IDaC preproposal conference 1.31.24.pptx

Brian Hutchison Contracting Officer Southwestern Division, Tulsa District, Date: 31 January 2024

INTEGRATED DESIGN AND CONSTRUCTION

PREPROPOSAL CONFERENCE FOR CALIFORNIA MEGA PROJECTS

PLEASE PROVIDE YOUR

NAME

COMPANY

PROJECT

In the Chat

CHAT

Brian Hutchison

USACE

Prado & Whittier

Prado Dam Spillway Modification Project The Government issued a single step, full and open solicitation on 15 DEC 2023 and intends to award one (1) contract. The solicitation number is W912BV23R0032

Solicitation Whittier Narrows Dam Safety Modification Project The Government issued a single step, full and open solicitation on 19 JAN 2024 and intends to award one (1) contract. The solicitation number is W912BV23R0039.

Agenda Best Value Tradeoff Evaluation Factors/Price Proposal Oral Presentations Fixed Price Incentive Concept IDaC Process Preconstruction Services Open Book Estimate Target Pricing Profit Total Evaluated Price Success

FAR 15.101-1 Tradeoff process is appropriate when it may be in the best interest of the Government to consider award to other than the lowest priced offeror or other than the highest technically rated offeror.

The Government will set the minimum technical standard with capability to pay more for exceeding requirement.

To trade-off, SSA decision must justify paying for tangible benefit to Government, Not higher rating.

BASIS OF AWARD: All evaluation factors other than cost or price, when combined, are significantly more important than cost or price.

Best Value Tradeoff

Prado Dam Evaluation Factors Factor 1 – Past Performance

Factor 2 – Technical Capability Sub-factor 1 – Key Personnel Sub-factor 2 – Management Approach Sub-factor 3 – Proposed Contract Duration and Summary of Schedule

Factor 3 – Pre-construction Services Sub-factor 1 – Constructability Sub-factor 2 – Collaboration

Factor 1 – Past Performance

Factor 2 – Pre-construction Services Sub-factor 1 – Constructability Sub-factor 2 - Collaboration

Factor 3 – Technical Capability Sub-factor 1 – Management Approach Sub-factor 2 – Key Personnel Sub-factor 3 – Proposed Contract Duration and Summary of Schedule.

Whittier Narrows Dam

Section 00 11 00, is to be completed in its entirety by all Offerors. See Section 00 11 00 with attached notes for further instructions.

Offerors must insert a price on all numbered items of the CLIN Schedule. Failure to do so may result in the offer being unacceptable.

Include cost breakdown information behind the Pricing Schedule. Include Open Book Estimate with other than certified cost or pricing data as well as a copy of the Risk Register. Offerors will be required to provide this information to support an adequate understanding of the scope.

The cost breakdown behind the pricing schedule shall separately list a cost for Labor, Materials, Equipment, and Subcontracts. The sum of all items in the cost breakdown shall equal the Initial Target Cost of the corresponding CLIN.

If deemed necessary, supplemental price breakdown information may be requested to assist the Government in performing the price evaluations.

Failure to submit this data or provide sufficient cost data including labor, plant, material, equipment, productivity rates, commodity pricing, subcontractor quotes, and any other pertinent information may result in a deficiency and preclude the offeror from award.

Price proposal

The Government intends to conduct Oral Presentations in accordance with FAR 15.102 as part of discussions with those offerors determined to be in the competitive range.

Oral Presentations shall only augment and/or clarify the written proposal submission and will not be evaluated separately.

The Government will provide items for discussion to the offeror at least one week in advance of scheduling the meeting.

The offeror shall ensure that, at a minimum, the Project Manager identified as Key Personnel, attend the presentation in person.

The Offeror will be provided 45 minutes to present highlights and details regarding their proposals followed by 45 minutes to respond to questions to be provided by the Government seven (7) calendar days prior to scheduled interviews.

The offeror shall submit a written revised proposal by the date/time identified in the discussion letter after the oral presentation.

Oral presentations

Introduction TO integrated design and construction (IDaC) A variation of Tools on the Fixed Price Continuum

Fixed Price Incentive concept Government point of view As cost decreases, price to the Government decreases Share the risk of cost increase Ceiling Price limits the Government’s exposure

Contractor point of view Contractor can increase profit dollars and profit percentage by reducing cost below target cost Share Ratio above target price provides risk mitigation to the Contractor

Pull from ECI slide(s).

IDAC - Process Map No

Production Point Reached?

Yes

Off-Ramp Compete Design-Bid-Build

No

START

FINISH

DO NOT Fast Track Construction Prior to Design Complete

“Early Work Item” may be allowed and is defined as a set of construction activities that can be clearly defined and separately performed and bid, including as an option, from the remainder of the construction work. Demolition or clearing and grubbing is an example of an early work item. These items are bid firm-fixed-price and not subject to price revision.

Proposal (Competition) – Initial Target Price (ITP)

Design Progress

Design Milestone (35/65/95/100)

Did Scope Change?

Yes

Negotiate Revision to Initial Target Cost (ITC)

Request Proposal for Firm Target Cost

(FTC)

Negotiate FTC and apply Profit Adjustment

Agreement

Negotiate FFP using Firm Target as Guide

Agreement

Complete Construction as FFP

Preconstruction services Responsibilities Provide sound management advice regarding the approach to the project, how to achieve the best value in the work being accomplished, necessary actions to minimize cost and risk, schedule control, alternative ideas, problem/claim prevention, and budgeting.

Design Review The A-E contractor that is providing design services under a separate contract is the Designer of Record and is contractually responsible for the design. Design errors and omissions related to calculations mistakes, code violations, or similar issues shall not be the Contractor's responsibility.

Errors and Omissions The Contractor shall be responsible for the construction cost impact of all errors and omissions that could have been reasonably identified during the design review process that are related to coordination, dimension discrepancies, or similar issues.

Problem Resolution The Contractor will make recommendations on how to correct problems with respect to constructability, cost estimates, and other administrative or technical matters, and will notify the Government in writing, of any errors or omissions found.

Pre-Construction Services shall include, but are not limited to:

Review and evaluation of design documents for constructability, and recommendations to improve and optimize constructability.

Identification of any constructability issues in the design and design documentation.

Consultation during construction document production

Assistance in developing construction document packages, construction phasing, preliminary project schedule including design, cost estimates, cost budgets , and subcontractor and supplier interest.

Consultation in construction methods and selection of materials and equipment (such as levee construction, floodwall construction, pump selection, and precast concrete construction, etc).

Actions designed to minimize adverse effects of labor and material shortages, and time requirements for procurement and construction completion.

Providing construction cost estimates and guidance on factors related to construction cost including estimates of alternative designs or materials, preliminary construction cost budgets, and possible economies for each design submission to include the 35%, 65%, 95% and 100% designs.

Developing and maintain a single project schedule, including a network analysis, for both design and construction phases.

Providing recommendations for the use of fast tracking , early ordering of materials, and any other procedures that will maximize the available funds for the project and speed project delivery.

Providing all recommendations, identification of problems or errors, guidance, and review comments in Dr.Checks (www.projnet.org ).

Providing all necessary resources to perform Pile Load Testing, Borrow Source Identification, and Access or Improvements Planning to include the testing results and constructability suggestions in order to inform the design in an efficient manner.

All systems and procedures necessary to support the implementation of the Earned Value Management System (EVMS) in accordance with section 1.4.5 Integrated Program Management prior to Option(s). The project WBS, Cost Accounts, etc. required will be set up during the preconstruction services.

Open Book Estimate Project Cost Estimate The Contractor shall provide an independent detailed cost estimate of project work for each design submittal. The cost estimates shall reflect the best estimate of cost to construct the project described in the drawings and specifications provided. No allowances should be included in the estimate for firm fixed price negotiations.

Open Book Estimate.

Shall provide an open book estimate in accordance with the Work Breakdown Structure as attachment to price proposal.

Offeror shall submit the Attachment A Cost Breakdown and each item shall separately list a cost for labor, materials, equipment, and subcontracts. The sum of all items in Attachment A shall equal the Initial Target Cost of the corresponding CLIN above The Government reserves the right to perform cost realism analysis on the submission of open book costs to evaluate performance or schedule risk in accordance with FAR 15.404-1(d)(3)

Pre-Construction Services shall include, but are not limited to:

Review and evaluation of design documents for constructability, and recommendations to improve and optimize constructability.

Identification of any constructability issues in the design and design documentation.

Consultation during construction document production

Assistance in developing construction document packages, construction phasing, preliminary project schedule including design, cost estimates, cost budgets , and subcontractor and supplier interest.

Consultation in construction methods and selection of materials and equipment (such as levee construction, floodwall construction, pump selection, and precast concrete construction, etc).

Actions designed to minimize adverse effects of labor and material shortages, and time requirements for procurement and construction completion.

Providing construction cost estimates and guidance on factors related to construction cost including estimates of alternative designs or materials, preliminary construction cost budgets, and possible economies for each design submission to include the 35%, 65%, 95% and 100% designs.

Developing and maintain a single project schedule, including a network analysis, for both design and construction phases.

Providing recommendations for the use of fast tracking , early ordering of materials, and any other procedures that will maximize the available funds for the project and speed project delivery.

Providing all recommendations, identification of problems or errors, guidance, and review comments in Dr.Checks (www.projnet.org ).

Providing all necessary resources to perform Pile Load Testing, Borrow Source Identification, and Access or Improvements Planning to include the testing results and constructability suggestions in order to inform the design in an efficient manner.

All systems and procedures necessary to support the implementation of the Earned Value Management System (EVMS) in accordance with section 1.4.5 Integrated Program Management prior to Option(s). The project WBS, Cost Accounts, etc. required will be set up during the preconstruction services.

The Offeror shall provide the Work Breakdown Structure and Open Book Estimate format for estimating the costs associated with the project. The current open book estimate as an attachment to the Price Proposal.

Initial Target Cost means the contractors proposal or bid amount for the construction work exclusive of profit or fee, representing the offeror’s open book estimate amount.

Provide open-book working estimates throughout the duration of the contract. The cost estimate must be presented in such detail so that labor, materials, equipment, subcontracts, general assumptions, and the estimate approach are clear and organized.

As part of the open-book cost estimate, provide all backup documents including equipment cost rates, field office overhead calculations, home office overhead audit reports, subcontractor quotes and supplier quotes.

OPEN BOOK ESTIMATE Continued

FAR 2.101 - Data other than certified cost or pricing data means pricing data, cost data, and judgmental information necessary for the contracting officer to determine a fair and reasonable price or to determine cost realism. Such data may include the identical types of data as certified cost or pricing data, consistent with Table 15-2 of 15.408, but without the certification. The data may also include, for example, sales data and any information reasonably required to explain the offeror’s estimating process, including, but not limited to–

(1) The judgmental factors applied and the mathematical or other methods used in the estimate, including those used in projecting from known data; and

(2) The nature and amount of any contingencies included in the proposed price.

Initial Target Cost (ITC) – Offeror Estimate to Complete Work Initial Target Profit (ITPr) – Offeror to Propose % Initial Target Price (ITP) = Target Cost + Target Profit Ceiling Price = Proposed by Offeror (Risk)

Initial Target pricing Established by RFP

NOT WORKING ESTIMATE

Profit Ceiling Profit Floor

Profit Ceiling Profit Floor

PROFIT

FAR 15.404-4

(a)(1) - Profit or fee prenegotiation objectives do not necessarily represent net income to contractors. Rather, they represent that element of the potential total remuneration that contractors may receive for contract performance over and above allowable costs. Just as actual costs may vary from estimated costs, the contractor’s actual realized profit or fee may vary from negotiated profit or fee, (a)(3) - Both the Government and contractors should be concerned with profit as a motivator of efficient and effective contract performance. Negotiations aimed merely at reducing prices by reducing profit, without proper recognition of the function of profit, are not in the Government’s interest. Negotiation of extremely low profits, use of historical averages, or automatic application of predetermined percentages to total estimated costs do not provide proper motivation for optimum contract performance.

PROFIT Continued

DFARS 215.404-4

(b)(1) - 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

(c)(1) Contracting officer responsibilities – DO NOT perform a profit analysis when assessing cost realism in competitive acquisitions.

Total evaluated price The Total of the firm fixed price Preconstruction Services, Early Work Items, plus the Ceiling Price for the Construction effort as proposed by the Offerors will be used to determine the total evaluated price.

The Initial Target Price, determined by adding the Initial Target Cost to the Initial Target Profit, will not be used for the basis of a best value tradeoff decision.

However, an award will not be made if the Initial Target Price is deemed to not be fair and reasonable.

Define Success What Determines a Successful Project Cost Quality Time/Schedule Safety Meets Originally Intended Purpose

Factors That Impact Success Integration/Collaboration Innovation Partnering

Success Factors – per the 2011 task force between American Institute of Architects (AIA) and the Associated General Contractors of America (AGC).

Partnering “We must always strive to maximize partnering outcomes to enable the safe delivery of quality projects that are on time and within budget…

Committed to working together with partners to accomplish the mission and build enduring relationships through trust, transparency, and shared values” -Lt. Gen Scott Spellmon

Success Factors – per the 2011 task force between American Institute of Architects (AIA) and the Associated General Contractors of America (AGC).

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