VESSEL_RECAP_Industry_Day_Q_and_A_-_5-23-19.docx

Vessel Acquisition Manager Industry Day Q & A regarding 693JF7-19-RFI-0004

1) Should there be certain exemptions for participation as a VAM? Some examples could include:

a) Anyone (or affiliate; broker; etc.) that is offering potential vessels

b) Any MSP Contract Holder

c) Any owner/ operator in international trade (potential conflicting interests with offering entities

d) Any US shipyard owner/ operator

Answer: There are no exceptions for any VAM. The Request for Proposal (RFP) will be openly competed via Federal Business Opportunities through the FedBizOpps website.

2) What is the actual cost of one vessel acquisition (under any previous vessel manager or procurement)?

Answer: For example, $30M (USD) was the price of the Cape W-class ships at last purchase.

3) What was the market/asking price of the used vessel and/or what was the actual price paid for the acquisition?

Answer: Unknown (Asking price)/$30M (Actual paid).

4) What was the actual cost of the conversion (if any)?

Answer: In excess of $10M.

5) What was the actual cost of outfitting (if any)?

Answer: In excess of $1M.

6) What was the actual cost of the maintenance and operation of that vessel?

Answer: In any average year, in excess of $6M, including Ship Manager services and fees.

7) What was the market/asking price of a new vessel and what was the actual price paid for the acquisition (if any)?

Answer: Unknown. MARAD has purchased only used vessels for the National Defense Reserve Fleet/Ready Reserve Force.

8) Do you intend to list the VAM procurement as separate line-items (e.g., ship broker, ship manager and logistics support contractor)?

Answer: It is not intended at this time, however if there is a reason to list by line item or alternative recommended CLINs.

9) what about compensation for the ship broker role (which is typically a fee based on the purchase price of a transaction? For instance, if I can negotiate the price of a vessel downwards of $1 - $10m would that be to my company's benefit or detriment...?

Answer: A respondent to this RFI may propose how compensation would be expected. If fee-based, the structure of the fee should be explained.

10) How does ship ownership work in terms of this requirement? Who will own the vessel at the various stages of progress?

Answer: Once a vessel is approved by the U.S. Government for procurement, the VAM will purchase the vessel as the government’s agent, and the government will own the vessel. The VAM will deliver a vessel to the U.S. Government, subject to the conditions of the contract including reflagging, regulatory inspection and compliance, classification, and modernization. The VAM is responsible to deliver the vessel to the U.S. Government, ready for service, in accordance with a timeline proposed by the VAM that includes milestone events such as purchase, drydocking, reflagging, reclassing, modernization, outfitting, dock trial, sea trial, etc.

11) Can we use the expedited MSP processes and minimum requirement for MSP flagging?

Answer: Unknown. MARAD expects that a discussion with U.S. Coast Guard would be needed, but MARAD suggest that the expedited re-flagging process is a proven example that could be implemented.

12) What is the RO/RO capacity requirement?

Answer: Approximately 170,000 square feet of deck space is the objective.

The minimum threshold is 150,000 square feet. The deck strength is a minimum of 50,000 square feet of deck heavy-deck, rated greater than 450 pounds per square foot (psf) and greater than 11-feet of vertical clearance; and at least 50,000 square feet of medium-strength deck rated greater than 250 psf with a vertical clearance of 9.5-feet; and the remainder of the deck is at the minimum utility of 150 psf and a vertical clearance of 7.5-feet.

13) What kinds of operational flexibility are we looking at? Where will the ships be going (what are their destinations) in terms of draft, and will it affect ship sizes and/or planning? Will there need to be an ICE class of vessel?

Answer: Sealift ships operated for the Department of Defense are capable of operating globally and independently. The loaded draft should be no more than 38-feet. Sealift ships in Reduced Operating Status (ROS) are normally berthed at strategically-located, commercial berths on the U.S. Atlantic, Gulf, and Pacific coasts and can be quickly activated to Full Operating Status (FOS) in 5-days or less. There is no requirement for an ice-classed vessel.

14) Is there an in-stream discharge requirement?

Answer: There is not a requirement to conduct instream discharge at this time.

15) What are the vessel age limitations and vessel life determination?

Answer: There are no defined age limits for the procurement of any ship, however the cost to procure, modify, and maintain over a lifecycle that could reach an additional 35-years should be considered by the VAM before making a proposal.

16) Does reflagging need to be done in a US shipyard or can it be done abroad?

Answer: Navy documents and the NDAA language indicate that work will be conducted in U.S. shipyards.

17) How will this contract deal with the 50+ year lifespan of the ship in terms of technological upgrades and the rapid pace of equipment becoming obsolete?

Answer: Per Navy requirements, the lifecycle of the ship may be up to 35-years from delivery to the government. To select a vessel for procurement, the VAM will review all information and use best commercial practices to consider proposing a vessel for purchase. The VAM will provide services to the government including but not limited to development of a lifecycle plan, preventive maintenance plans, structural inspections, use of classification societies and other means to determine the business case for selecting a specific ship. The expertise of the VAM is the

18) What exactly are the May 24th deliverables?

Answer: Rough order magnitude costs to perform services across 6 functional areas. If the VAM will partner or engage in a joint venture to accomplish the objectives, the VAM will provide a copy of related agreements and describe how the joint venture would supervise or perform the necessary work to obtain sealift ships.

19) Are we talking 2019 costs for the RFI or future costs/ projections?

Answer: The earliest known opportunity for this procurement is Fiscal Year 2021, however legislation or action by the Department of Defense could potentially hasten the procurement to Fiscal Year 2020.

20) Can we focus on cost of vessel without adding any of the requirements?

Answer: Not for this RFI. The purpose of the RFI is to identify respondents capable of providing services and a rough order of magnitude for the costs to provide services across six functional areas listed in the RFI.

21) Is the delivery included in the vessel procurement costs?

Answer: Delivery of the ship, including any conditions, to an agreed upon location for reflagging and conversion will be agreed upon within the procurement contract.

22) Will it need a scrubber? Will it need to be EPA compliant?

Answer: MARAD will comply with the most current SOLAS, MARPOL, IMO, and U.S. requirements. If a vessel is not compliant, the VAM will identify the costs to make the vessel compliant and include in a business case analysis for the vessel to be considered for U.S. Government purchase.

23) Once the requirements from the Navy come in, should we consider in future requirements (future changes) into the vessel when technology changes or requirements change?

Answer: Operational requirements or requirements for modification that occur after contract award for the VAM will be reimbursed as in MARAD’s Ship Manager contract. Generally, they will be either Government Furnished Equipment (GFE) or will be commercially-procured by the VAM and installed as directed by MARAD. Specific reimbursement for these items will be addressed in any CLIN.

24) Are there prohibitive sources?

Answer: Currently, there are no prohibited sources, however the NDAA Fiscal Year 2019 includes an order of vessels that is to be considered.

25) Will the VAM have a section 2 requirement?

Answer: An option of this VAM RFI is to identify those respondents that could compete and be awarded options or CLINs for ship management functions.

26) What types of risk-sharing will the government consider during this contract? How will risk be shared?

Answer: MARAD will accept risk in conversion costs, modernization cost growth, and delivery timeline, because this procurement is for a used ship. MARAD will not accept risk to the cost or timeline in the purchase, reflagging process, or delivery to the initial shipyard.

27) What will the period of performance look like? How will labor costs be considered? Which shipyard will be utilized?

Answer: MARAD will not choose the shipyard for this effort. If selected as a VAM, the offeror will propose a vessel and include the projected cost, scope, timeline, and location for the planned reflagging, modernization, or conversion work.

28) Which types of contracts will the government consider?

Answer: MARAD may award indefinite delivery/ indefinite quantity (ID/IQ) and may award to multiple VAMs. The objective of the procurement is the best value to the government and will not be a Lowest Price/Technically Acceptable (LPTA) model.