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Cleanup Contracting

What has the Army done? What does the Army have planned? Why is this important? Read more about it.

What is it?

In the past 15 years, Congressional and Executive Branch actions have reformed the laws and policies that govern federal acquisition. All of these laws emphasized the need to focus contracting on results rather than on the process, sending an important message about performance in federal programs and acquisitions. As a result, Performance-Based Acquisition (PBA) initiatives were developed at many Federal agencies to meet the requirements of these reforms.

The Army’s default position for acquiring environmental cleanup services is to use PBA unless there is a strong justification for using another acquisition approach. The belief is the use of PBA will significantly improve overall project performance and expedite environmental cleanup. The Army’s approach is based on several years of successful PBA implementation, where PBA has been demonstrated to improve cost, quality, and schedule performance without compromising cleanups that are protective of human health and the environment. Use of PBA can:

Lower risk of cost growth
Accelerate cleanup
Reduce contract reporting and oversight
Be aligned to exit strategies or encourage system optimization
Lower remediation costs
Encourage the use of innovative approaches

PBA is a contracting approach in which contractor performance is judged against the desired outcome rather than the level of effort performed (generally referred to as cost plus fixed fee, or time and materials contracts). The Army PBA initiative is designed to ensure:

Contractors are provided flexibility to determine and implement the best approach to meet the Government’s performance objectives;
Appropriate performance quality levels are achieved; and
Payments are made to contractors only for services that meet the agreed upon levels of quality and performance, and are delivered on the agreed upon schedule.

The PBA approach is used in the environmental cleanup contracting arena to promote innovative cleanup technologies and strategies that expedite completion of the environmental cleanup actions. Through PBA, remediation firms are allowed the flexibility to conduct cost effective environmental cleanups in a technically sound approach of their design, while ensuring the agreed upon milestones and regulatory requirements are achieved. PBA provides financial incentives for contractors specializing in environmental remediation services to develop and implement an expedited and efficient approach to achieve environmental cleanup goals. PBA also provides contractors flexibility in exercising approaches that are more cost effective to both the contractor and the Government.

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What has the Army done?

The Army has use performance-based contracts as far back as 2001. The Cleanup PBA program has continued to evolve over time based on lessons learned and changes in the Federal Acquisition Regulations.

In 2003, the PBA initiative for active Army Installations was initiated by the Army Chief of Staff for Installation Management (ACSIM). The ACSIM tasked the US Army Environmental Command (AEC) with the technical implementation of the PBA initiative. Within the Army’s framework of PBA implementation, performance-based contracts exhibit the following characteristics:

Contract for “what,” not how;
Utilize a performance work statement (PWS) to define performance objectives, metrics, and standards;
Generally use fixed-price contracts;
Use competition whenever possible;
Use a quality assurance surveillance plan (QASP) to track and document performance;
Provide flexibility and ensure accountability for results.

Although PBAs generally use fixed-price contracts, other contract mechanisms (such as cost-reimbursement contracts) may be considered for a PBA as long as many of the characteristics described above can be incorporated (e.g., clearly defined performance objectives and standards, non-prescriptive scope, QASP is developed and used). Cost-Plus-Award-Fee (CPAF) and Cost-Plus-Incentive-Fee (CPIF) contracts are two examples of cost-reimbursement contracts that may be tailored to incorporate PBA elements. The specific type of PBA used for a particular contract is based on the characteristics of the sites included in the PBA (e.g., contaminants and media, phase of remediation, uncertainty). This determination is made through a process that includes AEC working with the Installation Restoration Managers.

The USAEC maintains an oversight role of the Army cleanup program. A component of this role is to be a member of the project team that prepared the acquisitions package being used to procure all contracting actions. AEC also has a multi-level internal review process to ensure the documents are clear and understandable, the identified requirements meet the needs, the proper type of acquisition is being procured (which is critical to assess whether non-PBA efforts are warranted) and if the cost estimate appears reasonable.

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What does the Army have planned?

The Army will continue to use the PBA approach as the preferred contracting strategy for cleanup contracting efforts. The Army will use several service centers including the Mission and Installation Contracting Command Fort Sam Houston Center (MICC-FSH) for PBA aquisitions. In late 2012, AEC, in conjunction with the U.S. Army Contracting Command Aberdeen Proving Ground, completed procurement of the Environmental Remediation Multiple Award (ERMA) contract. Administration of this five-year contract was then transferred to MICC-FSH. AEC will be using this contract and any follow-on contract to work with the MICC-FSH for their cleanup contracts. AEC will continue to use the many service centers and contract vehicles available to them depending on the contract-specific circumstances.

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Why is this important?

Based on the history of the cleanup PBA program, there has been improved performance as a result of the use of the PBA approach. The improved performance resulted in expedited environmental cleanup efforts and significant cost savings. These factors are important in allowing AEC to restore the Army’s land while minimizing the impact to the American taxpayer and the Army budget.

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