m HOW TO37 MMFOAL
For:
Environmental contractinG
(A Mentor-Protege Program)
To Assist:
"Smarter Environmental Contractors "
(SEE)
Prepared For:
Region VIII
and
State of Colorado
Governor's Job Training Office
Prepared By:
fojmpktfitp Simplified, Inc
P. 0. Box 100280
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- MV,! ei
02 32
*How to" Manual for Environmental Contracting
i. PREFACE x
ii. OVERVIEW OF "HOW TO" MANUAL 2
hi. WHY DOES THIS OPPORTUNITY EXIST AND HOW LARGE IS IT? : 3
A. Superfund Cleanup program 3
B. CERCLA - 4
C. SABA 4
D. Under Utilisation by Superfunrters/ARCS 4
E. Env-i rnnmont a 1 Kqui fcy 5
iv. SO, HOW DO I GET MY FOOT IN THE DOOR? . 7
v. BUT, HOW WILL I EVER LEARN TO COMPETE IN THAT ARENA? . a
A. Mentor-Protege Program,—"Smarter Environmental Kntraprnnniire' . 8
B. Win-Win Management Philosophy . 9
C. Sic-ill Utilization 10
D. Program Coordination n
E. Training and Services n
F. MSWE Registry 15
G. "How To" Manual 15
vi. WHAT WILL BE THE RESULTS OF ALL THIS EFFORT? is
vii. WHAT ARE THE PREREQUISITES FOR AN ENVIRONMENTAL . 17
A. Pergonal Documentation 17
B. Business Documentation 24
VIII. WHAT BUSINESS DOCUMENTS DO I NEED?. . . . . 34
A. General Documentation Based on Tvoe Of Business 34
B. Certificate of Competence 37
C. Business Financial Status 41
D. Bonding Requirements . . . 41
E. Bankruptcy Information 46
ix. NOW I KNOW WHAT TO DO, CAN I ACTUALLY DO IT? 47
A. Elements of High Performance Thinking 47
B. Ptu-iriei-ines tn Hi ah Performannft Thinking. ........ 50
X. HOW DOES THE MENTOR-PROTEGE PROCESS ACTUALLY . 5 8
A. Performance Criteria . 58
B. Perf ormwnce Cri t- er i a - BflBfld EXPflGtat 1QOB . 60
C. Performance criteria Knt-inp Worksheet 63
XI. WHERE'S THAT ROADMAP YOU PROMISED? 6 4
A. "Smarter BiiainaBB Cvcle" 64
xii. WHICH MANAGEMENT TOOLS AND TECHNIQUES. ARE 98
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"How to" Manual for Environmental Contracting
A. Basic anri Composite Labor Rates 98
B. Operational Flow 100
C. Cash Flow Projections 100
D. Kst-.imating Models 101
E. PTCOR - PrncBRs r Tnjmts. Controls. Outputs, and Resources . . Ill
XIII. HOW DO I QUALIFY AND SELL THE BUYER? 114
A. Position the Buver - 114
B. Know your Products/Services 116
C. naval op your Presentation 116
xiv. HOW DO I MARKET AND SELL TO EPA PROCUREMENT? ... 121
A. Prepare to Sell 121
B. Make the Tnitial Contact 121
C. Obtain Direction to Appropriate KPA Affanr-y 122
D. Make Brief Presentation to Buyer/Manager 122
E. Receive Purchase Request - . 123
F. Call Suggested Suppliers 124
G. Tssiie Purchase Order (PO) 124
H. Fulfill Purchase Order 125
I. Schedule Payment 125
J. Receive Payment 126
K. EXAMPLE: EPA Region VIII Procurement Flow 126
xv. HOW DO I MARKET AND SELL TO EPA CONTRACTS? .... 127
A. Prepare to Sell 127
B. Make the Initial Contact 127
C. Understand the Suparfunri Prnrasg 127
D. Receive Bid/RFP
E. Attend Pre-Bid Conference 12g
F. Prepare Bid/RFP 12g
G. Oh tain Contract Auarri 13Q
H. Perform Contract 13Q
I. Schedule Payment 130
J. Receive Payment 131
K. EXAMPLE: EPA MSWE/8 (a) Region VIII Services Contract . . 132
xvi. HOW DO I MARKET AND SELL TO EPA/DOE PRIMES? 133
A. Make the Initial Contari- 133
B. Ohtain Direction tn Prima
C. Make Brief Present at- -i <-.Q Rnyor/Han^ar 134
D. Receive Purchase Ragiiagf *
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How to¦ Manual fojr Environmental Contracting
E. Call Suggested Suppliers 135
F. Tfisufl Purchase Order 136
G. -Fulfil] Purchase Order 136
H. Schedule Payment 137
I. Receive Payment 138
J. EXAMPLE: Prime Procurement Flow 138
xvii. HOW IMPORTANT IS CONTRACT COMPLIANCE? 13*
XVIII ONCE I HAVE THE CONTRACT, IS THAT IT? 140
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"How to" Manual for Environmental Contracting
i. PREFACE
P1
By 1987 it had become increasingly
apparent to me that, although there
was a great deal of talk about
Minority, Small, and Women
Entrepreneurs' (MSWEs) involvement in
environmental work, very few were
actually obtaining government
contracts, what was needed, I felt, was
a specific plan to aid MSWEs in their
efforts in this area and determined to
develop such a plan. The intial
concept was presented to Les Franklin
of the Governor's Job Training Office
and Bob Duprey of the Region viii EPA
Hazardous Waste Management Division
two individuals who had the vision and
the commitment to support me and the
Minority, Small, and Women
Entrepreneurs for whom this document
was written.
I would like to express my gratitude
and appreciation to these two
individuals for, without them and their
encouragement, this document would not
be available.
ill
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MHow to" Manual for Environmental Contracting
OVERVIEW OF "HOW TO" MANUAL
This book is an effort to assist Minority, Small, and Women
Entrepreneurs (MSWEs*) in the acquisition and. completion of long range
environmental projects in conjunction with prime contractors and
government agencies. This effort is accomplished in four phases:
Phase 1: By providing a clear understanding of the process,
constraints, requirements, risks, impediments and benefits to
environmental contracting and compliance as a prerequisite to becoming
involved in environmental work.
Phase 2: By presenting information on high performance thought
processes, thus allowing readers to overcame the habits, attitudes and
thought patterns which in the past may have prevented them from
performing at the level they desired and enabling than to make maximum
use of the information presented in this workbook.
Phase 3: By utilizing the Mentor-Protege concept in which more
powerful companies are entrusted to teach, guide, care for and -develop
smaller, less well-established MSWEs, thus enabling the MSWEs to be more
competitive in today's market place.
Phase 4: By outlining a roadmap to follow in the acquisition of
environmental contracts with the Environmental Protection Agency (EPA) ,
the Department of Energy (DOE), the State and the private sector. This
includes addressing the organization of the personal documentation, the
business documentation, the marketing approach, the contract, and
contract compliance systems.
* In This manual small businesses are referred to as Entrepreneurs,
"Es ; as opposed to Business Enterprises "BEs". Anytime the discussion
relates to goals or set-asides, minority and women entreprenuers are
referred to as MWEs.
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"How to* Manual for Environm&ntal Contracting
hi . WHY DOES THIS OPPORTUNITY EXIST AND HOW LARGE IS IT?
By 1989, the yearly statistics for the
issuance of EPA environmental
contracts to small businesses in the
State of Colorado, for example, were a
mere 2.6% (only 19 of the 84available
contracts or $180 million vs~ $6.9
billion). This occurred even though
86% of Colorado firms are small
businesses with less than 20
employees, employing 52% of the
workforce, and creating approximately
93% of the net new jobs. The
opportunity is clearly there and it is
sizeable.
Snpftrfund Cleanup Program
In 1980 the Superfund cleanup program was established by the
Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA). CERCLA originally authorized a five-year program by
the Federal government to perform the following primary tasks:
Site Identification
Identifying those sites where
releases of hazardous substances
had already occurred or might
occur and pose a serious threat
to human health, welfare, or the
environment.
OVER
2. Remedial Action
Taking the appropriate
action to remedy
those releases.
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"HOW to" Manual for Environmental Contracting
3. Compliance Monitoring
Insuring that the parties
responsible for the releases
pay for the cleanup actions.
B. CKftCLA
To accomplish these tasks, CERCLA gave new cleanup authority to the
Federal government, creating a $1.6 billion trust fund. (the
"Superfund") from tax assessments on oil and designated chemicals.
This fund pays for government cleanup and imposes cleanup liability
on those responsible.
By 1986 it had become increasingly clear that the problem of
abandoned hazardous waste sites was more extensive than originally
thought and its solution would be more complex and time-consuming.
Therefore, the Superfund Amendments and Reauthorization Act of 1986
(SARA) not only extended CERCLA for another five years, but
increased the Fund five-fold: from $1.6 billion to $8.5 billion.
SARA established new standards and schedules for site cleanup and
created new programs for informing the public of risks from
hazardous substances in their community and preparing communities
for hazardous substance emergencies.
D. TTnriar nt-ilization hy Sunarfunders /ARCS
Presently the "Superfunders/ARCS" are receiving the bulk of the
business. The Alternate Remedial Contract Strategy (ARCS) is a
long-term contracting vehicle whereby architectural/engineering
firms are cleaning up hazardous waste sites with actions ranging
from the oversight of Potentially Responsible Parties (PRPs) to
actual remedial action.
Although the intent is for these "ARCS" to subcontract with MSWEs,
it has been difficult to identify those MSWEs who are "qualified" to
do environmental work. Clearly a process must be developed to allow
access to this industry.
There has been some background work related to a policy change to
enable more small businesses access to environmental projects. The
DOE ^ and other government agencies need a Small Business Access
Policy to allow small business to participate in environmental
projects. Major contracts should be planned in increments that will
enable local small contractors to bid on them. Advance planning of
major environmental projects should be conducted considering the
local workforce and training needed to prepare small businesses to
participate. Large contracts need to be broken down into smaller
contracts to enable MSWEs to participate.
C. SARA
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~How to' Manual for Environmental Contracting
When we look at the proposed goals for government contracts to
minority and women owned businesses (5 - 10%) , and the actual
figures (1 - 2%, in 1989), the wide discrepancy is readily apparent.
To reduce this discrepancy we recommend allowing MSWEs to more
readily and successfully access the system as proposed in the
"Smarter Environmental Entrepreneurs" (SEE) Program.
E. Envi ronmantal Equity
"The consequences of environmental pollution should not be borne
disproportionately by any segment of the population. Accordingly,
the Agency is evaluating the environmental risk burden borne by
racial and ethnic minorities and low income people, as well as EPA's
role in reducing that risk. To accomplish this task, I have
established a work group which has my full support and to which each
operating component is expected to extend its full cooperation."
(Bill Reilly, EPA Administrator)
EPA:
•The Agency's proposed operating-definition of equity is to ensure
that no populations or communities are systematically ignored.
OTHERS:
• The fairness of a particular arrangement
• The ability to ensure that no individual or groups of individuals
suffer a disproportionate environmental risk burden because of race,
ethnicity, or income.
•The allocation of burdens to those best able to deal with them.
The Environmental Protection Agency (EPA) is engaged in a major
refocusing of its activities based on risk. Concerns within and
outside the Agency have caused the EPA to review the distribution of
environmental risk and the "EQUITY" of its programs and policies.
Current policies and programs are being examined. This review, for
the first time, involves the minority and low income communities.
The Administrator of EPA, Bill Reilly, formed the EPA Environmental
Equity Workgroup to:
• Review and evaluate the evidence that racial minority and low
income people bear a disproportionate risk burden.
• Review current EPA programs to identify factors that might give
rise to differential risk reduction, and develop approaches to
correct such problems.
• Review EPA risk assessment and risk communication guidelines with
respect to race and income related risk.
~Review institutional relationships, including outreach to and
consultation with racial minority and low income organizations, to
assure that EPA is fulfilling its mission with respect to these
populations.. The EPA report to the Office of Management and Budget
on Pollution Abatement and Prevention at Federal Facilities show
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"Bow to' Manual for Environmontal Contracting
that the Federal Government owns approximately 29,000 facilities in
the United States alone. in addition approximately 1.2 billion
dollars for pollution abatement controls was spent in fiscal year
1991. In many instances private contractors are employed to
implement pollution control remedies and projects at Federal
Facilities.
Many minority contractors are unaware of the- opportunities that
exist at these facilities and, therefore, they do not participate in
the clean-up effort. Consequently, the EPA has embarked upon a
program entitled Environmental Equity. Environmental Equity refers
to not only the distribution of environmental risks across certain
sub-group populations, it also includes the fair and equitable
distribution of Federal resources to contractors, particularly
minority contractors. Environmental Equity is important to those
who do not share equally in environmental benefits. it provides a
more equitable reduction of risks, distribution of resources, and
an environmental policy making process that allows the concerns of
all communities to be heard, understood and considered.
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"How to' Manual for Environmontal Contracting
SO, HOW DO I GET MY FOOT IN THE DOOR?
This document contains the procedure for
organizing the company/owner's/officers personal
documentation andfinancial reports, the business
documentation and financial reports, the plan for
marketing to EPA, DOE and prime contractors, the
contract, and contract compliance.
As in many things, BEING PREPARED and ready to respond is half the
battle. In the environmental contracts industry, there are certain
"rules and regulations", "policies and procedures'" to which a potential
contractor must adhere. Knowing what those requirements are and being
prepared to meet them enables' any entrepreneur, from the most
experienced to the novice, to enter the competitive arena with
confidence.
This manual begins with the organization of the very basic business
requirements; i.e., personal and business structure as well as
documentation in areas such as personnel and finance. These particular
items should be ready and available for contract and loan support (in
some instances there may be a need to obtain a loan to support the
potential contract) or a Contractor may need to be assured of the
company stability at the onset of the relationship, if the personal and
business documentation are in order, it may help to expedite the
contracting process.
This logic follows throughout this manual - - learning the system and
being ready to respond.
This manual is structured and written to address the business needs of
the novice entrepreneur as. well as of the highly qualified entrepreneur
who just needs assistance in entering the environmental field. This
manual is also for those who just need some direction as to where to
start with winning proposals.
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"How to" Manual for Environmental Contracting
V. BUT, HOW WILL I EVER LEARN TO COMPETE IN THAT ARENA?
A. Manfcor-P-rofcaga Pragi-Jini -Smurtar Environmantal Entn-opranaiirs" (SEE)
While it is true that smaller businesses do not have the resources,
financial or otherwise, to support marketing and lobbying personnel
at a national level, they can gain a foothold in this industry by
joining forces with a larger company through a mentor-protege
arrangement (the "Smarter Environmental Entrepreneurs" (SEE)
Program).
" Smarter Environ««ntal Entrepreneurs' (SEE)
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• MSWBEs A
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"0"DRSHIP - PROTEGE
it Philosophy
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to* Mtuiual for Environmental Contracting
The Mentor- Protege program, a joint venture between the private
sector and the government (EPA, DOE, SBA and the State) , focuses on
four major points:
1. Competition and performance
The program stresses competitiveness and performance (both in
business management and technical operations) for both the prime
contractor and MSWEs.
2. Joint ventures
The program utilizes joint ventures and subcontracts for long
range environmental project acquisition.
3. Deliverables
The program emphasizes that (1) performance should be measured
and that (2) as with any other deliverable, there should be a
rslationship between payment and performance.
4. Resource matching
The program provides a database of the State's resources,
coordinates with EPA, DOE and prime contractors about contracts
(existing, near term and long range) and assists in matching the
local resources to meet the contractual needs based on skill
level to low, medium and high risk contracts. SEE will assist
in matching based on skill level to low, medium, and high risk
contracts.
B. Win-Win Mwnnparnflnt- Phi 1 ngrtphy
A win-win management philosophy is employed. Specifically, MSWE
participation in environmental projects will increase without
sacrificing the high performance standards required of contractors
by stringent environmental laws.
The win-win management philosophy focuses on performance,
competitiveness, and deliverables, through cooperative ventures
between the Primed and MSWEs. This mentoring model includes
incentives to promote participation in the pilot program. Following
training and Prime Contractor mentoring of MSWEs, successful joint
ventures provide the incentive to continue this win-win
relationship.
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mHow to" Manual for Environmental Contracting
c. siHn utilization
The Stat© has qualified, but under-utilized skilled MSWEs to meet
the environmental contracting needs. These skilled MSWEs are at
various levels in their ability to perform contractual obligations
-- skilled and experienced, skilled and ready, and skilled and in
training.
'Smarter Environmental Entrepreneurs (SEE) Skill Levels
Colorado's Resources
1818
I
Potential
Contracts
Low
Risk
Contracts
Skilled and Experiencedare those who have experience in their respective
field in berth high and lew risk environmental contracts
Skilled and Ready are those who have experience in their respective Held
and have had the necessary environmental training, but have not performed
environmental contracts
Skilled and in Training are those who are skilled in their respective field,
but ham not yet had the necessary training and experience to perform
environmental contracts
Qualified - - Under utilized
This approach effectively utilizes both the technical and
administrative expertise of prime contractors to assist in meeting
MWE goals in an effective and efficient manner. The project also
underscores the idea that MWE goals are worthwhile and attainable
through this process, and that the cost of a carefully planned and
executed attainment program (such as Mentor-Protege) is an allowable
contract expense. Finally, the program emphasizes that: 1) both
MWE goals and the attainment program should be defined; 2)
performance should be measured; and 3) as with any other
deliverable, there should be a relationship between payment and
performance.
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"How to* Manual for Environmental Contracting
Program Coordination
The program is designed to work in concert with other State programs
that provide MSWEs with information, State-provided training,
certification, and assistance. This program seeks out the MSWEs that
have the occupational/industrial skills for environmental projects
and trains them in how to successfully access and manage these
projects. The program progress is documented in monthly reports
with recommendations to enhance the models that have been
demonstrated.
Tradnlng anri Sarvicas
Increased participation will be achieved, in part, as a result of
intensive training and services provided by the State through other
funding sources. This approach is unique in that both the prime
contractors and MSWEs are evaluated on performance and deliverables.
SEE's focus is on maximizing contractor performance to achieve MWE
goals in accordance with the existing EPA and State rules and
regulations. The prime contractors are strongly encouraged by the
facility's operator, the government, and the community to
participate in SEE and develop the MWEs to their optimum capacity
and capability.
1. Set -aside Programs
Since the late 1960's, MWEs participation in Federal and State
funded projects has been encouraged by establishing goals for
Federal and State contractors, and through set-aside programs
administered by Federal and State agencies. Prime contractors
are encouraged by law to arrange support to ensure successful
participation by disadvantaged businesses.
These programs have met with
limited success for several reasons,
principally: 1) confusing guidelines
and contract policies on utilization of
MWEs; and, 2) the additional burden
and expense to the prime contractor
of orienting MWEs to subcontract
procedures and responsibilities.
2. Pilot Program
The State of Colorado, through the Governor's Job Training Office
(GJTO), developed a pilot program to address these issues and
train MSWEs on how to compete, perform, and deliver on
environmental projects. The pilot program was designed to work
in concert with other State programs that provide MSWEs with
information, training, certification and assistance. This
program seeks out the MSWEs that have the occupational/industrial
skills for environmental projects and trains them in how to
successfully access these projects.
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"How to" Manual for Environmental Contracting
3. Existing Programs
MSWE outreach efforts inform the MSWE community of environmental
contracts and awards, and provides them with realistic
information and technical assistance in sufficient time to allow
them to respond with proposals.
An action-oriented outreach program informs the MSWE community
of the SEE project and then provides advance notice of
environmental projects. The outreach effort relies on personal
presentations, distribution of printed materials, and media
advertising to seek out MSWEs. Communication, in Colorado for
example, is networked through Colorado's Minority and Women
Chambers, Minority Enterprises Inc., Front Range news media,
government agencies, and the computerized MSWE registry (BASnet).
An effective outreach model is a major key to increasing the
potential for MSWEs to effectively compete and participate in
environmental projects. A significant result of the outreach
program is the ability to successfully access MSWE firms not only
in the local area, but in the entire State.
4. Existing Training
a) General Information Seminars (Primes and MSWEs)
Seminars are conducted to provide detailed information to
both the Prime Contractors and MSWEs. The notion of joint
ventures between the two on environmental projects is
introduced and dialogue between qualified MSWEs and the
Primes is facilitated. The general information is provided
on the new mentoring guidelines, training, MSWBE availability
and qualifications, certifications and licensing, bonding and
insurance.
b) MSWE Recruitment/Information Seminars
Seminars are- conducted to recruit MSWEs and to provide
realistic information on the diverse opportunities available
to bid on environmental projects, to participate in the
program, and to outline the advantages thereof, namely: 1)
accessing a new source of revenue; 2) gaining federal
recognition as a minority contractor with 8(a) certification;
3) joining a network of contractors eligible to participate
in a rapidly expanding industry; and 4) having an opportunity
to participate in the State's economic development. The
presentations include information about this program and the
resources offered to enable MSWEs to adequately compete for
environmental projects.
c) Prime Contractor Education/Information Seminars
Seminars are conducted to inform prime contractors about how
to do business with a culturally diverse business community
in accordance with the new incentive policies and
procedures.The desire of the contracting agency for increased
participation by MSWEs and a means to accomplish this is
discussed. The objective is to motivate prime contractors to
enter joint ventures with and to develop MSWEs. Information
is included on how to train their contract staff and EEO
personnel to contract with MSWEs.
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"Bow to" Manual for Environmental Contracting
d) MSWE Skill-Building Workshops
The purpose of this effort is to train MSWEs on the process
of how- to become environmental subcontractors. A group of
MSWE contractors are selected to participate in intensive
training workshops. The selections are based on
applicability of services versus the primes' needs and the
MSWEs' potential for success.
Workshops are conducted to train MSWEs to move further into
the mainstream of the local economy through "hands -on"
business skill building techniques. Guidance is provided in
developing a business plan on how to prepare for
environmental work. In developing the workshops, staff
interviewed corporations with success in developing small
businesses, surveyed training institutions and coordinated
with Colorado's Minority Business Office (MBO) to customize
activities to the specific needs of the MSWEs.
©)
f)
Page 13
-Hands on" group training sessions are conducted on how to
complete the 8(a) and other certification packages.
Considerable attention is given to introducing participants
to the paperwork involved in the bid process. a detailed
checklist identifying the needed requirements for
environmental project participation, such as OSHA Hazardous
Material Certification, and safety/liability issues and
insurance and/or bonding is developed.
Prime Contractor Focus Groups
Prime contractor focus groups are conducted to help
strengthen the communication between similar environmental
contractors on MSWE contracting. Techniques and procedures
to increase MSWEs successful participation are jointly
developed and shared. These workshops also assist the prime
contractors in ¦ developing internal training sessions to
address the diverse culture of MSWEs and the mentoring
process.
"Working Smarter" Seminars
The purpose of these seminars is to teach participants how to
utilize the Critical Task Analysis process which is a basis
for TQM. Participants learn to develop a strategic plan,
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*How to' Manual for Environmental Contracting
5. Potential Community Workshops
To assist in that
effort, community
workshops could be
conducted which
would consider, but
not be limited to:
a) Risk Assessments
Who pays? What does it mean in "lay terms"? How are they
done? What do they mean? How are they used? (For example:
What is a risk factor? How is risk determined? What risks
are acceptable? Why/why not?)
b) Legal Rights
What are people's rights and how can they be pursued? How
can private property owners pursue their legal rights? What
legal rights do they have? How can the Super fund cleanup
have a positive economic effect locally?
c) SARA Title III
What is it? How does it work? What is it for? Who can
access what information? How is that information accessed?
d) Technical Assistance Grants
How communities can access technical assistance grants or
other types of grants which they could use to do studies,
hire people for technical assistance, do outreach into
communities, etc.
e) Relationship of Federal/State/Local Governments
Responsibilities
Where does the responsibility lie for oversight, enforcement,
suits, etc., related to polluting industries?
f) Hazardous and/or Toxic Materials
Why are materials defined as hazardous and/or toxic?
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"How to" Manual for EnvjjronjnenCa I Contracting
MSWF Registry
The purpose of this effort is to expand and
enhance the MSWE registry system that
matches prime contracts with available
MSWEs. The objective is to match prime
contractors with available MSWEs that are
interested in and capable of performing
environmental projects.
The computerized MSWE Registry enables search by discipline,
service, ethnic group, gender, zip code, and certification status,
i.e., City and County of Denver certification, State Regulatory-
Agency certification, and those awaiting certification. The
database also includes other pertinent data such as number of
employees, and annual revenues. This database has the capability of
interfacing with other MSWE databases nationwide. This network is
capable of first searching for MSWEs in the local area, then
throughout the State. This computer registry expedites the matching
of certified as well as non-certified MSWEs for federal and state
funded environmental projects.
BASnet is not just a database, but a distributed computer
communications system allowing POs/RFPs to be loaded by Primes and
searched by MSWEs. Response to the POs/RFPs can be made through
electronic mail.
SEE can utilize BASnet to advertise and promote environmental
projects to both the Prime Contractors and MSWEs. BASnet can be an
integral part of the SEE Outreach Program. BASnet can also be
linked to the Small Business Development Centers (SBDCs).
"Wrm To* Manual
This manual, available at no cost to those who request it from EPA
Region VIII, is another tool for helping MSWEs better compete in
this arena. Designed to be used "independently", the manual allows
individuals to obtain the necessary knowledge at their convenience.
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*How to" Manual for Environmental Con tract in g
WHAT WILL BE THE RESULTS OF ALL THIS EFFORT?
•Minority, Small and Women Entrepreneurs trained to work on
environmental projects.
• A successful MSWE economic development model which can be used by
other governmental agencies.
• A contract compliance system which can be utilized by MSWEs and Prime
Contractors for project planning, development and management.
• A computerized MSWE registry providing easy access to a database of
quality contractors for environmental projects.
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"How to" Manual for Envijronm&ntal Contracting
WHAT ARE THE PREREQUISITES FOR AN fciMViHuNMENTAL
CONTRACTOR?
Extensive documentation is needed when you are doing business with the
government, much of which can be used repeatedly (with updates) no
matter which contract you are seeking. Although the initial compilation
of these documents may be tedious and/or time consuming, they are
critical to the contracting process aihd must be given the same attention
to detail that you give to the proposal itself.
A. Parsnnal nncumantatiQn—¦
1. Resume
A resume of the education, technical training, and business ami
employment experience for each officer and key employee
(including employer's name, dates of employment and nature of
employment) are crucial in promoting the Company and acquiring
contracts in that it concisely demonstrates your ability and
know-how.
Resumes are like people; they come in all sizes, shapes and
forms. A primary objective of a resume is to create in the
receiver a desire to read it and then set up an appointment with
the resume owner.
The bottom line of your resume is that you want the reader to
know that you are a potentially valuable employee and that you
are responsible, capable, and willing to work to meet their
needs.
The information contained in the resume should, therefore,
provide the reader with the necessary information to allow him to
determine if there is a match between your skills and the
organination's needs.
Today people are *30-second TV commercial" oriented, if we could
develop a 30-second resume, we would be conpatible with today's
resume readers. In the absence of our ability to do that,
however, there are specific guidelines you should follow in
preparing your resume.
Whil® the resume can be tailored to the job, this may be
dangerous in that you may not have a clear understanding of the
reader's needs or may fail to address a key area of importance.
You may want to use highlighting and underlining to draw
attention to the important and/or significant words in the
following five sections of your resume:
1) personal Data:
Personal data should help establish the
lividuals within the company they are
individual, as much as your set of
qualifications.
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"Sow to" Manual for Enviroilmantal Contracting
organization's opportunities may be a good match for your career
goals.
3) Previous employment: Most resume readers like to have a
summary heading with the listing of previous job t^sks
chronologically listed, beginning with the most recent.
The summary for each previous position should provide the job
title, description, 3and accomplishments; the length of time the
position was held; and the reason for leaving the position. It
is important to be specific without becoming too "wordy".
4) Education: In general, experience and education begin to
reverse in importance as the years of experience increase. A
recent graduate has only his/her education to rely on for a job,
whereas the experienced person usually has both. List such
things as company courses, home study courses, and technical
training.
5) References: Add. a statement that References will be provided
upon request.
A resume that is limited to two pages or less for a specific job
will be better received than a resume of 5 to 6 pages.
Professional presentation of the resume is important. Once your
resume is completed, have a couple of friends who don't have a
clear understanding of your business read it for clarity and
understanding as well as for errors in spelling, punctuation or
grammar. For ease of reading, ensure the type size is large
enough and your resume is printed on good quality paper for ease
of reading. This is your first "point of contact" and it should
be designed so as to create a favorable enough impression that it
will result in a personal interview for you.
a) EXERCISE: Previous employment
Prepare a rough draft of the previous employment section of
your resume.
(1) Job Title:
(a) Description:
(b) Accomplishments:
(c) Length of time position was held:
(d) Reason for leaving position:
(2) Job Title:
(a) Description:
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"How to" Manual for Environmental Con tract in &
(b) Accompli shments:
(c) Length of time position was held:
(d) Reason for leaving position:
(3) Job Title:
(a) Description:
(b) Accomplishments:
(c) Length of time position was held:
(d) Reason for leaving position:
Statement of Capabilities (SOC)
The SOC is another form of providing more details ahn^
experience and capabilities. The SOC is just that - a° your
of your capabilities, but written in a manner and striS-^"®!*
provide a clear picture of how you can meet the ne^R Ti°
reader. The SOC is not part of the resume.
It may be to your advantage to build a complete soc and *<=
opportunity arises select only those SOC portions that are
pertinent to the job that you are seeking. are
The SOC should first provide the job title with a comrn
statement of your duties and responsibilities followed
accomplishments within the specific job. y your
Personnel History
Individuals associated with a firm must be of good charan-
The information in this section is used in connection with ='
investigation of individual character of these individuals
The Personnel History should include:
• Name and coirplete address of firm
•First, middle and last name of the individual
•Date of birth (including month, day and year)
• Place of birth (including city, state or foreign countrv)
•Are you a US citizen? If no, give alien registration numw
• Social security number
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"How to* Manual for Environmental Contracting
• Percentage of ownership or stock owned in the Company
• Present residence address (including dates of residence)
• Immediate past residence address (including dates of residence)
•Answer the following three questions:
- Are you presently under indictment, on parole or probation?
(if yes, furnish details)
- Have you ever been charged with or arrested for any criminal
offense other than a minor motor vehicle violation? (if yes,
furnish details)
- Have you ever been convicted of any criminal offense other
than a minor motor vehicle violation? (if yes, furnish details)
• Name and address of bank
• Signature, title and date
The information may be either clearly printed or typed and
submitted by:
• The proprietor, if a sole proprietor
•Each partner, if a partnership
•Each officer, each director, and each holder of 10% or more of
the voting stock, if a corporation or a development company
•Any other person, including a hired manager, who has authority
to speak for and commit the borrower in the management of the
business.
Ensure that the information is complete and every question is
answered completely.
a) EXERCISE: Personnel History
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H
YOUR WORK
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4. Personal Financial Statement
The personal financial statement should contain a listing of
assets and liabilities with the net worth. Separate Personal
Financial Statements for partner/proprietor and spouse or
Corporate Officer, ' director, stockholder and spouse may be
required for some contracts/loans.
In the case of a Sole Proprietorship, separate Personal Financial
Statements should be available for the proprietor and his/her
spouse.
For a Partnership, separate Personal Financial Statements should
be available for each partner and his/her spouse.
For a Corporation, a separate Personal Financial Statement should
be available for each officer, each director and each stockholder
having more than 10* ownership in the applicant firm, as well as
for the spouse of each such individual.
a) EXERCISE: Personal Financial Statement Checklist
If you do not have a personal financial statement already
prepared, what is your plan for completing it? Include a
list of tasks which need to be accomplished and a date by
which each task will be completed. If the person responsible
for accomplishing the task is someone other than yourself,
identify who that individual is.
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"How to* Manual for Envijronm&ntal Contracting
TASKSVCOUPLETJON OATBReSPONSfBL£ PARTY
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"How to" Manual for Environmental Contracting
5. income Taxes
You should have copies available of individual federal income tax
forms filed for the past two years, including W-2 forms and all
schedules for each owner, partner, officer, director, and
stockholder, in case they are needed for financial purposes.
6. Real Estate
a) House
If you own, or are in the process of purchasing, a home you
will need to obtain a legal appraisal from a licensed real
estate appraiser in order to determine its value. A legal
description of the property should also be obtained.
If your home is fully owned, you need to have the deed
available. You may also need to make available title
insurance information and/or an abstract of the property.
If you are currently purchasing your home, you need to have
available the name of the mortgagor, the amount of the
balance of the loan as well as the amount of interest you
have in the property.
b) Other
just as with your home, you will need to obtain a legal
description and a legal appraisal from a licensed real estate
appraiser.
Then, depending upon whether you own or are in the process of
purchasing this property, you will need to provide proof of
ownership (the deed, abstract and title insurance) or
information on the mortgage (if you are in the process of
purchasing the property). This mortgage information should
include the balance due on the loan and the amount of
interest you currently have in the property.
7. Banking
Be prepared to provide the name, address and phone number of the
institution at which you bank; the name, title address and phone
number of your contact person there; and the types of accounts
which you have, i.e. savings, checking.
8. Investments
For investments, such as CD's, bonds and mutual funds, you will
need to Provide the name of the institution with which the money
11 rrh°f *5* Vinvest™»*, the current value of
the certificate, the nuntoer of the certificate, the maturity date
of the certificate and the individual u kVl„
certificate is held. individual(s) in whose name the
B. Riibi nass Documentation
1. General information
The following information may be rannir^ ¦
company profile. required, m addition to the
a) Law suits
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"Sow to' Manual for Environmental Contracting
Is the business concern or any person in the Company
management involved an any present or pending lawsuits' if
so, have information available. "
Facility
Floor space should be listed by square foot. If the business
has more than one location, list each location separately.
Equipment
Provide a detailed listing of your primary operatina
equipment by quantity, description, age, condition (good
fair, poor). Indicate whether it is leased or owned if
owned, provide the original cost and date of purchase.
Policies & procedures
• Tasks, schedules and cost
• Lead times
• Capaci ty
• Estimating
EXERCISE: General information development
(1) Law suit
Is the law suit issue applicable? If so, where is that
information available?
(2) Facility square footage
How many square feet of floor space does your business
occupy at each location?
(3) Operating equipment
Complete the following exercise.
(a) EXERCISE: Operating Equipment Listing
List your primary operating equipment. Indicate
quantity, description, age, condition (good, fair or
poor) and whether it is leased or owned (if owned,
provide the original cost and date of purchase).
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*How to* Manual for Environmental Contracting
UST OF PRIMARY OPERATING EQUIPMENT
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"How to" Manual for Environmental Contracting
Policies and procedures
In order to develop Policies and Procedures for your
business, it is necessary that you have a clear definition
of key functional operations such as:
• Tasks, schedules and cost
• Lead times
• Capacity
• Estimating
Define the relationships of tasks, schedules and cost for
your business.
(a) EXERCISE: Definition of business capacity
Define the capacity of your business. Include
necessary lead times.
Do you have an estimating model that considers task,
schedule and cost? If not, a model is provided later-
in this document (Section XII. D.).
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BUSINESS CAPAOTY AMD LEAD TIMES
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"How to" Manual for Environmental Contracting
2. Business profile
The company profile should be typed on'Company letterhead using
the example below. The profile should be one page, with double
spacing between paragraphs and a one-inch left margin.
a) EXAMPLE: Business profile
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*How to" Manual for Environmental Contracting
8744, 8748 & 8299), and US West.
Officers of the corporation are:
Thomas A. Godwin, President/Treasurer
Ruth L. Godwin, Vice President/Secretary
Corporate Advisors - Ty Godwin, Computer Systems;
Dave Talbott, Oil Production Engineer
Contact person is Tom Godwin, (3 03)777-1121.
EXERCISE: Business profile
COMPANY NAME
Street Address
City/State/Zip
Telephone Number
The introductory paragraph should consist of a brief overall
description of your business. You may also include some
promotional information to add interest. (Approximately 5
lines)
main paragraph and should include more
This sec.ta.on is ^ This section can be a bit
detail about bring out more background information
Sout company of for*. (Approximately 20 Unas)
This paragraph should contain
status, including any
(Approximately 5 lines)
information about your MBE/WBE
certifications you have.
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List your company officers (Approximately 5 lines)
List your company contact person (name, title, address and
phone number)
3. Company profile
a) Company demographics
• Business name (including any trade names)
• Street address, City, State, Zip Code, County, Telephone,
and Mailing Address of Business
• Type of business
Manufacturing
Dealer/Wholesaler
Construction
Non-professional service
Professional service
Concession
• Date established (This is the date that the firm was
established)
• Fiscal Year (This is the Fiscal Year for the firm)
• Date of present ownership (Fill in complete date; i.e.,
January 4, 1990).
• How long in business?
• Legal structure
• IRS employer's ID number (EIN) or Social Security Number
• Present number of full/part-time payroll employees
(including subsidiaries and affiliates)
• List the business activities in which you are presently
engaged. Indicate the percentage of your firm's total
revenues for the most recently completed fiscal year for each
type of business.
b) Company History
(1) EXAMPLE: Company history
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"How to* Manual for Environmental Contracting
A Sample, Inc. was incorporated in October, 1984 by owner
and President, R. H. Goodbar. The company was set up for
the purpose of state-of-the-art business technology
transfer to small and mid-market businesses.
The first Board of Directors meeting of A Sample, Inc.,
was held on the 10th day of October, 1984. The Company
focus has been in the development and enhancement of
minority and women businesses while working with the
respective Chambers.
A Sample, Inc., has completed numerous contracts with
small companies in putting together Business Plans, Cash
Flow Projections, and Bank Loan Packages. The Company has
also completed contracts with major entities. These
contracts involved locating small, minority, and women
businesses, training them in business management skills,
and getting them more involved in the economic mainstream
of the State.
Company Management
Based on your business structure, list the name of each
proprietor, partner, officer, director, and each stockholder.
List all officers and individuals in middle management. List
their name and title, annual compensation from the business
and hourly/weekly salary rate.
If the business is a Partnership, list the names of the
partners, whether they are a U.S. Citizen, and their percent
of ownership in the partnership.
If the business is a sole proprietor, list the owner and
state if they are a U.S. Citizen.
(1) EXAMPLE: Company management profile
A Sample Inc's management is structured as follows:
Every effort is made to minimize overhead costs by
utilizing temporary subcontract services, associates, as
well as the principal's skills in planning, integration,
implementation, and management.
R. H. Goodbar, President, will direct and manage all
operations of the Corporation.
Susan Ops directs the day-to-day operations -- job
assignments, budgets, schedules and reports.
Associate services will be used to support A. Sample, Inc.
in the areas where A. Sample, Inc. does not have the depth
or resources for a cohesive project implementation.
Ken Account, whose experience is in business and office
management will manage the office and business accounting.
Meg Goodbar will support A. Sample, Inc. in marketing on a
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"ffow to' Manual for Environmental Contracting
parttime basis while she continues to conduct her
full-time job as a computer supply and peripheral
salesperson.
The services of Fred Master (lawyer) will be utilized as
Joint Ventures are established for A. Sample, Inc. to
verify that A. Sample, Inc. complies with City, State,
Federal and business requirements.
Project associates will be enployed as needed for
project(s) implementation.
The present contract with the State of Colorado is a fixed
firm price contract for approximately $000,000 and it is
A. Sample, Inc's intent to provide other services to the
State of Colorado by additions to the present contract.
Company Organization
The Business Organisation chart must be complete with name,
title and responsibilities clearly delineated. Sign and date
each sheet.
• Colorado Minority Business Office
• Colorado Small Business Office
• Front Range Community College
• FRCC Small Business Dev Centers
• Jacobs Engineering Group Inc
• US West
• SBA
• EPA
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"Sow to' Manual for Environmental Contracting
VIII. WHAT BUSINESS DOCUMENTS DO I NEED?
A. general nntTlImen^aH<^n Based oil Type of Business
Depending upon how your business is organized, you will be required
to provide different documents.
1. Sole Proprietorship
a) Business License
Have copies of business licenses £City, County, or State, as
required by law) available
b) Business Insurances
Have copies of schedule of business insurances
(Comprehensive, Liability, Workmen's Compensation, etc.)
available
c) Business Federal Tax Forms
Have signed and dated copies of business Federal Tax returns,
including all Schedules, for past three years available.
1. Partnership
a) Partnership Agreement
Have a copy of your partnership agreement, including a
buy/sell agreement available, if applicable.
b) Business Insurances
Have copies of schedule of business insurances
(Comprehensive, Liability, Workmen's Compensation, etc.)
available.
c) Business License
Have copies of business licenses (City, County, or State, as
required by law) available.
3. Corporation
a) Articles of Incorporation
Have a copy of Articles of Incorporation available.
b) By-Laws, including all amendments
Have signed copies of all corporate by-laws and any
amendments that have been made available.
c) Stockholders Meeting Minutes
Copies of all minutes of stockholders meetings election of
Board of Directors, and last board meeting should be
available.
d) Board of Directors Meeting Minutes and Resolutions
Copies of all minutes of Board of Directors meetings and all
resolutions of the Board, of Directors should be available.
e) Stock Certificates and Stock Register
Copies of stock certificates (front and back) and stock
register should be available.
f) Certificate of Good Standing from State
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"How to* Manual for Envijronmental Contracting
A Certificate of good standing from the State should be
available in case it is requested as a final confidence
check. If you do not have a Certificate of good standing, it
can be obtained from the Secretary of State's Office.
g) Lease Agreement
If your business property is leased, have a copy of your
business lease agreement available.
h) List of Affiliates
If your business is affiliated with, any other company, have
list of affiliates available.
i) Business Insurances
Copies of schedule of business insurances (Comprehensive,
Liability, Workmen's Compensation, etc.) should be available.
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'How to" Manual for Environmental Contracting
4. imf/jCTSE: Business document checklist
CHECXLJST/LOCATION OF DOCUMENTS
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"How to" Manual for Environmental Contracting
B. Cart.-ificate of Competency
The Certificate of Competency (COC) procedure is one of the means
authorized by the Congress to help small concerns obtain Government
contracts. Its purpose is to assure fair treatment of small
business and it amounts to an appeal from a previous decision of the
buying agency that the low bidder can not deliver a quality product
on time.
Since the COC procedure delays Government procurement, time is of
the essence. SBA believes this write-up will assist small concerns
in making a timely response should they have the need for a COC.
SBA notifies the bidder when a COC is required. When required,
further details on just what is needed for an effective presentation
Of your firm's capabilities and appropriate forms will be supplied
by your SBA regional office.
The Small Business Administration was authorized and. directed by the
Congress to certify that small concerns are competent to perform a
specific Government contract.
Section 8(b) (7) of the Small Business Act of 1958, as amended,
provides as follows:
"(b) it shall also be the duty of the Administration and it is
hereby empowered, whenever it determines such action is necessary
(7) (A) To certify to Government procurement officers, and officers
engaged in the sale and disposal of Federal property, with respect
to all elements of responsibility, including, but not limited to,
capability, competency, capacity, credit, integrity, perseverance,
and tenacity, of any small business concern or group of such
concerns to receive and perform a specific Government contract. A
Government procurement officer or an officer engaged in the sale and
disposal of Federal property may not, for any reason specified in
the preceding sentence, preclude any small business concern or group
of such concerns from being awarded such contract without referring
the matter for a final disposition to the Administration.
(B) If a Government procurement officer finds than an otherwise
qualified small business concern may be ineligible due to the
provisions of section 35(a) of title 41, United States code (the
Walsh-Healey Public Contracts Acts), he shall notify the
Administration in writing of such finding. The Administration shall
review such finding and shall either dismiss it and certify the
small business concern to be an eligible Government contractor for a
specific Government contract or if it concurs in the funding,
forward the matter to the Secretary of Labor for final disposition,'
in which case the Administration may certify the small business
concern only if the Secretary of Labor finds the small business
concern not to be in violation.
(C) In any case in which a small business concern or group of such
concerns has been certified by the Administration pursuant to (A) or
(B) to be a responsible or eligible Government contractor as to a
specific Government contract, the officers of the Government having
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*How to" Manual for Envdronmontal Con tract in ff
procurement or property disposal powers are directed, to accept such
certification as conclusive, and shall let such Government contract
to such concern fc>r group of concerns without requiring it to meet
any other requirements of responsibility or eligibility."
The following listing of categories and kinds of information is
provided to facilitate preparation of the documentation which you
may provide in support of your COC application.
You are -encouraged to address all the areas which are relevant to
the proposed contract however it is not meant to imply that it is
necessary to respond to every item in the listing. Also, if you
know of other or additional information which you wish to have
considered do not' hesitate to include it. You must decide what
information and what level of detail will best serve your own
interest.
1. General Information
A brief description of the history of your business. Include the
following information.
• Date operations were started
•Date and nature of significant changes in the business.
•Current form of ownership, i.e., corporation, partnership, sole
owner.
•Identify the principal products and services offered.
•Description of any parallels and similarities between products
and services presently offered and those required by the proposed
contract.
•A list of business references. Include principal civilian and
all Government clients over the last three years. Include name,
address, and telephone of client. Identify contract number,
products or services, dollar value, beginning date and ending
date.
• Determination of the percentage of Government contracts relative
to total volume as an average over the last three years.
2. Management
A description of the ways in which the business is managed.
Include the following information.
•A description of the reporting relationships amongst the
managers, supervisors,, and key personnel.
•A resume for management, supervisory and other key personnel.
" ^ brief description of the following management functions.
- contract administration
- quality assurance
- purchasing
- legal counsel
- production planning and control
3. Contract Performance Plan
A written plan which shows how you intend to go about delivering
the required products and/or services. Please include the
following elements as part of your plan.
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mHow to" Manual for Environmental Contracting
• Identification of the important ©vents or actions which must be
coirpleted and when they must be completed.
•Description of the operations which must be performed. Describe
the equipment needed for each operation {and the number of
pieces).
•Identification and description of all the labor skills necessary
to perform the contract. Show the number of people in each job
classification who will be assigned to this contract during each
time period.
• A breakdown of the current work force by department and j ob
classification. Separately, show how many additional persons in
each job classification will have to be hired to perform on the
proposed contract. Explain how the additional personnel will be
obtained and what the prospects are.
•An equipment list which shows all the major pieces of equipment
now on hand which will be used on this contract. Include: name,
principal uses, rating or capacity, important performance
characteristics, and owned vs. rented vs. leased. If additional
equipment is required, prepare a separate list showing all the
preceding information and also provide information showing the
steps taken or to be taken to obtain the equipment.
•A brief description of the existing facilities which are to be
used. Include address or location, type of construction, source
of utilities and maximum quantities available, and the areas (in
sq. ft.) of the administrative, manufacturing, storage, and other
spaces available. State whether additional facilities will be
required. If additional facilities will be required, describe
them and the steps taken to secure them,
• A list of materials, components, and equipment to be purchased,
including names, telephone numbers and addresses of suppliers.
Letters or wires of commitments giving terms and delivery dates
must be included. Documentation provided must show that both the
First Article and the Production delivery requirements will be
met.
•A list of your principal subcontractor's names and addresses,
including components, subassemblies and/or services to be
supplied. Delivery schedule commitments, giving terms and
delivery dates are to be included. State what percentage of the
contract value is to be subcontracted.
4. Plant Loading
A description of the work load for the entire business including
the proposed contract. Include contract numbers or equivalent,
contract description, identification of deliverables, dollar-
value, manloading, start dates and complete dates. Include all
firm business. Show how the proposed contract relates to your
existing capacity in terms of personnel, equipment, space,
processes, testing, etc.
5. Financial Information
Show that your business has the financial strength and liquidity
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"How to' Manual for Environmental Contracting
necessary to perform on this contract and other on-going business
activities. Include the following information.
• A breakdown of the costs of performance with supporting data
showing how the costs were determined. A typical classification
will include the following:
Direct labor
Direct material
Other direct costs
Manufacturing overhead costs
GerTeral and administrative costs
Other indirect costs
Profit
Total cost to Customer
• A realistic projection of estimated costs from the current date
to the end of the performance period. Two sets of cash flow
projections are desired. One set is to show the projections for
the total work load including this contract only. SBA Form 74B
may be used for this purpose.
• A current balance sheet and a current income statement (not
necessarily audited, but prepared by a professional in the
field).
•A copy of a letter of credit from a recognized financial
institution for an amount at least equal to the difference
between the projected cash on hand and the projected peak cash
requirements. The cash flow projections are a logical way to
show what the peak cash needs are. Identification of an equally
reliable alternative source of funds may be substituted for the
letter of credit in certain circumstances.
6. Current and Past Performance
Information which shows your past and present contract
performance. if the buying agency has expressed dissatisfaction
with your performance as to delivery then you should provide the
following kinds of information.
• A listing of all contracts which are delinquent as of the date
of this letter. The listing for each item is to include the
contract number, identification of deliverable items, total
contract value, contractual delivery date, reasons for the
delinquency, present status of work, actions currently under way
to correct delinquency and expected final delivery date.
•A listing of those contracts which (within the last 24 months)
were completed late (without client concurrence) or where your
client has expressed written dissatisfaction with your
performance. Provide contract description, contract number,
contract value, award date, buying agency name, phone and address
and the events and reasons for your client's dissatisfaction.
•A list of any contracts you have failed to complete. Provide
contract description, contract value, award date, buying agency
name, phone, and address, and reasons contract was not completed.
•A description of the specific changes you have made or which you
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"How to* Manual for Environmental Contracting
plan to make (and the date of execution of each change) which
will ensure satisfactory performance on this contract and which
will eliminate the need for future COC referrals. It is expected
that the bulk of the changes will fall in the areas of
organizational structure and staffing, plant and equipment, and
financing arrangements.
wuc-inasfi Financial Status
1. Financial Profile
If you have existing bank or trade credit arrangements, list the
name, address and telephone number of the bank(s) or agency(s),
your contact person and their position, and the nature and amount
of credit. The business financial credentials will be required
as an integral part of the loan package as well as for some
contracts.
a) Balance Sheets
Copies of Balance Sheet and Profit and Loss Statement for
each of three preceding fiscal year end periods should be
available.
b) Federal Income Tax
Copies of Business Federal Tax returns, including schedules,
filed in last 3 years should be available. Be sure they are
signed and dated.
RnrH-ing RPirmi romnnts
Does business have current bonding capacity (if applicable)? If
yes, provide the name of the surety bonding agent and your bonding
level both single job and aggregate. Provide the amount of the
largest bond received. If not, the following apply:
1 General Financial Statements Requirements
All financial statement submitted by an applicant must show the
applicable date of the information given. They also must be
signed by the proprietor, a partner, or an authorized officer of
the applicant, and date of signing indicated, unless they are
prepared by an outside accountant and properly certified.
Statements that are disclaimed by the preparing accountant are
not considered to be "properly certified". Qualified opinions
may be accepted as "properly certified" only if the items
excepted from accountant's opinion constitute an insignificant
portion of applicants total assets. Must be signed by preparer
and principal.
a) Contractor and Affiliate(s) Business Financial Statements
Requirements
• New business opening or latest available financial
statements
•Existing business Past 3 years annual statements, or
complete Federal Income Tax Returns
Until further notice, business financial statements
requirement from the contractor are as follows:
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*How to' Manual for Environmental Contracting
•Contracts $500,000 or more
-Annual - audited financial reports, as defined by
AICPA, prepared by an independent public
accountant.
-Semi-annual - Review financial report, as
defined by AICPA, prepared by an independent
public accountant.
•Contracts $100,000 - $499,999
-Annual - Review financial report, as defined by
AICPA, prepared by an independent public
accountant.
- Semi-Annual - Compilation financial report, as
defined by AICPA, prepared by an independent
public accountant.
•Contracts up to $99,999
-Annual - Compilation-type financial report
prepared internally or by an independent public
accountant.
- Semi-Annual - Compilation financial report, as
defined by AICPA, prepared by an independent
public accountant.
Personal Financial Statements
• For sole proprietorships - on the owner and individual
indemnitors.*
• For partnerships - on each partner and individual
indemnitors.*
• For corporations - on each officer, director or
management or have at least 20% ownership and are
individual indemnitors.*
* Equal Credit Opportunity Act If additional
security/collateral is needed or if an indemnitor's financial
capacity is insufficient to consider issuing a surety bond,
an additional indemnitor may be necessary which could include
a spouse if the applicant selected the spouse as the other
indemnitor.
Preparers of Financial Statements/Independent, Qualified,
Etc.
A public accountant is independent when he/she or immediate
family has no material, managerial or financial interest
directly or indirectly in applicant's business operation
other than as an accountant. He/she is qualified unless there
is contrary evidence, when he/she is either (1) certified,
licensed and/or registered in the State or local jurisdiction
or (2) has been a public accountant for a minimum of five
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"How to" Manual for Environmental Contracting
years and is accepted by SBA.
Types of Financial Statements
•Audited year end statements. Perhaps the most important
statement the independent auditor can make is the one in
which he expresses an opinion regarding your financial
statements viewed as a whole. Because of the importance of
this statement to the investing and lending public and the
responsibilities the independent auditor assumes in
expressing it, that opinion usually takes the following form:
"We have examined the balance sheet of X Company as of June
30, 19 , and the related statement(s) of income and retained
earnings for the year then ended. Our examination was made
in accordance with generally accepted auditing standards, and
accordingly included such tests of the accounting records and
such other auditing procedures as we consider necessary in
the circumstances.
In our opinion, the accompanying balance sheet and
statement(s) of income and retained earnings present fairly
the financial position of X company at June 30, 19 , and
the results of its operations for the year then ended, in
conformity with generally accepted accounting principles
applied on a basis consistent with that of the preceding
year." '
The ABOVE statement is an unqualified opinion. it can be
made only when the independent auditor has formed the opinion
on the basis of an audit made in accordance with accepted
auditing standards, where presentation conforms with
generally accepted accounting principals applied on a
consistent basis and includes all informative disclosures
necessary to make the statement not misleading.
• Ac covin tant's Opinions. An accountant's unqualified opinion
is his concise statement that the data submitted fairly
represents the financial condition of the business.
Financial statements audited by accountants which are covered
by a qualified opinion (e.g.; the data was not verified) or
when the accountant is otherwise disclaiming responsibility
for the fairness of the statements and data, should be
certified by the applicant or an authorized officer of the
applicant corporation.
•Applicant's Certification or Opinion. An applicant's
certification is a statement by the owner, a general partner,
or an authorized officer that to the best of his knowledge
the data submitted fairly represents the financial situation.
The applicant's certification will be required on all
year-end statements not certified by a qualified public
accountant.
•Compilation of Financial Statements. Presenting in the form
of financial statements, information that is the
representation of management (owners) without undertaking to
express any assurance on the statements. (The accountant
might consider it necessary to perform other accounting
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"How to" Manual for En vironmen t al Contract ang
services to enable him to compile financial statements.)
Compilation-type financial reports must, as a minimum,
include the following information:
(1) Balance sheet
(2) Income (Profit and Loss) Statement
(3) Explanation of changes in the capital accounts -
"Statements of Changes in Financial Position"
(4) Appropriate footnotes explaining asset, liability,
and income statement items.
(5) Cover letter signed by preparer explaining the
scope of accounting work in preparing the statements.
•Review of Financial Statements. Performing inquiry and
analytical procedures that provide the accountant with a
reasonable basis for expressing limited assurance that there
are not material modifications that should be made to. the
statements in order for than to be in conformity with
generally accepted accounting principles or, if applicable,
with another comprehensive basis of accounting. (The
accountant might consider it necessary to compile the
financial statements or to perform other accounting services
to enable him to perform a review.)
•Interim Statements. Interim statements may be accepted as
presented with the accountants or the borrowers certification
as to its being correct and complete.
Comparison of Types of Financial Statements
The objectives of a review differs significantly from the
objective of a compilation. The inquiry and analytical
procedures performed in a review should provide the
accountant with a reasonable basis for expressing limited
assurance that there are not material modifications that
should be made to the financial statements. No expression of
assurance is contemplated in a compilation.
The objective of a review also differs significantly from the
objective of an examination of financial statements in
accordance with generally accepted adding standards. The
objective of an audit is to provide a reasonable basis for
expressing an opinion regarding the financial statements
taken as a whole. A review does not provide a basis for the
expression of such an opinion because a review does not
contemplate a study and evaluation of internal accounting
conttol, test of accounting records and of responses to
inquiries by obtaining corroborating evidential matter
through inspection, observation or confirmation, and certain
other procedures ordinarily performed during an audit. A
review may bring to the accountant's attention significant
matters affecting the financial statements, but it does not
provide assurance that the accountant will become aware of
all significant matters that would be disclosed in an audit.
Minimum Requirements for Acceptable Applications
(1) First Application
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"How to* Manual for Environmental Contracting
Contractor Furnishes to Surety:
•Application (on SBA Form 994)
• Personal History of Principals (on SBA Form 912)
• Financial statements on the business
-New business - opening balance sheet with
cover letter or latest available complete F/S
-Existing business - Past 3 years annual
statement or complete Federal Income Tax
Returns (Principal and Preparer must sign and
date the cover letter)
• Status of work in process (SBA Form 994F)
•Bank's letter of financing available (collateral, total
amount of Line of Credit, balance owing, balance
available)
•Surety's Application Form (contractors
questionnaire) including resumes on key persons in
the business.
• Personal Financial Statements - only on persons
personally indemnified on GIA (signed and dated)
- Sole proprietorships - financial on the owner
(and spouse)
-partnerships - financials on each partner (and
spouse)
-corporations - financials on each officer, director
stockholder and indemnitor (and spouse of each)
•General Indemnity Agreement (on Surety's form)
• Statements required by Laws and Executive Orders
(sign SBA Form 1261)
• Explanatory information, including 3 past years of
financial statements on any other business in which
there is common ownership, management or control
with the contractor's businesses/affiliates
•Contractor's guarantee fee check (for final bonds
only)
• Business Plan
• Form 1624 - Debarment Notice
Subsequent Applications
Contractor Furnishes to Surety:
•Application (SBA Form 994)
• Annual Financial Statements (if due since last
application)
•Semi-annual Financial Statements (if annual
financial statement is over 6 months old)
• Status of Work on Hand, at least a quarterly
update (on SBA Form 994F)
•Bank's Letter of Financing Available (at least
annually) - need bank line updated every 90 days
• Personal Financial Statements of Principals (if due
since last application - - required annually)
•Annual financial statements on affiliated businesses
(if due since last application -- required annually)
•Contractor's Guarantee Fee (on final bonds only)
Surety Furnishes to SBA on all Submissions
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"How to" Manual for Environmental Contracting
•All of the Contractor's submission to surety
• Guarantee Agreement (SBA Form 990); Name on
990 must match name on GIA,
•Underwriting Report, fully complete (SBA Form
994B)
• Credit Report or complete information in Block 9 (b)
of SBA Form 994B
E. RflnTcruptcy Information
Has business or any board member or officer been involved in a
bankruptcy or insolvency proceeding within the past SEVEN years? If
yes, the details should be available.
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""ffow to' Manual for Environmental Contracting
ix. NOW I KNOW WHAT TO DO. CAN I ACTUALLY DO IT?
The question is a good one. Although we
may know HOW to do something, that _
doesn't necessarily mean we will be
SUCCESSFUL doing it Developing an
"attitude of success" is critical if we
intend to make the best use of this
information.
A. K1flmants nf High Performance Thinking
It has been discovered that successful people tend to think in
certain ways, ways which assist them in attaining their goals.
1. Developing a positive self image
They "see themselves" performing a task successfully and "talk to
themselves" in ways that build that positive self image.
Take a moment to consider something you think you do well (ski,
golf, cook, paint, etc.) If we think we do something well, we
hold a positive self image of ourselves performing that task -
and, when our performance in that area is less than we expected,
we tend to "talk to ourselves" in terms of what we will do NEXT
time to insure the desired performance level. Now take a moment
to consider something you think you don't do very well. Chances
are you just got a "picture" of yourself in your mind performing
that task poorly. This is where it becomes interesting. in
these instances, when our performance level is lower than
desired, we do NOT talk to ourselves in terms of what we will do
next time to make it better ... we tend to talk to ourselves
about what a poor job we've done, how we have always done this
task poorly, how it never seems to get any better, etc. This
may not seem like a big difference, but let me assure you. it is
major! Until we "see ourselves" as successful environmental
contractors, it won't happen. You may be familiar with the term
"Seeing is believing" . . . a truer statement might be "Believing
is seeing". Until we believe we are capable of competing in this
arena of business, it will never happen (we will never "see" it).
We need to begin to tell ourselves that we have the resources,
capabilities, contacts - even if we don't at this points
Remember, believing is seeing!
a) EXERCISE: Self image description
In one or two sentences, describe your "self image" (how you
"see yourself") . It quickly becomes apparent that we have
multiple self images - we see ourselves, for example, as an
innovative business owner; a physical fitness advocate; a
supportive parent, etc. For purposes of this exercise,
however, limit your descriptions to how you see yourself as a
proposal writer, a government contractor, preparer of loan
requests and/or business plans, etc. - roles that are related
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*How to* Manual for Environmental Contracting
to your business obtaining a government contract.
HOW DO YOU 'SEE YOURSELF"?
2. Committing to active goal setting
They set goals, frequently without limiting themselves to the
resources which are currently available to them and without
knowing where those additional resources might be found.
Someone has said that people spend more time planning their
vacations than they spend planning their lives! This is probably
true, since fewer than 3% of the population actually write down
their goals - however, the ones who do are some of this nation's
highest performers.
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"How to' Manual for Environmental Contracting
a) EXERCISE: Business goals
List your business goals in the area of government
contracting.
L/ST YOUR BUSINESS GOALS FOR THE YEAR
YOUR WORK
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'How to" Manual for Environmental Contracting
B. r?n-irialinc>g t-<-> High Performance Thinking
One of the greatest things about knowing how high performers think
is also knowing that these high performance thought patterns can be
learned.
1. Positive self image
The way we "see ourselves" (our self image) is a direct result-of
how we "talk to ourselves" (our thoughts - and sometimes, for
those of us who talk to ourselves, our words!)
"perform" (our behavior).
Think of these three elements as constituting a cycle
with each element being the cause as well as the
result of the other two - - Ta/k, See, and Behave.
Behave See
The self image is rather like an automatic pilot in that it
allows us to act without having to think about it much (we
breathe, climb stairs, rock a child, etc. without having to
consciously consider our actions). We "know how we are" in front
of a crowd, on the golf course - or writing a proposal for a
government contract. Once we "know how we are", we then go out
and act like ourselves - it's easy! We know we panic in front of
a crowd so, given an opportunity to speak to a large group, we
immediately panic. We know we have a bad hook on the golf
course, so we go out to the golf course and hook a few balls!
We know our proposal will never be the "winning one" so we
prepare it, "knowing" all along that it is probably a waste of
our time.
The problem with "knowing how we are" is that it then causes us
to behave that way - even if our goals require different
behavior. We set goals we cannot see ourselves achieving - and
then wonder why we can't seem to achieve them; never
understanding how powerful our "automatic pilot" really is.
The key to entering that cycle lies in knowing where the optimum
entry point is. We can intercept the cycle at the point of our
behavior (attempting to change that behavior by exercising large
amounts of will power - extremely difficult for long term,
lasting change, because we are simply "overriding" our
automatic pilot rather than "changing the settings") or we can
intercept the cycle at the point where we think about and tell
ourselves "how we are". We can start changing those settings by
telling ourselves that we are confident in front of a crowd, that
our drives go straight down the fairway and that we are
successful in obtaining government contracts. . . thus starting
to create a new "picture of ourselves" (a new self image) which
eventually becomes the new "setting" for our automatic pilot.
Have you ever heard the phrase, "As a man thinks, so is he"? It
is true - theologically, psychologically, physically. In order
to think like a high performer, we need to "see ourselves"
successfully attaining our goals and recognize the power of our
thought and words (and the words of those around us) to create
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"How to" Manual for Environmental Contracting
self image.
EXERCISE: Positive statements
Write down 10 positive statements about "how you are" You
may choose to include statements which are not yet true about
you, but will be true when you reach your goal, i.e. "I am
proud of the winning proposals I write."
WRITE YOUR 10 POSITIVE STATEMENTS
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"How to" Manual for Environmental Contracting
2. Goal setting
As with most things, there are "right" and "wrong" ways to goal
set. Probably a better choice of words would be "effective" and
"ineffective". Many people set goals but experience little
success and they never understand why they have "failed" - after
all, they goal set to "succeed" . Effective goal setting
contains specific elements which enable individuals to overcome
some of the obstacles we face in reaching our stated goals,
including the obstacle of sabotaging our own success whereby we
subconsciously prevent ourselves from reaching a.goal which we,
on the conscious level, truly desire.
a) EXERCISE: Addressing unachieved goals
Exercise: Recall goals you have set for yourself but which
you failed to attain. Make a list of those you would still
like to achieve.
GOALS, UNACHIEVED, BUT STILL DESIRED
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"Hour to" Manual for Envijronm&ntal Contracting
Elements of successful goal setting
Now, let's examine the elements which will help make us more
effective ("successful") goal setters. We need to:
(1) Set goals in all areas of our life.
The truth about goal setting is it works. In fact, it
works so well that you will find that areas in which you
haven't goal set tend to become "problem areas" after a
time. So - even if things are going well in an area -
include it in your goal setting to insure it continues to
go well. Most of us tend to focus our goal setting on
work - a better, more balanced approach includes all areas
of your life which are important to you: family,
spiritual, health, etc."
(2) Write our goals down. Literally.
There is something about actually writing them down that
helps you attain them. It may be that it forces you to
become very clear on what it is you want to attain, to be
specific. It may be that the clarity of this "picture"
allows your subconscious to go to work for you, thus
helping you reach that goal even when you aren't aware you
are working on it. Whatever it is, it works. Goal set to
be in that top 3%!
Be a
Winner!
(3) Provide ourself with feedback on a regular basis.
We need to know where we stand in relation to where we
want to be in order to create the drive and energy we need
to reach our goals. As human beings, we have a need for
order (the definition of "order" varies considerably, I
might add!) and it isn't until things are "out of order"
that we get busy and "fix it". And.then we only fix it to
the level where we are once again comfortable - we don't
fix it "better" than the picture we hold in our minds.
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"How to' Manual for Environmontal Contracting
We must provide ourselves with
feedback so we will know if we
are progressing toward the
goals we have set.
When it reaches the point where we are uncomfortable with
the "order" of things (and., remember, the definition of
"order" varies considerably among people!), we will do
something about it - but not until then. We will struggle
along with the clutter until we think it needs to be
"fixed". At that point we will straighten things up - but
we seldom go to extremes; after all, some clutter looks
"right" to us!! The point is, however, if we never look
at our desk, we will never know it is "out of order" (i.e.
cluttered) .
For example, have you ever faced
a desk so cluttered you couldn't
find anything?
Regularly practice visualizing
Picture in your mind the situation when the goal has been
attained. Until you "see" yourself doing something
successful, it is difficult to actually do it. As we
talked about earlier in the section on self image, most
people, when they want to change a behavior, tend to focus
on the behavior itself rather than the self image which
"causes" that behavior. Although it is possible to change
behavior by focusing on the behavior itself, a much more
permanent change is realized when you focus on changing
your self image. visualizing helps you begin to see
yourself successfully and comfortably in a new environment
so - when you get to that new environment, you are
successful and comfortable. After all, you have "seen
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"How to* Manual for Envirozimental Contracting
yourself" in this situation millions of times and. done
very well! By the way, professional athletes frequently
use this method - rather than actually hitting a tennis
ball, skiing the slalom course or diving off the high
board, they visualize themselves doing it successfully;
essentially training their body to a high level of
performance without the wear and tear that results from a
physical workout.
When you visualize, follow these suggestions:
1) Include all of your senses - in addition to "seeing"
yourself in the situation, think also about what you are
hearing, smelling, feeling, thinking. The more
"realistic" you can make the visualization, the better.
2) Select optimum times to practice - there are times when
our minds are most receptive to the new image we are
creating. The best times to practice your visualizations
are first thing in the morning and just prior to going to
sleep. The important thing is that you be relaxed and
uninterrupted.
2) Be involved in the visualization - in other words, you
are "in" the situation, not observing it. If you are, for
example, visualizing speaking to an audience, you would
-see" the audience's faces, the podium,your notes, your
hands; you would hear the noise of the air conditioner,
the rustling of paper; you would smell the odor of the
food from the banquet being served next door, etc.!! You
tjot see you,standing in front of the audience as if
wu were watching a movie. You need to be IN your
visualization as a participant, not as an observer.
Use constructive motivation
Do things because we WAHT to, not because we. feel we HAVE
to This may seem pretty elementary, but it is surprising
how many of our goals are not ones we particularly want to
achieve We set many of our goals because we feel we have
t-n achieve, to conform, to prove ourselves, to obtain
oroval etc - and those are frequently the most
5?fficult to attain. The reason is threefold: when we
f 1 we "have to" do something we tend to react in three
nredictable ways, none of which are conducive to goal
achievement. We tend to work more slowly, less carefully
»nd to procrastinate. These aren't, of course, conscious
actions on our part; it just seems td be something which
JSSrs when our subconscious hears that we "have to" do
something. Therefore, make sure your goals are things you
80*:\. achieve and that you stay focused on why you want
?o achieve them, i.e. you don't go to work at 5 AM because
"have to" you go because you want to pay the mortgage
rthe house in which you and your family live. You don't
U I to pay the mortgage, of course. There are
fr niatives However, if none of the alternatives look
rfVcirable as paying the mortgage, you are paying it
hLause you want to; not because you have to Just change
because y use y0u no longer "have to" go to work,
th6te°that proposal, attend that meeting, etc. - you are
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"How to* Manual for Environmental Contracting
the words you use. You no longer "have to" go to work,
write that proposal, attend, that meeting, etc. - you. are
doing things because you "want .to" - that simple change
makes a remarkable difference in how you approach the
tasks set before you each day.
Too many people restrict themselves by setting goals based on the
resources currently available to them. Try to set unconstrained
goals - somehow the resources tend to "show up" when you are not
limiting yourself by the way you think. When we don't "need"
additional resources, we tend not to see them when they present
themselves to us; however, if we set a goal and haven't got the
necessary resources, we become very creative about finding them!
It works the same way when you decide to buy a new car ¦ until
you decided you wanted one, you didn't think much about cars; now
you are bombarded with information! "Your car" appears on TV
shows, is advertised in the paper, pulls up next to you at the
stop light, passes you on the freeway, receives glowing reports
from auto magazines, etc. That is the way unrestricted goal
setting works. If you know what you want, you will see things
that will help you attain it things that, previously, you never
even noticed.
3. Unconstrained goal setting
Dont be afraid to try some
"unconstrained goal setting"
where you focus entirely on the end
result with no idea as to how you are
going to attain it.
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"Hour to" Manual for Environmental Contracting
EXERCISE: Realistic goal setting
Using the information you now have about effective goal setting,
set at least one goal in each area of your life which is
important to you. The goal must be written, specific, measurable
and one which you WANT to achieve! It wouldn't hurt to also
list ways in which you are going to obtain feedback on your
progress. And, don't forget to use visualization - to "see
yourself" successfully achieving this goal (even if it seems
pretty far-fetched initially] Remember, we are changing those
settings on our automatic pilot and it thinks it would just be
"easier" to leave things alone!)
LIST YOUR BUSINESS GOALS FOR THE YEAR
\/^
YOUR WORK
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"How to" Manual for Environmental Contracting
x. HOW DOES THE MENTOR-PROTEGE PROCESS ACTUALLY WORK?
The SEE Mentor-Protege program is structured to identify and match MSWEs
who are eligible for subcontracts to participate in the subject program.
An MSWE can have more than one mentor. A mentor firm, for example, is
defined as a contractor or subcontractor eligible for environmental
contracts who received $25 million or more in environmental contracts or
subcontracts during the preceding fiscal year and can demonstrate the
capability to assist in the development of protege firms. The mentor
firm must receive the approval of the State Department of Health and the
Department of Energy/Environmental Protection Agency (DOE/EPA) before
participating in the SEE Program. The protege will not be considered an
affiliate of the mentor firms solely by receiving assistance. The
protege firm must first be awarded a contract on the merits of the
protege's ability and performance.
The SEE Mentor-Protege program requires an agreement based on
performance criteria with the protege firm describing: 1) the
assistance the mentor is offering, 2) a development program for the
protege that verifies the protege's progress and anticipated number and
type of subcontracts, and 3) a termination clause.
The SEE Mentor-Protege Program, if widespread, can develop successful
MSWEs. In order for it to be successful, the win-win management
philosophy must be continued -- cooperation, assistance, and unity among
industry, MSWEs,State Departments of Health, EPA and DOE.
A win-win management philosophy is necessary for the success of the SEE
Mentor-Protege program. Specifically, MSWE participation in
environmental projects can increase without sacrificing the high
performance standards required of contractors by stringent environmental
laws.
The SEE Mentor-Protege Program will focus on performance,
competitiveness, and deliverables, through cooperative ventures between
the Primes and MSWEs. This mentoring model will include incentives to
MSWEs and Primes to promote participation in the program. Following
training and Prime Contractor mentoring of MSWEs, successful joint
ventures can provide the incentive to continue this win-win
relationship.
The Mentor will develop a detailed plan which will describe in detail
the Tasks, Schedule, and Cost (TSC) against which the Protege must
perform in order to meet the contract requirements. The performance
criteria will be placed against TSC at the onset of the contract to
ensure that both the Mentor and Protege have a clear understanding of
each others expectations and needs.
A. Performance Criteria
In order to provide a measuring stick for the mentor-protege
program, performance criteria is a must and should include an
initial benchmark as well as intermediate and final points of
measurements. Without performance criteria, it would be difficult
to measure the progress of the MSWEs in learning to be more
competitive, or to realize increased performance with quality
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"How to* Manual for Environmental Contracting
The criteria should include, but not necessarily be limited to:
project planning, technical competence and. innovation, schedule and
cost, reporting, resource utilization, and effort.
1. Project Planning
^Development of plans (e.g., work plans, management plans, etc.)
5Development of project cost estimates and schedules
•Screening for organizational conflicts or interest
•Elimination of duplicative efforts
• Scheduling and budgeting multiple projects within cost
priority
2. Technical Competence and Innovation
•Effectiveness and thoroughness of analyses
•Meet plan goals and objectives
• Development of alternatives and implementation of courses of
action
•Adherence to agency and other Federal regulations, procedures,
and guidelines (e.g., health and safety, chain-of
custody/document control, CERCLA and RCRA regulations,
subcontracting, etc.)
•Provision of technical support to U.S. Army COE, states, and
other Agency or Federal Offices
•Creativity and ingenuity in approach (e.g., cost-effective or
technical innovative control/remedy schemes)
• Expert testimony
3. Schedule and Cost Control
•Maintenance of planned budgets and schedules (e.g., prompt
reporting of projected cost and schedule variances)
•Adjustment of schedule and priority requirements (e.g., ability
to expedite schedules)
•Ability to minimize costs
4. Reporting
•Timelines of deliverables (e.g., progress reports, project
reports, work plans)
•Clarity and thoroughness of project documentation (e.g.,
identification of problem and recommended solution, discussion of
alternatives)
5. Resource Utilization
• Suitability of staffing, recruiting and training of personnel
•Ability to obtain subcontractors and outside consultants
•Attention to equipment maintenance and accounting, minimization
of travel costs, etc.
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"How to" Manual for Environmental Contracting
Effort
• Responsiveness
• Preparedness and mobilization, of resources for contract and
assignments
•Regularity and effectiveness of day-to-day support/communication
with regional personnel and other organizations and individuals
involved with site
•Performance in special situation (e.g., adverse/dangerous
conditions or expedited time frames).
As seen from the above inter-
related criteria, there is a direct
relationship among Task, Schedule,
and Cost. The critical nature of the
balanced relationship can best be
demonstrated by the model to the
right (balanced - top illustration).
This model clearly demonstrates
the impact of achange in any one of
the elements. For example, a
change in task wilbbviously cause
a change inSchedule and Cost (out
of balance - bottom illustration).
It is therefore imperative that you
have the management tools and
techniques inplace to manage these
dynamics. The challenge of today
is managingthe dynamics.
Performance Cr-i teria-Raaad RxpnrraHn^c
The performance criteria can be utilized at the onset to define
expectations for both the mentor and protege. The protege might
consider a performance contract; i.e., if performance is greater
than expected or defined, they might receive a greater share of the
profits or less if performance is less than expected.
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How to" Manual for Environmental Contracting
1. EXAMPLE: Performance Expectation Worksheet
RATING PROJECT TECHNICAL SCHEDULE &
PLANNING COMPETENCE COST CONTROL
& INNOVATION
5 Ensures that cost/ Innovative technical Original schedule
Outstanding time is minimized solution applied. Re- met in spite of
to meet technical di- suits may establish major opera-
rectton specification, state or the ait tonal impedi-
"Fast tracking" or approach to address merits. Services
streamlined appro- problems. Exceeded completed ahead
aches implemented original established of schedule at a
as necessary. remedial action goals reduced cost to
and objectives. the Government
than originally
estimated.
4
Exceeded
Expecta-
tions
3
Satis-
factory
Provides for a sig-
nificant cost/time
savings and contains
adequate approaches
to address require-
ments contained in
the plan.
Quality was above
average of experi-
ence with similar
type of contractors
over past two years.
Adequate to meet re- Quality was average
quirements specified
in Statements) of
work, and goals and
objectives of the
program andtor con-
tract requirements.
of experience with
similar type con-
tractors over past
two years.
Original schedule
met in spite of
minor opera-
tional impedi-
ments. Sen/ices
completed on
schedule at a re-
duced cost to the
Government.
Original schedule
met Cost was
reasonable con-
sidering scope of
effort.
2 Work assignment or
Marginal contract specifica-
tions not completely
addressed.
Cost and/tor time
disproportionate to
required level of effort
Quality was below
average of experience
with similar type con-
tractors over past
two years.
Original schedule
slipped without
adequate warn-
ings or justifica-
tion. Avaiabie cost
savings not taken
advantage of.
1 incorrect identification Lack of technical
(Jnsatis- of requirements need- competence in any of
factory ed to meet SOW. In- major technical or
adequate schedule to management areas
provide quality service addressed,
or product or service.
Activities comp-
leted so late as
to have resulted
in loss of utility
or negatively
impacted program.
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*How to" Manual for Environmental Contracting
RATING REPORTING
RESOURCE
UTILIZATION
5 Reports provide much All of the contractor
Outstanding insight into key prob- resources are applied
lems and potential
solutions as to serve
as master plan for
collective action.
to minimize costs and
time, while enhanc-
ing overall work
quality.
4
Exceeded
Expec-
tations
3
Satis-
factory
2
Marginal
1
Satis-
factory
All reports are of
consistent high qual-
ity both in content and
presentation.
No rewrite of report
required by EPA per-
sonnel.
All required report-
ing were delivered on
time and with con-
tents as specified.
One or a few of the
contractor resources
are utilized effi-
ciently, resulting in
cost or time savings
and providing speci-
fied quality of work.
Staffing, subcon-
tracting, equipment,
and other resources
(e.g., travel ade-
quately utilized to
meet project and
contract require-
ments.
Required reports were
delivered within 15
days after the date
but without adequate
justification or warn-
ing.
Contorts of report
not as specified.
Required reports de-
livered more than
one week late with-
out adequate justi-
fication or warning.
Contents of reports
inadequate to permit
interpretation of pro-
blem or action.
One or a few of con-
tractor resources
are not used effi-
ciently, resulting in
cost overruns and
time delays.
EFFORT
Contingency
plans always
developed. Re-
sponse actions
talen in extreme
weather condi-
tions on high
risk areas.
Personnel ef-
fort well beyond
contract re-
quirements.
Effort was be-
low average of
experience with
similar type.
contractors
over the last
two year under
similar
circumstances.
Resource moni-
tored in suf-
ficient time to
meet established
budget/schedule.
Regular commu-
nication and in-
struction with
agency person-
nel.
Effort was be-
low average of
experience with
similar type
contractors
over the last
two years under
similar circum-
stances.
Consistent poor Operational im-
utilization of re- pediments unad-
sources which hinders dressed, and
the implementation of adequate wam-
the program. ing or justifica-
tion was not
provided or was
unacceptable.
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"How to" Manual for Environmental Contracting
Parformanca Criteria Rating Worlcshaal-.
1. EXAMPLE: Performance Criteria Rating Worksheet
CONTRACT NO.
PROJECT
"CONTRACTOR
SUBCONTRACTOR
PERFORMANCE CRITERIA RATING SUPPORTING
COMMENTS
5to 1
PROJECT PLANNING
• Development of Plans
• Dev Project Cost Estimates 4 Schedule
• Screening tor Organizational Conflicts
• Elimination of duplicative efforts
• Scheduling & budgeting multiple projs
TECH COMPETENCE & INNOVATION
• Effectiveness of analyses
• Meet plan goals 4 objectives
• Dev of alternatives & implementation
•Adhere to Regs & Procedures
• Provision of technical support
• Creativity & ingenuity in approach
• Expert testimony
SCHEDULE 4 COST CONTROL
• Budget (Hours 4 Cost) MainL
• Priority/Schedule Adjustments
• Cost minimization
REPORTING
• Timeliness of deliverables
• Clarity
• Thoroughness
RESOURCE UTILIZATION
• Staffing
• Subcontracting
• Equipment, Travel, Etc.
EFFORT
• Responsiveness
• Mobilization
• Day-to-Day Operations
• Special situations (e.g., adverse/
dangerous conditions
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"How to" Manual for Environmental Contracting
xi. WHERE'S THAT ROADMAP YOU PROMISED?
A. "Sma-rt.a-r Business Cycle"
The "Smarter Business Cycle" is that roadmap which will provide a
process to define, develop and implement effective management tools
as well as the needed systems in order for MSWEs to become Total
Quality Management environmental contractors. These tools/systems
will, in providing accurate and pertinent data, effectively enable
timely and profitable decisions and can assist in attaining revenue
goal(s). The "Smarter Business Cycle" process focuses on working
with personnel, as directed by management, to inplement the
developed systems and management tools, train, evaluate, and
follow-up. CSI's training model incorporates the THREE "E's" of
training - - Explanation, Example, and Exercise whereby CSI provides
the Explanation through lecture, with supporting Examples, and
finally the Exercise during which the student develops the needed
management tools to support the newly learned proven management
techniques.
1. "Smarter Business Cycle" Model
There are three basic elements of the "Smarter Business Cycle" -
- "Smarter Business Planning", "Working Smarter" and "Smarter
Proposals".
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"How to" Manual for Environmental Contracting
2. "Smarter Business Planning"
"Smarter Business Planning" will enable the business to set
specific measurable, attainable goals and develop a detailed
step-by-step "how to" process to achieve those goals. In
addition, the business will be provided with a clear sense of
direction. This process will enable the business to determine
where it is today -- "what is". Through brainstorming analysis,
it will enable the business to determine where it "could be".
Thus, resulting in where they "should be" tomorrow. This process
provides the business with a multi-year cash flow projection.
The "Smarter Business Plan" will enable the business to develop
simple procedures/action plans to carry out its "smarter business
plan".
a) Items to include in the plan
The plan, at a minimum, should consider in detail:
•Clear task definitions
• A schedule for individual/integrated tasks
•An associated cost of each task as well as the integrated
task
• Individual accountability for task accomplishment
- Critical milestones along the way to enable measurement of
your accomplishments.
•A cash flow projection
• Integration of task, schedule, and cost
•Action Plans to implement, monitor, status, and report
b) WICS Model
The "Smarter" Business Plan should contain the 1) goal and
objectives, 2) definition of the tasks, 3) sequence of the
tasks, 4) prerequisites for each task and 5) identification
of the individual/agent/department responsible for performing
each task. The schedule and cost along with the summary
should also be generated as well as detailed Action Plans to
monitor, status and report on the progress of the business
plan.
To enable this process, a simple model was designed to
utilize in walking you through the process. The WICS Model
- "Hhat Xs, Could, Should be".
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'How to" Manual Iojt Envijronm&ntal Contracting
[ DISTRIBUTORSHIP
GOAL ^CS "HOW TO" MODEL
• ' * *
X
WAREHOUSE
SALES
DROP SHIP
WAREHOUSE
DELIVERY
OBJECTIVES
n
>
I Introduction 1
Inputs
Reeourcaa
Prooass
-Product
-Sohadute
-Coat
-Rs&n*
Summary
U^or Task
X
A.
-JX
Ta
isk
Task j
Major Ta* J TASKS
WICS Objective Matrix
1st 'What Is*
-t»< M h»
>C
'What Is" Network
bBJecnvE»
MAJOR TASKS
TASK*
Task Description
Inputs
H—ouros*
Prooass
-Product
-Schedule
-Cost
-HSAfli
Summary
3rd " Should Be*
Tasks Networked
With Integrated:
• Task
• Schedule
• Cost
tf.
'Should Be* Network
"Smarter Business Plan
• Loan Summary
• Company Description
• Management Approach
• Marketing Plan
- FinanoM Plan
• Appendtoaa
-Cash Flow ftojaoilon
-Detail Rnanotai
Equipment List
Anions of Inoorp
ACTION PLAN
Issue:
Action-To-Oate:
Status:
Future Action:
"Executive Summary/Loan Package*
The three major phases of this model are:
• "What is" - What is in place today
• "Could be" • Brainstorming, what could be with analysis
• "Should be" - Analysis results of what you plan to
accomplish
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"Bow to* Manual for Sjivdj-onmontal Contractinff
Whereas, at a minimum, business plans should contain the
following:
• Description of Business
• Major product/Servic e
• Ownership
• History#
• Company Today
• Company Tomorrow
•Start-up Description
• Customer Base
"Smarter Business Plan" enhances the final product by
including eight (8) additional elements:
• Task Flow to Implement
• Schedule to Inplement
• Cost to Inplement
~Estimating Model (e.g., labor rates')
•Management Plan (approach and organization)
•Marketing Plan (both a conceptual understanding and
practical application of specific marketing efforts)
• Financial Plan (from how to read financial statements to
actual preparation of a loan package)
• Action Plans to Implement (clearly delineated and
qualifiable schedule of events to provide for subcontractor's
contractual compliance)
Executive Summary
The "Smarter Business Plan" should culminate with a 10 or 12
page Executive Summary which also serves as a loan package.
Once the "Smarter Business Plan" has been developed, an
Executive Summary should be developed. A more convincing loan
package can then be generated.
The "Smarter Business Plan" Executive Summary and the loan
package are virtually one and the same. Once the "Smarter
Business Plan" has been completed, the Executive Summary can
then b% pulled from the Plan.
(1) EXAMPLE: Loan Request
Loan Amount: Credit line of $00,000/month
Purpose: The credit line loan will be used to support a
THREE-year contract with the (Contractor's Name) t-n
(Br-iaf (iospriptinn of project.) for an estimated
$0,000,000 and an existing Contract Change Notice with the
iCant.ranmr' G Mama! for $00,000. The subject contract
payment schedule is in progress payments (cost) with
profit at milestone delivery.
Term: 6-9 months as driven by contract progress payments
and profit.
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"How to' Manual for Environmental Contracting
Rate: 00% {1.5-2.0 points above prime)
Value: See bank equipment list
Sales Schedule: See Cash Flow Projection
Repay Plan: The loan amount will"be repaid
from fees, (Iiist
Ravnnuas to be used for rapaymonH ,
] and
d) General Information
(1) Purpose
This document provides insight as to how fCompany Mama)—
plans to achieve the revenue goal set as derived from a
structured "Smarter" Business Plan analysis and as
depicted on the Cash Flow Projection.
(2) Objective
To convey (Cnmpany Mamol "Smarter" Business Plan
-- marketing, sales, financial and management approach to
depict to its associates, suppliers, customers, and
financial resources that its business goal is achievable
and low risk.
(3) Scope
This portfolio contains the ideas which define .
(Company name) as an established competitive (Type
of firm) firm which deals in (Products/Services\ ;
, and.
This document is the executive operating plan for
(Company name) It contains the Company description,
history, the company today, plans for tomorrow, the
incorporation, management structure of company, marketing
approach, and cash flow projection. The financial status
and proposed loan repay plan are also included along with
the officer's resumes.
e) Goal
. (Company Name) revenue goal for 1991 is to have gross
sales in excess of $000,000.
f) Objectives
The objectives for achieving (Company Name's) goals are:
(um active
(Ob-) active
ffl
#2
ana
and
ravanuai
ravsnufil
fObi active
#3
and
rflvsnun)
g) Company Description
Our major purpose at —
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'How to* Manual for Environmental Contracting
product/service Tn sririi 1--i on wa also provide
products/ssrv-ifies) and -—---^aer
The first (Major purpose of your rnmpany^
The second (Major purpose of your rnmpanyl
The third (Mai or purpose of your mmpany)
(1) History
(Company name) i a a corporation initiated by
(Name Of 1ndi virtual who Started company)
state-of-the-art business technology transfer to small and
mid-market businesses.
The first Board of Directors meeting of !Company na^)
, was held on (Date) The Company focus has been in
the development and enhancement of minority and women
businesses while working with ,the respective Chambers.
The Company has completed numerous contracts with small
companies and a few with major entities.
One of the major contracts that {Company—namft)
completed was with (Give details of contract) to
and.
(2) Today
(finmpany name) is presently under contract with the
(Customer name) to develop (WhatQuoT
product or service you provide). The contract involves:
1) : ;
2)
; 3) l and
4) ; .
(3) Tomorrow
Several contracts are pending with major organizations for
(T.ist- pending contracts) ,
, and
Pending contract number one description:
Pending contract number two description:
Pending contract number three description:
Management Approach
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"How to" Manual for Environmental Contracting
/Company name) 's approach to the management of its
business is structured as follows:
The management structure is formatted, to minimize overhead
costs by utilizing temporary, subcontract services,
associates, and utilizing the principal's skills in planning,
integration, implementation, and management.
rCompany Owner - President-,) will direct and manage all
operations of the Corporation.
Associate services will be used to support {Company namai
in the areas where (Company name) does not have the
depth or resources for a cohesive project implementation.
(w»nw of Office Manager) , whose experience is in
business and office management will manage the office and
business accounting.
(Name Company or parRnns) will support
(Company Name) on a parttime basis in marketing as he
conducts his normal job as a computer supply and peripheral
salesman.
The services of (Lawyar) will be utilized as Joint
Ventures are established for (Company namcO to verify
that (Company name) complies with City, State, Federal
and business requirements.
Project associates will be employed as needed for project (s)
implementation.
The present contract with (Cughonwr name) is a fixed firm
price contract for approximately $000,000 and it is
(Company name) 's intent to provide other services to the
(Customer name) by additions to the present contract.
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"How to' Manual for Environmental
Con tracting
i) Marketing Plan
Statistics indicate an increasing need for marketing
knowledge among small businesses in order to better enable
them to survive and grow.
(1) EXAMPLE: Marketing Plan
{rrnnpany name) 's services will be sold by
advertising through the economic development projects
being developed hy (uniomaver) and by word of mouth.
Continued Marketing effort will be through providing
assistance and support to the ethnic and women's chambers.
The Denver metro area and Colorado are prime for the
economic development projects being created and
implemented by (.Company name)—
The rnrame of proj acts /sflrvicas/products developed)
Projects developed and implemented by (Company name)
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"How to' Manual for Environmental Contracting
will continue to bo the primary marketing scheme employed.
by {Primp any name) (Company name) being on
the leading edge for development and implementation, will
attempt to stay one step ahead of its competitors. The
projects being developed, accepted and implemented by
rrninpany name) _ are the key factors in keeping ahead of
its competitors.
In sunmary, when (Company name) 's strengths,
weaknesses, opportunities, and threats are synthesized --
frwnpany name) is at the present time and in the near
future ahead of its competitors.
Strengths:
1) Leading edge in Business Management
Technology and tools
2) Ability for accurate and rapid needs assessment
3) Major and simple systems design, development
and implementation
4) Creditable name in business community
5) Computerized operation
• Weaknesses:
1) Computer reliance
2) Leading edge
3) Company size
4) Non-profit entity support
• opportunities:
1) (List)
2) _
3 )
4)
Threats
1) (List)
2)
3) :
4)
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MHow to" Manual for Environmental Contracting
j) Financial
The loan amount being requested by (Company name) is a
credit line of $00,000/month. This amount was determined,
based on proposed cash flow requirements for purchases an(i
operating costs per this plan (see Cash Flow Projection
Appendix).
Credit checks will indicate that (Company name) and (Company
nrnin'g) principal have always had an excellent credit
rating.
All present debts are current. Although there have been
times due to reduced cash flow, payments have been late,
they have never gone unpaid.
(1) Ratios
(a) Current Ratio
How Calculated: Divide current assets BY current
liabilities.
What it shows: How the business can meet its current
debt. Popular thought is that the higher the ratio,
the better shape the business is in. However,"a high
ratio, of itself, does not tell: 1) whether cash is
being used to best advantage; 2) the distribution of
current assets - receivables may be too high or
inventory may be too high.
(b) Worth to Debt Ratio
How Calculated: Divide net worth BY total debt
(current liabilities minus long"term liabilities)
What it shows: What percentage of the total money
invested in the business is the owner's; what
percentage was contributed by creditors. The higher
the ratio, the more money the owner has in the business
and the safer any creditors. (They are safer because
more owner's equity is there to cushion creditors
against a loss) . However, it may also show that the
owner is too conservative; is unwilling to take any
risks; is not using funds to the best advantage; or is
not realizing the maximum potential of the business.
(c) Profit on Sales
How calculated: Divide net profit (before taxes)
for period BY sales for period.
What it shows: What part of every sales dollar is
profit. Higher percentage means greater efficiency of
operation.
(d) Inventory Turnover
How calculated: Divide cost of goods sold BY
inventory.
What it shows: How many times the inventory turns --
or "sells out" during the year. Normally a high
turnover rate means salable, fresh and liquid
inventory. Too slow turnover means too much inventory
for the sales capacity of the business. However, too
fast turnover can indicate a hand-to-mouth existence
-------
"How to' Manual for Environmental Contracting
easily upset by sales drop-off -- the business is
buying today what it is selling today; paying today out
of today's sales.
) Receivables Turnover
How calculated: - Divide annual sales BY accounts
receivable.
What it_ shows: How fast the business is collecting
from customers. The higher the turnover, the faster
the collecting.
The average number of days it takes to collect the
accounts receivable can be calculated: Divide the
turnover rate into 360. The more days, the more chance
of delinquent accounts.
:) Profit to Net Worth
How calculated: Divide Profit BY Net Worth.
What it shows: Return on investment. What yield
or "interest rate" -- the investment in the business is
getting; percentage of investment that is being
returned yearly through profit. Divide this percentage
into 100 to see how many years it will take to get back
the total investment in the business.
j) Sales to Working Capital
How calculated: Net sales divided BY working capital
(current assets less current liabilities).
What it shows: How many dollars of sales the company
makes for every dollar of working capital it has. This
ratio can be of great value when the business is
expanding. It helps to determine how much more working
capital will be necessary to support higher sales.
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*How to" Manual for Environmental Contracting
3. "Working Smarter" , Total Quality Management (TQM) Applied
"The agony of poor quality remains long after the ecstasy
of low price is forgotten" - • Tom Godwin
Total Quality Management (TQM) focuses on meeting the
expectations of the customer, thereby resulting in repeat
business. The customer MCJST be the focal point throughout the
organization, with the recognition of the importance of meeting
their needs permeating every aspect of the operation, from
employee attitude to task performance.
The mission statement of the company
should clearly integrate quality into
the processes throughout the
organization in order to design quality
into the product or service. The
operational work flow must encompass
an integrated team approach and be
supported with the proper tools in
order to meet customer objectives
within schedule and cost. It also must
be able to collect the needed data for
evaluation in order to determine which
actions will enhance the operation by
overcoming weaknesses while building
on the strengths. This requires a tool,
for use by the team, which closely
integrates task, schedule and cost —
they are interrelated and
interdependent with a change in any one
impacting all others. The team must be
empowered with the proper attitude,
tools, techniques and authority in order
to achieve the task (a quality
product/service) within schedule and
cost.
Statistical Process Control (SPC) is the silver thread that runs
through TQM. By examining the operational flow, the SPC approach
determines initial data collection locations and system
requirements while identifying areas of responsibilities and work
flow of the product throughout the process. At this point
redundancies, overlaps, and opportunities for "quick hit"
-------
"How to" Manual for Environmental Contracting
(immediate) process improvement benefits often occur.
In 1978, while responsible for a major project in which quality
was paramount, I recognized, a need for a system which would
provide direction and guidance to the project team thereby
insuring a quality product. This project team was comprised of
individuals from systems, design, manufacturing, quality
assurance, testing, and operations. The team functioned as a
unit, each representing their respective areas, in the
development, manufacture, and operation of the product. Th©
team delivered that product within specifications, ahead of
schedule, and within cost.
In recent years, the Total Quality Management (TQM) process has
become well known and it has been gratifying to discover that
what I had developed out of the necessity to insure a quality
product is, in fact, supported by those who are now considered to
be the "experts" in this process. An overview of the work of two
of these experts is contained in the section on TQM Background in
order to provide you with the theoretical basis against which to
compare my practical, operations-oriented model. It would appear
that, even though the work being done by Deming and his
associates was unknown to me at the time, the underlying premise
of what is now known as TQM have always been the basis for the
"Working Smarter" element of the "Smarter Business Cycle."
a) TQM Background
Quality, the cornerstone of competitive strategy for firms
that hope to survive the 20th century, is having a profound
effect on the way companies are managed. American business
is being drawn into the quality revolution by the
ever-growing expectations of customers around the world, who
are demanding high quality products and services at low
prices. For those that succeed, the evidence shows clearly
that quality has become the key to increasing both market
share and profits.
While some U.S. firms have turned to promotional gimmicks to
improve their quality image, many are making dramatic changes
and finding that a real commitment to meeting higher quality
goals also results in higher productivity, thereby lowering
costs.
A small group of "quality experts" have been saying for years
that quality is a cost effective and necessary business
strategy. Today, a growing number of U.S. firms are
following the coaching of these experts in an effort to
compete. Four of the most sought after "quality coaches":
are W. Edwards Deming, Joseph M. Juran, William E. Conway,
and Philip B. Crosby.
All of them recognize that there are no short cuts to
quality, and that the improvement process is a never-ending
cycle, requiring the full support and participation of
individual workers, whole departments, and, most importantly,
top management. Beyond that, the four coaches disagree about
how best to go about improving quality. Presented here are
Deming's and Conway's "game plans" for American business.
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'How to' Manual for Environmental Contracting
These articles on Darning's and Conway's -0am
American business were copied from CPI pUr if ® Plans" for
sponsored by Dow Chemical Company and writton ®sin9 which was
Y James Gagne
(1) Dr. W. Edwards Deming
Dr. Deming is the 85-year old statistician h
setting Japanese business upon the cours known for
them number one in quality throughout the has macle
he went to Japan to help the U.S. Secretary 5m In 1950'
a population census, and was invited to 1 r conduct
business leaders on statistical qualitv t0 top
told the Japanese they could -take over the wonSV- .Deming
followed his advice. The rest is historv ^ they
highest quality award in Japan is named af'to^n todaY the
has been called the "founder of the Thir-ri enu-n^- He
Industrial Revolution" and often sounds lit- ve of the
for quality with statements such as "it -i «= a crusacier
a new religion in America." ' lltle to ad-°Pt
He estimates that it will take the United
to accomplish what the Japanese have done to -iTT^earS
quality because "a big ship, traveling at fuii Seed*
requires distance and time to turn." He w-r™ *
"people who expect quick results are doomecL
disappointment." ea to
According to Deming good quality does not necessarily
mean high ^ality It is rather, "a predictable degrei
of uniformity and dependability, at low cost and suited
to the market." He recognizes that the quality of anv
product or service has many scales, and may get a hi ah
mark on one scale and a low mark on another in other
words, quality is whatever the customer needs and wants
And since the customer's requirements and tastes are
always changing, the solution to defining quality in terms
of the customer is to constantly conduct customer
research.
Deming's basic philosophy on quality is that productivity
improves as variability decreases. Since all things vary,
he says, that is why the statistical method of quality
control is needed. "Statistical control does not imply
absence of defective items. It is a state of random
variation, in which the limits of variation are
predictable," he explains.
There are two types of variation: change and assignable,
and says Deming, "The difference between these is one of
the most difficult things to comprehend." it is a waste
of time and money to look for the cause of chance
variation, yet, he says, this is exactly what many
companies do when they attenpt to solve quality problems
without using statistical methods. He advocates the use
of statistics to measure performance in all areas, not
just conformance to product specifications. Furthermore,
he says it is not enough to meet specifications; one has
to keep working to reduce the variation as well.
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"How to" Manual for Environmental Contracting
Deming is extremely critical of U.S. management and is an
advocate of worker participation in decision making. He
claims that management is responsible for 94 percent of
quality problems, and points out that it is management's
task to help people work smarter, not harder. "The first
step is for management to remove the barriers that rob the
hourly worker of his right to do a good job," he says.
He also knocks motivational programs, in which he includes
zero defects, and says that everyone simply doing their
best is not the answer because it is also necessary that
people know what to do. And, he asks, "How can a man do
it right the first time when the incoming material is off
gauge, off color, or otherwise defective, or if his
machine is not in good order?
Deming cites the following as a typical letter from a
supplier in response to an inquiry on its quality: "We
are pleased to inform you that quality is our motto. We
believe in quality. You will see from the enclosed
pamphlet that nothing goes out of this plant until it has
been thoroughly inspected. In fact, a large portion of
our effort in production is spent on inspection to be sure
of our quality." This, he says, "is a true confession of
ignorance of what quality is, and how to achieve it."
Inspection, whether of incoming or outgoing goods, is,
according to Deming, too late, ineffective, and costly,
"inspection does not improve quality, nor guarantee it,"
he says. Moreover, inspection is usually designed to
allow a certain number of defects to enter the system.
For example, a company that buys items with an acceptable
quality level of three percent is, in effect, telling the
vendor that it can send three bad items out of every 100.
"The vendor will be pleased to meet these requirements,"
says Deming.
He says that judging quality requires knowledge of the
"statistical evidence of quality," and that companies
dealing with vendors under statistical control can
eliminate inspection. You will note from the control
charts that came along with the product, far better than
any inspection can tell you, what the distribution of
quality is, and what it will be tomorrow. In this way,
quality is predictable, and one can also safely predict
that the vendor's quality will improve over time. "One of
the first steps for managers of purchasing to take is to
learn enough about the statistical control of quality to
be able to assess the qualifications of a supplier, to be
able to talk to him in statistical language," says Deming.
Deming also points out that simply checking the
specifications of incoming materials may not be enough if
the material encounters problems in production.
"Specifications cannot tell the whole story. The supplier
must know what the material is to be used for," he says.
He is critical of most procedures for qualifying vendors
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MHow to" Manual for Environmental Contracting
on quality because once qualified, the vendor "has
discharged his responsibility, and the purchaser accepts
whatever, he gets." The only effective way to qualify
vendors is to see if their management abides by his 14
points, uses statistical process control, and is willing
to cooperate on tests and use of instruments and gauges.
The best recognition one can give a quality vendor,
according to Deming, is to give that vendor more business.
He points out that requiring statistical evidence of
process control in selecting vendors would mean, in most
companies, a drastic reduction in the number of vendors
they deal with simply because not that many vendors would
qualify. Nevertheless, he says, this is the only way to
choose vendors, even if that means relying on a single
source for critical* items. In fact, Deming advocates
single sourcing. "A second source, for protection, for
every item purchased is a costly practice," he says. The
advantages of single sourcing include better vendor
commitment, eliminating small differences between products
from two suppliers, and simplifying accounting and
paperwork.
As to the fact that relying on a single source can often
mean paying a higher price, Deming says, "The policy of
forever trying to drive down the price of anything
purchased, with no regard to quality and service, can
drive good vendors and good service out of business. The
ways of doing business with vendors and customers that
were good enough in the past must now be revised to meet
new requirements of quality and productivity."
Deming works as a private consultant to dozens of firms in
the United States. It is said that he will simply stop
working with a client who does not show a total commitment
to quality.
(a) Deming's 14 points of management
1. Create constancy of purpose toward inprovement of
product and service.
2. Adopt the new philosophy. We can no longer live
with commonly accepted levels of delays, mistakes,
defective materials, and defective workmanship.
3. Cease dependence on mass inspection. Require,
instead, statistical evidence that quality is built in.
4. End the practice of awarding business on the basis
of price tag.
5. Find problems. It is management's job to work
continually on the system.
6. Institute modern methods of training on the job.
7. Institute modern methods of supervision of
production workers. The responsibility of foremen must
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"How to" Manual for Environmental Con tract Ang
be changed from numbers to quality.
8. Drive out fear, so that everyone may work
effectively for the conpany.
9. Break down barriers between departments.
10. Eliminate numerical goals, posters, and slogans for
the work force, asking for new levels of productivity
without providing methods.
11. Eliminate work standards that prescribe numerical
quotas.
12. Remove barriers that stand between the hourly
worker .and his right to pride of workmanship.
13. Institute a vigorous program of education and
retraining.
14. Create a structure in top management that will push
every day on the above 13 points.
William E. Conway
Mr. Conway is a relative newcomer to the quality game.
Born 6 0 years ago, he graduated from Harvard and the U.S.
Naval Academy before beginning a business career that
would lead him to the top as president and chairman of
Nashua Corp. In 197 9, he invited Dr. Deming to Nashua
Corp. to help improve the firm's quality. The visits
lasted three years, and in 1983, he founded Conway
Quality, Inc. Because of his close association with
Deming, he is sometimes described as a "Deming disciple,"
but Conway has developed his own plan for quality
improvement.
He does not talk in terms of a specific definition of
quality per se. Instead, he incorporates that into his
broad definition of quality management, which he says is
"development, manufacture, administration, and
distribution of consistent low cost products and services
that customers want and/or need." Quality management also
means constant improvement in all areas of operations,
including suppliers and distributors, to eliminate waste
of material, capital and time. The wasting of time is, by
far, the biggest waste that occurs in most organizations,
according to Conway. Excess inventory is another
important form of waste because, he says, 60 percent of
the space commonly used is not needed, yet a conpany must
pay for it, pay to maintain it, and pay taxes on it.
Taking the view of the man who has been there at the top
of a corporation. Conway talks about the "right way to
manage" rather than simply how to improve quality. He
says the biggest problem is that top management is not
convinced that quality increases productivity and lowers
costs. Furthermore, they feel they don't have time to
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"How to" Manual for Environmontal Contracting
the new system is intended to be customized for each
department. In fact, it is not necessary to wait for
someone at the top to start the change; they can be shown
by exaiqple the "right way to manage."
Conway's call for constant improvement in all areas of
operations is intended to include a company's suppliers,
and here, too, the key to success iis the use of
statistics. "It is just as vital to achieve statistical
control of quality from your vendors as it is to have it
internally," he says.
Overspecification, another form of waste in Conway's view,
is not solely the responsibility of engineers. Purchasing
managers and anyone connected with the design of a product
are also responsible. He warns that specifications --
like work standards -- sometimes "cap" in^jrovements.
In addition to working closely with clients,. Conway
Quality also provides training materials and furnishes a
three-month implementation plan for management, called th©
"Gold Plan," which is a step-by-step plan for improving
quality and productivity.
(a) Conway's 6 tools for quality improvement
1. Human relations skills -- the responsibility of
management to create at every level, among all
employees, the motivation and training to make the
necessary improvements in the organization.
2. Statistical surveys -- the gathering of data about
customers (internal as well as external), employees,
technology and equipment, to be used as a measure for
future progress and to identify what needs to be done.
3. Simple statistical techniques -- clear charts and
diagrams that help identify problems, track work flow,
gauge progress, and indicate solutions.
4. Statistical process control -- the statistical
charting of a process, whether manufacturing or
non-manufacturing, to help identify and reduce
variation.
5. Imagineering -- a key concept in problem solving,
involves the visualization of a process, procedure, or
operation with all waste eliminated.
6. Industrial engineering - - common techniques of
pacing, work simplification, methods analysis, plant
layout and material handling to achieve improvements.
CSI's TQM Process
(1) Definition of Terms in CSI's process
The following are definitions of terms used in the
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^ow to" Manual for Environmental Contracting
"Working Smarter" process.
Goal - Something toward which effort or movement is
directed
Objective - That which is striven for or aimed at; end
'Task A specific amount of labor or study imposed by
authority or required by duty or necessity.
" Critical Task(s) - Those tasks that must be accomplished
on time and within budget in order for the
function/project to be successful.
• Strategic - of or pertaining to strategy (a plan or
technique for achieving some end -- direction).
•Business - an occupation, trade or profession.
• Plan - A scheme, method or design for the attainment of
some objective
•Network - A flow diagram consisting of the activities
that must be accomplished to reach the program objectives,
showing their planned sequence of accomplishment,
interdependencies, and interrelationships.
Overview of CSI's process
CSI's TQM process can be accomplished through CSI's
•"Working Smarter". "Working Smarter" uses Critical Task
Analysis (CTA) and the PICOR (Process, Inputs, Controls,
Outputs, Resources) model (see Section XII) . CTA is used
to establish the operational flow(s) to meet the
customers' needed products/services. CTA also assists in
defining the necessary resources, thus minimizing
gaps/overlaps and maximizing the utilization of resources.
The focus is on customer satisfaction with team attitude
being driven positively through known operational
processes which meet customer needs.
As you develop your functional process (operational flow),
consideration should be given to the types of
projects/contracts that you work, so that potential
projects/contracts can be better estimated and implemented
later. The major purpose is to identify those tasks that
must be performed in a logical sequence, on time and
within budget for success -- "critical task analysis"
(CTA) .
The CTA process establishes the baseline for quality,
realistic estimating models which can be utilized to
define each task within the flow and to provide definitive
relationships, controls and resources.
The "Working Smarter" Critical Task Analysis process is
used to enable minimization of communication problems by
addressing matters such as overlaps, gaps and deficiencies
in the jobs presently being performed. "Working Smarter"
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'Now to* Manual for Environmental Contracting
is a must in today's competitive arena. This process will
enable increased competitiveness and profits by-
•minimizing overlaps
• reducing gaps
•defining basic and composite labor rates
• defining clear roles and responsibilities
•developing cash flow projections and analysis
•developing operational flow diagrams, Critical path
Management
• developing estimating models
• marketing
• evaluation
• reporting
It is crucial that management use caun™ .
through this process. Critical tasks can be driven fS
the top down through a company's Strategic Plan or frn
bottom up by the supervisors, managers, and directors h,??
yields the greatest results when driven from the bottn™
up. To implement the overall company strategic nlan
departments' objectives an support of that stratom> rfi
must be identified along with the associated tasks
goal, objectives, and major tasks.
„j-m be to identify the critical tasks for
The ne*5 These are the tasks that must be
the objec to achieve the objectives, in turn,
satisfying the company goal and satisfying the company
strategic plan.
t-h critical tasks have been identified and analysis
conducted, detail action plans are developed to implement
company strategy.
The critical task analysis will enable you to define and
develop your functional operational flows. In turn it
will enable you to use the sub3ect network for specific
oroiect development and management. This operational flow
(network) will also be the basis for the development of
your estimating model.
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"How to' Manual for Environmental Contracting
For clarity the "Working Smarter" process is broken down
into seven individual processes. The seven processes are:
1) Critical task identification, 2) Critical task
amplification, 3) Critical task matrix development, 4)
Critical task network (operational flow) development, 5)
"Should be" matrix development based on "Could be"
analysis, 6-) "Should be" Operational Flow (s) , and 7)
Action plans.
In summary, "Working Smarter" follows the following
overall process:
Starting with a conqpany strategic plan - - Goals
Establishing departmental objectives -• "What is"
• Identifying critical tasks to achieve objectives
Brainstorming for improvements - - "Could be"
Conducting an analysis - - "Should be"
Network
Scheduling the network
Developing detail action plans to implement,
(a) EXAMPLE: Critical Task Analysis Model
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CT
Team
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• What task do
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• Critical Task
Description
Inputs
Resources
Process
Criteria for
Success
Schedule
Summary
Details about
Critical Task
'What la
Matrix
—
Description
Inputs
Resources
Process
Products &
Success
Criteria
Rs&Rs
Schedule
Cost
Summary
"What la" Net
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I • Rs&Rs
• Team
Effort
Organization
adjustments
• Understanding
relationships, total
process, and time
• Enables analysis to
determine strengths
and deficiencies
• Understanding of
price vs ROI
Modifies
"What Is"
to overcome
deficiencies
Actiei Plan
e Issue
• Action-to-
Date
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measure and report
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"How to" Manual for Environmental Contracting
4. "Smarter Proposals"
"Smarter Proposals" are the key to opening the door of
opportunity. Proposals are also a small business' least
expensive marketing tool, yet they have the greatest impact.
Proposal preparation should include proposal analysis,
development, review and negotiation considering task, schedule,
and cost as well as the interrelationship of technical and
management - the "how to" in developing winning proposals.
Quality proposals can increase the chances of acquiring contracts
if certain steps are followed:
•Request for Proposal (RFP) analysis
• Proposal development and writing
• Proposal estimating
• Proposal packaging and submittal
• Reviewing
• Negotiation
• Reporting
One of the most intimidating items that small businesses face is
a big thick government Request for Proposal (RFP). However, the
way that you eat a whale is one bite at a time. If we can learn
to bit-by-bit digest that big thick RFP, we can begin to become
comfortable enough to develop a competent and competitive
proposal.
The objective of this section is to assist you in analyzing,
preparing, and negotiating a winning proposal. There are a few
basic elements to all proposals and the key is to be able to
recognize those elements and begin to analyze what they mean to
you and your Company. In some cases it may require outside help
to understand and respond, and you need to know when and where to
go for help. There is nothing wrong in asking for help in
preparing something that will hopefully make you money. If you
have questions on the RFP, call the RFP owner (originator) as
they usually are helpful.
The system(s)/processes are in place, so don't spend time
fighting the system. Your time should be spent learning the
system and becoming successful working within the system.
If you don't get the contract, call or meet with the RFP owner
(originator) to find out how your proposal could have been the
winner -- was it lack of experience, responsiveness, clarity,
etc?
a) RFP Review
Proposals begin with a clear understanding of all internal
operations, labor rates, overhead, and profit as integrated
into a good estimating model. The Request for
Proposal/Quote/Bid should be reviewed in detail and compared
to your company's capabilities. The terms and conditions are
to be understood and compared with your operation to ensure
that your company can comply and survive under those terms
and conditions. There may be some work that you do not
perform, however you can subcontract this work.
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"How to* Manual for Environmental Contracting
Upon receipt of the RFP, review and study it to make sure you
have a complete package.
(1) Proposal Checklist
The next step is to develop a proposal checklist outlining
all pertinent information such as due dates and
requirements.
•Pre-bid conference dates (Note: Some RFP's make this a
mandatory requirement -- if you do not attend the pre-bid
conference, your proposal may be thrown out)
• Proposal submittal due date, time, and location for
delivery - There are no exceptions when it comes to the
submittal due date and time. In many cases the location
for delivery will require your mailing the proposal
several days ahead of time or using overnight mail. It is
always a good idea to use Certified mail when mailing your
proposal.
•Proposal content requirements - RFP's are specific
regarding content requirements. if your proposal does not
meet these requirements, it may be thrown out.
•Number of copies to be submitted
• Signature requirements - note that there are certain
agreement pages and information pages sent out with the
RFP that must be completed and signed.
•Packaging instructions - RFP's will state whether you
will package your technical package and cost package
together or in separate packages.
•Mailing instructions - Some RFP's are very specific in
asking that the proposal package be mailed "Certified".
•Any special instructions unique to the proposal,
(a) EXAMPLE: RFP Checklist
(THIS EXAMPLE CHECKLIST COVERS A RANGE OF PROPOSALS)
MANDATORY Pre-bid conference at 2:00 P.M.
MST, JUNE 11, 1990, CH2M Hill, 6060 S. Willow Drive,
Greenwood Village
Proposal submittal due date JUNE 22, 1990,
5:00 P.M.
Proposal must be delivered to:
CH2M Hill, Rocky Mountain Office
6060 So. Willow Drive
Englewood, CO 80111
Attention: John Butler
Proposal must be typewritten and single spaced.
Proposal will contain 2 bound volumes - - Volume
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"How to" Manual for Environmontal Contracting
I, Technical; and Volume II, Proposal Price
Total Page Count - maximum 20 pages
MUST contain cover page on each volume (not
included in Total Page Count).
MUST contain Table of Contents on each volume
(not included in Total Page Count).
Resumes of key personnel to be included in
Technical Volume and in total page count.
Subcontract Documents will be submitted as
attachments (not included in Total Page Count).
The Agreement shall be signed by the proposer and
returned with the Subcontract Documents (not included
in Total Page Count).
MUST submit Federal income tax identification
number or Social Security number.
Submit 2 copies each of Volume I and II, and
attachments.
Cover pages should include signature line and
signatures of Program Manager.
Proposal package MUST be packaged in an opaque
sealed envelope marked with Project Title and name of
proposer.
Proposal package should be mailed by certified
mail through U.S. Post Office, or Federal Express for
overnight delivery.
Analysis of RFP (5 points to consider)
(1) What to do
• Read RFP
• Study RFP
• Plan to be responsive
•But, don't goldplate
• Consider offering alternatives
Note: Most RFPs contain the following quote: "Your
proposal should fully coitply with all instructions
contained in this Request for Proposal (RFP). Failure to
do so could result in your proposal being considered not
acceptable." FOLLOW RFP INSTRUCTIONS
(2) What the RFP analysis should include:
• Review of RFP for "hot buttons" and areas of high
contractor interest
•Review for areas not clearly defined in the RFP which
must be treated anyway
• Develop strategies and directions for the proposal team
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"How to" Manual for Snvironmontal Contracting
• Develop customer responses/questions
(3) Who conducts the RFP analysis?
•Project Director, Marketing, and. selected on-project
personnel
(4) When is the RFP analysis conducted
• In time to respond to contractor deadlines
• In time to influence thematics and task plans
(5) Output format
Any appropriate format for Contractor communication and
on-project direction
c) Proposal Overview Analysis
(1) Proposal Structure and Requirements
• The letter - This is the official invitation for your
proposal with an overview and key specifics to assist you
in your proposal preparation.
Scope of Work - Description of the work to be
accomplished. (Your proposal is the response- to the RFP
as to how you will accomplish the work and what the work
schedule and cost will be with documented proof that you
can meet the terms and conditions.)
(a) Background
Here an overview of the proposed projects is given
along with related previous activities to direct you
in locating pertinent data that will assist you in your
proposal preparation. This also helps to establish the
basis for the RFP.
(b) Proposal Tasks
"Oversight and enforcement support of remedial
design/remedial action activities performed by the RFP
or other activities as required by the project." You
need to fully understand all requirements (such as the
statement above) before preparing a proposal. The
following will assist you in that understanding.
i) Task Flow Chart
ii) Related Task Federal Acquisition Requisitions
(FARs)
iii) Task Schedule
iv) Task Cost
(2) Proposal Evaluation Criteria
The evaluation criteria should be studied and mapped
against the task flow chart.
Writing to the criteria as you explain in your proposal
how you plan to satisfy the scope of work is important.
In some cases it may be advisable to develop a
requirements traceability matrix to show how you plan to
meet the scope of work through your step-by-step
implementation process, culminating with the required
reports.
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How to" Manual for Environmental Contracting
(3) Federal Acquisition Regulations (FARs)
The prime contractor is obligated, to carry out the
Federal, State, and local regulations imposed on the
subject contract, and to inform you as they must ro'll down
these regulations to their subcontractors. It is of
utmost importance to you that you understand these
regulations and the impact on your proposal. It may be
8-dvisable to consult with an attorney, or consultant, or
attend some college courses to fully understand their
impact on the performance of your proposal.
The FARs should be compared against your operations
network/flow and your capabilities matrix.
(4) Terms and Conditions
The Terms and Conditions are simply the groundrules which
are to be followed in the proposal implementation, the
insurance requirements, invoice and payment cycle,
conflict of interest, patents, affirmative action, etc.
Here again, it is of utmost importance that you clearly
understand the impact of the FARs (terms and conditions)
on your proposal and that you sure covered in the event
that any one or all are executed against your proposal.
You may want to call the RFP owner (originator) for
clarification of clauses.
Proposal Thematics
Thematics set the stage for competitive proposal development
by having all individuals involved in the proposal
development focus on addressing the evaluation criteria.
(1) What they do
• Provide roadmap planning
• Provide win theme traceability and tuning
• Provide for RFP requirement alerts to section authors
• Serves as early author instructions from leads
(2) Who does it
• Proposal Manager
) Topical Outline
The topical outline is necessary to focus your approach and
strategy to be in line and responsive to the RFP. This will
also provide you with another comparison of the RFP
requirements and your capabilities.
(1) What does the topical outline provide
•Lists all subjects to address in a logical sequence
• Paragraph numbers all subjects and establishes exact
titles
•Lists authors responsible for each subject
•Establishes page count for each subject
(2) Who does the topical outline
• Proposal Manager
(3) EXAMPLE: Topical outline
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"How to' Manual for Environmental Contracting
Outlining
- Follow the RFP
- Cross index
-Include: Topic, author, page count
Para No. Topic
Page count Lead
Total
I.
Introduction
1 Sue Doe
II.
Description
2 John Doe
III.
Design Approach 5 John Pubic
Proposal Task Flow
The Task Flow provides you with a detailed integrated picture
and understanding of task, schedule and cost. The Task Flow
is the basis for developing a good, technical, cost-
competitive proposal.
This is where you summarize the plan for inplementing the
task.
The Statement of Work/Request for Proposal should be matrixed
and task-flowed with the organization to verify that all
tasks and resources are identified to perform the subject
tasks. Once the tasks are understood and organized, you can
then begin to write a winning proposal.
The contract Work Breakdown Structure (WBS) can then be
developed for cost collection in conjunction with the tasks
and schedule -- thus task, schedule and cost integration.
This will minimize the incompatibilities of statement of
work/organization/WBS/schedules as experienced in the past
when WBSs were developed without considering the close
interrelationships to Statement of Work (SOW), organization,
schedule, and how cost was to be collected.
In today's environment of high cost and inflation,
specialized skills, and multi-level management, upfront Task,
Schedule, Cost (TSC) integration is a must for success.
A Program Automated Management System (PAMS) provides the
capability to schedule and status all technical products,
i.e., engineering releases, procurement drawings,
specification drawings, components, and manufacturing end
item installation and testing.
(1) What the task flow accomplishes
• Demonstrates an integrated plan for implementing all
tasks
• Provides Work Breakdown Structure (WBS) visibility for
each task
•Establishes input/output requirements
• Establishes credibility of plans and schedules
• Provides credibility basis for manpower and cost
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"How to" Manual for Environmental Contracting
(2) Who develops the task flow
• Responsible leads and manager
(3) Inputs needed by task author
•RFP statement of work/task description
• Program master schedules
• WBS
• Program organization
• Specific WBS responsibility within program
• Topical outlines
(4) Important coordination activities
• Task time spans that support master and element schedule
•Inner-WBS task alignments
• Input-Output support between tasks
• Functional organization support and inputs
Proposal Preparation Model
The proposal preparation model is used to structure and
organize the collection, formatting, and generation of the
subject proposal. This model is especially useful when there
are a number of different entities involved in the generation
of the proposal.
Once the proposal preparation model has been utilized to
generate the necessary response to the RFP, the proposal
should then be structured in accordance with the RFP
instructions.
(1) RFP Requirements
Here you merely restate the requirement of the RFP.
(2) Interpretation
Provide a brief description of what you understand the RFP
is asking for you to perform.
(3) General Description
Here you give a brief description of how you plan to
satisfy the RFP requirements to include purpose and
objectives.
(4) Inputs
Here you list the inputs required to start the task.
(5) Resources
Here you list those things/items/people used to perform
the task.
(6) Process
Here you list in chronological order the tasks to be
performed in order to satisfy the RFP requirements. It is
imperative that the relationship of the task, schedule and
cost be clearly defined in the "Process" in order that the
customer has a clear understanding of the basis of
estimate, i.e., "to perform this task the services of two
(2) high tech trainers for three (3) hours at a rate of
$55/hour are required".
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**How to' Manual for Environmental Contracting
(a) Product
Here you define the product of the respective task; and
how that product is to be utilized in meeting the RFP
requirement.
(b) Schedule
Here you define the schedul-e required for the specific
tasks to include the hours required to perform the
task, as well as the span time needed in the
performance of the tasks.
(c) Cost
Here you provide the cost for each specific task (the
product of the hours required to perform the task and
the respective labor rate). You will also identify
other direct costs (ODC) as well as reimbursable costs.
To this basic cost, you then add overhead and profit to
determine the price for the respective task.
(d) Roles and Responsibilities
Here you clearly define the roles and responsibilities
of the respective individuals for the subject tasks.
(7) Summary
Benefits: Here you list the benefits of the respective
tasks.
Concerns: Here you list the concerns of the respective
tasks making sure that all concerns have been addressed
and proposed solutions are incorporated in the general
description and process.
Risks: Here you define whether it is a low risk, medium
risk or high risk task.
Proposal Writing Instructions
In writing the proposal, all writers should remain focused on
the thematics and the topical outlines. Should there be any
deviation from the thematics and topical outline, they must
be coordinated with the entire proposal team via the Proposal
Manager.
(1) Understanding of requirements
We must assure the Contractor that we understand his
requirements, perhaps including the rationale for our
understanding of the requirements. Example: The holding
pond must be designed to enable . . . because ..."
(2) Approach
At this point we define how we will satisfy the
contractor's requirements.
(3) Soundness of approach
Here we tell the Contractor that he can have confidence in
our approach because we've done it this way a thousand
times without failure, or it's an established and accepted
process, or our analysis results dictate this approach.
(4) Analysis to define approach
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'How to' Manual for Environmental Contracting
It's here that we tell the Contractor about the
analyses/analysis that we conducted to arrive at our
approach. For example, "we looked at the completed
Marshall Project, Capitol Project and Campus Project while
considering growth, selected the key points from each, and
tailored them to meet these requirements". (Remember we
can draw on our mistakes, too, as how not to do something)
(5) Task risk
The risk associated with this task is low because it's
similar to the Marshall Project that we completed, OR the
risk is medium because the requirements aren't yet clearly
defined.
(6) Writing Tips
•Include pertinent data only -- non-pertinent data may be
a signal that you don't understand the scope of work.
•Don't add something to give an old thing a new appearance
and. don't tutorialize.
- Open up immediately with your biggest point
- The start and closing of a paragraph is where the
impact lies. Close with a strong point.
•Use simple, whole, declarative sentences
• Use the active tense
• Refer to graphics in the context of the key conclusions
supported by the graphic. Many evaluators won't look at
the graphics. They are text readers -- your key points
must be in the text.
•But, other evaluators are visually-oriented -- be sure
the graphic is professional and supportive
•Use a "because" preamble with all "chest puff"
statements.
- Important for blending in applicable experience in
the form of lessons learned
•Most RFPs will include the preparation format. Always
set up your RFP response exactly according to their
requirements. Proposals are thrown out because format
requirements are not followed. Pay careful attention to
page count.
i) Proposal Review
•Review your proposal response for clarity, thoroughness,
ambiguity, and consistency
•The following are common mistakes of proposal writers:
- Too much material on graphics
- Graphics reduced to point of illegibility
- Text not talking to graphics
- Text not driving reader to graphics
- Not fully responding to all RFP requirements
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"How to* Manual for Environmental Contracting
•Solutions to these common mistakes are:
- Review text by itself
-Review graphics package by itself
-Review text and graphics side-by-side
- Prepare RFP requirements checklist
•Elimination of errors is essential, this includes:
- Typographical errors
- Numbers
- Decimal points
•Most RFPs request that the technical portion and cost
portion of your response be packaged in separate volumes.
•After final proposal response copies are made review for:
- Print quality
- Right side up
- Assembled properly
Proposal Submittal
This is the last gate before opportunity - - late proposals
close the gate. Make sure that you have followed your
checklist and the proposal is packaged in accordance with the
RFP instructions.
Proposal Negotiation
-Don't give away the farm
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"How to- Manual for Environmental Contracting
-Don't leave it on the table
-You don't negotiate profit
(1) Negotiations
Negotiations are a process of the buyer and supplier
coming to agreement on the proposal. This includes
-clarification on the tasks adjustments, finalizing the
schedule and finally negotiating the cost. You negotiate
profit as related to risk. Overhead is not negotiable
unless you renegotiate with the public utility company!!
A good estimating model will enable rapid response to
contract negotiations as task and schedules are negotiated
and finalized. Factors that impact tasks, schedule, and
cost that must be considered are terms and conditions,
delivery, technical, risk, and complexity.
Am I negotiating with the buyer/decision maker or just an
employee. Let the buyer do most of the talking and only
answer the questions asked. The more they talk the more
you learn. Steer clear of high risk areas. Focus on hard,
clear facts. Guide the buyer to focus on your strong
points. On points of differences, don't take it
personally. You must translate technical, financial, or
other pertinent points into plain language. While on your
feet, patience is a virtue, but speak up when needed.
(2) The Buyer
It is important that you know the buyer -- their likes,
dislikes, history, their knowledge of product/service,
their buying limits. Suggest other ways that your
product/service can meet their needs outside the proposal.
Talk about your competitors - - focus on how much better
your product/service is and that you deliver on time and
within cost rather than on downgrading your competition.
(3) Knowledge of Product/Service
It is mandatory that you know your product/service like
the back of your hand -- both technical, schedule, and
cost. Know the materials used, the construction process
and production rates. Why is your system more reliable?
Supporting documents and services must be presented in
negotiations.
(4) Cost, Terms and Conditions
You must know the Cost Breakdown Structure and the basis
of the cost development as it relates to the Task,
Schedule, and Terms and Conditions. Special clauses must
be clearly understood as to how they relate to cost and
schedule.
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'How to' Manual for Environmental Contracting
EXAMPLE: Smarter Proposals Flow Chart
Proposal
Evaluation
Focus
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"How to" Manual for Environmental Contracting»
XII. WHICH MANAGEMENT TOOLS AND TECHNIQUES ARE HELPFUL?
The complexity of today's industry and the dynamics of our economy have
forced us into increased specialization. This is true, not only in the
fields of advanced technology, but also in simpler business
applications. The impact of this complexity has made it difficult for
management to differentiate between "what is" and what "should be", and
to arrive at profitable decisions at the proper time.
Running a business by the seat of your pants rather than according to
written processes is a good way to avoid contract compliance.
Developing good management tools and techniques is a daunting task.
However, these are a must in order to provide good estimates, contract
management, and contract compliance for successful business operation.
The-first place to start is to develop basic and composite labor rates.
Second, a good operational flow(s) is needed in order to develop
estimating models (spreadsheets and critical path management flows).
These tools will enable successful contract compliance and are an
integral part of total quality management. These tools are also
essential in developing "Smarter Business Plans", "Working Smarter" and
developing "Smarter Proposals".
A. Basic and Composite T.abor Ratag
Labor Rate Calculation
Individual and company composite labor rates are necessary to
determine accurate overhead costs and to develop an accurate and
competitive estimate in response to requests for proposals (RFPs).
The following are CSI's instructions for developing your basic labor
rate calculations using a Basic Labor Rate Calculation Worksheet:
1) List all employees and annual rates in the "Position" and
"Annual Rate" columns
2) Determine the number of sick leave, vacation, holidays, and
non-work (less than 10%) hours based on empirical data and enter
into the respective column
3) Subtract the number of non-working and non-chargeable hours
(sick leave, vacation, holidays) per year from 2080 (yearly working
hours) and enter in "Billable Hours" column
4) Divide the "Annual Rate" by the number of "Billable Hours" to
determine the individual Basic Rate - enter in "Basic Rate"
5) Multiply the individual "Basic Rate" times the Overhead Rate to
determine the individual Cost Rate - enter in "Cost Rate". (The
Overhead Rate is defined as the relationship of accounts receivables
versus the cost of doing business. A percentage added to a direct
task cost to cover indirect costs of performing that task.)
6) Multiply the individual "Cost Rate" times the Profit to
determine the individual "Price Rate" enter in "Price Rate"
7) The composite rate is determined by averaging the "Basic Rate"
Page 98
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"//asir to" Manual for Environmental Contracting
times Overhead for Cost, and the product of that times Profit for
the composite "Price Rate".
1. EXAMPLE: Determining Basic Labor Rate
Position Annual Sick Vac Hoi Hon Bill Basic
pafA Leave 25% 2080 Rate
40
120
64
520
1336
37 .43
40
120
64
520
1336
29 . 94
40
80
64
520
1376
25 .44
40
80
64
520
1376
21.80
President $50,000
V. P. $40,000
Director $3 5,000
Manager $3 0,000
$38,750 $28.65
OVERHEAD 65% $18.62
COST $47.27
PROFIT 20% $9.4 5
BILLING RATE PRICE $56.73
2. EXERCISE: Compute the basic labor rate for your organization.
O
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"How to" Manual for Environmental Contracting
B. Operational Flow
An Operational Network which can be loaded onto a personal computer
utilizing some low-cost project management software will be of great
value to the company in developing and managing proposals. There
are a number of good books (i.e., "Management of Engineering
Projects" (third edition) by Victor G. Hajek and "Planning Big with
MacProject" by James Halcomb) available on project engineering
management that will assist you in estimating and setting up you?
Operational Flow/Project on the computer.
An Automated Program Management System approach is a must in today's
competitive world. Now that you have a network of your operation on
the computer, you can better analyze your operation to define areas
of improvement and to develop better and more accurate estimates.
This will also enable you to better manage your day-to-day
operations, therefore increasing your profits.
"Top down" planning techniques seem to have their origins in "Work
Breakdown Structures". Basically, an automated project management
allows the user to define several "High level" activities and link
them together, then to "top down" to a lower level and build up the
detail under the higher activity (Refer to Networking Section)
Once underlying details are in place the higher level activity
becomes a summary of the lower level activities. The "Critical Path
Method (CPM)", which requires the logical construction of the
network at the detailed level and allows the detail to be summarized
upwards to the Top Level - - "Bottoms Up Scheduling".
C. Flnw Project-irmg
The Cash Flow Projection is one of the most critical day-to-day
management tools your company can utilize. This tool will provide
you with the monthly projected sales required in order to depict
true real-time negative or positive profit margin. This tool will
organize and structure all, and I repeat all, income and
expenditures to depict your negative or positive balance. This tool
will also depict credit line requirements, operating capitol, and
the startup's non-recurring (start-up) expenditures. This tool,
when properly maintained and utilized, provides you with real time
company health enabling you to compensate today for tomorrow's
financial problems.
1. EXAMPLE: Cash Flow Projection by Month
-------
Cash flow forecast by month
Preparation datj 10/5/00
OOL
Inc CFP
IP
%
n>
Cash at first of month
SEE
BASnet
'Smarter Cycle"
BCPCS
Credit Line
TOTAL CASH INFLOWS
Qioss Wages
FICA (.0765)
Fed Unemp Taxes (.008)
State Unemp Taxes (.029)
Workmans Comp (.0094)
Mlsc Taxes
Advertising
Marketing
Printing
Postage
Outside Services
Dons/Contri
Dues/Subscriptions
Professional Development
Auto Lease
Auto Expense
Legal/Accounting
Insurance
MIsc/PC/ChecK Charges
Office Supplies
Computer/Office Equlpt
Office Equip Maint
Depreciation
Market Research
Rent
Telephone
Other Expenses
CL Payment
CL Interest 0.13 APR
TOTAL CASH OUTFLOWS
Credit Line Bal i
NET CASH FLOWS
Credit Line Needs
1
Jan-92|
Feb-92l
Mar-92> Aor-92l Mav-92l
Jun-92|
Jul-92l
Aug-92| Sep-92|
Oct-92l
Nov-92l
Dec-92|
145,509
156,372
187,234
178,097
188,959
199,822 210,885 221,547 232,410 243,272 254,135 264,998
8,148
8,146
8,148
8,148
8,146
8,146
8,148
8,146
8,146
8,146
8,146
8,146
710
719
719
719
719
719
719
719
719
719
719
719
1,485
1,485
1,486
1,485
1,485
1,485
1,485
1,485
1,485
1,485
1,485
1,485
9,583
9,583
9,583
9,583
9,583
9,583
9,583
9,583
9,583
9,583
9,583
9,583
0
0
0
0
0
0
0
0
0
0
0
1 19.9331
19,9331 19,9331
19,933|
19,9331
19,933
19,933|
19,9331
19,9331
19,933|
19,933|
19.9331
3,700
3,700
3,700
3,700
3,700
3,700
3,700
3,700
3,700
3,700
3,700
3,700
283
263
283
283
283
283
283
283
283
283
283
283
30
30
30
30
30
30
30
30
30
30
30
30
107
107
107
107
107
107
107
107
107
107
107
107
35
35
35
35
35
35
35
35
35
35
35
35
56
56
58
56
56
56
56
56
56
66
66
56
75
75
75
75
75
75
75
75
75
75
75
75
154
154
154
154
154
154
154
154
154
154
154
154
132
132
132
132
132
132
132
132
132
132
132
132
38
38
38
38
38
38
38
38
38
38
38
38
1,092
1,092
1,092
1,092
1,092
1,092
1,092
1,092
1,092
1,092
1,092
1,092
313
313
313
313
313
313
313
313
313
313
313
313
20
20
20
20
20
20
20
20
20
20
20
20
12
12
12
1 2
12
1 2
1 2
12
1 2
12
12
12
490
490
490
490
490
490
490
490
490
490
490
490
395
395
395
395
395
395
395
395
395
395
395
395
40
40
40
40
40
40
40
40
40
40
40
40
480
480
480
480
480
480
480
480
480
480
480
480
162
162
162
162
162
162
162
162
162
162
162
162
45
45
45
45
45
45
45
45
45
45
45
45
206
208
206
206
206
206
206
206
206
206
206
206
45
46
45
45
45
45
45
45
45
45
45
45
250
250
250
250
250
250
250
250
250
250
260
250
81
81
81
81
81
81
81
81
81
81
81
81
425
425
425
425
425
425
425
425
425
425
425
425
231
231
231
231
231
231
231
231
231
231
231
231
174
174
174
174
174
174
174
174
174
174
174
174
0
0
0
0
0
0
0
0
0
u
0
0
0
0
0
0
0
0
0
0
0
0
0
0
I 9,071|
9.0711
9,0711
9.07lj
9.0711
9.0711
9.0711
9.071
9.07 ll
9.0711
9.0711
9.0711
D
0
0
0
0
0
0
0
0
0
0
0
o
1 10.8831
10,8831
10,8831
10.8831
10,8831
10,8831
10,863|
10.8631 10,8631
10,8631
10.863)
10.8631
0
0
0
0
0
0
0
0
0
0
0
0
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"How to" Manual fojr Environmen tal Con tracting
D. KsHmating Models
Included in this section is a discussion of two basic estimating
models - - the spreadsheet and the network (CPM) .
Through the process of developing the "what is" operational network,
you have developed the foundation from which an estimating model can
be developed. - An estimating model is an integration of t.ask,
schedule, and cost which is used to intelligently bid on competitive
procurements. It is used to determine whether or not the
procurement is profitable for the company. This estimating model
can be generated in two forms -- the network or spreadsheet. For
those initiatives requiring many interrelated tasks such as
construction and manufacturing, the network is suggested due to the
importance of critical path management. For less complex
initiatives such as support services, the spreadsheet can be
employed. Again the key ingredients of a good estimating model are
Task, Schedule, Cost (direct, indirect labor, materials).
Consideration must be given to recurring and non-recurring cost in
order to determine total cost.
1. EXAMPLE: Estimating model checklist
An estimating model checklist should be developed to include as a
minimum:
1) Omissions - - Have you met all the customer requirements?
2) Did you break down the structure adequately to develop
accurate estimates?
3) Have you misinterpreted the customer requirements?
4) Are you using the right data?
5) Have you left out any big items?
6) Did you conduct a risk analysis to determine risk factors?
7) Did you play the "what if" game?
2. Spreadsheet
For the spreadsheet, you might want to utilize a computer system
that enables transfer of data from a spreadsheet to a word
processor for ease of proposal preparation. The spreadsheet
should be set up to include as a minimum:
1) Tasks as outlined in the network
2) Associated task hours (schedule)
3) Skill labor rates
4) Skills performing task(s)
5) Other direct charges and reimbursables
6) Overhead
7) Profit
This estimating model can now give you an accurate picture if the
assumptions are true of what it will cost to provide your
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"How to" Manual for Environmental Contracting
services/product. Are you competitive? Are you making money?
Are you losing money?
The sample spreadsheet estimating model considers^ the key
elements in developing good estimates^ with the flexibility to .
provide bottom line estimates in real time.
a) ~ Fields and Descriptions
Item No. - In many cases for ease of locating in computer
databases as well as in proposal preparation, tasks are given
item numbers.
Task & Resource - Simply, the task title and the resources
that will perform the task.
L Rate - is the labor rate for the respective resource that
is performing the task.
P Hrs - are the hours to be expended by the prime person in
charge (PIC) of the task. Also in that field adjacent to the
task the total hours for that task are entered. The hours
entered here are the base hours for the task to be used as
reference for all others who are involved in the task.
J Hrs - are the hours to be expended by an individual who is
working jointly with the PIC -- equal hours for PIC and
Joint.
S Hrs - are the hours to be expended by a supporting
individual such as draftsman for an engineer which in this
case is 25% of the engineer's time.
R Hrs - are the hours to be expended by an individual who
must review the work of the PIC.
A Hrs - are the hours to be expended by an individual who
must approve the work of the PIC.
I Hrs - are the hours to be expended by an individual who
must integrate the respective tasks and individuals.
Total Labor Price - is the total labor cost, overhead, and
profit for the respective task and resource.
T Hours - are the total hours to be expended on the task by
the respective resource.
Total ODC - is the total other direct charges (printing, shop
work, etc.) for the respective task and resource.
Note: The J, S, R, A, and I Hrs Fields can be used for other
factors in the estimating model for such as risk, learning
factors, experience factors, etc.
Caution: If the above fields are NOT employed, place the
number "1" in whole in the block just below "Hrs".
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"How to" Manual for Environmental Contracting
Total Price - is the sum of labor, other direct cost and
reimbursable.
No. Units - are the number of estimated units for the
respective items being priced against the respective task by
the resource.
Unit price - is the average price of each item.
Unit(s) Price - is the price of the product of the units
times the unit price for the respective task.
Note: Other reimbursable could be added to the estimating
model.
Air Fare - is the price of the airline ticket (s) for the
respective trip.
Car Rental - is cost for the respective trip/task
Mileage - is the cost for the respective trip/task
Hotel - is the cost for the respective trip/task
Meals - is the cost for the respective trip/task
Misc - is the miscellaneous cost against the respective task
by the resource.
Trip Days - is the length of the trip (number of days) by the
respective resource for the related task (i.e., 2 people, 2
days = 4 trip days).
Trip Price - is the total trip price for the respective
resource against the related task.
Reimb Price - is the total trips, telephone, and any other
reimbursable.
The price summary provides a summarization of the Estimating
Model elements for proposals, "what if" games, and project
planning
EXAMPLE: Price Summary-Task & Resource Sheet Explanation
The Price Summary Sheet summarizes all calculations performed
on the Task Resource Worksheet and is the document which is
submitted with your proposal.
The Task & Resource Sheet is the worksheet on which the
computer calculates the expenses associated with each task
performed and, once the calculations are completed, the
totals are automatically transferred to the Price Summary
Sheet. The Task & Resource Sheet is NOT submitted with your
proposal. The Task & Resource Worksheet (which can be used
on any spreadsheet) is valuable to you in that it serves as a
backup for your negotiations with the buyer, enabling you to
make rapid changes to your cost package with a minimum of
effort. This, in turn, allows you to obtain a reasonable
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"How to" Manual for Environmental Contracting
price for your work.
An explanation of- the Task & Resource Worksheet follows. You
will also need to refer to Section XII.D. of this workbook
for a description of the abbreviations used at the. top of the
Task & Resource Worksheet columns (fields), i.e. L rate =
labor rate.
The explanations below refer to the underlined letters and
numbers at the very top on the following Task & Resource
worksheet.
A Numbers all tasks which must be performed to complete the
project, i.e. Task #1 is Data Quality Design, Task #2 is
Monitor Sampling. These task numbers correspond to the Item
# column (field) on the Price Summary Sheet. The number of
tasks may equal any number (this example contains 6 tasks)
and may be expanded to also include an infinite number of
sub-tasks. The value of a computerized spreadsheet becomes
readily apparent when you realize the amount of data with
which you are going to be dealing and that it may be
necessary to compute several "what if" scenarios to determine
your final cost.
B Lists (by name) all tasks necessary to complete the
project (Data Quality Design, Monitory Sampling, Monitor
Sampling Preparation). Again, these task names correspond
with those on the Price Summary Sheet.
C Lists all individuals (human resources) whose efforts
will be required to complete the task (i.e., Project Manager,
Field Engineer, etc.) These are listed twice: the first
time in the data entry section (CI) and the second time in
the calculation section (C2) . Again, this list of
individuals is duplicated on the Price Summary Sheet.
D Entries in this section of the worksheet indicate which
resources (i.e., the project manager, the field engineer)
serve in what capacities (i.e., as prime, joint, support,
review, etc.) The number "1" entered in this section serves
to "trigger" the necessary calculation, i.e., the "1" in the
"S" column (field) indicates that the field engineer will
spend 25* of the total time (designated by the .25 entered
under the field heading) engaged in support activities and
the "1" triggers the computer to calculate the hours and
expense associated with this activity.
E Entries in this section of the worksheet represent the
total hours each resource spends on the task and in which
area (support, review, approve) that time is spent.
Using Task #1 (Data Quality Design) as an example, let's
"walk through" the worksheet. The numbers on the left side
of the page refer to the numbers entered over the column
(field) headings, i.e. 1. refers to the L rate column
(field).
J— In the "L rate" field, we find two pieces of
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"How to" Manual for Environmental Contracting
information.
(1) the number of individuals, by job function, needed to
complete the task (CI) . We will need 1 project manager, 1
field engineer, 3 field technicians, etc.
(2) the hourly rate for each of these individuals (C2). The
project manager- receives $55/hour; the field engineer
receives $48/hour; each of the 3 field technicians receive
$32/hour, etc.
2^ In the "P hours" field we also find two pieces of
information.
(1) Next to the task (B) we find the total number of hours
the task will require by the Prime (i.e., Data Quality Design
will require70 hours to complete).
(2) Next to the individual job titles, the hours each
individual will spend on the task as the prime person. On
this task the project manager is the prime person so "1" is
entered next to his name. Remember, this "1" triggers the
computation of his hours and labor rate (more on this later).
2^. In the "J hours" field are the hours spent by the person
working jointly with the prime person ("J hours" are equal
to the "P hours") and are, therefore, figured at a rate of
1, or 100* of the "P hours") . This means that anyone
serving in a "joint" capacity will work 100% of the Prime
task time (i.e. , 70 hours). Since there is no joint
responsibility on this task, the hours are listed as "0".
4^ In the "S hours" field are those hours spent
"supporting" the task. This is figured at a rate of .25
(again, this is found beneath the "S hours" heading) X the
numbe- of total hours required (.25=25%). Remember, this
meam chat a person serving a support function will work 25%
of the Prime task hours, i.e., 25% of 70. On this task the
one field engineer serves as a support person. The
calculation (which will be entered in Section E) is as
follows:
The "1" in Section D "triggers" the calculation to begin:
therefore: "1" X 1 (one field engineer) X .25 (the rate at
which S hours are figured) X 7 0 (the Prime time this task
requires) = 17.5 (total hours spent on the task by the field
engineer when in a supporting role).
5. In the "R hours field are those hours spent "reviewing"
the work done on this task. This is figured at a rate of .10
(once again, this number is found beneath the "R hours"
heading) X the number of hours. In other words, reviewing
this task will require 10% of the total allotted time (i.e.,
10% of 7 0). In this example the field technician, the health
& safety officer, the equipment manager and the report
manager each have "1" entered in Section E, thus
"triggering" the calculation (which will be entered in
Section D) as follows:
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"How to" Manual for Environmental Contracting
"1" X 3 (three field technicians) X .10 (the rate at which R
hours are figured) X 70 (the Prime time the task requires) =
21 (total hours spent on the task by the three field
technicians when in a reviewing role.
"1" X 1 (health & safety officer) X .10 (the rate at which R
hours are figured) X70 (the Prime time this task requires = 7
(total hours spent on the task by the health & safety officer
when in a reviewing role. (This same calculation can also be
used for the one equipment manager and the one report
manager.)
6. in the "A hours" field are those hours spent
"approving" the work done on this task. in this instance,
the field engineer served in the "approving role" which is
figured at a rate of .25 (which signifies it will take 25% of
the total task hours) . Once again, the number .25 is found
beneath the heading "A hours".
The calculation (entered in Section E) is as follows:
"1" X 1 (one field engineer) X .25 (the rate at which
approving hours are figured) X 70 (the Prime time this task
requires) = 17.5 (total hours spent "approving the task" by
the field engineer.
7. In the "I hours" field are those hours (figured at .1 or
10%) which are spent integrating the individuals and
activities associated with this task. On this task, the
project manager performs this role.
The calculation (entered in Section E) is as follows:
"1" x 1 (one project manager) x 70 (the "P" hrs required by
the project manager to perform the task) = 7 0 (total hours
spent by the project manager).
The algorithm for this calculation is = IF (D6=l,D5,0)xC6
D6 is the "1" to trigger the computer to calculate the
project manager's prime task (column 2)
D5 is the hours required for the task (data quality design)
by the project manager.
C6 is the "1" project manager
"1" x 1^ (one project manager) x .10 (the rate at which
integrating hours are figured) x 7 0 (the Prime time this task
requires) = 7 (total hours spent "integrating the task" by
the project manager. The algorithm for this calculation is
=IF(16=1,I4xD5,0)xC6
15 is the "1" to trigger the computer to calculate the
project manager's integration task. 14 is the "0.1" factor
for integration in column 7.
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"How to' Manual for Environmental Contracting
D5 is the hours required for the task (data quality design)
by the project manager.
C6 is the "1" project manager
In the "T hours" field are the total hours spent on this
task by each job -function, i.e., the field engineer spent
17.5 hours as a support person and 17.5 hours as a review
person. When these numbers are added together, you get the
total hours the field engineer spent on this task (35 hours)
On this task the project manager spent 77 hours, the field
engineer spent 35 hours; the field technicians spent 21
hours; the health & safety officer, the equipment manager
and the report manager each spent 7 hours and the X ray
technician spent 0 hours for a total of 154 hours. (Although
the prime hours spent oh the task equal only 77, the
remaining 77 hours are required to support, review, approve,
etc.)
9. In the "TOTAL L-PRICE" field you find the total cost of
the labor this task requires, i.e., the field engineer who
spent 35 hours on this task receives $48/hour. Therefore,
35X48=$1680. These numbers are automatically transferred to
the Price Summary Sheet in the "LABOR PRICE" field.
in. In the TOTAL ODC" field are direct charges associated
with the completion of this task. in this instance-, the
equipment manager incurred an expense of $125. These
numbers, too, are automatically transferred to the Price
Summary Sheet in the "ODC" field.
11. In the "TOTAL Reimb" field are any costs which must be
reimbursed direttly to the individual. in this instance,
there are none. If there were, these numbers would also be
automatically transferred to the Price Summary Sheet in the
"REIMB" field.
12 _ In the "TOTAL Price" field we find the sum of columns
9 10 anrf ll. When all calculations are completed, columns
9\ 10, 11 and 12 are then automatically transferred to the
Price Summary Sheet. A "grand total" (the total cost of the
entire project) appears directly beneath the column title,
"TOTAL PRICE", and consists of the costs of each of the tasks
combined, i.e., $7 9,27 2.
n Fields 13-23 are the "support material" for the
Reimbursable field on the Price Summary Worksheet.
Fields 13-15, however, are not considered as part of the
"trip" ant* are fiSJured separately from "trip expenses."
These "units" refer to such things as telephone calls,
r>i-inted documents, meals, etc. - things that are necessary
in the completion of this task but are not "trip related."
this task there were no entries made in these columns,
but let's refer to Task #2, Monitor Sampling, for an example.
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"flow to" Manual for Environmental Contracting
For Task #2, Field 13 shows that 50 telephone calls were
made, each at a cost of $1.34 (Field 14) for a total
expenditure of $67.00 (Field 15).
Fields 16-23 are considered to be costs associated with any
"trips" necessary in the completion of this task. Again,
using Task #2 for an example, let's look at the expenditures.
The one field engineer, the three field technicians and the X
ray technician each spent $345 on air fare (Field 16).
The trip lasted 160 days for the one field engineer, 60 days
for the three field technicians and 38 days for the X ray
technician (Field 22) . During that time, these individuals
spent the night at a hotel which cost $56/night (Field 19)
and spent $25/day on meals (Field 20) . The field engineer
also rented a car for $25/day (Field 17) . Each of these
daily amounts will have to be multiplied by the number of
days the individual was "on the road", i.e., the field
engineer, who was gone 160 days, spent $16,960: 160X$56
(hotel) + 160X$25 (meals) + 160X$25 (car rental) for a total
of $16,960. This amount is then added to the other trip
expenses for the field engineer (the $34 5 air fare) for a
total of $17,305. When the non-trip expenses (phone calls
totaling $67) are then added in, the total reimbursable
cost (Field 24) for the field engineer for Task #2 becomes
$17,372 (the amount which is automatically transferred to the
Price Summary Sheet).
These calculations are then repeated for each of the
individuals assigned to the task and for whom a "trip" was
required.
AS WITH ALL MATHEMATICAL COMPUTATIONS, IT IS CRITICAL THAT
YOU INSURE THEIR CORRECTNESS.
DOUBLE AND TRIPLE CHECK YOUR FIGURES TO MAKE SURE THEY "ADD
UP", I.E. THE SUM OF THE LABOR COSTS ASSOCIATED WITH THE
INDIVIDUALS MUST EQUAL THE TOTAL LABOR COST, THE "GRAND
TOTAL" MUST BE THE SUM OF THE TOTAL COSTS ASSOCIATED WITH
EACH TASK, ETC.
(1) EXAMPLE: Price Summary & Task & Resource Worksheet
-------
-------
Field Engineer
ci
Field Technician
X ray Technician
Health and Safety Officer
Equipment Manager
Report Manager
Project Manager
Field Engineer
_C2_
Field Tftrhnteian
X ray Technician
Health & Safety Officer
Equipment Manager
Report Manager
Monitor Sampling
Project Manager
Field Engineer
55
48
32
32
40
30
28
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i
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Field Technician
X ray Technician
Health and Safety Officer
Equipment Manager
1 |
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Project Manager
Field Engineer
Field Technician
X ray Technician
Health & Safety Officer
Equipment Manager
Report Manager;
Monitor Sampling Preparation
55
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JL
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150
$6,225
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$0
$375
$17,372
$5,205
$3,436
$0
$0
$0
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Hearth and Safety Officer! 1
Equipment Manager i 1
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Project Manager! 55
Field Engineer! 48
15 I 15
$825
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$1,800
4-
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Field Technician j 32
113
0 ! 113
$3,600
$0
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ABC - CH2M Hill By Complexity Simplified, Inc
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"How to" Manual for Environmental Contracting
3. Network
Networking through the use of computers is becoming more and more
the business style of today when working with major entities. it
is therefore to the advantage of the small business to begin to
communicate through computer networks for tnajor projects. In
order to create this capability, it is necessary to develop
operational flows of the existing processes of the business - -
"What is" operational flows.
The "What is" operational network can be loaded onto a personal
computer utilizing some low-cost project management software. it
may be important to review the section on networking or there are
a number of good books available on project engineering
management that will assist you in estimating and setting your
project up on the computer.
A Program Automated Management System (PAMS) approach is a must
in today's competitive world. Now that you have a network of
your operation on the computer, you can better analyze your
operation to define areas of inprovement and to develop better
and more accurate estimates. This will also enable you to better
manage your day-to-day operations, therefore increasing your
profits.
"Top down" planning techniques have their origins in "Work
Breakdown Structures". Basically, PAMS allows the user to define
several "high level" activities and link them, together, then to
"top down" to a lower level and build up the detail under the
higher activity (see Figure 1, Top Down Planning).
"Bottoms up" scheduling is a must in order to fulfill "Top down"
planning. Once underlaying details are in place the higher level
activity ("Top down") becomes a summary of the lower level
activities. Several layers are allowed and, depending on the
package, dither no connection between the so called
"sub-projects" is allowed or in some cases, no restrictions are
imposed, allowing random connections between detailed and summary
activities. This contrasts with the "Critical path method
(CPM)", which requires the logical construction of the network at
the detailed level and- allows the detail to be summarized upwards
to the Top Level - - "Bottoms Up Scheduling".
What is the difference? In the preparation and presentation of
the initial network, barcharts and reports, probably none. in
fact, users claim the "top down" method is usually quicker. The
problems start to occur as the project moves on, work is started
out of sequence, activities are delayed or deleted, and additional
work is required. Results from conventional packages using
"standard" techniques are subject to various errors, the results
from "top down" packages can be significantly wrong, particularly
if lead and lag times (start to start/finish to finish) are used.
The problems being caused by the lack of tight logical
connections at the actual "working" level of the network. Of
course skilled planners can avoid many of these problems but what
happens to the many users of these packages who do not understand
the basic theories and mathematics involved and happily accept
the information provided on the basis that it must be correct
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"*How to" Manual for Environmental Contracting
after all it was calculated by a computer! (see Figure 2,
Critical Path Method/CPM) .
Network construction is facilitated by the use of sub-projects
with a considerable number of "interface events" to connect
between the different sub-projects.
After the initial data entry, you should time analyze the project
and adjust to meet your specific requirements. PAMS should
provide you with ways for controlling time analysis, various
types of imposed start and finish dates, the transmission (and
reception) of dates from totally different project networks on
the same hard disk or LAN (Local Area Net) and negative "float"
where the project overruns contract deadlines. Inevitably at
this stage it is necessary for you to go back and edit the
network to correct mistakes and adjust sequences to meet imposed
requirements. PAMs should allow you to control paths, "super
critical" paths and listings of all preceding or succeeding
events to isolate for review. PAMS should allow you to.open up
and adjust activities from the screen bar chart, the network
screen or the tables described above. Calendars are changed from
five day to six or seven day work weeks, shift work and planned
overtime is introduced, and so on until eventually everyone is
happy with the time analysis.
Resource analysis is the next stage in most projects. This
should allow you to process up to 200 different resources, each
with their own calendar, cost • rates (idle time, normal hours,
overtime and "overload") and "availability profile" (to allow for
holidays) with both normal and threshold levels. You should be
able to bring individual resources together to be allocated as
"group resources" or switched off so that their costs are
accumulated but the resource does not affect scheduling. You
should decide whether to allow resource analysis to split
activities (and by how much), to stretch activities if enough
resources aren't available, or to demand an immediate start
irrespective of resource availability.
After adding the resource and cost information to the program, it
is time for you to see the consequences! You should consider:
"early" and "late" aggregation with all activities starting on
their earliest and latest dates respectively, "time critical"
resource smoothing (only activities with float are delayed until
they become critical, then resources are overloaded) and
"resource critical" analysis where resources are not overloaded
until the "project maximum delay" date is reached. You should
continue to adjust the resource data to achieve a workable plan.
PAMS resource program should provide you with various costing
options and include accrual periods, monthly budgets for the next
six months, "earned value analysis", "budget-vs-actual" cost
comparisons, global or activity level adjustments and most of the
other reports required by DOD Standard 7000.2 and C/SSR.
When your "plan" is agreed upon, time, resource and budget
information should be stored for future variance and baseline
comparison reports.
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"How to' Manual for Environmental Contracting
PAMS should provide you with standard reports and some custom
reports where you can design your own layouts. You should be
able to select and sort on almost any field of data for inclusion
in the reports. You should be able to include diagrams, text and
sketches in the form of PICT (picture) files to the reports for
additional impact.
As work on your project progresses, sophisticated project
monitoring and tracking options come into play. "Out of
sequence" work should be reported without changing the network
logic, and progress compared with the baseline schedule and
original budget.
a) EXAMPLE: Top Down Planning & Critical Path Method (CPM)
•^¦Finish To Start-
Top Laval
B
Figure 1 Top Down Planning
D First Detail Level
"B" win be reported aa ready start after "A" is
finished ignoring the tact "C" is delayed, or
"D" has to be completed prior to the start of
"B", Time Analyis will give incorrect results
I A I Top Laval
-c>[3*nr
B
NOTE: With CPM, "C" and "D" must be completed
before "A" is finished - - Bottoms up scheduling
Figure 2 critical Path Method (CPM)
E. PICOR - Process. Inputs. Controls, Outputs, anri Resources
PICOR is an analytical tool that assists in breaking down each
process by its components. This process assists in understanding
each process and its relationship with other processes.
1. Five Parameters of PICOR
PICOR has five parameters, each of which are defined as follows:
• Process - is the task being accomplished. The Inputs and
Resources being utilized to accomplish the task. Step-by-step
activities to achieve objective.
• Inputs - are those products from other tasks that are necessary
to drive the process.
•Controls - are what or who governs the process.
•Outputs - are the product or results of the process.
•Resources - are those items, elements, or people needed to
perform the process.
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"How to" Manual fox- Environmental Contracting
EXAMPLE: PI COR Model
EXAMPLE: "Network", process flow
Note that with this model, each of the individual inputs is a
process in itself. By lining up all of these processes from
start to finish, we can design what we identify as a "network",
the flow of the entire process. This is identified in the
example below. The network is the flow of activities that must
be accomplished"to reach the objectives/goal, showing the planned
sequence of accomplishments, activities, objectives and tasks
involved.
Controls may exist internally or externally. Internal controls
are seen in the example of an owner building a house, but
external controls also exist in the forms of regulatory agencies,
laws and city ordinances.
Looking at the interrelationships of processes, you can see that
the outputs of one PICOR can be the inputs of another (i.e.,
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"How to" Manual for Environmental Contracting
attaining funds can b© viewed as an independent process, but it
is also an input to the process of buying the lot).
Resources apply to all the processes, which may involve extensive
manhours, computer time, materials . . . or it may only involve
15 minutes of labor and the applied phone charges.
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"How to" Manual for Environmental Contracting
XIII. HOW DO I QUALIFY AND SELL THE BUYER?
A. Pofi-i t---inn the Buyer
It is important that you develop a healthy -business relationship
with the buyer. The following is a suggested process for building
that relationship.
Objective: To learn about the Buyer's Company and the products they
buy.
It is inportant for the Supplier to learn as much as possible about
the Buyer and their processes by asking the following questions as a
start:
•What are your major products?
• Do you have any special products? If so, what are they?
• Do you buy Mil Standard services/products (specification for
government)?
• Do you buy to procurement drawings?
• Do you have any special procurement requirements?
•What market do you serve?
•Category of clients -- Federal, State, commercial?
•Are some of your PO's worked on an annual basis; if so, which ones?
• How often does your list of services/products come up for bid?
• What is your maintenance cycle?
•What is your preventative maintenance cycle?
•Who presently provides your services/products?
•What is your qualification process?
•Do you have a vendor evaluation program; if so, how does it work?
• Do you have scheduled vendor visitation hours?
• What is your invoicing cycle?
• What is your accounting year?
• List of buyers and what they buy?
•Who is the end product user within your company, and would you
introduce me?
• How do they evaluate bids? Cost only? Delivery? Service?
• How do they request bids? BASnet? Approved lists only?
•Do they have pre-bid conferences on major purchases?
1. EXERCISE: Positioning the Buyer
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"*How to" Manual for Environmental Contracting
QUESTIONS TO ASK THE BUYER
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"How to" Manual for Environmental Contracting
B. Know your Products/Services
Objective: To sell your product/service
The supplier should never get caught unprepared by not knowing all
the details about their product or service. Therefore, you must
know your own products/services. As a minimum, study the following
about your product or service:
• Manufacturer
¦ Engineering/service contact
• Specifications
• Guarantees
• Warranties
• Capacity
•Schedules
• Market turnaround time
Now that you understand the prospective buyers needs, explain how
your products can meet their needs and why they should buy from you.
They should buy from you because your Company considers:
• Quality
• Quantity
• Delivery Schedule
• Cost
• Performance
Think about and address any concerns they may have about the
relationship.
C. novel op your Present-.at-.inn
1. Suggested Company Profile Outline
Now that you have qualified the buyer, you can now prepare your
presentation to sell and close the deal.
a) Company Background History
• Years in operation
•Type of ownership, -- corporation, partnership, sole
proprietorship
• Principals, if closely held, or publicly held if appropriate
•Make-up of employees (if appropriate) academic or technical
emphasis
•Locations, if more than one
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"How to" Manual for Environmental Contracting
•Corporate evolution, if important
• Other historical data and information
b) Company Stability
• Years in business
•Own your facilities, or lease and for how long have you been
there
• Revenue growth pattern
• Profitability
•Borrowing ceiling versus average outstanding balance
•Management background, experience and time with the company
•Relationship with key customers, i.e., how long have they
been customers
c) Company Philosophy
• Mission statement
• Core values
• Statement of philosophy
• What is important to the company
• How we want to treat others and be treated by others
d) Products Lines or Areas of Expertise
•Technical description of products and services
• Specific listing
•One of the few areas which must be precisely accurate
e) Approach to Quality
•Mil Spec requirements
• Total Quality Management (TQM)
• Statistical Process Control (SPC)
•Quality control department
• Formalization of the process
• Philosophy on quality
f) Contract Performance History
•Summary of specific information from customers
• Statement of performance
• Internally generated statistics and data
g) Skills Mix/Technical Breakdown
• Educational degrees of technical personnel
•Years of experience in specific disciplines
• Summary of labor categories
h) What Makes Your Company Different
• Answer the question - - why should this customer buy from
you?
• Important issues - -
- Quality
- Customer service
- Delivery
- Cost
• Make your best case
• Be creative
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"How to" Manual for Environmental Contracting
2. EXERCISE: Developing your presentation
a) Complete Section c) Company Philosophy
WHAT IS YOUR COMPANY PHILOSOPHY?
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"How to" Manual for Environmental Contracting
b) Complete Section e) Approach to Quality
DESCPJBE THE QUALITY PROCESS YOU USE
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"How to' Manual for Environmental Contracting
c) Complete Section h) What Makes Your Company Different
WHY SHOULD THE CUSTOMER BUY FROM YOU?
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"ffow to' Manual for Environmental Contracting
XIV. HOW DO I MARKET AND SELL TO EPA PROCUREMENT?
A. Prsparo tn Soil
In order to reach the point of negotiation of a contract, there are
two major steps that must be taken marketing and sales.
Marketing, getting your Company name before potential customers, and
getting on their bid/mailing list is the first and most important
step. Second, once you have their attention and an opportunity to
sell, you must be prepared to present and close the sale.
B. Make the Tn-if-ial Contact
1. Description
Inquiries are received by the EPA Region VIII Administrative
Services. Based upon what they have to offer, Suppliers are
instructed as to whether this agency can use them. If this
agency cannot use them, they might be referred to a totally
different agency. If this agency can use them, they are
instructed to fill out a standard Form 129 and submit it.
Completion of the Form 129, places them on the Bidders Mailing
List. Based on the service or supplies that they offer, the
Contract Specialist in Administrative Services will direct them
to the appropriate office within this agency to set up an
appointment.
Upon contact with the appropriate office, they will set up a
phone appointment or office appointment to discuss how that
particular office can utilize your company's services or
products.
If the purchase is for more than $2,500 the appropriate office
needs to give the EPA Administrative Services Contract Specialist
three sources. They cannot be a large and a small business --
they have to be all large or all small businesses. The small
businesses cam be in different categories -- minority owned,
women owned, or minority/women owned. EPA can compete the three
bids as long as they are all small businesses. Again, it can't
be a mix of small and big -- it either has to be all small or all
big.
2. Input
• Completed EPA Form 129
3. Control
•Federal Acquisition Regulation (FAR) Chapter 13 and EPA
Procurement Regulations
4. Output
•Appointment with appropriate agency or "no fit"
5. Resources
•EPA Administrative Services Contract Specialist
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*How to' Manual for Environmental Contracting
C. nht-.ain nirort-.ion to Appropr KPA Agency
1. Description
Once the EPA Administrative Services Contract Specialist
determines that there is a possible match with one of the EPA
agencies, arrangements are then made for a presentation to the
appropriate agency personnel.
2. Input
• Purchase Request from Buyer
3. Control
• FAR Chapter 13
4. Output
• Appointment with appropriate agency personnel
5. Resources
• EPA Administrative Services Contract Specialist
• Suppliers
D. Malta Brief Presentation to Biiyar/Manaper
1. Description
The Supplier provides a 15-minute briefing to present their
products/service to the respective agency personnel.
2. Input
• Supplier briefing to EPA Agency
3. Control
• Suppliers Procedures
4. Output
•Buyer with clear understanding of supplier's products/service
5. Resources
• Supplier
• Buyer
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"How to" Manual for Environmental Contracting
E. Reicft-iva Purchasa Request
The Purchase Request (PR) is
prepared and entered into the
computer for tracking purposes.
The PR is then assigned to the
Buyer, who then contacts you:
All federal agency purchasing is regulated by the Federal
Acquisition Regulation (FAR), Chapter 13. The FAR states that you
only need three resources to compete. However, the EPA Acquisition
Regulation (EPAAR) requires 3 responsive, responsible bidders.
Regulations state that a contract of between $1 and $2,500 does not
have to be competed. Anything between $2,500 and $25,000 must be
competed. A request between $2,500 and $10,000 can be responded to
verbally. A request between $10,000 and $25,000 must be responded
to in writing. The EPA files will reflect whether the quote was
verbal or written. A request for less than $2,500 does not need a
sole source justification. A sole source request of $10,000 to
$25,000 has to be published in the Commerce Business Daily.
There are occasions, for example in a request for consulting, that
the EPA requester or originator will write a statement of work. The
statement of work will then be sent out to each resource. The
resource will then respond to that statement of work with their bid.
1. Description
The EPA Requester/Buyer will get price quotes from the three
resources and put that amount on the PR so that amount of dollars
can be allocated. The resource people should be aware that when
an individual calls and they are not a contracting specialist,
they are usually calling for quotes only and not to order the
service or the product. Obligations come from the Contracting
Specialist only.
2. Input
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"How to' Manual for Environmental Contracting
•Buyer's List
• PR
3. Control
• FAR Chapter 13
4. Output
• Supplier to fill Purchase Order
5. Resources
• EPA Administrative Services Contract Specialist
F. Call Suggestart Suppliers
1. Description
The contract specialist will call for three quotes. The quotes
will then be evaluated to determine which one best meets the
needs. The selection is based on price, delivery, discount and
type of business. The Contract Specialist will then select a
supplier.
2. Input
•Buyer's List
• PR
3. Control
• FAR Chapter 13
4. Output
•Supplier to fill Purchase Order
5. Resources
• EPA Administrative Services Contract Specialist
G. Tggna Purchase Order fPO)
1. Description
When the suppliers are contacted for quotes, the Contract
Specialist will ask if they will accept an oral purchase order or
if they prefer a written one. EPA prefers to use the oral one
since it saves time for both parties. Some purchase orders of up
to $10,000 can be orally agreed to. (Refer to D. Purchase
Request) Purchase Orders for over $25,000 are issued out of EPA
Headquarters.
Once the Purchase Order number is given to the Supplier, whether
oral or written, and the Supplier begins to perform, it is
considered a binding contract.
2. Input
• PR
• Supplier
3. Control
• FAR Chapter 13
4. Output
• EPA Approved PO
5. Resources
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"How to" Manual for Environmental Contracting
• EPA Administrative Services Contract Specialist
imlf-iH Pnrrhaso Order
1. Description
The Supplier fills the order and makes delivery based upon the
Purchase Order.
2. Input
• PO
• Services/Products
3. Control
• FAR Chapter 13
4. Output
•Delivered products/services
5. Resources
• Supplier
SfihadulB Payment
1. Description
The invoice should not accompany the items. The invoice must be
sent directly to the Finance office. Based upon the date of
receipt of the invoice and the receiving report, which is an
internal process at EPA, the appropriate office will send the
receiving report to Finance stating that the invoice can be paid.
If the contract is for services, for example consulting, the
originating office will do the receiving report and in a lot of
cases partial payments will be made. If it is a 6-month
consulting service, they can partial invoice every thirty days.
The originating office will do a receiving report every 30 days
based upon the consultant meeting all of the requirements. This
is set up in the contract.
2. Input
• Invoice
3. Control
•FAR Chapter 13
4. Output
• Payment schedule
5. Resources
•Regional Finance Office
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"How to" Manual for Environmental Contracting
Receive Payment
Description
30). Allow another 5-7 days
for the check to be delivered
through the mail from Kansas
City.
payment discount offered by
the vendor (i.e., 2% 10, net
The payment is made 30 days
from the date of receipt of
invoice and receiving report
(whichever is later) at the
Finance Office or the terms
established by the prompt
Input
• Payment schedule
Control
• FAR Chapter 13
Output
• Check to supplier
Resources
•Regional Finance Office
EXAMPLE: EPA Region VIII Procurement Flow
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EPA Region VIII Procurement Flow
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• Air
• Water
• Hazardous WH
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• Computer (IM)
• Laboratory
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Purchase Order* 4 Delivery Orders)
Paving
Hazardous WaaM Removal
Hazardous Waste Transportation
Hazardous Waste Contslnsrs
Instrumentation
Laboratory Supplies
' Safety Equipment
' Moving
• Malntenanoa (Phone t Eulpment)
> Office Supplies
> Contract Labor
• Coulter Services
Selection Considerations
• Prtoe
• Delivery
• Discount IN«t10/30)
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"How to" Manual for Environmental Contracting
xv. HOW DO I MARKET AND SELL TO EPA CONTRACTS?
The Region VIII Contract Department's function is to monitor the
Superfund contracts implementation as well as contracting for small and
small disadvantaged businesses focusing on 8(a) contractors. The Region
Viii Contracts Office can issue contracts up to $10M with local approval
and up to $5 0M with Central Office approval. These contracts are all
listed in Commerce Business Daily and BASnet.
A. Prepare to Sell
In order to reach the point of negotiation of a contract, there are
two major steps that must be taken -- marketing and sales.
Marketing, getting your Company name before potential customers, and
getting on their bid/mailing, list is the first and most important
step. Second, once you have their attention and an opportunity to
sell, you must be prepared to present and close the sale.
B. Make the Tnit-ial Contact
1. Description
Inquiries are received by the EPA Region VIII Superfund Contracts
Office. Based upon the contractors services, contractors are
instructed as to the types of contracts they might bid against.
If there is a match, they are instructed to fill out a standard
Form 129 and submit it to the Contracts Office. Completion of
the Form 129, places them on the Bidders Mailing List. Based on
the Contracts they perform, the Contracts Office will mail
related bids/RFPs to them as they become available.
If the purchase is for more than $25,000 EPA can make the
purchase a set-aside for 8(a) or compete the bid/RFP. They
cannot be a large and a small business - - they have to be all
large or all small businesses. The small businesses can be in
different categories -- minority owned, women owned, or
minority/women owned. EPA can compete the three bids as long as
they are small businesses. It can't be a mix of small and big.
It either has to be all small or all big.
2. Input
• Completed EPA Form 129
3. Control
• Federal Acquisition Regulation (FAR) Chapter 13 and EPA
Procurement Regulations
4. Output
•Appointment with appropriate agency or "no fit"
5. Resources
•Region VIII Superfund contracts
C. Understand the Rnparfund Process
1. Description
The EPA Region VIII Contracts Officer will explain the
contracting process, the options, and the terms and conditions.
2. Input
• Completed Form 129
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"How to" Manual for Environmental Contracting
3. Control
• FAR Chapter 13
4. Output
• List of Superfund opportunities
- Site-Specific Project Management
Site planning
Project monitoring and control
Project coordination
- Remedial Planning
Project planning
Community relations
Field investigation
Sample analysis and validation
Data evaluation
Assessment of risks
Treatability study/pilot testing
Remedial investigation reports
Remedial alternatives screening
Remedial alternatives evaluation
Feasibility study/Rl/FS reports
Enforcement support
Miscellaneous support
Expedited response action
- Remedial Design
Project planning
Community relations
Data acquisition
Sample analysis/validation
Data evaluation
Traceability study/pilot testing
- Remedial Implementation
Procurement support
Construction management
Technical engineering services
Preliminary design 3 0%
Equipment/Service procurement
Intermediate design 60%
Pre-final/Final design 90-100%
Post remedial design support
- Other Technical and Management Assistance
Remedial oversight
Enforcement support
Community relations
Data management
Analytical support
Other technical support
5. Resources
•Region VIII Contracts Officer
• Contractor
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"*How to' Manual for Environmental Contracting
Receive Bid/RFP
1. Description
Each Superfund contract will be developed through the bid/RFP
process.
The Bid/RFP is prepared and entered into- the computer for
tracking purposes. The Bid/RFP is then assigned to the Buyer.
All federal agency contracting is regulated by the Federal
Acquisition Regulation (FAR), Chapter 13. The FAR states that
you only need three resources to compete. However, the EPA
Acquisition Regulation (EPAAR) requires 3 responsive responsible
bidders.
Regulations state that a contract of greater than $25,000 must be
competed but can be approved locally. A bid/RFP greater than
$10M up to $50M must be approved by the Central Office. A
Bid/RFP has to be published in the Commerce Business Daily.
2. Input
•Superfund cleanup
3. Control
• FAR 13
4. Output
• Region VI11 Superfund bid/RFP
5. Resources
•Region VIII Superfund Contracts Officer
Attend Pra-Hiri Cnnfa-rarirft
1. Description
The Bid/RFP will call for a pre-bid conference depending on the
nature of the Bid/RFP. The pre-bid conference is conducted to
verify that all interested parties have a clear understanding of
the Superfund needs.
2. Input
•Bid/RFP
3. Control
• FAR Chapter 13
4. Output
•Contractors with a clear understanding of the Bid/RFP process.
5. Resources
•Region VIII Superfund Contracts Officer
Prepare Bid/RFP
1. Description
The Contractor(s) prepare the bid/proposal in accordance with the
B i d/RFP reques t.
2. Input
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"How to* Manual for Environmental Contracting
•Bid/RFP
• Pre-bid/RFP Conference
3. Control
• FAR Chapter 13
4. Output
•Contractors Bid/Proposal
5. Resources
• Contractor(s)
G. Ohtain Contract Award
1. Description
The EPA Region VIII Contracts Officer will award the bid to the
winning contractor and/or negotiate the proposals.
2. Input
•Bids/RFPs
3. Control
•FAR Chapter 13
4. Output
• Winning contract award
5. Resources
•EPA Region VIII Superfund Contracts Officer
H. Perform Contract
1. Description
The Contractor will perform the tasks in accordance with the
negotiated contract and report as stipulated in the contract.
2. Input
• Negotiated contract
3. Control
• FAR Chapter 13
4. Output
• Contract deliverables
5. Resources
• Contractor
I. schedule Payment
1. Description
The invoice should not accompany the items. The invoice must be
sent directly to the Finance office. Based upon the date of
receipt of the invoice and the receiving report, which is an
internal process at EPA, the appropriate office will send the
receiving report to Finance stating that the invoice can be paid.
If the contract is for services, for example consulting, the
originating office will do the receiving report and in a lot of
cases partial payments will be made. If it is a 6-month
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"How to" Manual for Environmental Contracting
consulting service, they can partial invoice every thirty days.
The originating office will do a receiving report every 3 0 days
based upon the consultant meeting all of the requirements. This
is set up in the contract.
Input
• Invoice
Control
•FAR Chapter 13
4. Output
* Payment schedule
5. Resources
•Regional Finance Office
Receive Payment
1. Description
2. Input
• Payment schedule
3. Control
•FAR Chapter 13
4. Output
• Check to supplier
5. Resources
• Regional Finance Office
The payment is made 30 days
from the date of receipt of
invoice and receiving report
(whichever is later) at the
Finance Office or the terms
established by the prompt
payment discount offered by
the vendor (i.e., 2% 10, net
30). Allow another 5-7 days
for the check to be delivered
through the mail from Kansas
City.
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"How to' Manual for Environmental Contracting
K. EXAMPLE: EPA MSWE/8(a) Region.VIII Services Contract Flow
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EPA MSWBE/8(a) Region Vlil Services Contract Flow
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• Suparfund * Sifr-Spaoiflo frojaot Umrngtmaat
, - SHt Planning
- Project Monitoring and Conk-ol
- Project Coordination
• Ram*dlsl Pluming
- Pro|ect Planning
- Community Relatione
- Field Inveefgation
- Sample Analyala and valdation
- Data Evaluation
- Aeeeeament ol Hake
- Treatability Study/Pilot luting
- Ramadial Invaatigation Rapcrta
- Ramadial AJternatlvee Screening
• Remedial Altarnatlvaa Evaluation
- Feaaibilily Study/RVFS Raporta
*- Enforcement Support
- Mlecellaneoue Support
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CONTRACTS (Blanket Purchase Agreements, Purchase Onto*, & Delivery Orders)
• AmM Design
• Project Planning
- Community Rda#on»
- Data Acqiition
- Sampia Analyataftalidation
- Data Evaluation
• Treatability Study/Pilot Tacting
- Pralimlnary Daaign 30%
- EqulpmanVSarvIca Proeuramant
- Intarmadata Dadgn 60%
- Praftnai/final Daaign 90-100%
- Poat ramadM Daaign Support
• Remed/m! /wp/omantation
- Procurement Support
- Conafudion Management
- Technical Engineering Senncee
• OUtsr Tseh & Ugt Assistance
- Remedal Overalght
- Enforcement Support
- Commnutty Relatione
- Data Management
- Analytical Support
- Other Technical Support
Check out Nat 1
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"How to" Manual for Environmental Contracting
XVI. HOW DO I MARKET AND SELL TO EPA/DOE PRIMES?
A. Make the Trritial Contact
1. Description
Potential subcontractors should call or visit firms that they
seek to do business with to accomplish the following:
•Determine what products/services you have that the firm could
use.
• Determine who in the firm makes the requests for
products/services (technical personnel).
• Determine who procures the products/services.
•Determine what must be done to get on a "bidder's list".
It is best to meet with those persons who are the requesters and
those persons who actually place the orders or issue Invitation
For Bids (IFBs).
Each firm has its own procedures for procuring products/services.
Find out as much as you can about the procedures.
2. Input
•Completed Standard Form 254, Architect - Engineer and Related
Services Questionnaire.
• Completed Standard Form 255, Architect-Engineer and Related
Services Questionnaire or other SOQ for specific project.
• Appointment with buyer
3. Control
• Corporate Procurement Policy and Federal Acquisition
Regulations.
4. Output
•Appointment with buyer, project manager, or "no fit"
5. Resources
• Administrative Manager or Director of Purchasing
B. Obtain Dirartion t.n Primo
1. Description
Once the Administrative Manager or Purchasing contact determines
that there is a possible match with one of the project managers,
arrangements are then made for a presentation to the appropriate
personnel.
2. Input
• Purchase Request from Project Manager
3. Control
• Federal Acquisition Regulations
• Procurement Policies
4. Output
• Appointment with appropriate personnel
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"Bow to" Manual for Environmental Contracting
5. Resources
• EPA Administrative Services Contract Specialist
• Suppliers
C. Makfl Brief Presenf.atinn to Buyar/Manager
1. Description
The Supplier provides a 15-minute briefing to present their
products/service to the appropriate personnel.
Note: "Working with the buyer" does not mean giving away the
farm. It means the supplier should let the buyer know his
company will be as flexible as possible to meet his needs. Also,
express desire to make the sale and show appreciation. This can
have at least a psychological effect on the buyer. Even if you
don't make this sale, you will be remembered as cooperative and
will be well positioned for the next purchase by that firm.
2. Input
• Supplier briefing to appropriate personnel
•Samples and references, if available
3. Control
• Time limitations
4. Output
•Buyer with clear understanding of supplier's products/service
5. Resources
•Knowledge of the Buyer's needs
•Knowledge of the Buyer's firm and operations
D. Receive Purchase Request
Each firm will have unique purchasing procedures. If they are using
Federal funds, they will generally follow FAR regulations to a
degree. If corporate funds are used, they will use only their
purchasing procedures.
All federal agency purchasing is regulated by the Federal
Acquisition Regulation (FAR) . The FAR states that you only need
three resources to compete. However, the EPA Acquisition Regulation
(EPAAR) requires 3 responsive responsible bidders.
Regulations state that a contract of between $1 and $2,500, does not
have to be competed. Anything over $2,500 must be competed. A
request between $2,500 and $10,000 can be responded to verbally. A
request over $10,000 is to be written. A request for less than
$2,500 does not need a sole source justification.
There are occasions in a request for consulting, the requester or
originator will write a statement of work. The statement of work
will then be sent out to each resource. The resource will then
respond to that statement of work with their bid.
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"How to" Manual for Environmental Contracting
1. Description
The requester/buyer will generally
request price quotes from the three
resources and put that amount on the PR
so that amount of dollars can be
allocated. The resource people should
be aware that when an individual calls
and they are not a contracting
specialist, they are usually calling for
quotes only, and not to order the
service or the product. Obligations only
come from the Contracting Specialist.
2. Input
•Buyer's List
• Purchase Request from Project Manager
3. Control
•Federal Acquisition Regulation
• Corporate Purchasing Procedures
4. Output
~Supplier to fill Purchase Order
5. Resources
• Small Business Administration
E. Can SuggQRt-Qd Suppliers
1. Description
The buyer will generally call for three quotes. The quotes will
then be evaluated to determine which one best meets the needs.
The selection is based on price, delivery, discount and type of
.ness. The buyer will then select* a cnnni tot* Th« sunni i&v
— —- r— — uoiivoiy, uxbuuu
business. The buyer will then select a supplier,
should express willingness to work with the buyer to meet
possible terms and conditions.
Input
The supplier
all
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"How to' Manual for Environmental Contracting
•Buyer's List
• Purchase Request from Project Manager
3. Control
•Federal Acquisition Regulations
• Corporate Purchasing Procedures
4. Output
• Supplier to fill Purchase Order
5. Resources
• Small Business Administration
F. TsRua Purchase Order
1. Description
When the suppliers are contacted for quotes, the Buyer may ask if
they will accept an oral purchase order or if they prefer a
written one.
Once the Purchase Order number is given to the Supplier, whether
oral or written, and the Supplier begins to perform, it is
considered a binding contract.
Note: Be sure to get the delivery schedule. Receiving
goods/services when they are needed is more important than the
cost.
2. input
• PR
• Supplier
3. Control
• Federal Acquisition Regulations
• Corporate Procurement Procedures
4. Output
• Approved Purchase Order
5. Resources
• Small Business Administration
• Project Manager
Note: The Project Manager can be a resource in that he may
provide information to the supplier about his needs, delivery
schedule, etc. It also helps for future business to talk with
the Project Manager to assure his satisfaction.
G. Fill f-ill Purchase Order
1. Description
The Supplier fills the order and makes delivery based upon the
Purchase Order.
2. Input
• PO
• Services/Products
3. Control
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'How to" Manual for Environmental Contracting
•Supplier's capabilities, capacity
• Federal Acquisition Regulations
• Procurement Procedures
4. Output
•Delivered products/services
5. Resources
• Supplier
H. Schedule Payment
1. Description
The invoice should not accompany the items. The invoice should
be sent directly to the Buyers or others as instructed. Based
upon the date of receipt of the invoice and the receiving report,
the buyer will send notice to Finance or Accounts Payable stating
that the invoice can be paid.
If the contract is for services, for example consulting, partial
payments may be made. Terms of payment are generally preprinted
on the Purchase Order.
2. Input
• Invoice
3. Control
• Federal Acquisition Regulations
• Procurement Policies
4. Output
• Payment schedule
5. Resources
• Accounts Payable
• Buyer
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"How to" Manual for Environmental Contracting
I. Receive Payment
1. Description
The payment is generally made 30
days after receipt of invoice or
depending on the discount. Allow
another 5-7 days for the check to
be delivered. If payment is not
made according to the Purchase
Order, you should call the Buyer to
be sure all terms were met by the
Supplier, and find out when
payment will be made.
2. Input
• Payment schedule
3. Control
• Federal Acquisition Regulations
• Procurement Procedures
4. Output
• Check to supplier
5. Resources
• Buyer
J. EXAMPLE: Prime Procurement Flow
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Prime Procurement Flow
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PROJECTS
• Air
• Water
• Hazardous Waate
• Safety
• FaoUlttM
• Computer (IM)
• Laboratory
• StppOas
• Consultants
• Engineers
• Specialist
CONTRACTS
(Stanfcat Purchase Agreement
Purchase Orders, A Delivery Orders)
• fisrtig
• Hazardous Waste Removal
• Hazardous Waal* Transportation
• Hazardous Waste Container*
• Instrumentation
• Laboratory Supplies
• Safety Equipment
• Moving
• Uaimananoa (Phone ft EuJpment)
• Offlos Supplies
• Contract Labor
-------
Selection Considerations
• Woe
• Delivery
• Diaoount (Net 10/30)
• Type of Business
APPROVAL & PAYMENTS
Check out Nat t
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"How to' Manual for Environmental Contracting
XVII. HOW IMPORTANT IS CONTRACT COMPLIANCE?
A contract compliance system must be developed to provide detailed
accountability for all project funds received and expended. Financial
reports must be utilized for program monitoring and management.
Specialized reports must be completed as required by program funding
sources.
| Progress
9 "Report
hmrnmrnmrnik
Both the prime and MSWE contractors are in need of an integrated project
management system for the planning and operations of small, medium, and
large projects. The contract compliance system could utilize systems
such as Lotus 1,2,3 and Artemis software for project tracking by primes
and participating MSWE subcontracts, with input via disk, direct input
or modem. This type of system will enable easy statusing (daily,
weekly, or monthly) as the project management demands.
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"How to" Manual for Environmental Contracting
xviii. ONCE I HAVE THE CONTRACT, IS THAT IT?
Once the contract has been negotiated and signed; tasks, schedule and
cost must be finalized and planned to meet the contract requirements.
The contract should be scheduled with initial and intermediate
milestones to enable monitoring, status, and reporting to meet contract
objectives.
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