Vandenberg_PBR_SubCLIN_Overview_11Oct12.pptx

Overview of Sub-Contract Line Item Numbers (CLINs) in PBRs

15 October 2012 Vandenberg AFB Group Site Visit

I n t e g r i t y - S e r v i c e - E x c e l l e n c e

Headquarters U.S. Air Force

AF will utilize a Statement of Objectives (SOO) that identifies the agency’s overarching and site-specific minimum performance objectives (MPOs).

PBR Contractors will then propose the end state for each site to be achieved (in order of preference – see Section 1 of the SOO):

Site Closeout (SC) Response Complete (RC) Remedy in Place (RIP) For all sites that do not achieve SC during the Period of Performance (POP) of this TO:

Conduct optimization studies, and implement those solutions to enhance or replace existing treatment systems and monitoring networks; including monitoring optimization, contaminant removal and/or containment, and treatment efficiency.

What’s Different in the New AF PBR Initiative?

Note: Pay particular attention to the definitions of SC, RC and RIP in the Final RFP!

AF will identify minimum performance objectives in the final RFP that all PBR Contractors must meet - referred to as Table 1 of the SOO.

Contractors will be required to propose an end point that is an optimum solution for the Government in the context of expected life-cycle costs beyond the POP for sites not achieving unrestricted SC during the task order POP (i.e. business case analysis).

Sub-CLINs provided at the time of solicitation will reflect the minimum performance objectives only.

Contractors shall propose Sub-CLINs pursuant to their proposed end state to meet stretch goals (i.e. overarching objectives).

Minimum Performance Objectives Table 1: Example Minimum Performance Objectives

SS333 – BLDG. 13852

TA549 – BUILDING 11777

TU561 – B;DG 13017

TU563 – BLDG. 13020

TU580 – BLDG. 06008

TU582 - DEMO BLDG. 06335

TU587 - BLDG. 07015

CD124 - CE Maintenance Compliance with the FFSRA and associated schedules.

Air Force approval through the COR and Regulator approval (e.g. written regulator confirmation of acceptance of SC documentation for unrestricted use).

Achieve Remedy in Place (RIP) within two (2) years from NTP at the following sites:

MY240: FORMER BUILDING 9310

TU670 - Building 11670 Compliance with the FFSRA and associated schedules.

Air Force approval through the COR and Regulatory approval (e.g. written confirmation of acceptance of RIP documentation).

What are Sub-CLINs?

Sub-CLINs provide a means for funding economically or programmatically viable stages by identifying the items or remediation services to be acquired as non-severable contract deliverables (i.e. performance objectives versus fiscal year).

Sub-CLINs shall provide a firm fixed price for separately identifiable contract deliverables (performance objectives).

The performance period for the Sub-CLIN may be for more than one (1), but not more than five (5) fiscal years.

Performance period on Sub-CLINs is not the same as performance period in Table 1 of the SOO (money expiration for Sub-CLINs vs. objective completion date per Table 1 of SOO).

Past performance may be judged by timeliness of completion per SOO Table 1.

How are Sub-CLINs used?

Sub-CLINs should identify remediation objectives or activities that relate directly to, and are an integral part, of the CLIN.

Include separate Sub-CLINs for Project Management Plan (PMP) and for Environmental Insurance (if used).

The sum of all Sub-CLIN prices and completion dates must not exceed the value or completion date of the CLIN. Milestone Payment Schedule (MPS) values and completion dates must not exceed the value or completion date of the individual Sub-CLIN.

Sub-CLINs cannot be partially exercised (e.g. must be fully funded at time of exercise or violates Anti Deficiency Act).

Because the amount of available program funding is unpredictable, the use of multiple Sub-CLINs provides the AF with the flexibility to match options to be exercised with available funding.

The Government may restructure the Sub-CLINs with Apparent Successful Offeror based upon the submitted MPS.

Example CLINs and Sub-CLINs

CLIN (Yellow Row) = 4 digits

Sub-CLINs (Green/Blue Rows) = 4 digits + 2 letters (started at AA, proceeding alphabetically to AZ, then BA through BZ, etc.) Note: The letters “O” and “I” are intentionally omitted, since they tend to be confused with the numbers “0” and “1”.

CLIN and Sub-CLINs are included in the awarded contract

CLIN or “award value” = Sum of all Sub-CLINs The PMP activities cover more than 5 FY’s, and therefore, are broken into more than one Sub-CLIN.

Milestone Payment Schedule The Contractor shall propose milestone payments as part of the MPS in its proposal.

Milestone payments shall be based on the completion of a definable and measurable step, which is considered integral and necessary to the achievement of the stated performance objectives.

Completion of milestones shall demonstrate payment is appropriate and warranted.

The Air Force intends to use the Contractor’s proposed MPS to restructure Sub-CLINs, if necessary, to align with projected available funding prior to award; however the MPS is not final with award of the TO.

The MPS shall be included as part of the Project Management Plan (PMP). The MPS will be negotiated during development of the PMP and may require additional changes.

Sub-CLIN Sites Task Name Duration Start Finish Payment Milestone Amount % complete

EXAMPLE

Milestones shall include approval requirements in accordance with the performance standards in Table 1 in the SOO and the requirements of the regulatory structure.

The Air Force will review draft deliverables to ensure lead agency concurrence before the documents are provided to the regulators.

Contractors may sub-divide deliverables that require regulatory approval into two milestones:

“Air Force Approval of Draft __” and a second milestone of “Air Force and Regulatory Approval of Final __”.

Contractors may also use a single milestone:

“Air Force and Regulatory Approval of Final____”.

If Regulators do not have authority on the deliverable, it may remain as “Air Force Approval of Final ___”.

EXAMPLE

Milestones shall not include management and overhead type costs (program/project management, monthly reporting, mobilization costs, etc.) that do not provide measureable program advancement.

Milestones shall not represent a “progress” payment or a monthly payment for level of effort expended. Completing site mobilization/demobilization, accomplishment of field activities, or submittal of a monthly/annual status report are examples of unacceptable milestones.

Terms of acceptance of milestones will be negotiated during the PMP. The Government will document agreements for payment within the Surveillance Plan that will be a living document throughout the life of the task order.

At the time of proposal, it’s a best practice for the MPS to include:

Description of the milestone including standard of acceptance and deliverable associated (e.g. AF and Regulator acceptance of Final ROD).

Amount of proposed payment associated with completed milestone.

Date at which milestone is to be completed per Integrated Master Schedule (month/year).

During post award, it’s a best practice for the MPS to also include:

Projected date (month/year) for Sub-CLIN to be exercised to maintain schedule – continue to update with project acceleration or delays during life of contract.

Date Sub-CLIN exercised.

Percent complete for each milestone.

Optimized Exit Strategy (OES) Sub-CLINs and milestones for OES are required for all sites that do not achieve Site Closeout during POP (i.e. OES is required for sites upon reaching RIP or RC). Refer to Section 1.0 of Final RFP.

Milestone for AF Approval of an OES Plan is expected as one of the first deliverables under this objective. This can either be a separate document or incorporated into Work Plans. It is used as the framework to advance toward or achieve SC, during or post POP.

The OES objective may include multiple Sub-CLINs to meet funding availability, not exceeding the five (5) year funding duration. Sub-CLINs may include specific non-severable deliverables depending upon proposed approach, or may consist of an approach similar to the following:

“Mobilize and Develop an OES” in which the final deliverable must be an OES Implementation Plan.

“Implement an OES Strategy” in which the final deliverable must be an Implementation Completion Report.

“Finalize an OES” in which the final milestone expected within the POP will be a Final OES Effectiveness Report.

Performance Model The Contractor shall develop a Performance Model that describes the expected course of the remediation process (i.e. how conditions are expected to change over time as measured using appropriate performance indicators from the current state until the response objective is achieved).

Predictive model indicating how concentrations and /or mass will be reduced over time, or how annual costs will be minimized over time with the proposed approach.

Intended to identify specific effectiveness metrics for milestone payment of the interim activities associated with the optimization approach.

Used to define payable metrics for proposed milestones.

Refer to Final RFP for specific requirements to determine whether a conceptual model at the time of proposal with details in work plans during task execution will be acceptable or if a detailed model is required at the time of proposal.

Example #1: CLIN, Sub-CLINs and Payment Milestones

EXAMPLE

(Sub-CLIN portion negotiated between the Air Force and the selected Offeror prior to award. MPS finalized during the PMP development and approved by the Air Force when the PMP is approved.)

deliverable. In the example above, 80% of $200,000 = $160,000; therefore, RACR (draft+final) = $40,000 or 20% of the Sub-CLIN 0009AC. Air Force approval of the "Draft" is defined as Contractor resolution of Air Force comments on the Draft deliverable.

Payment Milestones Sub-CLINs are included for the Preliminary PMP and the Final PMP; but the PMP is to be updated and maintained over the life of the task order with a minimum of annual updates per the SOO. The terms “Preliminary” and “Final”, as used in the sub-CLIN description, do not equate to only two (2) versions of the document; but rather are used as terms to bridge the PMP, which is greater than five (5) FY’s worth of activities.

Example #2: Negotiation with Apparent Successful Offeror

EXAMPLE

(Sub-CLIN portion negotiated between the Air Force and the selected Offeror prior to award. MPS finalized during the PMP development and approved by the Air Force when the PMP is approved.)

Payment Milestones Values illustrated are the original values per the Offeror’s proposed milestones. The AF should communicate their desire to restructure, then allow the Offeror to adjust their values, if appropriate, for sufficient cash flow provided the final deliverable is at least 20% of the sub-CLIN.

What Changed in Example 1 versus Example 2?

Sub-CLIN 0001AC for $200,000 to achieve RIP was sub-divided into 0001AC for $60,000 to achieve ROD and 0001AD for $140,000 to achieve RIP.

Total price for site CG025 did not change from $200,000 but sub-division allows progress of work at this site to proceed with smaller amount of available dollars.

Requires completion of the ROD prior to execution of the remedial action (e.g. bona fide need).

Provides float in funding expiration in the event of unforeseen delays:

Each Sub-CLIN can extend up to 5 years from date of exercise to complete prior to funding expiration.

Extension of time for expiration of funds does not equate to extension of performance objective delivery date in contract unless a no cost modification to Table 1 dates was also provided.

Payment milestone values will need to be adjusted by the apparent successful offeror.

Understanding the Types of Sub-CLIN Options Anything not exercised at the time of award in inherently an “option”:

May not have sufficient funding to exercise at task order award.

May require completion of prior activities before there is a bona fide need to exercise an option.

May include unit pricing in which case you only exercise the number of units necessary.

Options may be ordered anytime within the POP, provided they can be completed within the POP, or five fiscal years from the date of exercise (whichever is sooner).

The Government reserves the right not to exercise options.

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