Appendix F-Addendum to FAR 52.212-2.pdf

APPENDIX F

ADDENDUM TO FAR 52.212-2

EVALUATION FACTORS FOR AWARD

1.0. Source Selection (SS)

1.1. Basis for Contract Award

This acquisition will utilize Tradeoff Source Selection procedures, with technical proposals, to make an integrated assessment for a best value award decision. Award will be made to the

Offeror who is deemed responsible In Accordance With (IAW) the Federal Acquisition

Regulation (FAR) Part 9, as supplemented, whose proposal conforms to the solicitation’s requirements (to include all stated terms, conditions, representations, certifications, and all other information required by FAR 52.212-1 and its Addendum of this solicitation) and is judged, based on the evaluation factors, to represent the best value to the Government. This may result in an award to a higher rated, higher priced Offeror where the decision is consistent with the evaluation factors, and the Source Selection Authority (SSA) reasonably determines that the superior technical risk of the higher priced Offeror outweighs the price difference.

1.1.1. The SSA will base the source selection decision on an integrated assessment of proposals against all source selection criteria in the solicitation (described below). While the Government

Source Selection Evaluation Board (SSEB), Source Selection Advisory Council (SSAC), and the SSA will strive for maximum objectivity, the Source Selection process, by its nature, is subjective and, therefore, professional judgment is implicit throughout the entire process.

1.1.2. This source selection is conducted IAW FAR Part 15.3, Contracting by Negotiation, as supplemented by the Defense Federal Acquisition Regulation Supplement (DFARS), the Air

Force Federal Acquisition Regulation Supplement (AFFARS), the Department of Defense

(DOD) Source Selection Procedures 01 April 2016, and the Air Force (AF) Mandatory

Procedures 5315.3. These regulations are electronically available at AF FAR Site, http://farsite.hill.af.mil.

1.2. Number of Contracts to be Awarded:

The Government intends to select one contractor for this acquisition. However, the Government reserves the right not to award a contract at all, depending on the quality of the proposals and prices submitted and the availability of funds.

1.3. Competitive Range Determination

If discussions are conducted, the Government shall establish a competitive range comprised of the most highly rated proposals, IAW FAR 15.306(c). As part of the competitive range determination, the Government will consider the correction potential of any technical proposal, including any aspect evaluated as a deficiency, weakness, and/or significant weakness. The correction potential is based on the amount and/or complexity of the corrections needed to meet the Government requirements. During the evaluation process, multiple competitive range determinations may be made that eliminate Offerors from the competition IAW FAR

15.306(d)(5). The competitive range determination can be based on Factor 1 Technical, Factor 2 http://farsite.hill.af.mil/vffara.htm http://farsite.hill.af.mil/

As of 15 May 2020

Technical Risk, Factor 3 Price, or a combination of the three factors. A competitive range determination may eliminate Offerors based on their initial proposal evaluation results, after discussions (if necessary), prior to issuance of the Final Proposal Revision (FPR) request, or for efficiency IAW FAR 15.306(c)(2). If Offerors are excluded from the competitive range, they may request a debriefing IAW FAR 15.505.

1.4. Discussions

The Government intends to award without discussions, but reserves the right to conduct discussions if necessary. Therefore, it is imperative that the initial offer contain the Offeror’s best terms from a price and technical standpoint. However, if during the evaluation period it is determined to be in the best interest of the Government to hold discussions, the Government will determine if responses to Evaluation Notices (ENs) received during discussions will be considered formal proposal revisions, or if Offerors will be required to include EN responses in the FPR. The Request for FPR letter will include specific instructions on how Offerors will submit FPRs. The Government also reserves the right to request Draft FPRs during discussions.

1.5. Reviews and Visits

Site visits are not planned.

1.6. Solicitation Requirements (Terms and Conditions)

Offerors are required to meet all solicitation requirements, including all terms and conditions, representations, certifications, and instructions required by FAR 52.212-1 and its Addendum of this solicitation, Engine Procurement Specification (EPS), and Statement of Work (SOW) requirements, in addition to those identified below as factors and subfactors. Failure to comply with the requirements of the solicitation may result in the Offeror being ineligible for award.

Offerors must clearly identify any exception to the solicitation requirements and must provide complete supporting rationale. The Government reserves the right to determine any such exceptions unacceptable, and the proposal, therefore, ineligible for award.

2.0. Evaluation Factors

2.1. Evaluation Factors and Subfactors

2.1.1. Evaluation factors used to evaluate each proposal:

Award will be made to the Offeror proposing the combination of factors deemed most advantageous to the Government based upon an integrated assessment of the evaluation factors described below.

Factor 1: Technical

Subfactor 1: Evaluation Criteria

Subfactor 2: Performance Capability

Factor 2: Technical Risk

Factor 3: Price

2.1.2. Relative Importance of Factors and Subfactors:

Factor 2: Technical Risk is approximately equal to Factor 3: Price. In order to be considered for the best value tradeoff, a proposal must be determined to be technically acceptable under

Factor 1 Technical: Subfactor 1 Evaluation Criteria. Factor 3, Price, includes consideration of Factor 1 Technical: Subfactor 2 Performance Capability in the best value decision is limited to the decrement applied to the Offeror’s Total Proposed Price (TPP), resulting in a

Value Adjusted Total Evaluated Price (VATEP).

2.1.3. Evaluation Methodology:

The best value determination will be conducted in two phases.

Phase I: Factor 1 Technical: Subfactor 1 Evaluation Criteria will be evaluated on a pass/fail basis IAW paragraph 2.2.1 below. In order to be considered for award, a proposal must receive a rating of Acceptable under Factor 1: Subfactor 1.

The Government will also evaluate technical proposals for Factor 1 Technical: Subfactor 2

Performance Capability and will assign price decrements based on the criteria in paragraph

2.2.2 below. Offerors can receive best value credit for achieving performance capabilities related to the two elements identified in paragraph 2.2.2 below. The best value credit will be applied as a price decrement to the Offeror’s TPP, resulting in a VATEP. The VATEP will be used for evaluation purposes only.

Phase II: Factor 2: Technical Risk will be evaluated IAW paragraph 2.3 below. Price will be evaluated IAW paragraph 2.5 below. The Government will apply the price decrement calculated under Factor 1 Technical: Subfactor 2 Performance Capability, to the Offeror’s TPP, resulting in a VATEP. For all technically acceptable proposals, the SSA will make an integrated assessment of which Offeror provides the best overall value to the Government IAW paragraph 2.1.2 above.

See table below for visual depiction of the Best Value Tradeoff:

2.2. Factor 1 – Technical

The Technical evaluation will be based on each Offeror’s approach for meeting the technical requirements listed below. The evaluation focuses on the technical approach as described in each Offeror’s technical volume. The technical evaluation will not consider price.

2.2.1. Subfactor 1 Technical: Evaluation Criteria

Subfactor 1 will receive one of the ratings described below based on the criteria listed below.

A single deficiency within Subfactor 1 will result in an Unacceptable rating for the subfactor.

To be eligible for award, an Offeror must be rated Acceptable in Subfactor 1.

Rating Description

Acceptable Proposal meets the requirements of the solicitation.

Unacceptable Proposal does not meet the requirements of the solicitation.

The Government will assess the Offeror’s proposed approach for the requirements listed below. Offerors are required to present all the information as stated in the Instruction to

Offerors (ITO), Addendum to FAR 52.212-1. The subfactor minimum is met when the

Offeror’s proposal indicates an adequate understanding of the requirements, and provides convincing rationale how their approach will meet the requirements for all of the following:

a) Fuel Consumption: The approach must ensure the engine meets the fuel consumption performance as specified in EPS paragraphs 7.2.1.1.6 and 7.2.1.1.7 and

Table 7-2.

b) Combat Ceiling: The approach must ensure the engine meets the Military Rated

Thrust (MRT) minimum performance at 39,000 feet altitude as defined in SOW paragraph 1.2, Table 1-2: Combat Ceiling Mandatory Requirements.

c) Takeoff Rated Thrust: The approach must ensure the engine meets the minimum

Takeoff Rated Thrust performance as defined in SOW paragraph 1.2, Table 1-3:

Takeoff Rated Thrust Mandatory Requirements.

d) Power Generation: The approach must ensure the engine and its accessory gearbox meet the minimum power generation as specified in EPS paragraph 7.2.4.2.12.

e) Scheduled Engine Removal (SER): The approach must ensure the engine satisfies the

SER requirement as specified in EPS paragraph 16.4.2.

f) Unscheduled Engine Removal (UER) Rate: The approach must ensure the engine meets the minimum UER Rate as specified in EPS paragraph 16.4.3.

g) Integration: The approach must ensure the CERP modified engines will be successfully installed on the aircraft and will function IAW SOW paragraph 3.1.4.

h) Propulsion Military Type Certification (P-MTC): The approach must ensure the

Government will have sufficient data, documentation, and analysis to obtain the P-

MTC outlined in SOW paragraphs 1.2, 4.4.14, and 4.4.15.1.

i) Lifecycle Analysis: The approach must ensure lifecycle costs are minimized as described in SOW paragraph 3.1.3.

j) Letter of Intent: The Letter of Intent must ensure the Offeror’s ability to obtain from the aircraft integrator appropriate data and technical support.

k) Small Business Participation: The approach must be consistent with both FAR 52.219-9 and DFARS 252.219-7003 or 252.219-7004.

2.2.2. Subfactor 2 Technical: Performance Capability

The maximum requirements for the elements listed below will be evaluated as part of Subfactor 1.

With Subfactor 2, Offerors are afforded the opportunity to receive best value credit for the elements listed below, based upon achieving performance capabilities below the maximum requirements. The best value credit will be applied as a price decrement to the Offeror’s TPP, resulting in a VATEP, which will be used in the best value decision. Consideration of Subfactor 2 in the best value decision is limited to the decrement applied to the Offeror’s TPP. The VATEP is used for evaluation purposes only.

To receive a price decrement under Subfactor 2, Offerors must identify specific performance capabilities for each of the two elements below (Fuel Consumption and UER Rate), and provide sufficient supporting rationale describing how the performance capability will be achieved. The price decrement to be applied to each Offeror’s TPP will be the sum of the decrements earned for each of the two elements IAW the following criteria:

a) Fuel Consumption

The Offeror will receive a price decrement for demonstrating that its proposal will achieve fuel consumption performance below the maximum requirement for each performance mission specified in EPS paragraphs 7.2.1.1.6 and 7.2.1.1.7 and Table 7-2.

The price decrement earned will be calculated IAW the value of the pounds of total fuel used as follows:

Total Fuel Used (lbs.)

Price Decrement

133,543 $0

132,208 $9,475,357

130,872 $18,950,714

129,537 $28,426,071

128,201 $37,901, 428

126,866 $47,376,785

125,530 $56,852,142

124,195 $66,327,499

122,860 $75,802,856

121,524 $85,278,213

120,189 $94,753,570

118,853 $104,228,927

117,518 $113,704,284

116,182 $123,179,641

114,847 $132,654,998

113,512 $142,130,355

112,176 $151,605,712

110,841 $161,081,069

109,505 $170,556,426

108,170 $180,031,783

106,834 $189,507,140

105,499 $198,982,497

104,164 $208,457,854

102,828 $217,933,211

101,493 $227,408,568

100,157 $236,883,925

98,822 $246,359,282

97,486 $255,834,639

96,151 $265,309,996

94,816 $274,785,353

93,480 $284,260,710

92,145 $293,736,067

90,809 $303,211,424

89,474 $312,686,781

88,138 $322,162,138

86,803 $331,637,495

85,468 $341,112,852

84,132 $350,588,209

82,797 $360,063,566

81,461 $369,538,923

80,128 $379,014,280

For purposes of the price decrement calculation, the pounds of total fuel used will not be rounded (e.g., 130,872.1 will not be rounded to 130,872 fuel lbs.). Any amount falling between two values will receive the decrement assigned to the higher of the two values (i.e., the lower decrement dollar value). For example, if the total fuel used is

130,872.1 lbs., which falls between 130,872 lbs. and 132,208 lbs., the Offeror will receive a price decrement of $9,475,357 (the amount assigned to 132,208 lbs.). The maximum price decrement for this element is $379,014,280, based on achieving 80,128 lbs. or less of total fuel used. Any fuel consumption below this level will not receive any additional price reduction.

b) Unscheduled Engine Removal (UER) Rate

The Offeror will receive a price decrement for demonstrating that its proposal will achieve below the maximum UER Rate as specified in the EPS paragraph 16.4.3. The price decrement earned will be calculated IAW the value of the UER rate as follows:

UER/1000 EFH Price Decrement

0.260 $0

0.100 $10,000,000

0.050 $25,000,000

0.045 $35,000,000

0.040 $45,000,000

0.035 $55,000,000

0.030 $65,000,000

0.025 $75,000,000

0.020 $85,000,000

0.015 $95,000,000

0.010 $105,000,000

0.005 $115,000,000

0.000 $125,000,000

For purposes of the price decrement calculation, UER rates will not be rounded (e.g., .0401 will not be rounded to .040). In cases where the UER rate falls between two rates listed above, the Offeror will receive the decrement assigned to the higher of the two rates (i.e., the lower decrement dollar value). For example, .0401 UER will receive a decrement of $35,000,000 (the amount assigned to the UER rate of .045). The maximum price reduction for this element is $125,000,000, based on achieving zero

UERs per 1,000 EFH calendar year through 2050.

2.3. Factor 2 – Technical Risk:

The Technical Risk evaluation assesses the degree to which the Offeror’s technical approach under Factor 1 Technical: Subfactor 1 may cause disruption of schedule, degradation of performance, the need for increased Government oversight, or increased likelihood of unsuccessful contract performance. Technical Risk is manifested by the identification of weaknesses or significant weaknesses. The Technical Risk evaluation does not consider the

Offeror’s proposed price. For the Technical Risk evaluation, the Government will utilize the data, information, and approach in the Volume I Technical Proposal submitted by the Offeror as well as the OTA Reports. The Government will review and analyze the Offeror’s approach and OTA

Reports and apply professional judgment in determining whether the approach includes weaknesses and/or significant weaknesses in relation to Subfactors 1 and 2.

The Technical Risk evaluation will include requirements under Factor 1 Technical: Subfactor

1a/2a, 1b, 1c, 1d, 1e, 1f/2b, 1g, 1h, and 1i (as set forth in paragraphs 2.2.1 and 2.2.2). A single risk rating will be assigned for the nine requirements combined. The requirements under Factor 1

Technical: Subfactor 1j and 1k will not be evaluated for technical risk. The risk rating considers the risk associated with the technical approach in meeting the requirement. For any weakness or significant weakness identified, the evaluation will consider the probability of whether the weakness/significant weakness will occur, and the impact to the program if the weakness/significant weakness were to occur.

The definitions of Weakness and Significant Weakness IAW the FAR 15.001 and DoD

Mandatory Source Selection Procedures are outlined below:

Weakness means a flaw in the proposal that increases the risk of unsuccessful contract performance.

Significant Weakness in the proposal is a flaw that appreciably increases the risk of unsuccessful contract performance.

The Offeror’s risk assessment provided IAW Addendum 52.212-1 paragraph 3.3, Factor 2 –

Technical Risk will be evaluated by the Government. The evaluation will also consider risk mitigations proposed by the Offeror, and whether the mitigation approach is manageable. The

Government will also evaluate the Offeror’s proposal to determine if there is any risk, which was not identified by the Offeror. The Government is not bound by the Offeror’s proposed risk rating.

NOTE 1: For Subfactor 1b, 1c, and 1h, the Offeror was instructed in Addendum to FAR 52.212-

1, Instructions to Offerors, paragraph 3.2.3h, to identify differences or gaps between the requirements in the EPS and the existing certified limits and capabilities of the proposed engine.

The Offeror was also instructed to provide a risk assessment for each identified difference or gap.

As part of the determination for weaknesses and significant weaknesses, the Government will consider the number of gaps and/or the impacts the gaps have on engine performance in relation to the EPS requirements. The Government will consider the gaps as a group in deciding a weakness or significant weakness.

NOTE 2: Addendum to FAR 52.212-1, paragraph 3.2.3 instructed the Offeror to provide the

OTA Reports with its proposal. The Government will utilize the OTA Reports and any related

Offeror-proposed mitigations or changes to the proposed approach as part of its evaluation in determining weaknesses and/or significant weaknesses.

Each proposal will receive one of the risk ratings described below. To be eligible for award, an

Offeror must receive a Low or Moderate Technical Risk rating. For the best value determination, tradeoff considerations for Technical Risk will be based on any identified weaknesses and/or significant weaknesses in each Offeror’s approach. The source selection evaluation team will specifically consider the probabilities of whether the weakness(es)/significant weakness(es) will occur and the impacts to the program if the weakness(es)/significant weakness(es) were to occur.

Rating Description – Technical Risk

Low

Proposal may contain weakness(es) which have little potential to cause disruption of schedule, increased cost or degradation of performance. Normal contractor effort and normal Government monitoring will likely be able to overcome any difficulties.

Moderate

Proposal contains a significant weakness or combination of weaknesses which may potentially cause disruption of schedule, increased cost or degradation of performance. Special contractor emphasis and close Government monitoring will likely be able to overcome difficulties.

High

Proposal contains a significant weakness or combination of weaknesses which is likely to cause significant disruption of schedule, increased cost or degradation of performance. Is unlikely to overcome any difficulties, even with special contractor emphasis and close

Government monitoring.

Unacceptable

Proposal contains a material failure or a combination of significant weaknesses that increases the risk of unsuccessful performance to an unacceptable level.

2.4. Reserved.

2.5. Factor 3 – Price

Price proposals will be evaluated for (1) price reasonableness (including completeness), (2) unbalanced pricing, (3) price realism, and (4) TPP. Offerors whose price is determined to be incomplete, unreasonable, or unrealistic will not be considered for award. Additionally, an Offeror’s price may be rejected, if it contains unbalanced pricing to the extent it poses an unacceptable risk to the Government.

The Government shall evaluate the TPP of all Offerors, including option prices. The TPP will be calculated IAW the Calculation Methodology worksheet in the Pricing Matrix (Appendix D).

For purposes of the best value determination, the Offeror’s proposed TPP will be adjusted to the

VATEP IAW the methodology described in Addendum to 52.212-2, paragraph 2.2.2, Subfactor

2 Technical: Performance Capability. The VATEP will be used for evaluation purposes only.

NOTE: Evaluation of options or extensions does not obligate the Government to exercise such options or extensions.

2.5.1. Price Reasonableness

The proposed prices will be evaluated for reasonableness. Analysis of price proposals will be performed using one or more of the techniques defined in FAR 15.404-1(b)(2) in order to determine price reasonableness. Reasonableness must represent a price to the Government a prudent person would pay in the conduct of competitive business. Normally, price reasonableness is established through adequate price competition, but may also be determined through price analysis techniques as described in FAR 15.404-1(b)(2). To evaluate completeness, the Government will confirm all unit prices and rates in the Pricing Matrix

(Appendix D), columns E–U, have a dollar amount or rate proposed, as applicable. Offerors shall provide rationale if any proposed unit price or rate is entered as zero in the Pricing

Matrix (Appendix D).

2.5.2. Unbalanced pricing

Offerors’ proposals will be reviewed for unbalanced pricing. The Government will evaluate any supporting information provided by the Offeror explaining variances that appear unbalanced.

Evaluated offers that are determined to be unbalanced may be deemed ineligible for award by the Contracting Officer (CO) if a determination is made that lack of balance poses an unacceptable risk to the Government. Unbalanced pricing exists when, despite an acceptable total price, the price of one or more line items is significantly over or understated, as demonstrated by application of price analysis techniques, such that:

a) There is reasonable doubt the offer would result in the lowest overall cost to the

Government even though it is the lowest priced Offeror; or

b) The offer is so grossly unbalanced; its acceptance would be tantamount to allowing an advanced payment.

2.5.3. Price Realism

Proposed prices will be evaluated for price realism. To be realistic, the proposed price must demonstrate an adequate understanding of and consistency with the requirement, and must ensure the price does not pose an unacceptable risk to performance. To evaluate price realism, the Government intends to use one or more of the price analysis techniques and considerations described in FAR 15.404-1(b)(2). The Government may also use other evaluation techniques, as needed.

2.5.4. Data Other than Certified Pricing Data

If requested by the CO, data other than certified pricing data may be evaluated to support a determination of reasonable, realistic, and balanced pricing. This information will only be requested if all other sources have been insufficient to support a determination of reasonable, realistic, and balanced pricing.

2.5.5. Rounding

If any pricing proposal deviates from the format described in Appendix E (-1), Instructions to Offerors, paragraph 5.2.5, the Government will apply the specified format to determine the extended pricing and TPP. Compliance with instructions regarding rounding will be verified during evaluation. NOTE: The Pricing Matrix (Appendix D) includes a rounding formula when calculating the extended totals to automatically round the proposed unit prices to the correct format. Unit prices rounded to the nearest whole dollar will round up if equal to or greater than 0.5 and round down if less than 0.5 (i.e. $11,253.50 is rounded to

$11,254). This methodology applies to labor rates rounded to the nearest cent (i.e. $55.493 is rounded to $55.49) and percentages, rounded to 4 places to the right of the decimal

(8.952% is rounded to 8.95% and entered into the pricing matrix as 1.0895).

2.5.6. Total Proposed Price (TPP)/Value Adjusted Total Evaluated Price (VATEP):

Pricing proposals will be reviewed for compliance with Addendum to 52.212-1 paragraph 5.0.

The TPP calculation methodology is detailed in the Pricing Matrix (Appendix D). The Offeror’s proposed TPP will be adjusted to the VATEP IAW the methodology described in Addendum to

52.212-2, paragraph 2.2.2. The VATEP will be used for evaluation purposes only.

2.5.7. Estimating Techniques and Past Experience

The Government will review the basis of estimate on which proposed pricing was established.

The relevance and application of the Offeror’s price estimates based on past experience will be reviewed by the Government. The Government reserves the right to obtain information from the

Contract Business Analysis Repository as considered necessary.

2.5.8. Proposed Price Reduction per Corporate Management Decision

The Government will review the Offerors’ explanation of any reduction in proposed pricing as a corporate or management decision. The Offeror’s explanation of how any reduction will not affect contractor responsibility or put the Government at an unacceptable performance risk will also be reviewed.

2.5.9. Price Assumptions Used in Development of Proposed Pricing

The Government will review information provided in the Price Volume regarding all price assumptions, limitations, and/or qualifications utilized in the development of proposed pricing.

Such information will be used to understand the Offerors’ proposed pricing basis of estimate.

Additionally, these assumptions help provide support for the Government’s determination of price reasonableness, balanced pricing, and price realism.

2.5.10. Labor, OEM Material Handling, Subcontractor Material Handling, Travel G&A, and Transportation/Miscellaneous Shipping Rates

The Government will review the Price Volume to ensure the Offeror has indicated their understanding that proposed ceiling rates will apply to all out-years despite what current actuals are running at the time.

2.5.11. Government Field Support Agencies

The Government will review and confirm submission of the cognizant Defense Contract

Audit Agency (DCAA) and Defense Contract Management Agency (DCMA) offices responsible for administration of the Offeror’s Government contracts.

2.5.12. Other Documentation

In reviewing proposed prices, all additional information from the Price Volume will also be considered. Offerors may provide any additional data, other than certified cost or pricing data, as believed necessary to support, justify, or clarify their proposed pricing. All pricing information provided in response to the solicitation may be reviewed and considered, if the Government determines the information will contribute to the evaluation of price reasonableness, balanced pricing, and price realism.

2.5.13. Pricing Matrix

The Government will confirm the Pricing Matrix (Appendix D) was completed and utilize it to evaluate Offeror’s TPP.