JR3_OUTWEST_Offeror_Tab.pdf

Reference JR3 – OUTWEST Offeror Tab Utility Privatization Guidance for Preparing Offeror LCCA Summary Data Guidance

RFP GUIDANCE FOR OFFERORS

PURPOSE

The purpose of this paper is to provide guidance to offerors on how they are to present utility privatization cost estimates. Following this guidance will accomplish the following goals:

Reduce government follow up and clarification questions to proposers.

Simplify comparisons of offeror and government costs.

Decrease analysis time by reducing labor required to verify reentry of data into the Operational Utilities Template with Economic Support Tool (OUTWEST).

Ensure that values used in OUTWEST are as presented by the offeror.

GUIDANCE

The Department of Defense (OSD) has developed OUTWEST as an aid in conducting economic analyses. To reduce the time lag between proposal submittal and an initial decision, offeror Life Cycle Cost Analyses (LCCA) Summary Data will follow a standard format. Standardization of summary data does not imply a standardization of offer development methodology or a standardization of the underlying cost structure.

Standardization only applies to summary data; offerors will continue to develop their LCCA in whatever manner they choose.

The standardized LCCA Summary Data Model consists of general data, seven (7) pre-formatted, and five (5) proposer formatted (other) cost categories. Offerors are not required to use all the categories; rather, the offeror is to use only the fields necessary to represent its offer.

All charges to the government must be reflected in the summary data. The offeror must provide supporting schedules and calculations used to arrive at this summary data.

Attached to this document is a model LCCA Summary Data spreadsheet. This spreadsheet is to be completed and submitted with the proposal. The spreadsheet does not limit the construction or design of the offeror’s proposal nor does it supersede any government regulations.

STANDARDIZED LCCA SUMMARY DATA SPREADSHEET

Double click to download. This spreadsheet must be submitted with the offeror’s pricing proposal.

Standardized LCCA Summary Data Spread

DISCUSSION OF THE STANDARDIZED LCCA SUMMARY DATA

SPREADSHEET

The Standardized LCCA Summary Data Spreadsheet requires entry of general data, and has seven (7) preformatted and five (5) offeror formatted (other) cost categories.

General Data

1. Offeror purchaser - Enter the name of the offeror.

2. Contract period – Entry the duration of the proposed contract in years.

a. Cost Dollar Values - Enter the year the contract will start. All values will be expressed in Contract Year 1 Dollars. For cost comparison purposes values will be increased by the projected inflation rate in accordance with OMB Circular A-94.

3. Other Cost – Enter the title of any customized (other) cost categories used (see Customized Cost Categories below).

Preformatted Cost Categories The Standardized LCCA Summary Data Spreadsheet offers seven (7) pre-formatted cost categories. Offerors are not required to use all the categories; rather, the offeror is to use only the fields necessary to represent its proposal. The seven (7) pre-formatted cost categories are:

1. Annual O&M – The annual charge to the government for operation and maintenance of the system.

2. Annual G&A – The annual charge to the government for general and administrative costs associated operation of the system.

3. Annual Recap – The annual charge to the government for routine upgrades and renewal of the system.

4. Upgrades – The annual charge to the government for initial upgrades or initial expansion of the system. All system upgrades required to bring the system into compliance with regulations and industry standards should be completed within the first 5 contract years.

5. Profit – The annual charge to the government for reasonable profit.

6. Taxes – The annual amount the offeror will pay in Federal Corporate Taxes for activities directly related to owning and operating this system. Taxes associated with payroll will not be included in this figure. This value is needed so that the costs of federal taxes can be offset by an equal amount of Federal Tax Credit to the offeror’s proposal when making the privatization decision (ie. when comparing the offeror’s proposal to the costs of continued government ownership/operation).

7. Purchase Price – The purchase price may take the form of a lump sum or as an annual reduction to other charges. In the LCCA Summary Data Spreadsheet any purchase payment will be entered as a negative value in the appropriate contract year.

Customizable Cost Categories Other Cost Category (One, Two, Three, Four and Five)

The Standardized LCCA Summary Data Spreadsheet offers five (5) offeror formatted (other) cost categories. The offeror may rename these categories, as necessary to represent its proposal. As with all summary data; the offeror must provide supporting schedules and calculations used to derive this data.

If a Contribution in Aid of Construction (CIAC) Tax is built into the proposed LCCA, the same value should be entered as a negative value in one customized cost category. This value is needed so that the costs of the CIAC Tax can be removed from the offeror’s proposal when making the privatization decision (ie. when comparing the offeror’s proposal to the costs of continued government ownership/operation).

The 15 April 2002 memorandum from the Office of the Under Secretary of Defense Subject: Class Deviation – Interest Cost permits UP contractors to recovery interest costs associated with capital expenditures to acquire, renovate, upgrade, replace and expand utility systems. The contractor will not be permitted to receive facilities capital cost of money. Interest recovery is limited to no more than 600 basis points above the Contracts Disputes Act interest rate in effect at the time the contractor makes the capital expenditures.

Offeror 1

Offeror 1 Data Inputs For Import DATE____________

Offeror1 Inputs Data Input Description

Offeror Legal name of utility proposing to purchase the utility system

Contract period The period of years for which the utility services contract will be in force

Cost Dollar Values All values are expressed in Contract Year 1 dollars

Other Cost One Classification of additional cost item

Other Cost Two Classification of additional cost item

Other Cost Three Classification of additional cost item

Other Cost Four Classification of additional cost item

Other Cost Five Classification of additional cost item

Offeror 1 Input Data

Contract Year Annual O&M Annual G&A Annual Recap Upgrades Profit Taxes Other Cost 1 Other Cost 2 Other Cost 3 Other Cost 4 Other Cost 5 Purchase Price