Atch_4_-_Air_Force_Contracting_Construction_Guide_Ref_Question_14.pdf

Air Force Contracting Construction Guide

May 31, 2017

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

Atch 4 19-R-0001 QAs

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. Beneficial Occupancy

7.19. Termination

7.20. Liquidated Damages

7.21. Final Contract Completion

7.22. Contract Closeout

Acronyms

Tools

INTRODUCTION

The purpose of this Air Force Construction Guide is to address key issues to assist the contracting officer and stakeholders in acquiring construction. The Guide focuses on critical processes and strategies to prepare a construction acquisition. The Guide addresses Independent Government Estimates, Acquisition Planning, Simplified Acquisition Base Engineer Requirements (SABER), Multiple Award Construction Contracts (MACC) and Task Order Negotiations, Evaluating Unit Prices - Indefinite Delivery Contracts (IDC), and Construction Labor Requirements.

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.

CHAPTER 1

Independent Government Estimates

1.1. Introduction

1.1.1. An Independent Government Estimate (IGE) is an unbiased cost estimate based upon the specifications and without the influence of potential contractor’s marketing effort or input. In the Air Force construction environment, 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.

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. At the discretion of the contracting officer, an IGE may be required for actions less than the simplified acquisition threshold.

Waiver of this requirement however, does not relieve the contracting officer of the responsibility to determine price reasonableness. FAR 36.203 further requires that 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 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 cost estimate is to approach it from a prospective contractor’s viewpoint. This means the estimate should include (1) the direct costs incident to the construction; (2) an allowance for indirect or overhead costs; and (3) an allowance for a reasonable amount of profit.

1.1.4. Once the IGE is developed, CE and the CO ensure that the cost estimate is fully funded.

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 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) 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 building cost. Once a general structural design is determined, the contractor can use this relationship to estimate the total building price or cost (i.e., plus up or down scope) - excluding the cost of land. This technique is reliable and can save both the contractor and the Government time and resources in the development of estimates and it produces results similar to that of other more detailed techniques.

1.2.2. Engineering Cost Estimate. The basis of an engineering estimate is labor and material costs for significant work elements. Instead of dividing the estimate for concrete into its major components, as the contractor might do, the engineer will estimate so much for materials and so much for labor. 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.

This price would include the cost of cement, aggregate, reinforcing steel and forms, but it usually excludes all overhead and profit.

1.2.3. Construction Cost Estimate. The basis for the construction element, frequently referred to as a brick and mortar estimate, is a detailed analysis of construction methods. Typically, the estimates prepared by Government estimators and A-Es are commonly prepared to this level of detail. First, divide the required work into its major components. Each of these is then separated into its constituent elements such as cement, aggregate, reinforcing steel, additives, form lumber and hardware, form fabrication, form erection and stripping, placement of reinforcing steel, mixing and placing concrete, and finishing concrete surfaces. Next, enter the estimated unit cost of labor and material for each element, multiplied by the quantities of each. Finally, add the plant, equipment, and job overhead costs.

Lastly, apply home office expense and profit to develop the total price.

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 previous, similar contracts can be a valuable source of information in formulating the IGE (e.g., the requirement is for the establishment of an indefinite delivery-indefinite quantity (IDIQ) contract for various paving requirements). The price schedule contains 200 individual line items. In the previous competition for the same or similar requirements, six offerors responded. In this scenario, the competitive prices of the six offerors may be used in the development of the IGE for the follow-on paving contract, considering any consumer price index adjustments.

1.3.1.2. While this is an excellent source of information, use caution and recognize certain extenuating circumstances may invalidate the data. For example, if using unit prices from a previous requirements or IDIQ type or sole source contracts, consider how those prices were determined fair and reasonable. 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 prices need adjustment for special site conditions, changes in labor rates or materials?

1.3.2. Architect-Engineers (A-E) Estimates. Because of the use and far-reaching impact of their estimates, A-E firms must provide comprehensive and up-to-date estimates for projects they design for the Government. Using the latest computerized estimating programs and technology and commercial pricing guides, they are fully equipped to prepare accurate cost estimates for their designs. Designers must be aware of the relative economics of different types of structures and materials and must keep pace with changing trends in building costs. However, before relying on an estimate for budgetary or price analysis purposes, the estimate should be updated to include any adjustment for escalation of prices, and for any design changes (both additions and deletions) injected by the Government since receipt of the initial 100% design package. This is especially important when dealing with an older design. You may discover, after-the-fact that facility occupants or requirements have changed without a commensurate adjustment to the project cost estimate.

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 costs, Americans With Disabilities Act (ADA) compliance pricing, assemblies cost data, concrete/masonry, electrical, and 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 and it can help flush out the “gray” areas that may affect price. Besides providing functional expertise, the right mix of team members can be a valuable source of historical data.

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 acquisition decisions. Statements of Work (SOW), IGEs, tradeoff decisions, funds reallocations, contract negotiations, value engineering change proposals (VECP), and spend plans will all rely on this structure and related cost elements.

1.4.1.3. Format. The emphasis is on information, not format. Most construction projects do not call for a unique combination of skills, materials, and equipment. Therefore, a logical approach and standard spreadsheets or common application software allow IGEs to be easily developed and transferred electronically. Information that should always be included is:

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)

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 price analysis or contract negotiations. This is 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. Validate a cost estimate more than two years old to reflect the current design, requirements of the end user, and schedule.

1.4.2. Cost Elements. The following are standard cost elements that should be included in the IGE, as applicable.

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 which includes only salary; and burdened, which includes salary plus an allocation of costs for overhead, general and administrative, profit, and any escalation for option years.

1.4.2.1.2. Burdened rates simplify the cost estimating process. The accuracy of this method may depend on the availability of recent, competitively negotiated burdened rates that have similar skill requirements as your acquisition. Labor burden rates vary considerably depending on the contractor’s organization and facilities and the type of work performed.

1.4.2.2. Other Direct Cost (ODC). These are all costs (other than labor and materials) used to satisfy the requirement: Materials & Supplies, Equipment, Travel, IT, and any other direct cost such as bonds. Do not use "Lump sum" estimates. These estimates are not useful in evaluating the proposal.

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 and for which a prudent contractor would depreciate over several years or many hours of usage. It is necessary to know if the contractor will be using rented or owned construction equipment.

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. Check rental rates with local suppliers or catalogues; check invoices if retrospective pricing.

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 vary from one contractor to another.

Overhead rates can be actual indirect cost rates or DCAA audited rates. Either way, the purpose is to determine overhead rates based on costs that are allowable, allocable and reasonable.

1.4.2.4. Profit. IAW DFARS 215.404-4, if Certified Cost or Pricing Data is required then one of the three structured methods identified must be used to develop a pre-negotiation profit or fee objective on any negotiated contract action. However, regardless of the need for Certified Cost or Pricing Data, it is still highly recommended that a structured approach is used to analyze profit for all acquisitions. The intent is to eliminate an arbitrary profit objective and to provide a consistent manner to reward risk, motivate efficiency and quality performance. The most common of the three methods is the Weighted Guidelines Method 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

1.4.2.4.3. Working Capital Adjustment and Facilities Capital Employed

1.4.2.4.4. The form normally used is DD 1547, Record of Weighted Guidelines Application.

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. 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. The Contracting Officer is the only person who has the authority to disclose Government cost estimates. Disclosure may put the Government at a disadvantage in dealing with contractors. Moreover, it gives contractors an unfair advantage over other contractors competing for the same requirement.

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. Stakeholders include the contracting officer, Small Business Office (and possibly the Small Business Administration), technical representative/engineer/inspector, contracting officer’s representative (COR), and the facility occupant, and might include legal and environmental personnel, as well as the administrator or CO of a similar project.

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

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 and the local environment.

3.2. Definitions

3.2.1. SABER contract generally means a fixed-price, indefinite-delivery/indefinite-quantity (ID/IQ) contract. A SABER contract includes detailed task specifications that 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. Although rare, they might also include Government-developed unit price books. UPGs list tasks by unit of measure and unit price. Because the prices are general, the team must tailor the UPG to a specific location. This step, called “localization,” is critical to the success of a SABER Program. Government and commercial software is available for localization and for compiling task listings and unit prices. 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 multiplied against the standard unit prices in the UPG to calculate TO prices. Offerors propose coefficients for costs 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 that 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 the offeror’s experience and knowledge of the local construction market. Typically, we expect proposed coefficients of less than 1 in a strong competitive market. Experienced contractors will know this. Therefore, in this situation, a proposed coefficient of 1 or more might point to a flawed proposal or weak experience. To aid in the analysis of proposed coefficients, the team should consider requesting a rationale for each coefficient. Do not consider this information as certified cost or pricing data in the context of FAR 15.

3.2.2. Minimum Design.

3.2.2.1. Typically, minimum design for SABER is up to 35%. However, if the design requires the services of a registered architect or engineer, it is outside the parameters of minimum design. The contractor is responsible for submitting documentation that substantiates the proposed approach.

3.2.2.2. Typically, supporting documents are requested from the contractor. Documents 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 and sizing of utilities and 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 required tasks, quantity, unit of issue, UPG price per unit, and the coefficient plus the negotiated price for any non-priced items (NPI). NPIs must be within the basic intent and general scope of the contract and be negotiated separately from UPG items before issuance of the TO.

3.3. Purpose of the SABER Program

3.3.1. SABER contracts expedite award of civil engineer (CE) requirements by reducing CE design work and acquisition lead-time. SABER can be either a single or multiple award contract, although multiple awards are preferred. 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 that require minimum 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. However, multiple award construction contracts (MACC) are ideal for larger projects.

3.3.3. A successful SABER program provides:

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

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 TOs for future projects.

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 or task orders, have worked well. Careful consideration must be given to establishing multiple SABER contracts. Such things as volume of workload, limited facility space, limitations on competition, etc.

must be taken into consideration.

3.4. Limitations of SABER Contracts

3.4.1. SABER is not appropriate for large, complex construction projects that require extensive design effort or for predominately single skill/material projects for which competitively awarded contracts, single trade ID/IQ contracts, or competition under a MACC would be more cost effective.

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 not SABER requirements. The Department of Labor (DOL) has jurisdiction over the classification of a requirement. 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 DOL guidance provides services such as carpet installation, landscaping, asbestos removal, and building demolition performed are construction because they are incidental to a larger construction project. If the preponderance of the work is non-personal services, even though there may be some incidental related construction work, the project falls under the Service Contract Labor Standards statute and is not a candidate for SABER.

3.5. Acquisition Planning

3.5.1. SABER Working Group.

3.5.1.1. Experience reveals 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) prepares SABER program specifications. These include the master specification and the technical or guide specifications. The master specification describes the overall scope of the SABER Program and is part of Section C in the RFP. The technical specifications define specific construction standards for tasks ordered under the contract and form 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 and any required related 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 project orders:

3.6.1.1. Supported by a Government estimate in as much detail as practicable, but taking into consideration the nature of the contract. However, the estimate should contain enough detail to support the programming estimate. 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. Include a statement of work, including concepts, sketches, and drawings;

3.6.1.3. Identify any statutory cost limitations;

3.6.1.4. Furnish any special instructions or requirements; and

3.6.1.5. Include required cost comparisons, justifications, and approvals.

3.6.1.6. Assist 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. The contract administrator then forwards the technical proposal to the SABER program manager for a technical review. The contracting officer and program manager jointly evaluate the proposed method of construction, tasks, quantities, performance schedules, and any contractor drawings and prepare documentation to support the evaluation. 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 adjustment 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

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 on NPIs. However, experience reveals 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, paragraph 1(c).

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 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. 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, and probably the most cumbersome and least desirable, is to incorporate a static coefficient and a static UPG. This last approach requires use of an EPA clause to adjust option prices.

(Sample Clause for SABER EPA)

CHAPTER 4

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

4.1. Introduction. The Multiple Award Construction Contracts (MACC) process is one tool available to facilitate construction projects at your installation.

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

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

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

MACC SABER

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

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. When developing the acquisition strategy consider that Small Business performs the majority of construction and the award of a MACC could significantly affect small businesses.

4.5.3. During acquisition planning, review the requirement and determine if bundling or consolidation will occur.

4.5.4. Reference OSD (AT&L) Bundling Guidebook.

4.5.5. IAW FAR 2.101, Bundling means:

4.5.5.1. 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 —

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

4.5.5.1.2. The aggregate dollar value of the anticipated award;

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

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

4.5.5.2. In addition consider “consolidation” during the process.

4.5.5.3. “Consolidation of contract requirements” means the use of a 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

4.5.5.4. IAW DFARS 207.170-3, Consolidation of Contract Requirements Policy and Procedures and DFARS Class Deviation 2013-O0021, Consolidated Contracts, agencies shall not consolidate requirements with a total value exceeding $2,000,000 unless the acquisition strategy includes: results of market research; identification of any alternative contracting approaches that would involve a lesser degree of consolidation; and a determination by the Senior Procurement Executive* (SPE) that the consolidation is necessary and justified.

4.5.5.5. Approval authorities are in accordance with AFFARS 5301.601.

4.5.5.6. Market research may indicate that consolidation is necessary and justified if the benefits of consolidation exceed the benefits of the alternative contracting approaches. Regardless of whether quantifiable in dollars, benefits include costs and

4.5.5.6.1. Quality;

4.5.5.6.2. Acquisition Cycle;

4.5.5.6.3. Terms and conditions;

4.5.5.6.4. and any other benefit.

4.5.5.7. Administrative savings alone do not constitute a sufficient justification unless the total amount of savings are expected to be substantial in relation to the total cost of the procurement

Engage with the Local Small Business Administration Early in this Process and Ensure They Participate Throughout the MACC Process.

4.6. HOW MANY CONTRACTS SHOULD BE AWARDED?

4.6.1. There is no “magic” number of contracts under a MACC. The size, complexity, and scope of the requirements anticipated under the MACC program, funding available to support contract minimums, regional influences, and the costs and resources needed to administer the contracts are all factors to be weighed when determining what constitutes a "reasonable" number of awards. Awarding too many contracts could result in overly optimistic expectations on the part of contractors. Further, some awardees may find it is not cost effective to continue to submit proposals because there is too much competition. The chart below depicts what other Air Force bases have done in this area:

4.6.1.1. Langley AFB MACC & TO (Sample)

CONTRACTS AWARDED CONTRACT MIN/MAX CONTRACT TERM

Two 8a Two Large Business

Min = $20K Max = $250M*

* inclusive of all 4 contracts

Basic w/ seven option periods

4.6.1.1.1. The contract allows for several competitive methods—best value, low price technically acceptable or low price. Use the first two methods for design/build projects and the low price method is for build-only projects (no design required).

4.6.1.1.2. The contract provisions allow small business to compete against large business.

All four contractors compete for the MACC projects. The MACC terms allow for projects estimated under $250,000 to be competed among the 8(a) contractors only.

4.6.1.2. Ellsworth AFB MACC & TO (Sample)

CONTRACTS AWARDED CONTRACT MIN/MAX CONTRACT TERM

Three 8a Two Full & Open (Small Business)

Min = $5K Max = $50M*

* inclusive of all 5 contracts

Basic w/ four option periods

4.6.1.2.1. In this arrangement, Full & Open competes against Full & Open and 8(a) competes against 8(a). The MACC awards were to three SBA 8(a) contractors and two small businesses.

4.6.1.3. Nellis AFB

CONTRACTS AWARDED CONTRACT MIN/MAX CONTRACT TERM

Three 8a Two Large Business

Min = $250K Max Order = $5M Max Contract = $20M*

* inclusive of all 5 contracts

Basic w/ four option periods

4.6.1.3.1. Projects $250,000 - $1,000,000

4.6.1.3.1.1. Compete among all three 8(a) contractors

4.6.1.3.1.1.1. Best Value (normally Design/Build)

4.6.1.3.1.1.2. Low price technically acceptable (Minimal Design/Build)

4.6.1.3.1.1.3. Low price (no up-front design required)

4.6.1.3.1.2. Select one 8(a) contractor with which to negotiate

4.6.1.3.2. Projects $1,000,000 - $5,000,000

4.6.1.3.2.1. Compete among all five contractors

4.6.1.3.2.1.1. Best Value (normally Design/Build)

4.6.1.3.2.1.2. Low price technically acceptable (Minimal Design/Build)

4.6.1.3.2.1.3. Low price (no up-front design required)

4.6.1.3.2.2. Select one contractor with which to negotiate (e.g., to meet minimum order amounts or sole source)

4.6.1.3.2.3. Small business competes against large business if the project exceeds $1,000,000.

4.6.1.4. Scott AFB MACC (Sample)

4.6.1.4.1. Compete projects equally among all awardees after award of seed project, except where necessary to satisfy a contract minimum or where other exceptions apply in accordance with FAR 16.505(b).

CONTRACTS AWARDED CONTRACT MIN/MAX CONTRACT TERM

One Small Business Three Large Businesses Two 8(a)* One Additional HUBZone SB **

Min = $666K seed project awarded to best value offeror. All others awarded $2500

Max Contract = $90M program

Basic w/ four options

CONTRACTS AWARDED CONTRACT MIN/MAX CONTRACT TERM

* One with dual status as HUBZone ** with dual status as a woman-owned amount*

* inclusive of all contracts

4.7. TASK ORDERS AND TASK ORDER COMPETITION.

4.7.1. Each MACC award cites an individual contract number and work is ordered by written task orders issued on a DD Form 1155 (Order for Supplies or Services). Task orders are firm fixed price and clearly define the specific work performed sequentially numbered, and they relate back to the awardee’s contract.

4.7.2. Projects may be non-complex performance oriented tasks requiring minimal design, complex design build, or construction based on fully developed designs.

4.7.3. Generally, the basis for award is a best value approach to include performance price tradeoff, low price technically acceptable, or other tradeoffs based on factors other than just price and performance. In the latter instance, award factors will vary depending on the uniqueness of the requirement. Obtaining written proposals or holding discussions with awardees is not always required.

Formal evaluation plans are not usually required. Consider one or more of the following criteria in addition to Price or Cost:

4.7.3.1. Past Performance

4.7.3.2. Quality of Deliverables

4.7.3.3. Ability to Meet Schedule Requirements

4.7.3.4. Relevant Experience

4.7.3.5. Cost Control, if applicable

4.7.3.6. Potential impact on other orders placed with the…