Outsourcing Management Functions for the Acquisition of Federal Facilities (2000) / Chapter Skim
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2 Outsourcing of Management Functions
2 Outsourcing of Management Functions
Pages 21-45
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From page 21... ...
This chapter begins with a brief history of the federal organizational structure for acquiring facilities and describes a general process for facility acquisition, including process components, participants, and contract methods. Federal legislation and policies related to determining which functions are inherently governmental a critical determinant in outsourcing decisions are then reviewed.
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From page 22... ...
In the post-Civil War period, federal architects and engineers continued to do much of the design work for government facilities, but the actual construction was contracted out to the private sector. The burgeoning of the government's design activities and the desire of private-sector architects to participate led to the passage of the Tarnsey Act in 1893, which permitted but did not require the Treasury Department to contract for private-sector architectural services selected through a competitive process.
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From page 23... ...
1924, 1930 Public Building Acts authorize Treasury Department to acquire design services from the private sector. 1939 1947 1949 Public Buildings Administration established, absorbing responsibilities of the Treasury Department.
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From page 24... ...
GENERAL FACILITY ACQUISITION PROCESS The federal government has not established a single, standardized process for facility acquisition, although it has established general guidance through legislation and regulations. In practice, the complex and diverse nature of federal projects, the variety of contracting methods, and the decentralization of facilities acquisitions preclude an exact, systematic, or single process for programming, budgeting, planning, designing, or constructing a facility.
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From page 25... ...
The contracting method can also affect who is involved at each phase (architect, engineer, construction contractor, etch. For example, if the design-bid-build contract method is used, the phases generally occur in sequence, with an architect-engineer entity involved in the design phase and a construction entity involved in the construction phase.
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From page 26... ...
Several alternative design solutions may be considered during this phase, leading up to the selection of a single preferred approach that will be the basis of the scope of work used in making future decisions and in procuring design and construction services. Studies by academicians, the NRC, the Construction Industry Institute, The Business Roundtable, and the Project Management Institute have all highlighted the importance of conceptual or advance planning to the entire facility acquisition process.
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From page 27... ...
Conversely, a project cash-flow curve shows that conceptual planning and design costs are relatively minor and that costs escalate significantly as the project evolves through the equipment procurement and construction phases. The project scope and statement of work for a federal facility may be developed by an agency's in-house staff or with the assistance of external entities.
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From page 28... ...
Equipment procurement may proceed in parallel with construction-phase activities to ensure that long-lead-time equipment is furnished to the construction contractor at the proper time to avoid construction delays attributable to late deliveries. Construction Phase The construction phase of the acquisition process is by far the most costly.
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From page 29... ...
Before the early 1990s, the design-bid-build method, described below, was used almost exclusively. Although there are variations, current federal practice recognizes four basic contract types that apply to several facility acquisition systems: Quality assurance is defined as the process of evaluating overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards (PMI, 1996)
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From page 30... ...
The actual construction work is performed by trade contractors under contract to the CM, who then becomes responsible to the owner for construction means and methods and delivery of the completed facility within the owner's scope of work for cost, time, and quality. Under the construction management approach, the owner typically retains responsibility for managing all preconstruction architecture-engineering services and, therefore, must address all interface issues between service providers (FFC, 2000~.
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From page 31... ...
INHERENTLY GOVERNMENTAL FUNCTIONS Although the federal government has contracted with the private sector for various design and construction activities for more than a century, a larger philosophical debate over which functions should be provided by the government and performed by government employees so-called inherently governmental functions and which functions should be provided by the private sector socalled commercial activities can be traced back to discussions among the framers of the Constitution that appear in the Federalist Papers (GAO, 1992~. The debate continues today.
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From page 32... ...
However, a 1990 report of the President's Council on Management Improvement focusing on Circular A-76 concluded: The identification of what are inherently governmental functions...and identification of commercial activities that can be contracted out is frequently contentious and difficult to accomplish. The identification process is normally unique to each organization's programs and circumstances...the definition of activities inherently governmental in nature is unclear, and there is little consensus as to which activities are governmental in nature and which are not (GAO, 1992)
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From page 33... ...
. Subpart 7.5, Inherently Governmental Functions of Part 7, Acquisition Planning, of the FAR implements the policies of OFPP Policy Letter 92-1.
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From page 34... ...
. Under the A-76 process and related legislation, agencies are required to evaluate their activities to determine whether they are inherently governmental functions or commercial activities and to complete an inventory of commercial activities.
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From page 35... ...
. OUTSOURCING OF MANAGEMENT FUNCTIONS FOR FEDERAL FACILITY ACQUISITIONS One element of the committee's statement of task was to assess recent federal experiences with the outsourcing of management functions for planning, design, and construction services.
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From page 36... ...
"Using another government agency with established procedures and internal administrative processes at variance with FBO created problems such as variation in standards and quality of acceptable product delivery established in each agency, and the variation in each agency's criteria for contract completion." International Broadcasting Bureau The Office of Engineering and Technical Operations of the IBB was responsible for the construction of radio relay stations for the U.S. Information Agency and Voice of America when the committee's questionnaire was distributed (the IBB has since been reorganized)
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From page 37... ...
NASA centers are responsible for providing end users with required facilities and maintaining existing facilities. Headquarters engineering staff monitor project schedules, the obligation of funds, and costing and ensure that project requirements are incorporated as authorized.
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From page 38... ...
NASA has outsourced management functions for facility acquisition in its government-owned, contractor-operated (GOCO) centers since its establishment.
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From page 39... ...
Control over subcontractors was inadequate.5 After evaluating this experience, DOE determined that the following factors would be critical to the success of subsequent projects: · strong leadership and experience in senior management · checks and balances at appropriate points · a strong partnership and shared goals between DOE and the contractor · a focus on quality · proactive identification, tracking, and resolution of problems The APS, in contrast, was determined to be a successful example of the outsourcing of management functions for facility acquisition. The APS, a onemillion square foot, third-generation synchrotron radiation facility, was completed ahead of schedule and under budget.
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From page 40... ...
Air Force Office of the Civil Engineer, Engineering Division, is responsible for policy, planning, and budgeting of the Air Force's military construction program. The Air Force's FY 96 military construction budget was $587.2 million, including $26.6 million for project design.
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From page 41... ...
The construction management contract documents defined the duties and responsibilities of the construction management firm; the architect-engineer firm that designed the project and the construction contractor reported to the construction management firm. NIST reported that a key result of outsourcing the management functions for this project was compensation for a shortage of in-house staff.
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From page 42... ...
The State Department reported that its experience using federal provider agencies was less successful than with private-sector firms because of conflicts with established procedures and internal administrative processes. The IBB reported that its experience with a federal provider agency was successful.
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From page 43... ...
The level of involvement and oversight by the owner organization varies depending on the contract method used. In the last 50 years, efforts have been made to develop laws, policies, and guidelines for federal agencies to determine which governmental functions should be performed only by government employees (inherently governmental activities)
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From page 44... ...
1992. Government Contractors: Are Service Contractors Performing Inherently Governmental Functions?
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From page 45... ...
1994. Responsibilities of Architects and Engineers and Their Clients in Federal Facilities Development.
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