less.

3.3.2.2. Incentives for the contractor to work to a high standard and complete projects in a timely manner in order to receive future TOs based on past performance.

3.3.3. Concurrent SABER Contracts. Concurrent SABER contracts, one for vertical construction and one for horizontal construction where the contractors do not compete with each other for task orders, have worked well in the past. Careful consideration by the acquisition team must be given to establishing multiple SABER contracts. Things like volume of workload, limited facility space, limitations on competition, etc. must be taken into consideration.

3.4. Limitations of SABER Contracts

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3.4.1. SABER is not appropriate for large, complex construction projects which require extensive design effort or are for predominately single skill/material projects which competitively awarded contracts, single trade ID/IQ contracts, or competition under a MACC would be a better use of Government resources.

3.4.2. Architect-engineer (A-E) services.

3.4.2.1. SABER is not an appropriate acquisition approach for A-E services as defined in FAR

36.601-4(a). The Brooks Act (1101 - 1104) requires use of specific procedures (see FAR 36.6) to acquire A-E services.

3.4.2.2. Non-personal services subject to the provisions of the Service Contract Labor

Standards statute (e.g., a TO solely to install carpet when the labor involved exceeds $2,500) are another area where using SABER is inappropriate. The Department of Labor (DOL) has jurisdiction over the classification of a labor standard. They determine if it is construction work subject to the Construction Wage Rate Requirements statute or a service subject to the Service Contract Labor Standards statute. The wage rate requirements for the entire project are determined by where a majority the work is being completed as a whole. DOL guidance states services like carpet installation, landscaping, asbestos removal, and building demolition performed are considered a service because they are incidental to a larger construction project. If the preponderance of the work is construction, even though there may be some incidental service related work, the project falls under the Construction Wage Rate Requirements.

3.5. Acquisition Planning

3.5.1. SABER Working Group.

3.5.1.1. The key players are CE, contracting, legal, and other affected functional areas. The team plans and implements a SABER acquisition that supports the installation requirements in the timeframe needed. Team responsibilities include:

3.5.1.1.1. Estimating the expected scope of the installation SABER Program, to include considering historical information, projected funding opportunities, projected mission changes and bed-downs.

3.5.1.1.2. Determining the appropriate minimum and maximum contract amounts.

3.5.1.1.3. Determining the feasibility of using other DoD contracts. These may be ideal sources for funding the contract minimum.

3.5.1.1.4. Determining the organizational structure of the SABER post-award surveillance and administration office.

3.5.2. Base Civil Engineering (BCE) works with the end user to prepare SABER program specifications. These include the master specifications and the Statement of Work. The master specifications describe the overall scope of the SABER Program and is part of Section C in the RFP.

The Statement of Work defines specific construction standards for all tasks ordered under the contract and forms the basis for developing line item work tasks in the UPG. The BCE chooses the UPG after developing the specifications.

3.5.3. Request for Proposal (RFP)

3.5.3.1. The SABER RFP should closely mirror the format and content of a large construction

ID/IQ solicitation. Unique features of a SABER RFP generally include the following:

3.5.3.1.1. A description of the coefficient(s) that the offeror must propose, to include a tiered approach in which the offeror proposes declining coefficients based on cumulative task order expenditures. For example, the first tier might require coefficients for total task orders up to $3 million.

The second tier might encompass cumulative expenditures between $3M and $5M with yet another tier for cumulative expenditures exceeding $5M. Regardless of the strategy used, the RFP must fully describe the tiers and explain implementation of the approach.

3.5.3.1.2. Identification of individual coefficients for standard hours, non-standard hours, geographically separated ranges or sites, secured areas, and/or varying project magnitudes, as appropriate;

3.5.3.1.3. Identification of the applicable UPG along with any required software, hard copies, and/or computer support requirements;

3.5.3.1.4. A sample SABER project scheduled for an award later under the resulting

SABER contract. Selecting a sample is highly recommended as it provides a demonstration that the offeror understands the design aspect of the SABER program and confirms the offeror’s commitment to provide the quality design packages to the Government;

3.5.3.1.5. The level of architectural/drafting support performed by the contractor (not to be interpreted to mean A-E services);

3.5.3.1.6. A provision covering the preparation of designs in the last quarter of the fiscal year in anticipation of fall out funds (Sample Hold Harmless Agreement); and

3.5.3.1.7. A provision for adding non-prepriced items (NPI) to the contract.

3.6. SABER Execution and Contract Administration.

3.6.1. Processing Civil Engineer Project Orders after Contract Award. The SABER project manager should provide the contracting officer with a requirements package which:

3.6.1.1. Supports the Government estimate in as much detail as practicable, but also takes into consideration the nature of the contract type being utilized. The estimate should contain enough detail to support the programming estimate and provide a rationale for any unique requirements. FAR 36.203 requires preparation of an Independent Government Cost Estimate when the anticipated price/cost of the construction or modification is above the simplified acquisition threshold.

3.6.1.2. Includes a statement of work, concepts, sketches, and drawings;

3.6.1.3. Identifies any statutory cost limitations;

3.6.1.4. Furnishes any special instructions or requirements;

3.6.1.5. Includes any required cost comparisons, justifications, and approvals; and https://cs.eis.af.mil/sites/10059/afcc/knowledge_center/Documents/Other_Pubs/Other_Guides/construction_guide/attachment_3C.docx

3.6.1.6. Assists in the timely closeout of completed projects.

3.6.2. Site visit. The SABER project manager/inspector, contracting officer representative, using organization, and contractor should normally conduct a scope validation/site visit for each project order to discuss topics such as:

3.6.2.1. Site access;

3.6.2.2. Methods and alternatives for accomplishing work;

3.6.2.3. Definition and refinement of requirements;

3.6.2.4. Requirements for plans, sketches, drawings, etc.;

3.6.2.5. Detailed scope of work; and

3.6.2.6. Time requirements for completion, phasing requirements, and liquidated damages.

3.6.3. Contractor’s project order proposals. The contractor develops a detailed price proposal by identifying necessary tasks in the UPG, verifying as-built drawings, refining quantities, pricing NPIs, preparing working drawings, and developing performance times. The SABER program manager may need to answer questions from the contractor and clarify technical aspects of the project.

3.6.4. TO negotiation. The contract administrator reviews the contractor’s proposal for scope, compliance, completeness, and reasonableness. This review should verify that individual line item prices are the same as in the UPG and appropriate coefficients are applied. The contract administrator forwards the contractor’s proposal to the SABER program manager for a technical review of the project. The contracting officer and program manager jointly evaluate the proposed method of construction, tasks, quantities, performance schedules, and any contractor drawings. A proposal evaluation is completed to support the Governments assessment of the contractor’s proposal. The SABER DO Tracking Tool is a good tool to use for SABER administration.

3.6.4.1. After completing initial evaluations, the SABER team reviews the proposal with the contractor. The contracting officer, with assistance from the SABER program manager, establishes the Government’s negotiation objective, including any variations involving tasks, methodology, quantities, NPIs, and/or timelines.

3.6.4.2. After completing negotiations, the contracting officer prepares a price negotiation memorandum (PNM) in accordance with FAR 15.406-3. (Task Order File Checklist)

3.6.4.3. Unless otherwise noted in the contract, consider SABER task orders as firm fixed price orders. Absent documented changes in requirements (necessitating increases in quantities), or evidence of gross mistakes, the underestimating of quantities of materials does not summarily entitle the contractor to an upward adjust ment of price. Nor is the Government entitled to a rebate of unused quantities in such orders unless specifically mentioned in the task order (i.e., order includes estimated quantity line items subject to a variation and for which the Government will only pay for the quantities actually installed.)

3.6.5. Adding Non-Prepriced Items (NPI) to the Contract

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3.6.5.1. NPI prices include only direct costs. Negotiating prices for NPIs and incorporating them in a TO does not incorporate the items into the contract for subsequent use as a priced item. To permit subsequent use, the contracting officer must incorporate prices for NPIs by supplemental agreement into the SABER contract itself, in which case they become pre-priced items under the contract. This may occur with an annual update to the UPG or separately at another time during the year.

3.6.5.2. There is no limit to the number of NPIs which can be included in a project, however they cannot exceed 10 % of the total price of the project. Past experience has shown it is wise to keep them to a minimum.

3.6.6. Funding and End of Year Requirements

3.6.6.1. In order to expedite year-end or emergency requirements, the contracting officer may process SABER projects up to the point of award in advance of full project funding utilizing the procedures of AFFARS MP5332.7.

3.6.6.2. The contracting officer normally establishes milestones for actions in support of end-of-year actions to ensure sufficient lead time for SABER review, approval requirements, receipt of preliminary SABER project cost estimates, technical analyses, and negotiations.

3.6.7. Task Order Modifications. Modifications to SABER task orders are common. Routine modifications include differing site conditions and changes in requirements. However, SABER by its nature requires the contracting officer’s diligence in identifying contractor omissions or design carelessness.

3.6.8. SABER Inspection and Acceptance. While inspection is the inherent responsibility of CE, it is the contracting officer’s responsibility to ensure inspections, reporting, and tracking occurs.

Normally payments are based upon a percentage of completion for projects of sixty (60) calendar days or longer. The project manager/inspector is responsible for verifying the amount of work completed, and ensuring overpayment does not occur.

3.6.9. Option Price Adjustments. There are several ways to structure SABER contracts to allow for option price adjustments throughout the life of the contract which can span multiple years. One strategy is to incorporate a static UPG for the duration of the contract and allow offerors the opportunity to propose different coefficients for each of the contract periods. Another approach is to incorporate a static coefficient, or coefficients, and update the UPG each period. A third strategy, which is the most cumbersome and least desirable, is to incorporate a static coefficient as well as a static UPG. This last approach requires the use of an EPA clause to adjust option prices. (Sample Clause for SABER EPA) http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/af_afmc/affars/MP5332.7.htm https://cs2.eis.af.mil/sites/10059/afcc/knowledge_center/Documents/Other_Pubs/Other_Guides/construction_guide/attachment_3A.docx

CHAPTER 4

Multiple Award Construction Contracts (MACC) & Task Order (TO) Negotiations

4.1. Introduction. The Multiple Award Construction Contracts (MACC) process is a tool to facilitate construction projects on an installation. Based on the Federal Acquisition Regulation paragraph 16.504(c)(1)(i), the contracting officer must, to the maximum extent practicable, give preference to making multiple awards of indefinite-quantity contracts under a single solicitation for the same or similar supplies or services to two or more sources.

4.2. MACCs – WHAT ARE THEY?

4.2.1. MACCs are indefinite delivery-indefinite quantity (IDIQ) contracts whose requirements are competed among a pool of multiple awardees based on work defined in individual task orders.

4.2.2. Work may consist of multiple disciplines in general construction categories. It may involve design services for all aspects of general building construction including construction, modifications and renovations of existing facilities.

4.2.3. MACCs guarantee each awardee a minimum amount of work, usually expressed as a dollar amount. Rather than stating a minimum amount for all contracts equally, a design-build seed project may be awarded to the offeror representing the best value to the Government.

4.2.4. MACCs may augment or replace SABER contracts, depending on specific base requirements and the contracting environment. Typically, SABER is well suited to smaller, less complex projects with MACCs picking up larger, more complex projects. The following matrix identifies and compares the primary features of each contract tool that should be carefully considered during the acquisition planning phase:

4.3. MACC vs. SABER.

MACC SABER

Contract Type IDIQ IDIQ

Ordering Delivery or task orders Delivery or task orders

Initial Competition Competitive Competitive or set-aside

Program Size No Limit Usually $20-$50M over 5 years

Number Contracts Varies by base but 5-7 provides good competition

Most bases can only support one contract

Competition After Award

- Task orders priced per requirement

- Requirements competed among all awardees

- Task orders priced using commercial unit price books

- No competition unless more than one

SABER

Flexibility Complex projects Full design & build -- up to 100% design -- no restrictions

Non-complex projects Minimum design -- up to 35% -- some updating of old designs

MACC SABER

Task Order Scope $1M-$5M (typical) $150K-$1M (typical)

Task Order Lead Time 15-45 days average 7-14 days average

Contract Responsiveness – Small requirements

May be less responsive -- Must compete -- Longer lead time

May be more responsive -- If only one contractor -- Shorter lead time

4.4. ACQUISITION PLANNING. As emphasized in Chapter 2, Acquisition Planning, sound planning is at the heart of a successful MACC acquisition. The following are some of the specific issues to consider during the planning and strategizing phases in addition to those areas addressed in Chapter 2:

4.4.1. Development of statement of work

4.4.2. Identify target number of awards

4.4.3. Consider 8(a), HUBZone, unrestricted, other

4.4.4. Establish program maximum dollar amount

4.4.5. Establish contract minimums

4.4.6. Address feasibility of regional contracts versus base specific contracts

4.4.7. Address availability of funding for contract minimums

4.4.8. Identify seed/demonstration project – for first contract awarded

4.4.9. Address availability of funding for seed/demonstration project

4.4.10. Address acquisition approach (FAR 15 and 36 / AFFARS 5315.3)

4.4.11. Identify measures planned to increase interest and competition

4.4.12. Address task order limitations

4.4.13. Address task order restrictions

4.4.14. Identify evaluation factors

4.4.15. Establish relevancy definition for past performance

4.4.16. Address task order ordering procedures and surveillance

4.4.17. Address bundling considerations and/or consolidation of requirements, discussed in more detail below http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/af_afmc/affars/5315.htm

4.5. BUNDLING and/or CONSOLIDATION

4.5.1. Acquisition Planning will lay the groundwork for a successful acquisition. A key consideration early on in the process is bundling or consolidation.

4.5.2. Small Business performing a majority of construction and receiving the award of a MACC should be considered during the acquisition strategy.

4.5.3. Review the requirement and determine if bundling or consolidation will occur during acquisition planning.

4.5.4. IAW FAR 2.101, Bundling means:

4.5.4.1. Consolidating two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract that is likely to be unsuitable for award to a small business concern due to —

4.5.4.1.1. The diversity, size, or specialized nature of the elements of the performance specified;

4.5.4.1.2. The aggregate dollar value of the anticipated award;

4.5.4.1.3. The geographical dispersion of the contract performance sites; or

4.5.4.1.4. Any combination of the factors described in paragraphs (1)(i), (ii), and (iii) of this definition.

4.5.4.1.5. Substantial bundling per FAR 7.107-4 (a) (1) and (2)

Substantial bundling is any bundling that results in a contract task, or delivery order with an estimated value of; $8 million or more for the Department of Defense; $6 million or more for the National Aeronautics and Space Administration, the General Services Administration, and the Department of Energy; or, $2.5 million or more for all other agencies.

These thresholds apply to the cumulative estimated dollar value (including options) of; Multiple-award contracts; Task orders or delivery orders issued against a GSA Schedule contract; or Task orders or delivery orders issued against a task-order or delivery-order contract awarded by another agency.

4.5.4.2. In addition, consider “consolidation” during the process.

4.5.4.3. “Consolidation of contract requirements” means the use of a single solicitation to obtain offers for a single contract or a multiple award contract. The purpose of the consolidation is to satisfy two or more requirements of a department, agency, or activity for supplies or services that previously have been provided to, or performed for, that department, agency, or activity under two or more separate contracts lower in cost than the total cost of the contract for which the offerors are solicited. Note:

Consolidation is not the same as bundling. It is applicable regardless of business size of previous contractor. Consolidation and Bundling requirements could both apply to an acquisition http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/02.htm

4.5.4.4. IAW FAR 7.107, Additional Requirements for Acquisitions Involving Consolidation, Bundling, or Substantial Bundling, before conducting an acquisition that is a consolidation of requirements with an estimated total dollar value exceeding $2 Million, the senior procurement executive or chief acquisition officer shall make a written determination that the consolidation is necessary and justified in accordance with 15 U.S.C. 657q, and ensure steps listed at FAR 7.107-2 (a), Consolidation, are accomplished.

4.5.4.5. Approval authorities are in accordance with AFFARS 5301.601.

4.5.4.6. Market research may indicate that consolidation is…