PWS_Deep-Draft_Vessel.pdf

Performance Work Statement (PWS) Compilation of Ocean-Going Self-Propelled Deep-Draft Vessel Operating

Costs (DDVOCs) 2018 Institute for Water Resources (IWR)

U.S. Army Corps of Engineers (USACE)

I. Introduction

a. The Institute for Water Resources of the U.S. Army Corps of Engineers (USACE-CEIWR) is responsible for the compilation and analysis of operating cost (VOC) data for self-propelled deep-draft vessels which serve the nation’s deep-draft coastal waterway and harbor system. This data is used to develop a set of generalized or aggregate vessel operating cost estimates for an array of commercial cargo vessels by general type and size or cargo capacity.

b. The Chief of Planning for the Army Corps of Engineers distributes generalized or aggregate vessel operating cost estimations and supporting documentation to field or Division\District planning and operations personnel in support of requirements integral to civil works navigation planning guidance. VOC estimates and related guidance are used by USACE analysts for economic evaluation of waterway system improvements via assessment of deep-draft vessel operations and related operational efficiencies associated with implementation of waterway system improvements. Efforts typically include the assessment of variance in deep-draft waterway unit transportation costs for waterborne transport of cargo or commodities with efficiencies made possible by placement or improvement of general navigation features (GNFs) such as extension or deepening of transit channels or enlargement of vessel maneuvering areas.

c. Within USACE planning requirements, vessel costs are applied to evaluate alternative plans of improvement for the nation’s waterway system in compliance with USACE civil works planning guidance as described in engineering regulation (ER) 1105-2-100 (current and as amended). Deep-draft VOC (DDVOC) estimates typically undergo a detailed analysis and reassessment every one to two years or an annual limited or interim effort for update when a detailed assessment is undertaken at intervals greater than two years. A copy of a prior edition of deep-draft vessel cost planning guidance and table format will be made available to offerors upon request for example and illustration and review is recommended prior to response to this performance work statement (PWS). Proposed specifications for this PWS include contract award on the basis of a contract for professional services with a minimum duration of a one (1) year base contract with the option to exercise two (2) additional years at the discretion of the Government for services up to a total of three years. This PWS also includes optional tasks (a-d) that may be exercised any time while the base contract is in force subject to funding resource availability and needs of the Government.

II. General Description of Core Tasks for Base and Optional Years

a. The primary emphasis of work efforts under this contract will be the compilation of vessel operating costs according to cargo vessel type and size or capacity classes typically of concern to USACE analysts when undertaking waterborne navigation project evaluations. Integral to the needs for estimation of vessel operating costs will be the creation of a computerized application to support use and limited adjustment of estimates and estimation of bunkerage costs. It will be required that bunkerage costs be separably investigated and estimated for ocean-going cargo vessels.

b. The focus and deliverable product(s) for efforts under this requirement will be for a sufficiently detailed level of study and analysis for the contract period (as defined by the schedule for deliverables for each year or period applicable under the contract) to produce credible or appropriate and current VOC values for distribution via standardized table and summary table formats as used for preparation of related guidance. The physical relationships for dimensions relative to deadweight tonnage (DWT) presented in the current or prior guidance are presently assumed to be relatively stable or generally remain unchanged. However, if new or current information indicates otherwise, there may be a need to undertake the investigation and acquisition of more detailed hull investment and other relevant costs along with supporting data on vessel physical specifications for statistical analysis to adjust or produce new vessel cost relationships relative to additional DWT classes or delineations. While the composition of the world deep-draft fleet has changed over the years, the array or DWT delineations by vessel type and size applied in the present planning guidance is to be retained and continued largely in its present form. This is essential for the purposes of updating or comparing economic analyses of prior or historical studies and assessment of fleet characteristics or requirements over time. A requirement, however, will be to identify which specific classes in reality no longer (significantly) exist or practically apply, and what new classes or delineations are now or foreseeably appropriate given trends and continuing development or evolution of the world self-propelled deep-draft commercial cargo carrier fleet.

c. The Contractor will collect and analyze data on current vessel operating costs according to two (2) general areas:

i.) Initial hull construction or hull asset acquisition ii.) Ongoing operation and maintenance (administration, crew or manning, insurance and maintenance, bunkerage consumption, etc.)

d. The collection of vessel acquisition or replacement and operating cost data will be accomplished through use of existing or available primary and secondary data sources to the maximum extent possible. The contractor will, to the extent allowed or permissible by its clientele, employ findings from surveys and interviews as appropriate conducted in support of its other ongoing or affiliated business investigations with private-sector vessel operators and supporting maritime transportation interests affiliated with and knowledgeable of, the construction and operation of self-propelled deep-draft vessels operating in support of domestic and international waterborne trades of the United States. The sourcing of available construction and operating cost data may involve personal interviews, questionnaires, and telephone inquiries.

Data collection efforts can be supplemented by research of current industry literature, but data collected by such secondary sources (i.e.: literature search, published industry journals, etc.) is to be reasonably verified to the extent practical by knowledgeable individuals or sources in the industry to ensure validity or reasonableness of data. In the interests of minimizing costs, the contractor will structure effort to maximize data acquisition with efficiency in time and efforts to reasonably minimize costs.

Statistical analysis of vessel costs to establish upper and lower statistical bounds and test statistics for estimated costs to support sensitivity analysis will be required.

e. Information and data as assembled will be specifically analyzed regarding explicit costs or expenses for manning or crew and supporting requirements (wages, benefits, provisions and subsistence expenses, logistical or crew transportation expenses, etc. ), insurance, operational administration and management, and other vessel-related operating expenses (life-cycle maintenance and repair, supplies or stores, and other relevant expenses). Data on bunkerage or fuel consumption and associated expenses will also be collected in order to ensure an acceptably complete profile of VOCs are developed which are inclusive of significant variable costs. The requirements for compilation of bunkerage costs will entail estimation of average bunkerage costs per metric tonne for all major ports of the world which comprise the primary locales of bunkerage supply distribution and end-user purchase. Accordingly, it is estimated that efforts will include compilation of bunkerage consumption and cost data for an estimated forty (30) to sixty (50) ports or port regions including foreign and domestic locales geographically dispersed worldwide. Coverage of bunkerage markets will be sufficient to provide viable estimates of related costs particular to major trade regions or primary waterborne corridors for world trade.

Bunkerage consumption and cost data will be analyzed to provide a basis for understanding of the relationship between fuel consumption and horsepower, geographic location of vessel deployment, direction of service, global region of service, and type of vessel or carrier service provided. In the interests of efficiency, it is anticipated that bunkerage information will be acquired from secondary commercially available sources that assemble related data for other purposes.

f. Prior to proceeding with compilation of bunkerage cost data, the contractor will develop and submit for review and approval a listing of ports or port markets for bunkerage cost estimation and supporting written rationale for the proposed listing. Where and to what extent practical costs will be based on relative weighted averages based on volume(s) sold or consumed and corresponding cost (on a U.S. dollar basis). Also provided in supporting data tabulations will be the range of costs with maximum and minimum levels of cost over the applied period (i.e., whether monthly or quarterly) and duration of the applied moving average period. Tentatively, it is proposed that bunkerage cost estimates be based on a historical three-year (3-year) moving average and will be compiled on preferably a monthly, or at a minimum, a quarterly basis with adjustment to price level(s) commensurate with year or time period for release and application of aggregate vessel operating costs for USACE planning guidance (typically price levels as of October and the following March of a given year). The contractor will be required to review the variance and volatility of bunkerage costs over the most recent historical three-year period and determine if a lesser period is more appropriate or sufficient to acceptably smooth associated cost data. Relative to purposes of scoping, it is anticipated that review and evaluation of moving average periods of five (5), four (4), and a minimum of three (3) years in duration will be required.

g. Because VOCs described herein are by nature of application compiled with intent for use (by USACE personnel) relative to estimation of value of vessel operations costs per unit of time, additional requirements will include the compilation of data and information for intensity of employment with assessment of time employed or available for employment versus time unemployed or withdrawn from service each year (such as for maintenance or repair) for appropriate derivation of vessel per-unit-of-time value and costs. Estimates of time for unemployment or underemployment and withdrawals from service will be identified to the extent applicable and relevant (i.e., underemployment due to laytime otherwise available for service versus required or prudent withdrawal from service for maintenance, drydocking, inspection, etc.).

h. Cost data and information is to be evaluated within the context of economic resource costs (as opposed to only financial or accounting costs) with estimates assembled and formulated on an annual basis and converted to average annual equivalent (AAEQ) estimates subject to the applicable water resources interest\discount rate (to be provided by the Government to the contractor) and applicable functional life-cycle or economic asset life. Estimates of functional or economic asset life will (as appropriate) conform with industry practices or conventions for construction, operation, and eventual demolition or breakage, or permanent withdrawal from waterborne transport service or service as intended by vessel or hull design. Accordingly, corresponding cost data and time horizons for salvage and breakage will be compiled and appropriately applied for corresponding adjustment to estimated overall aggregate vessel (economic resource) costs. Within the current context of requirements for breakage, the contractor will be required to evaluate applicability of demolition practices considered applicable to current or foreseeable standards for material proceeds recycling and overall environmental compliance for permanent withdrawals from service, and recommend appropriate analytical procedure(s) for adjustment to VOC estimates where considered significant

III. Listing of Tasks for Base and Optional Years

The following tasks will be undertaken and completed by the contractor:

a. Concerning the compilation of critical data, the contractor will employ data and information from relevant waterway transportation firms, as well as other firms, agencies, organizations or entities that may have relevant information on the construction and operating costs of vessels supporting deep-draft waterborne transportation. To the extent practical, the population of firms or maritime interests from which data will be employed should represent an analytically viable and reasonably broad cross section of firms relative to ongoing operation and management of the world fleet and involve an array of firms stratified to the maximum extent possible across geographic theatre or market of operation, size or DWT capacity, type of vessel(s) employed, and vessel operator fleet size (i.e., a small number or moderate number of vessels owned, operated, or managed versus a relatively large number of vessels owned or operated).

b. The contractor will employ data available from private sector shipyards or vessel owners for estimating vessel construction costs, as well other entities (academic institutions, government agencies, private sector interest groups, trade consultancies, etc.) that may have information pertaining to the construction and operation of deep-draft self-propelled vessels serving the coastal waterway and harbor systems of the United States and its worldwide trading partners.

c. Due to the sensitive nature of the cost information provided by firms in the private sector, it is anticipated the primary method of acquiring such information will have been or be by personal communication or contact. Under such circumstances it is emphasized that such data and information be analyzed and evaluated in comparison to industry aggregate data when possible for reasonableness or validation. In addition, due to the nature of the world deep-draft fleet and its relationship in support of foreign trade (i.e., imports and exports), in the interests of efficiency, information may be employed as obtained by telephone interviews, mail correspondence, and (applicable) internally available information or data to the maximum extent possible. While the number of firms or entities to be included is not presently specified, the number and scope of waterborne vessel operations and shipyard firms to be addressed in evaluations will be in consideration according to availability of information, geographic location and market for service, type of vessel service and scale of operation or presence in structure of the world fleet. Information or data identified as sensitive or proprietary in nature by sources, contributors or the contractor will be protected from public disclosure and unwarranted distribution as per applicable U.S. Federal laws and regulations (current and as amended).

d. As previously indicated, the contractor will review developments within the deep-draft vessel industry since the compilation of Fiscal Year (FY) 2015-18 deep-draft VOC Planning Guidance to determine if the need exists to augment or reduce the number of DWT delineations or size classes by specified vessel type for which vessel replacement and operating costs are to be explicitly developed or estimated. Correspondingly, the contractor will examine the changes which have taken place in the intervening time period since the last VOC update and recommend modifications (if any) to tabulations or delineations of vessel costs (according to type and size as illustrated for example in existing or prior release of subject VOC guidance) to reflect a reasonable cross-section or stratification of the actual and foreseeable population of vessels which are currently (and expected to be) significantly employed in the industry and world fleet inventory. Vessel cost classification will also include or allow for two (2) general cost categories according to vessel flag or registry. These categories will be vessels of:

I.) U.S. registry (separably accounting for vessels deployed for foreign trade in addition to service and vessels compliant with domestic cabotage laws; assuming for both registry categories hulls in class and manning in ITF (International Transport Workers Federation) and IMO ( International Maritime Organization) compliance and requisite compliance with U.S. Coast Guard and U.S. Maritime Administration requirements [as applicable]);

and

II.) Vessels of foreign registry (with sub-classification or grouping to address European flag or registry subject to funding for Government resources for optional services) aggregated based on representation of all foreign sea-faring nations with hulls in class and in service and crews in ITF (International Transport Workers Federation) and IMO (International Maritime Organization) compliance and general requisite compliance with U.S. Coast Guard (USCG) and U.S. Maritime Administration (USMARAD) requirements [as applicable]).

Vessel operating costs for hull assets of U.S. registry will include separate subdivision or delineation of costs by carrier type and DWT class or capacity within the applied population of hulls as appropriate for recognition of differing cost structures where relevant according to cabotage law(s) for support of U.S. domestic trade (U.S. Jones Act Qualified) and U.S international or foreign-service registry or certification.

e. It will be a requirement under this PWS as described herein to continue evaluation of the number of vessel types for cost tabulations compared to existing VOC guidance. Accordingly, the compilation of VOCs will encompass as a base or baseline the four (4) general vessel types long historically provided in prior and existing VOC guidance plus five (5) additional vessel types recently added and listed as follows (with required DWT range(s) as tentatively taken from the existing cost guidance for the specified vessel types):

Existing Self-Propelled Vessel Types:

1.) Tankers (primarily crude\bulk liquids); U.S. & foreign registries; single and double hull as or where currently appropriate 2.) Bulk Carriers (primarily dry bulk cargo); U.S. & foreign registries 3.) Containerized Cargo Carriers (fully cellular; Lift-On\Lift-Off or LO\LO); U.S. foreign service, U.S. domestic service (Jones Act qualified), and foreign registries 4.) General Cargo Carriers (dry palletized and average or moderate size project cargo, etc.); U.S. & foreign registries

Recently-Added Self-Propelled Vessel Types Required (separably for U.S. and foreign registries where or if applicable:

5.) Gaseous Tankers (LNG\LPG\Anhydrous Ammonia, etc.)

6.) Chemical and Product(s) Tankers 7.) Roll-On\Roll-Off Carriers\Vehicle Carriers 8.) Refrigerated Cargo Carriers (dedicated refrigeration; non-cellular and cellular-capable) 9.) Ocean-Going Passenger Vessels or Liners\Cruise Ships

f. A separable effort but integral to overall contractual services for compilation and analysis of VOC estimates will be evaluation of evolving classes or designs for cargo and passenger vessels as generally listed. With regard to evolution and development of the world and domestic fleets, special or intensive efforts are often required to gather information on costs or pricing for construction and ongoing operation of new hull designs as such information is often derived from limited shipbuilding activity and sensitivity of information associated with development of new, larger or technologically innovative vessel types or hull designs and size classes. This is particularly of issue for vessel types where significant development or migration in design and capacity is not considered as mature as for other vessel types of the world fleet. Such a comparative relationship is generally characteristic of the world bulk carrier fleet versus the fully cellular containerized carrier fleet (with the latter often considered less mature in structure of capacity for upper echelon sizes as measured by deadweight tonnage and nominal intake or slot capacities). Due to issues of need, timing, and resources applied for construction, evolving or relatively new vessel types or classes often do not exhibit the same unit cost efficiencies characteristic of more universal or established echelons or size groupings of the world fleet.

Correspondingly, the contractor will need to exercise credible prudence and expertise in the evaluation of evolving hull classes with an emphasis on fully cellular LO\LO containerized carriers. Because this effort will likely require significant incremental effort compared to research and data compilation of more established echelons or DWT groupings of the world fleet, the contractor will be required to provide a separable cost and labor time estimate for associated activities relative to that undertaken for other vessel types and\or classes.

g. The contractor will separably estimate construction or current newbuild replacement costs based on available information collected from interviews conducted with vessel owners and/or vessel operators, cost estimates available from shipyard owners and/or operators, naval architects and classification societies or other viable individuals or entities familiar with new or evolving hull asset design, construction and maintenance (to include government or public-sector agencies, private sector industry groups, trade-associated consultancies, other entities, etc.).

Relevant information will also be compiled as available from research of authoritative industry-related publications and journals. Cost data collected for the various types of vessels under investigation will be analyzed for each cost component typically detailed in IWR aggregate vessel cost tables as previously described relative to hull, machinery, and manning with estimates scaled as appropriate and necessary to cover all required or relevant vessel DWT size categories. Correspondingly, the contractor will also estimate vessel operating costs (VOCs) including crew-related costs (crew wages, fringe benefits, provisions and subsistence, and crew transportation costs), vessel-related operations costs (maintenance and repair, supplies, insurance, and other or miscellaneous costs), administration and management of vessel and crew, bunkerage costs and consumption (for cargo and passenger vessel operations), and any other significant related costs. As with VOCs developed for established DWT classes, the contractor will estimate vessel-related costs relative to periods of (probable) employment versus inactivity for withdrawals from service associated with maintenance and support activities for productive employment versus significant laytime (where applicable or to the extent possible). After the first year of the contract (if the optional years are exercised), the contractor will be required to prepare two VOC submissions each year over the contract period; mid-fiscal year estimates representing the product of detailed efforts and end-of-year data compilation with the most recent data for bunkerage prices. Mid-fiscal year will be as defined for the U.S. Government (i.e., typically March to April or May) with interest or discount rate for amortization of hull value to be initially specified by the U.S. Government. The second submission for each year will be by the end of October for each year which adjustment of the mid-year estimates according to current bunkerage costs and if applicable, the change in interest or discount rate as provided by the Government.

h. The contractor will aggregate and analyze the data and information assembled and will estimate deep-draft vessel operating costs (DDVOCs) for each calendar year (CYs 2014-15) brought to appropriate price levels, with all estimates of costs in current U.S. dollars for respective year of edition or release. Estimates of vessel construction or replacement costs and vessel operating costs will be developed respective to DWT capacity rating and corresponding specification(s) for maximum summer loadline draft (MXSLLD) class to facilitate estimation of intermediate sizes or interpolative values. General log-linear and/or basic linear regression is proposed for smoothing and derivation of aggregate costs and corresponding cost functions unless the contractor can identify a better statistical fit for the data collected. The contractor will be required to conduct reasonable and prudent analysis or investigations to verify the best statistical fit(s) across DWT, length (overall or between perpendiculars), extreme breadth, and maximum summer loadline draught estimates according to vessel type. The contractor will provide a written description or report concerning the rationale for selection of the model, equations or numerical relationships, and algorithms chosen to fit the data points and to predict or estimate costs as presented in the aggregate tables. The written rationale will also address the applicability of derived functions to intermediate vessel sizes for which data was not specifically collected or estimates formulated. The contractor will also develop and provide respective measures of statistical variance as appropriate and comparable for related work of professional standard. The format for compiling, tabulating and presenting results will generally be similar or the same as for previous guidance (except where specified by the Government), a copy of which will be provided on request as previously described.

i. In support of the compilation of VOC estimates themselves and to gain further insight and perspective on vessel operating costs, an optional requirement related to the vessel operating cost estimation effort involves estimation of secondary market sales and associated valuation or pricing of hulls, general investigation of estimated long-run costs of capital, and returns on vessel asset investment. Integral to general investigations of asset value capital costs and returns will be general research, review and discussion of what issues related to costs or pricing are significant relative to concepts of financial versus economic resource costs.

j. Specific to economic resource costs, newbuild pricing (in current and constant price levels) is largely considered sufficient and such information concerning response and behavior to issues relative to financial costs also helps to substantiate or explain regimes for vessel life-cycle management, extent of functional service life, and underlying trends driving shipyard order books and potential for laydown delays and cancellations in addition to forecasts for breakage, capacity growth, and replacement tonnage. Further, such considerations are critical and worthy of investigation as at any given time a significant portion (and in some vessel type segments, the majority of hulls) are in secondary ownership. Investigations and estimations will be formulated both according to vessel type and registry in addition to the ocean-going shipping industry as a whole (to the extent practical).

k. Computerized cost model development for VOC estimate generation, adjustment, and VOC formatted table generation - As a prudent course for development of costs and in the interests of user-efficiency for USACE analysts, integral to efforts for derivation of VOCs the contractor will be required to develop a software application for estimation or derivation of costs, adjustment of costs for limited variability of specified inputs, presentation of, and export of VOC estimates and parameters into independent standard spreadsheet and PDF file formats (with text, structure, and appearance as incorporated into the VOC tables for internal USACE distribution and use).

Required capability for variability of inputs will be across the applicable range of value(s) for specified inputs and will include allowances and adjustment of costs for the following:

a. Number and nationality of crew or manning and whether or not manning is ITF-approved

b. Age of hull asset (and underlying relationships for maintenance, etc.; reference item e.)

c. Aggregate cost and regional trade route pricing of bunkerage

d. The potential range of costs based on variance in flag or registry (within the universe or population of foreign-flag vessels).

e. Life-cycle maintenance relative to functional service life

l. It is advised that research be conducted into the existence of (any) available deep-draft vessel operating cost models which may have been developed and maintained either by the private or commercial sector, the public sector (i.e.: a Federal, state, or local agency, national research laboratory, etc.) including educational or academic sources (i.e.: a university or other research academic entity). Related research should include review of both domestic and foreign sources.

The existence and\or methodology of such a model (or models) could potentially be used to develop or provide a framework for development and subsequent improvement or update of the required computerized application for deep-draft vessel replacement and operating costs in a cost-efficient manner under this contract. If research fails to identify any such deep-draft vessel replacement and operating cost model (applicable to USACE needs within the context of both economic resource and financial costs), the contractor will independently identify the requirements, activities, and resources necessary to initially develop, support, and update a computerized costing model or system. Accordingly, the contractor will be required to provide or include costs for development of operative source code and data import\export or transcription formats. The computerized model is to be stand alone, personal computer based and both Windows 7, Windows 8, Windows XP and operable, and be made for limited internal distribution to USACE field personnel and authorized supporting contractors (in abbreviated form for contractors). The model and any supporting or affiliated source code, documentation, and information, data, and estimates or results will become the property of the Institute for Water Resources (IWR) U.S. Army Corps of Engineers (USACE).

m. In addition to general requirements previously described, the contractor will be required to undertake evaluation or assessment of the following facets of vessel operating parameters and costs:

- Estimation of Long-Term Normalized Returns

- Differential(s) in costs between vessels of European registry and aggregate foreign registry

- Estimation of Air Draft and Hull Height

- Differential(s) in costs for ice-classed vessels

The preceding parameters will be assessed either via abbreviated or limited evaluation within the primary scope of requirements or through more detailed analysis and evaluation outlined as optional taskings further below. Under the framework of abbreviated or limited evaluations which are to be considered part of the base or core requirements of the contract (i.e., not optional) the contractor can evaluate each of the generally described parameters commensurate with readily available information combining past experience with information readily available from credible trade and industry information sources. Each of the parameters will be evaluated as appropriate according to vessel type, DWT size or capacity class, and general vessel registry (whether of foreign registry or U.S. foreign or domestic service [Jones Act qualified]). Specific to abbreviated versus what are envisioned as more detailed optional analytical tasks (further addressed later in the PWS herein) the offeror will include in any proposal or response to the PWS solicitation a description of the differentiation in costs and level of effort and service to provide input and findings for each parameter with limited or abbreviated efforts versus more or sufficiently detailed efforts to develop more analytically robust and credible efforts compared to abbreviated scoping (for additional explanation or information concerning each of these parameters please see scoping description further below as presented in reference to optional taskings).

n. Because previous editions of VOCs have been held and distributed for official use only, the contractor’s cost estimate should reflect continuation of subject practices for limited, non-public distribution. The contractor should be aware, however, that estimates and relevant statistical parameters may be made available to academicians and other parties designated for official independent technical review (ITR) or projects or studies where VOCs are applied, and parties to whom subject information is released for such review purposes will be under mandate not to use, apply, or otherwise disseminate information or estimates for any purpose other than for needs as defined by the U.S. Army Corps of Engineers (USACE) for independent review (within the governance of both non-disclosure and non-alternative use).

o. General - Competencies\Experience - The contractor should be staffed ideally with maritime economists having considerable knowledge of maritime logistics in addition to transportation and welfare economics. The contractor and its assigned personnel will have extensive current and ongoing practical experience and knowledge in the evaluation and application of deep-draft vessel operating costs (VOCs) for vessel operators, knowledge or consultancy for vessel asset management, and other relevant interests, skills and associated experience concerning the maritime industry.

IV. Deliverable Products, Reports, and Schedules for Base and Option(al) Years

The contractor will prepare and submit for review the following reports and\or products:

1. An initial progress report will be submitted (either in writing or telephonically) prior to conducting or initiating any substantial efforts or investigations and will describe the following:

a. A written listing of interview questions or queries generally applied for contact of firms and compilation of internally available data.

b. Confirmation of the proposed set of representative types, sizes, and general distribution of vessels for which cost information is to be assembled.

c. The names of the firms (and respective points of contact) where confidentiality agreements permit.

d. Written documentation concerning any requirements or conditions for confidentiality mandated or required by individual and commercial sources that have provided data and information

2. A progress report (either written or telephonically) will be submitted when compilation of vessel construction\replacement cost and operating cost data and information is ninety to one-hundred percent (90%-100%) complete. This report will provide a summary of the degree of success to which data has been collected and an evaluation of the quantity and quality of the data to be used in the development of cost equations for the various vessel types and size categories.

3. A draft report (90 to 95 percent level of product completion; electronic or computerized copy submittal) displaying the preliminary estimates of vessel construction and operating costs, including descriptive text describing the procedures and techniques used to analyze the data collected for estimating vessel construction and operating costs. This report is also to include a supplement concerning development and\or maintenance of a computerized system for generation of costs estimates with adaptability of design for District field office distribution and update. At this level of completion it will be required that a draft or minimally functioning computerized application be submitted for preliminary testing and review.

4. A final product report displaying the final cost figures for vessel construction and operating costs, including descriptive text describing the procedures and techniques used to analyze the data collected for estimating vessel construction and operating costs. The contractor will provide their evaluation of the quality of the data acquired, problems or issues associated with the collection of data (as appropriate), and suggestions for improving the data acquisition and analysis process. The contractor will provide a written assessment of the viability of using a vessel operating cost model to generate future updates of deep-draft vessel operating costs.

Further, as part of the final report the contractor will provide the estimated vessel replacement and operating costs using the format and structure as will be specified by the Government and which has been used in previous updates, with accompanying text, suitable for internal distribution to Corps field analysts or operating personnel. The draft and final reports should contain and concisely present or explain relevant information and data which serves as the basis for aggregate vessel cost estimations.

5. A draft report (80 to 90 percent completion of effort) concerning data, information and findings related to new or evolving vessel classes (this content may be included in content of the final product report previously described). The report content will sufficiently document or substantiate the sources of data, findings, conclusions, and supporting logic for conclusions as to the estimation of costs for new or evolving vessel classes. Also presented will a be discussion as to the time period estimated for leveling or normalization of costs where they are estimated to differ from mainstream or primary trends for costs generally characteristic of relatively more mature deadweight tonnage (DWT) or displacement classes of the world fleet as a whole.

Subsequent to technical review of the draft report or submittal by IWR, the draft report will be followed by a final report (100 percent level of completion) with data and conclusions that will be applied to refinement and update of USACE vessel operating cost (VOC) guidance where appropriate.

6. Upon completion of all technical and analytical requirements to support derivation of vessel operating costs and the supporting computerized applications for cost adjustment and VOC table(s) generation, export, and analyst use or adjustment, the contractor will provide a finalized copy with rights of ownership and use surrendered to the U.S. Government. In reiteration offerors should identify and designate any information, data, or materials considered sensitive or proprietary in nature for contexts of limited distribution with USACE for official use only (FOUO) purposes and application. All final supporting or accompanying documents for the general report, technical appendices, and generalized set of vessel cost estimates and tables (which will ultimately be distributed to Corps analysts or field operating personnel) will be in a computer software program format to be determined mutually between the Corps and the contractor. This deliverable will also include finalization of the previously described computerized application for USACE analysts’ use which will incorporate practical limits or bounds for adjustment of vessel operating cost estimates and associated parameters according to vessel type and size or capacity class.

V. Optional Tasks

Within the past few years, the VOC derivation process, procedures and methodologies underwent an initial independent review by academicians in addition to maritime industry representatives and experts in an effort to help define and offer suggestions for improving VOC analysis and estimation procedures. Correspondingly, several items have been defined for investigation and these are listed below as tasks which may be undertaken as either optional singular-occurrence over the course of the contract while in force (i.e., once over the one to three-year period) or annual tasks to be undertaken each year during the overall contract period or respective year while the contract is in force and should the Government choose to exercise them subject to time and availability of fiscal resources.

Time for draft and final product submittal for each of these items would be negotiated when exercised, but would be exercised in anticipation that all associated work could be completed and due within specified timeframes or as noted for other draft and final product submittals for a given year or the last year of the contract (either base or option) to be exercised with completion of work for each optional item expected to be in proportion to schedule for overall work efforts with progress reported accordingly. The contractor is therefore required to submit a separable estimate of dedicated time and costs for each of the following technical items or tasks depending on year of the general contract that the associated optional task is or may be exercised.

a. Detailed investigation of long-term normalized cost and returns on capital for vessel operation and management according to vessel type and class. This involves investigation and measure of capital costs or costs of financing and borrowing for asset acquisition, operation, and management as a truer measure of capital costs than using the interest or discount rate traditionally specified by the Government based on the U.S. Federal water resources interest or discount rate. This effort will also involve the estimation of long-term margins for associated profit or net return which review by academicians appears to indicate could be included in allowances for economic resource costs based on principles of including long-term normalized profit margins in context of long-term normalized costs.

b. Adjustments for foreign flag or registry of shipping. In previous years, due to competiveness of the industry, costs for a given vessel type and respective DWT size or capacity classes were based on derivation of a single aggregation registry category of all respective hulls of foreign registry. Recent cursory investigation suggests however that development or evolution of the world fleet may be sufficient to support the estimation or differentiation of vessel costs based on characteristics or requirements either associated with or correlating to flag or registry. Such characteristics may concern nationality of crew, location of hull construction, typical locale of maintenance, geographical base of management and ownership, etc.. Under this requirement, the contractor will be tasked with investigation of the most significant influences on costs respective to or correlating to flag and formulating adjustments for vessel operating costs where they apply.

c. Investigation and update of air-draft and hull height. Several recent studies and studies in the past have revealed that civil works structures such as bridges sometime impose limitations on vessel or fleet service for a port and such limitations need to be taken into account for studies.

Often this information is not readily available through traditional data sources or avenues employed for compilation of vessel characteristics. Under this optional tasking the contractor will be required to develop or compile a computerized database of air draft for commercial cargo shipping sufficiently representative of the world fleet that can be applied for fleet analysis, VOC table applications, and general project planning of waterway systems as typically undertaken by

USACE.

d. Vessel operating cost (VOC) adjustment for ice-classed vessels (to include Arctic and IACS polar classes). Due to requirements for use or employment of ice-classed hulls of some existing trade routings and potential new routings that may become generally available to commercial cargo shipping (i.e., such as the Northwest Passage located above Canada) it has been determined that adjustments to base vessel operating costs for ice-class construction of hulls needs to be compiled and made available to USACE analysts. Adjustments will be formulated according to all vessel types and sizes evaluated for the general VOC PWS and constituent indices will be prepared for adjustment to construction and any other costs (i.e., such as insurance or crewing, etc.) to or for which adjustment based on ice-classed rating pertains or is applicable. Where grade or level of ice class varies (such as for scantling requirements or strength, whether breaker escort is required, limitations on time of year, and ice conditions depending on design for severity of service), the contractor shall formulate indices for adjustment to base vessel operating costs.

VI. Schedule of Deliverables

a. The schedule as listed below is for the completion of investigative tasks and provision of described products each year or on an annual basis. The schedule of deliverables associated with the performance of the above described work will in part depend upon turnaround or response time of the government technical representative in regard to completion of draft or product review and subsequent forwarding of comments or directives where appropriate. For purposes of formulating costs and resource assignments to comply with this PWS, general expectations for schedule of contract deliverables are outlined below; however, work isn’t required to be performed in 280 consecutive days as certain efforts for the work are carried out at particular times of the year.

DELIVERABLE ITEMS Award + (calendar days)

1. Pre-data coverage and assembly progress report 30 calendar days

2. Post data assembly progress report 80 to 90 calendar days

3. Draft report(s)\Products (as described for all tasks; including optional items or tasks where or if assigned) 150 to 160 calendar days

4. Final report(s) (all items or tasks as assigned) 210 to 280 calendar days

Core Requirements for Base Year and Both Optional Years:

General Task I. Baseline or “core” compilation of Deep-Draft Vessel Operating Costs

(limited to four primary vessel types; to include update\and\or development of computerized model)

General Task II. Detailed or limited periodic supplemental analysis of costs for new or evolving vessel size classes (with present emphasis on containerized carriers with execution of effort for other carrier types as deemed critical or appropriate)

General Task III. Costs for recently-added vessel types; five (5) in number as specified

(with General Task I limited to the existing four (4) vessel types)

General Task IV. Compilation of bunkerage costs for the world cargo fleet

General Task IIV. Limited\abbreviated evaluation of estimation of long-term normalized returns; differential(s) in costs between vessels of European registry and aggregate foreign registry; estimation of air draft and hull height;

differential(s) in costs for ice-classed vessels

Optional Tasks (a through d) for Base Year Only:

a. Detailed investigation of long-term normalized cost and returns on capital for vessel operation and management according to vessel or carrier type and class.

b. Detailed evaluation adjustments for foreign flag or registry of shipping.

c. Detailed investigation of air-draft and hull height.

d. Detailed investigation and compilation of cost adjustments for ice-classed hulls.

Contract Specifications for Compliance with Operational Security (OPSEC) Requirements

The work associated with the performance work statement (PWS) as set forth for this contract will be unclassified but the contractor will be required to handle and work with information considered sensitive and proprietary to interests in the private sector who provide data to the either the contractor or the Government and the U.S. Army Corps of Engineers (USACE) that is protected under limitations of disclosure subject to Section IV of the Freedom of Information Act (FOIA). Accordingly, within 17 calendar days of contract award, the contractor’s official representative for this contract and any of its employees who will have access or handle data identified by either the contractor or USACE as sensitive or proprietary will be required to sign agreements (where or to the extent applicable) for non-disclosure and non-alternative use that will limit the access and use of subject data only to activities and requirements essential to execution of the work and technical requirements as set forth by the (PWS) herein.

END – Performance Work Statement (PWS) Technical Specifications\Description; Compilation of Ocean-Going Self-Propelled Deep-Draft Vessel Operating Costs (DDVOCs)