Attachment J-03 TERP Procedures 4-28-21.docx

HQ0858-21-R-0010

Section J, Attachment 3 TERP Procedures

HQ0858-21-R-0010

Section J, Attachment 3

TEAMS-Next Solicitation HQ0858-21-R-0010

Section J, Attachment 3 TEAMS-Next Emergent Requirements Package (TERP) Procedures

28 April 2021

Approved for Public Release 20-MDA-XXXXX (XXXXX)

1.0 Purpose

As set forth in Statement of Work (SOW) (Attachment 1) paragraph 11.0, “Emergent Requirements”, Option CLIN 0001 of this contract includes a reserve pool of unexercised Cost-Plus Fixed Fee, Level of Effort (CPFF-LOE) hours to support future emergent, in-scope requirements. Specifically, additional LOE may be procured, on a case-by-case, incremental basis, in support of any requirements set forth in SOW paragraph 3.0. The resulting increase in LOE will be implemented via a TEAMS-Next Emergent Requirements Package (TERP), bilaterally signed by the Government and the Contractor, and executed in a subsequent contract modification. (The cost and fee per hour of the subject labor category and location will not be subject to negotiation, since these amounts were established during competition.)

Should the Government choose to award an emergent requirement, it will be awarded per the procedures set forth herein. CLIN 0001 provides for an increase in hours of up to 40% of the total LOE set forth in the competitive solicitation. Conversely, if and when a decrease in effort is required for an existing requirement, a reverse TERP will be bilaterally negotiated to reduce and reallocate hours and associated CPFF from the active CLIN to CLIN 0001.

2.0 Procedures

2.1 Period of Performance for Option CLIN 0001.

If and when labor CLINs for Option Years are exercised, a corresponding no-cost period of performance extension for the Emergent Requirements Option (CLIN 0001) will be executed in parallel, such that the maximum hours and estimated cost (up to 40% of the competitively awarded contract) may be available through the entire contract PoP.

2.2 TERP Formulation.

When the Government identifies an emergent, in-scope requirement, the Contracting Officer will issue a TERP to the Contractor utilizing the form at Section J Attachment 04. The TERP will include, but not be limited to, the specific SOW paragraph task(s) being increased (from SOW section 3.0), the affected CLIN(s), the duration of the added effort (whether short-term or recurring for the remainder of the contract), the location (including whether on- site or off-site), the total hours, and the total CPFF.

The Functional Integrator and Contract Specialist will populate the requisite information as prescribed in the Attachment 04 TERP Form. The Functional Integrator will complete an Independent Government Estimate (IGE) Worksheet and TERP FTE Model identifying the desired Labor Categories, Locations, Work Sites, CLINs, and skill mix per year. The Contract Specialist will utilize this information to populate Section J Attachment 05 TERP Pricing Model “Option Pricing Example” tab. No cells in the TERP Pricing Model shall be modified except for those in the “Option Pricing Example” tab - columns C through G and I through P. The model will populate all remaining columns and establish the total TERP CPFF.

The Government may seek input from the contractor on the optimal solution for labor categories and/or skill mix. If so, an alpha process may be utilized to accommodate a more expedient solution.

In addition to an increase in LOE, the Government may also dictate corresponding adjustment(s) in estimated cost for Travel and/or ODC. These adjustments would only be to the estimated cost for the Travel/ODC CLIN. Forms 100 (Travel) and 70 (ODC) would still be required for authorization of either on a case-by-case basis.

2.3 TERP Exercise Procedure.

The TERP document shall be signed by the Contracting Officer and a representative authorized to commit the contractor. A subsequent contract modification will be executed to realign the authorized ceiling (estimated cost/fee) and hours (LOE) from CLIN 0001 to the affected CLIN(s). The contractor shall not incur cost against a TERP prior to authorization.

Through a contract modification, CLIN 0001 will be drawn down by the total hours and estimated CPFF from the TERP, such that the maximum value of the contract (inclusive of all unexercised options) will remain unchanged (zero sum). Conversely, increases in either Travel or ODC will not be drawn down from CLIN 0001; these increases will be implemented as a net increase in maximum contract value (inclusive of options) by increasing the affected CLIN without a corresponding decrease to CLIN 0001.

As part of the modification, the CSK Cost/Price Analyst will update Section J Attachment 19 EPW to capture the LOE and CPFF adjustments associated with the TERP. The conformed version of Attachment 19 must be copied in the Conformed Attachments folder in the contract file. The contract specialist shall also prepare a Price Verification Memorandum (PVM) and Determination and Findings (D&F) for Option Exercise for PCO approval.

Prior to execution of the TERP modification, the Contracting Officer shall ensure all below documentation is signed and included in the package:

· Bilaterally signed TERP Form

· Price Verification Memo (PVM) (including Excel file)

· Determination and Findings (D&F) for Exercise of TERP Option

· CS Coordination Memo

· Funding documents

· IGE / FAS

· CLIN Checklist (if adding a new CLIN pursuant to par. 2.7)

The following notional example assumes a TERP will increase existing effort by 9,600 hours (through the remainder of the base period only) at a total CPFF of $1,600,000; no associated increase in Travel or ODC. The LOE increase will be allocated among 2 stakeholder CLINs (SN and TC), as follows:

3,840 hours to CLIN 0300 for Sensors (SN) support (CPFF value: $736K) 5,760 hours to CLIN 0320 for Targets (TC) support (CPFF value: $864K)

CLIN 0001 (unexercised option) will be decreased by 9,600 hours and $1.6M CPFF CLIN 0300 (SN Base CLIN) will be increased by 3,840 hours and $736K CPFF CLIN 0320 (TC Base CLIN) will be increased by 5,760 hours and $864K CPFF.

As shown in the example above, the adjustment in LOE is derived by a realignment between CLINs 0001 and 0300/0320, not an overall increase in the maximum contract value (inclusive of options).

No TERPs may be issued after all LOE has been drawn down from CLIN 0001. If the CLIN 0001 estimated CPFF has been completely drawn down to $0 and there are still remaining LOE hours under CLIN 0001 (e.g. if a disproportionate amount of higher priced labor has been authorized under prior TERPs), the Government may elect to purchase the remaining hours as an increase in contract value, subject to funds availability.

2.4 Fixed Fee.

Adjustments in fixed fee associated with TERPs shall not affect the billing and payment procedures for fee earned. Specifically, the contractor shall follow the invoicing procedures for fixed fee as set forth in clause G-08, “Payment of Fixed Fee (Ordering – Level of Effort) (JUN 2012)”.

2.5 Reverse TERP.

If, over the course of performance, it is determined that a particular effort is no longer required for the remainder of the PoP, a Reverse TERP may be utilized to preserve the hours (LOE) and associated CPFF for other/future use. The decremented LOE will be negotiated utilizing the same TERP procedure above, only in reverse. The negotiated hours and CPFF will be reduced from the affected CLINs and realigned as an increase (in LOE and CPFF) to CLIN 0001. (The cost and fee per hour of the subject labor category and location will not be subject to negotiation, since these amounts were established during competition.)

2.6 Modification Authority.

For purposes of contractual modification authority, all TERPs shall be issued pursuant to this Section J Attachment. If, however, a TERP also drives a change in SOW (including labor categories), CDRLs, or any other terms and conditions of the contract, the “Changes” clause shall also be cited accordingly.

2.7 TERP that Requires New CLINs.

In certain instances, such as an increase of Foreign Military Sales (FMS) requirements, or the addition of a new stakeholder effort, a new CLIN may be required. In such instances, the Contracting Officer shall rely on the resident Cost/Price Analyst to make the appropriate formulaic adjustments to the EPW and the TERP Pricing Model to incorporate the newly added CLIN.

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