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Cost Analysis
The decision to use contract services shall be based on economic
considerations of contract versus in-house operations.  From applicable
methods, select the disposal method which is lowest in cost.  (Air Force
personnel should refer to AFM 91-11.  Navy activities must refer to OPNAVINST
4860.7B for additional guidance when determining whether to perform solid
waste services in-house or by contract.)  Consider a choice conclusive if its
indicated cost is ten percent or more below the next lowest estimate. Complete
records shall be kept on the overall operation to facilitate planning and cost
control.  Where cost differences are not conclusive, favor the proposal which
includes recycling or resource recovery as the preferred method of disposal as
opposed to incineration or landfill.
Municipal Contracts.  Contracts with municipalities shall be favored
where the cost is less than that of building and operating government
facilities.  If cooperation allows enlarging the scale of the operation,
municipal disposal facilities can be made more efficient and environmentally
more acceptable.
Consolidated Military Operations.  Where a number of Department of
Defense installations are concentrated in a geographic area and the use of
municipal operations is not feasible, serious consideration shall be given to
establishing a consolidated Department of Defense facility.  Consolidation
allows for design and operation of a more sophisticated, economical, and safe
facility.  A centralized control authority shall be established to develop
management and operational guidelines for the facility.
Contract Development Guidelines.
The following shall be considered in
solid waste management contracts:
a.  Economics.  Near urban areas, economics often favor contractor
collection and disposal of wastes.  Preparation of the contract must be in
accordance with the procedures given in appropriate procurement regulations
for each service, and the Federal Acquisition Regulations (FAR).
b.  Equipment and Work Force.  On all but the smallest installations, a
contractor would require additional equipment and work force to meet
contractual requirements.  These represent a high initial cost which must be
recovered by the contractor.  Even considering resale of equipment, a one-year
contract at a medium-sized base represents a high initial investment and low
equipment utilization which will result in increased costs that the contractor
must be permitted to recover.  Two methods which have been successfully used
to overcome this problem are
regional contract for all government installations in a
particular area
use of a multi-year rather than a single-year service contract,
which will allow recovery of investment costs over a longer
period of time


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