Summary of Work with PIVOT_20231115.pdf

Sources Sought Number: W912823S0026

The U.S. Army Corps of Engineers (USACE), Sacramento District is evaluating the merits of including an emerging pricing strategy for construction contracts on a planned, forthcoming solicitation. USACE Sacramento District is planning to conduct a presentation and feedback session with industry in order to gather industry insight on the proposed strategy.

USACE Sacramento District is considering use of a “Price Includes Variation Over Time” (PIVOT) strategy for the acquisition described below. COVID-19 and other economic impacts continue to negatively influence the US market, causing price hikes in simple commodities and skilled labor. These impacts result in higher prices, longer acquisition schedules, decreased competition, and more frequent requests for additional funding from customers.

With inflation reaching levels not seen in over 40 years contractors are feeling the impacts of rising costs; causing a growing reluctance to hold or extend proposal pricing.

Combined these effects with lengthy budget processes and program funding shortfalls, stakeholders are seeing negative impacts to contract award and our ability to keep commitments. The PIVOT approach requires the offeror to offer multiple prices to span several periods; empowering contractors to hedge risk over the Government’s predefined periods.

Offeror’s prices remain valid for all periods and at the prices proposed for each individual period. Selection of the best value (under a best value selection methodology) is based upon the weighted average price, referred to as the Total Adjusted Price (TAP). The TAP is not the award amount but represents an indexed value by which to evaluate all pricing periods.

USACE Sacramento is seeking industry feedback on the potential use of this strategy on a project described below:

Magnitude of Construction: Disclosure of the magnitude of construction, as prescribed in FAR 36.204 and DFARS 236.204(iii), is between $100M and $250M.

Project Summary of Work:

This upcoming solicitation will be executed using a design-bid-build (DBB) project delivery method, which will require the contractor to provide the Government with a complete facility and warranty based on the Request for Proposal (RFP). Use of PIVOT pricing is possible, but not confirmed at this time.

Hill Air Force Base (HAFB) requires construction of utility infrastructure systems to support the planned and future development of multiple facilities on the east side of Hill Air Force Base (AFB). The work includes the construction of taxiways, tow-ways, and associated airfield lighting systems; roadways, privately owned vehicle parking, government owned vehicle parking, sidewalks, and emergency vehicle circulation;

pump houses, lift stations, and a communication information technology (ITN) node building; and the relocation of a tactical navigation (TACAN) facility, as well as, upgrades to various privately owned and government owned utility systems including water production (well), storage (water tank) and distribution; sanitary sewer, storm sewer, and industrial waste; electrical distribution and communications; natural gas, and compressed air. All facilities and infrastructure systems will be permanent construction in accordance with applicable Department of Defense Unified Facilities Criteria (UFC).

Special Construction Requirements:

This project will require significant coordination public, privatized and government utilities.

Culinary Water (Privatized), Sanitary Sewer (Privatized), Electrical Power (Privatized), Storm Sewer (Government), Natural Gas (Government - connection to public utility, Dominion Energy), Industrial Waste (Government), Fire Water (Government), Communications (Government).

Project Period of Performance: 730 calendar days from construction Notice to Proceed (NTP).

DRAFT Evaluation Documents: To facilitate fruitful exchange with industry, draft solicitation attachments are being provided for review:

- The summary of work provided herein.

- Draft conventional and PIVOT bid schedules.

- PIVOT briefing slides.

- Draft Industry Day Slide Deck.

- No technical specifications or drawings are being provided at this time.

Participation Details:

Join via Webex. Virtual Industry Day is scheduled for 27 November 2023 at 1:00

PM (MST)

Meeting Information

• WebEx Link: https://usace1.webex.com/meet/britanie.v.butler

• Call-In Information: 1-844-800-2712

• Access Code: 2762 551 8313

Please come prepared to discuss the following questions or provide feedback NLT 28 November 2023 at 2:00 PM (MST).

1. Is the PIVOT strategy seen as beneficial to industry?

2. Is there any additional cost/and or risk potential for a project utilizing the PIVOT strategy?

https://usace1.webex.com/meet/britanie.v.butler

3. Has industry seen other ways that Government has achieved a shared goal of minimizing pricing risk that has been successful on other projects? Please provide examples.

4. The Government is considering the parlay option for the proposed project. Is there any reason to believe that the other options (indexed, percent scaling) would be more beneficial to the project?

5. The TAP – rather than individual pricing per period will be the basis for selecting the best value offeror. Please discuss pros/cons related to utilization of the TAP on a large MILCON acquisition.

6. It is likely that amendments will be submitted after receipt of pricing. Basis for amendments could vary, but could be due to scope revisions, revisions to general conditions, proposal extensions, wage rate adjustments, etc. How will utilization of PIVOT affect your process for re-pricing work, and are there concerns with the level of effort associated with re-pricing the PIVOT bid schedule repeatedly?

Please submit your written responses to the sources sought for company capability statement and feedback to the PIVOT questions and Industry Day no later than 2:00 PM (MST), 28 November 2023 to Britanie Butler at britanie.v.butler@usace.army.mil.

mailto:britanie.v.butler@usace.army.mil