Office of the Secretary of Defense, Pentagon Renovation Management Office, 100 Boundary Channel Drive, Arlington, VA 22202

Y -- COMMENTS ON PENTAGON SEGMENT 2/3 RENOVATION PRICING ARRANGEMENT POC Raymie Shelton, Contract Specialist, (703) 614-2728 E-MAIL: Click here to contract the contract specialist via, sheltonr@army.pentagon.mil. The Pentagon Renovation Office (PRO) seeks industry comments regarding the pricing strategy for a future project to renovate a portion of the Pentagon basement and mezzanine (Segments 2 and 3). The renovation work will include complete slab-to-slab reconstruction of the space; replacement of all architectural, electrical, mechanical, and plumbing systems; and fitting out of general office space, information technology space, and special usage space. In the fourth quarter of fiscal year 1999, the PRO intends to issue a request for proposals (RFP) that will include the 100 percent design drawings for the core and shell and 35 percent drawings for the tenant fit-out. The government intends to award one contract on a best value basis. Request industry review the pricing strategy for the core and shell work and provide comments and/or alternative pricing strategies. The anticipated pricing arrangement would be fixed-price incentive fee with award fee (FPIF/AF-zero profit). Under this strategy, the availableaward fee would not exceed 10 percent of the contract price. The contractor must earn 85 percent of the award fee to share in the incentive fee. The incentive fee would include a firm target profit of zero, a negotiated target cost, and a price ceiling that does not exceed 110 percent of the contract price. The government/contractor share in cost overruns and underruns would be 50/50. Given that the contractor has the opportunity to earn up to 10 percent profit under the award fee arrangement, would additional base profit be required under the fixed-price incentive arrangement? Please provide your comments electronically to Ms. Raymie Shelton at sheltonr@army.pentagon.mil, subject: Segments 2 and 3 Pricing Comments. Comments are due by 15 June 1999. For information, please call Ms. Shelton at (703) 614-2728. Posted 05/26/99 (W-SN336098). (0146)

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