Solicitation Number: W9128F22R0054
The U.S. Army Corps of Engineers (USACE), Omaha District is evaluating the merits of including an emerging pricing strategy for construction contracts on a planned, forthcoming solicitation. USACE Omaha District is planning to conduct a presentation and feedback session with industry in order to gather industry insight on the proposed strategy.
USACE Omaha 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 Omaha 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, is between $25M and $100M. The magnitude of construction for this project is projected to be between $60M-$80M.
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.
B-21 Radio Frequency Facility (RF Hangar), Ellsworth Air Force Base (EAFB), South Dakota (SD).
This is one of several major construction projects that serves as part of a multi-year facilities beddown in support of the B-21 program at EAFB, SD. This project will provide a new +/- 60,000 SF single-bay hangar facility and associated airfield apron, site features, utilities, and infrastructure for radio frequency testing of the emerging B-21 airframe. The project may include bid options for furniture, furnishing and equipment (FF&E), user-funded equipment, intrusion detection systems (IDS), access control systems (ACS), and closed-circuit television (CCTV) systems.
Facilities will be designed as permanent construction in accordance with the DoD Unified Facilities Criteria (UFC) 1-200-01, General Building Requirements and UFC 1-200-02, High Performance and Sustainable Building Requirements. The facility must be compatible with applicable DoD, Air Force, aircraft, and base design standards. In addition, sustainable (green) construction materials and techniques shall be used where cost effective and/or where specified. This project will comply with DoD antiterrorism/force protection requirements per unified facilities criteria.
Special construction and functional requirements: The project will be constructed on Row 60 of flightline facilities at EAFB. As such, the project will be constructed adjacent to and is required to integrate with active airfield operations. Demolition of existing facilities, utilities, and infrastructure to include hazardous materials contaminated hangars, apron, and soils may be required. New airfield apron will be designed in compliance with UFC 3-260-02 and will be constructed in compliance with UFGS 32 13 14.13.
Facility functional areas include on (1) hangar bay sized to fit B-2A Spirit aircraft with space and configuration to accommodate radio frequency testing on the aircraft.
Administrative and support functions are located to the side and behind the hangar bay. The facility contains multiple secure spaces to be designed and constructed to ICD/ICS 705 criteria. Special oversight of this project may be required
Project Period of Performance: 900 calendar days from construction NTP.
DRAFT Evaluation Documents: In order to facilitate fruitful exchange with industry, draft solicitation documents are being provided for review:
- The summary of work provided herein.
- Draft conventional and PIVOT bid schedules.
- Draft contracting front end.
- Draft Source Selection Evaluation Criteria (00 22 00)
- 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 19 August 2022 at 10:30 AM (CST)
Meeting Information
- WebEx Link: https://usace1.webex.com/meet/andy.c.temeyer
- Call-In Information: 844-800-2712
- Access Code: 1991625927
Please come prepared to discuss the following questions or provide answers NLT 26 August 2022 at 2:00 PM (CST).
- Is the PIVOT strategy seen as beneficial to industry?
- Is there any additional cost/and or risk potential for a project utilizing the PIVOT strategy?
- 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.
- 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?
- 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.
- 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, bid 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 responses to the draft RFP, the above questions, and Industry Day no later than 2:00 PM (CST), 26 August 2022 to Shawn Adkins at shawn.a.adkins@usace.army.mil, Scott Dwyer at scott.dwyer@usace.army.mil, and copy Glenda Canty at Glenda.a.canty@usace.army.mil.
Background
The U.S. Army Corps of Engineers (USACE), Omaha District is evaluating the merits of including an emerging pricing strategy for construction contracts on a planned, forthcoming solicitation. USACE – Omaha District is planning to conduct a presentation and feedback session with industry in order to gather industry insight on the proposed strategy.
USACE – Omaha 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.
Work Details
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.
The project involves constructing a B-21 Radio Frequency Facility (RF Hangar) at Ellsworth Air Force Base (EAFB), South Dakota. The project will provide a new +/- 60,000 SF single-bay hangar facility and associated airfield apron, site features, utilities, and infrastructure for radio frequency testing of the emerging B-21 airframe. The project may include bid options for furniture, furnishing and equipment (FF&E), user-funded equipment, intrusion detection systems (IDS), access control systems (ACS), and closed-circuit television (CCTV) systems. Facilities will be designed as permanent construction in accordance with DoD Unified Facilities Criteria (UFC) 1-200-01, General Building Requirements and UFC 1-200-02, High Performance and Sustainable Building Requirements.
Period of Performance
900 calendar days from construction NTP.
Place of Performance
Ellsworth Air Force Base (EAFB), South Dakota
