Attachment 1- HARCD SOW.pdf

Source Selection Information – See FAR 2.101 and 3.104

Statement of Work

Hardware Acquisition Recompete Customer Direct (HARC)

In Support of All U.S. Military, Foreign Military, and Non-Military Customers

TABLE OF CONTENTS

1.0 INTRODUCTION AND SCOPE

1.1 Contract Type, Term, and Administration

1.2 Contractor Responsibilities

1.3 Government Responsibilities

2.0 TRANSITION & OPERATIONAL CAPABILITY

2.1 Post Award Conference

2.2 Initial Operational Capability

2.3 Full Operational Capability

3.0 SYSTEM INTERFACE & INTEGRATION

3.1 DIBBS

3.2 ANSI X12

3.3 EDI

3.3.1 EDI Transactions

3.3.2 Order Processing and Invoicing

3.3.3 iRAPT

3.3.4 Vendor Managed Inventory (VMI) EDI Requirements

3.4 Multiple Contract Numbers

3.5 Supplies and Services

3.6 Modifications

4.0 TECHNICAL REQUIREMENTS

4.1 Items Descriptions

4.1.1 Warranty

4.1.2 Obsolescence Management

4.1.3 Configuration Control

4.2 Quality Management

4.3 Origin Inspection

4.4 Forecasting & Inventory Management

4.5 Distribution & Transportation

4.5.1 FMS Orders

4.6 Delivery Requirements

4.6.1 Customer Direct Fill Rate

4.6.2 Fill Rate Metric

4.6.3 Backorders

4.6.4 Material Returns

4.6.5 Disposals

4.6.6 Product Quality & Supply Deficiencies

4.6.7 Quality Metric

4.6.8 Packaging/Marking Requirements

4.6.9 Surge and Sustainment

4.6.10 Cyber Security Requirement

5.0 ADDITION OF ITEMS

6.0 DELETION OF ITEMS

7.0 BUYBACKS

8.0 PROGRAM MANAGEMENT REVIEWS

9.0 REPORTING REQUIREMENTS

10.0 VENDOR MANAGED INVENTORY

11.0 END OF CONTRACT SUPPORT

12.0 CONTRACT EXPIRATION

1.0 INTRODUCTION AND SCOPE

This Statement of Work (SOW) defines the scope of effort required to provide performance-based customer direct (CD) material and logistics support for a subset of Industrial Hardware in the Federal Supply Classes (FSCs) as shown below and in Attachment #1 (Schedule of Supplies). These items were selected for inclusion in this solicitation because they represent the highest volume demand and most frequently ordered items in the Hardware FSCs.

FSC 5301 | Historical FSC FSC 5305 | Screws FSC 5306 | Bolts FSC 5307 | Studs FSC 5310 | Nuts and Washers FSC 5315 | Nails, Machine Keys, and Pins FSC 5320 | Rivets FSC 5325 | Fastening Devices FSC 5330 | Packing and Gasket Materials FSC 5331 | O-Ring FSC 5335 | Metal Screening FSC 5341 | Brackets FSC 5342 | Hardware, Weapon System FSC 5345 | Disks and Stones, Abrasive FSC 5346 | Historical FSC FSC 5350 | Abrasive Materials FSC 5355 | Knobs and Pointers FSC 5360 | Coil, Flat, Leaf, and Wire Springs FSC 5361 | Historical FSC FSC 5365 | Bushings, Rings, Shims, and Spacers FSC 5390 | Historical FSC FSC 5395 | Historical FSC

1.1 CONTRACT TYPE

The resultant contract between Defense Logistics Agency (DLA) (or “Government”) and the Contractor shall be an Indefinite Delivery Indefinite Quantity Commercial Fixed Price Contract with Economic Price Adjustment. The contract has a potential ten-year duration.

The options will be exercised pursuant to FAR clause 52.217-9, “Option to Extend the Term of the Contract.” Pursuant to FAR Clause 52.216-22, “Indefinite Quantity,” the Guaranteed Minimum (FM) for the total contract will be $1,000.00.

1.2 CONTRACTOR RESPONSIBILITIES

1.2.1 The Contractor shall be responsible for supplying the identified Industrial Hardware National Stock Numbers (NSNs) that meet the criteria in section 5.0. The Contractor will be responsible for supporting all Defense Logistics Agency (DLA) customers through customer direct shipments to Continental US (CONUS), Outside Continental US (OCONUS), and the replenishment of Forward Stocking Locations (FSL) through DLA direct shipments. DLA’s customers include the Department of

Defense (DoD), other civilian agencies, and Foreign Military Sales (FMS). The Contractor shall be responsible for an adequate supply chain infrastructure (to include personnel, processes, facilities, and program-level managerial structure) in place to support the requirements of the solicitation.

1.2.2 The Contractor shall perform comprehensive supply chain management of Industrial Hardware to include but not limited to the following:

• Procurement of materials

• Planning & Forecasting

• Order Processing & Fulfillment

• Procurement & Purchasing

• Inventory Management

• Quality Control

• Storage, Packaging, Transportation & Distribution

• Obsolescence Management

• Data Management & Delivery

• Customer Support Services

• Material Returns

• Managing excess government stock and vendor managed inventory

(VMI) depletion

1.2.3 The Contractor shall also be responsible for the following:

• A quality plan that ensures its internal processes and procedures provide accurate information and data to the Government.

• Handling customer returns associated with Product Quality Deficiency Reports (PQDR) and Supply Discrepancy Reports (SDR) for the NSNs listed in Attachment 1.

• Maintain a single point of contact to interface with the Government’s Program Manager to ensure timely resolution of business and technical problems, and timely implementation of corrective action.

• The Contractor will not knowingly procure and supply counterfeit products or materiel. The Contractor shall take the necessary actions to mitigate counterfeit occurrences. If counterfeit products or material are found, the Contractor shall investigate and report incidents to the Government Industry Data Exchange Program (GIDEP) system. The Contractor shall provide similar guidance to sub- vendors and sub- Contractors to ensure supply chain integrity.

• The integration of manpower, facilities, and a supply chain necessary for a program of this magnitude.

1.2.4 The Contractor shall establish at a minimum a toll-free number and web site link that DLA may use to query the status of requisitions. The Contractor shall have an action plan for addressing customer complaints. Vendor shall maintain a website that is capable of facilitating two-way communications between DLA and the Contractor on the status of orders.

1.3 GOVERNMENT RESPONSIBILITIES

The Government will be responsible for the following:

1.3.1 Provide DLA Customer Account Specialist (CAS) Point of Contacts (POC) to coordinate communications with customers (who have assigned CASs) and provide assistance with Contractor access to customer locations.

1.3.2 Maintain responsibility for technical and quality matters, such as furnishing all drawings and bid sets, alternate source approvals, approval of surplus material, issuance of Quality Assurance Letters of Instruction, processing of Product Quality Deficiency Reports (PQDRs) and Supply Discrepancy Reports (SDRs), approval of waivers and deviations, creating new NSNs, maintaining and providing access to the Qualified Supplier List (QSL), and Procurement Item Descriptions (PID) updates.

1.3.3 Make Economic Price Adjustments (EPA).

1.3.4 Provide Contractor access to Government systems, such as, but not limited to webSDR.

1.3.5 Provide the following reports:

1.3.5.1 Demand history to be used for demand planning

1.3.5.2 On hand inventory levels

1.3.5.3 Material movement between DLA stock locations

1.3.5.4 On order/due in positions

2.0 TRANSITION & OPERATIONAL CAPABILITY

Transition must be synchronized among the Contractor, DLA Distribution, and DLA Aviation to ensure that customer requirements remain satisfied during the transfer with little or no disruption in customer support, in accordance with the approved transition plan.

2.1 POST AWARD CONFERENCE

The KO, in conjunction with the cognizant Administrative Contracting Officer (ACO), may require a post-award conference in accordance with FAR 42.503, Postaward conferences. If a conference is deemed necessary, it will be conducted within thirty (30) days of contract award. The Contractor shall be responsible for ensuring that all critical subcontractors participate in the conference. The date, time, and location of the conference will be mutually agreed upon by the KO, ACO, and the Contractor. The Contractor shall develop and submit its GAP analysis report as part of its proposal (GAP analysis report is excluded from page count and can be included as an appendix to Volume II).

Once the plan is approved by DLA, the plan will be incorporated into the contract and the Contractor shall manage the transition in accordance with its approved plan.

2.2 INITIAL OPERATIONAL CAPABILITY (IOC)

At least 30 days prior to receiving orders for supplies, the Contractor shall

• be capable of receiving and processing orders (manual and Electronic Data Interchange)

• capable of submitting invoices

• have a website with download capability that provides status of orders and inventory positions.

2.3 FULL OPERATIONAL CAPABILITY (FOC)

The Contractor shall have completed transition within six (6) months after contract award or earlier if the Contractor assumes responsibility for individual products during transition. The Contractor shall assume responsibility for all NSNs in the listing of Schedule of Supplies (Attachment 1) within the timeframes specified in its Transition Plan. In the event the Contractor does not meet the milestones negotiated and/or cannot become fully operational within the Transition period, the contract may be terminated under FAR 52.212-4.

3.0 SYSTEM INTERFACE & INTEGRATION

The Contractor shall maintain a Management Information System (MIS) for reports, information flow, connectivity with existing and emerging Government information systems, Contractor network management, subcontractor management, and Surge & Sustainment requirements, and invoicing. The MIS shall include, at the minimum, a delivery order tracking system and a stock position monitoring system.

3.1 DIBBS. Delivery orders will be available through the DLA Internet Bid Board System

(DIBBS) which requires that the Contractor possess Internet capability to receive email notification that an order is available on the website, https://www.dibbs.bsm.dla.mil.

3.2 ANSI X12. The American National Standards Institute (ANSI) X12 Standard will be utilized for formatting the EDI transactions. Information regarding EDI, ANSI X12 transactions, and Defense Automated Addressing System (DAAS) approved Value Added Networks (VANs) can be obtained from the DAAS web site by going to https://www.daas.dla.mil/daashome/homepage.asp.

3.3 EDI. The specific EDI transactions that will be exchanged between the Contractor and DLA for this effort are:

• EDI 850 Delivery Order

• EDI 997 Functional Acknowledgement of Delivery Order

• EDI 856 Ship Notice/Manifest Transaction Set

3.3.1 Delivery orders will be issued via the 850 EDI transaction. The functional acknowledgement (997 EDI transaction) will constitute the Contractor’s receipt of the delivery order. The shipment notice (856 EDI transaction) will constitute the date of shipment.

3.3.2 As the data sharing and communication processes are further defined during contract implementation, the EDI transactions required as listed above may be modified or supplemented through mutual agreement of the parties via bilateral contract modification. Subject to mutual https://www.dibbs.bsm.dla.mil/ https://www.daas.dla.mil/daashome/homepage.asp agreement, the Contractor shall use (or upgrade to) the latest EDI transactions as they become available.

3.3.3 iRAPT. Invoicing, Receipt, Acceptance, and Property Transfer (iRAPT), formerly Wide Area Workflow (WAWF), is a secure web-based system for electronic invoicing, receipt and acceptance. Access https://wawf.eb.mil/ for additional information on getting setup in I RAPT/WAWF. Additionally, the Contractor shall have an account in the Systems for Award Management (SAM) at https://www.sam.gov in order to register in WAWF at https://wawf.eb.mil/.

3.3.4 The contract may specify the following VMI EDI requirements where VMI is applicable:

VMI Transactions:

• EDI 945A ‐ Shipment Confirmation into SAP

• EDI 947I ‐ Inventory Adjustment or change in Condition code

• EDI 527R ‐ Receipt due‐in confirmation into SAP

• EDI 945A ‐ DSS denial into SAP

• EDI 511R ‐ Customer requisition, passing order, or redistribution order into SAP

• EDI 940R ‐ MRO/DRO/RDO or follow‐up from MRO/DRO/RDO out from SAP

• EDI 869A ‐ Customer follow‐up out from SAP

• EDI 945A ‐ DSS Current status of customer requisition into SAP

• EDI 846P ‐ Request for Physical Inventory Count out from SAP

• EDI 945A ‐ Response to MRO/DRO/ cancellation into SAP

• EDI 869C; 940R ‐ Cancellation Request out from SAP

• EDI 527D ‐ Due‐in to storage site out from SAP

• EDI 846R‐ DZH/DZN Location Reconciliation Request

• EDI 846R; 527R – DZK Transaction History Transmittal

• EDI 846P ‐ Request for Inventory

• EDI 846R ‐ History Transaction

VMI Order Fulfillment Features:

• OF‐INT‐0011 (945A) – Shipment confirmation into SAP

• OF‐ INT‐0039 (947I) – Inventory adjustments/change in condition code

• OF‐ INT‐0049 (527R) – Receipt due‐in confirmation into SAP

• OF‐ INT‐0051 (945A) – DSS denial into SAP

• OF‐ INT‐0055 (511R) – Customer requisition, passing order, or redistribution order into SAP

• OF‐INT‐0056 (940R) ‐ MRO/DRO/RDO or follow‐up out from

SAP

https://wawf.eb.mil/

• OF‐INT‐0060 (869A) – Customer follow‐up for MRO/DRO/RDO out from SAP

• OF‐INT‐0061 (945A) – DSS current status of customer requisition into SAP

• OF‐INT‐0071 (846P) – Request for Physical Inventory Count out from SAP

• OF‐INT‐0091 (945A) – Response to MRO/DRO/cancellation into

SAP

• OF‐INT‐0092 (869C; 940R) – Cancellation request out from SAP

• OF‐INT‐0106 (527D) – Due‐in to storage site out from SAP

• OF‐INT‐0167 (511R) – Post Issue

• OF‐INT‐5105 (846R; 527R) – (IRM) Transaction history transmittal DZH/DZN

• OF‐INT‐5107 (846P) – Request for inventory

• OF‐INT‐5108 (846R) – History transaction

3.4 Multiple Contract Numbers: Due to the extraordinary volume of delivery orders under this contract, the listing of available supplementary procurement instrument identification numbers (PIIN) for delivery orders is expected to be exhausted. To prevent duplication of supplementary PIINs, it will be necessary to create multiple additional basic PIINs for this contract.

3.5 Supplies and services already acquired under the initial contract number shall remain solely under this contract number for purposes of Government inspection, acceptance, payment, and closeout. All delivery orders, beginning after a date to be specified by the KO during the period of performance, will be accomplished under the new contract number. All new material that is to be placed on order following the specified date shall be labeled with the new contract number. Issuance of a new contract number may occur multiple times over the course of the contract.

3.6 Modifications to the basic contract will be issued against the original contract number.

4.0 TECHNICAL REQUIREMENTS

4.1 ITEM DESCRIPTIONS

All materials delivered under this contract shall be provided in strict compliance with the applicable Procurement Identification Description (PID) requirements. Compliance includes conformance to all standards for testing, inspection, packaging, repacking, marking, etc. The Contractor is responsible for notifying the Government if the part number or technical data (including specification and drawing revisions) are different from the information cited in the PID (Attachment 2). Until the Government has approved such a change, the Contractor shall provide the product in accordance with the PID.

The Contractor shall receive Government approval prior to ordering material from sources other than those approved in the PID, on a source-controlled drawing, or in a qualified products list.

Contract Data Requirements List (CDRLs), DD Form 1423 may apply to this procurement.

CDRLs are used to delineate any requirement for data which must be provided by the Contractor as deliverable items. This can include, but is not limited to, Pre-production Test Reports, special process demonstration reports, etc.

If a CDRL applies, it will be stated in PID Text/Item Description as a Quality Assurance Provision (QAP) with CDRL in the description. CDRL documents are posted to cFolders (https://pcf1x.bsm.dla.mil/cfolders/).

4.1.1 Warranty. The Contractor shall provide an adequate commercial warranty that is consistent for all items. The warranty must outline all warranty provisions and must ensure overseas shipments are covered until supplies are received at their final destination. The Contractor should have a return/exchange program for incorrect or defective components.

4.1.2 Obsolescence Management. The Contractor shall have an obsolescence management program to manage the loss, or impending loss, of manufacturers or Contractors. The program shall include notifying the Government with information regarding any known obsolescence issues and assisting the Government in establishing obsolescence solutions.

4.1.3 Configuration Control. The Contractor will ensure Configuration

Control is maintained in accordance with the PID requirements. Any process deviations and/or waivers shall be coordinated with the Contracting Officer (KO) for approval.

4.2 QUALITY MANAGEMENT

The Contractor shall manage quality to ensure all material is delivered on time and meets required technical specifications. In addition, the Contractor and/or its subcontractors shall maintain a Quality System that meets the elements of ISO 9001-ANSI/ASQC Q9001, quality system model for Quality Assurance in Design and Development, Production, Installation, and Servicing.

The Contractor’s Quality System must be approved by an ISO 9001 International Registrar. The Government reserves the right to assess compliance with this requirement, and quality system procedures, planning, and all other documentation, media, and data which comprise the quality system shall be made available to the Government for its review and use. The Government reserves the right to disapprove the quality system or portions thereof when it fails to meet its intended objectives.

4.3 ORIGIN INSPECTION

Defense Contract Management Agency (DCMA) source inspection at the Government’s approved source’s location and Contractor’s distribution facility is required for all FMS orders. It will be the Contractor’s responsibility to contact DCMA to schedule inspection.

https://pcf1x.bsm.dla.mil/cfolders/

4.4 FORECASTING & INVENTORY MANAGEMENT

The Contractor shall be responsible for forecasting and inventory management of all products (Attachment 1), to include any items added after contract award, to meet the Government-established delivery requirements.

4.5 DISTRIBUTION & TRANSPORTATION

The Contractor shall be responsible for all shipments of materials from its facility to the customer within CONUS; to the customer or designated Container Consolidation Points (CCPs) or Point-of-Embarkation (POEs) for OCONUS; or to freight forwarders for FMS orders. The Contractor shall also be responsible for transporting customer material returns and discrepant orders from both CONUS and OCONUS customer sites to the Contractor’s facility. The Contractor is responsible for identifying and correcting misdirected shipments.

Vendor Shipping Module (VSM): The Contractor shall establish a VSM profile. To create a profile, contact the DLA Distribution (1-800-456-5507) which will assign a unique User Name and Password to access the website at https://vsm.distribution.dla.mil/net. The Military Shipping Label (MSL) and carrier information/shipping instructions should be available in VSM within 24 hours of initial shipment registry. The carriers chosen by the Government will be responsible for shipping from the CCP, POE or Freight Forwarder point to the OCONUS customer destination.

4.5.1 FMS ORDERS

Upon receipt of a FMS order, the Contractor shall request shipping instructions by utilizing the Shipping Information Request (SIR) application, available through DCMA’s website: https://www.DCMA.mil.

SIR submittals will not include additional shipping documentation, i.e., Wide Area Workflow (WAWF), DD1348, DD1149, DD250. Once shipping instructions are received from SIR, the inspection process will start (scheduling, acceptance, shipping documentation, WAWF entry).

The cost of any transportation furnished but not used due to a Contractor issue will be charged to the Contractor.

4.6 DELIVERY REQUIREMENTS

The Contractor shall provide uninterrupted performance to the customer and have the ability to expeditiously respond to and meet both planned and unplanned variability in customer demand.

4.6.1 CUSTOMER DIRECT FILL RATE

Delivery performance will be measured by the Customer Direct Fill Rate (CDFR). The CCDFR is based on the Time Definite Delivery (TDD) standards. CDFR starts with the order receipt date and ends with the ship date rather than delivery receipt date. The Contractor is required to meet a 90% CDFR for all items except Nuclear Reactor Program (NRP) items which must meet a fill rate of 95%.

https://vsm.distribution.dla.mil/net https://www.dcma.mil/

CUSTOMER DIRECT FILL

RATE MEASUREMENTS

CONUS and

OCONUS Shipment to CCPs/POE

Delivery Order Category (CAT)

Codes

Priority 01

CAT 1 (High Priority) 2 Day

Priority 04

CAT 2 3 Day

Priority 09

CAT 3 4 Days

Although performance tracking will start upon the issuance of the first delivery order, the CDFR will assess performance over a 12-month performance period. The first performance period will start at FOC and will continue through contract expiration.

The Contractor is required to meet the TDD Standards outlined in the SOW however, the CDFR will be measured based on ship date rather than delivery receipt date. Monthly CFDRs will be computed to assess Contractor performance and identify problems as they occur. The CDFR percentage is calculated by taking the total number of orders shipped complete within the designated timeframe, divided by the total number of orders received during that same timeframe. A completed shipment is defined as the item(s) transferring possession from the vendor to the shipping courier. Both the monthly and annual performance CDFR percentage will be computed using this calculation and rounded to the nearest tenth.

CDFR% = (TRS/TRR) * 100

TRS = Total Orders Shipped complete within the designated measurement timeframe.

TRR = Total Orders Received in the designated measurement timeframe.

4.6.1.1 CUSTOMER DIRECT FILL RATE EXCEPTIONS

The following CDFR exceptions listed below apply and will be excluded from the calculation of the CDFR metric:

• Newly added NSNs (excluded until one full PLT has passed)

• Government Source Inspection delivery orders

• Cancelled delivery orders

• Excusable delays; see clause 52.249-14, Excusable

Delays

4.6.2 CUSTOMER DIRECT FILL RATE METRIC

The following Customer Direct Fill Rate charts illustrate, nominally, the incentives and disincentives.

Performance Period 1: (Completion of Transition Period thru contract completion) CDFR Incentive/Disincentive 100% 5.5%

99% - 99.9% 5.0% 98% - 98.9% 4.4% 97% - 97.9% 3.7% 96% - 96.9% 2.8% 95% - 95.9% 2.1% 94% - 94.9% 1.6%

93.1% - 93.9% 1.2% 90% - 93% 0

88% - 89.9% -3% 85.1% - 87.9% -5% 85% or less -10%

Performance Period 1: (Completion of Transition Period thru contract completion)

CDFR NRP Items Incentive/Disincentive 95% or greater 0 93% - 94.9% -3%

90.1% - 92.9% -5% 90% or less -10%

The disincentive will be calculated based on the total value of all delivery order(s) not shipped complete in accordance with the defined fill-rate standards for each defined 12-month performance period. Backorders will be included in the disincentive calculation. The incentive/disincentive amount will be added/deducted in a lump sum to/from the management charge paid in the period(s) immediately following the 12-month performance period.

NSNs added after contract award will be granted a full Production Lead Time (PLT) based on Government system data prior to being subject to the CDFR metric. All delivery orders received within the initial PLT will not be subject to the metric.

The Contracting Officer will provide a monthly metric report to the Contractor within fourteen (14) calendar days from the end of the preceding month. The Contractor will have fourteen (14) calendar days to challenge individual delivery orders or the calculations for the metrics in writing to the Contracting Officer.

The challenge shall include rationale and any supporting evidence. The

Contracting Officer will approve/disapprove the challenge request within 14 calendar days after receipt. If the Contractor does not submit a timely challenge, then no adjustment will be made to the monthly metric.

4.6.3 BACKORDERS

A backorder is any order that is not shipped complete in accordance with the established fill rate. Backordered delivery orders will be included in the Delivery Disincentive.

4.6.4 MATERIAL RETURNS

The Government does not authorize material returns outside of the PQDR/SDR process (See 4.6.6 of the SOW). If the Contractor chooses to provide a material return service, the Contractor shall be responsible for picking up material returns at customer sites (both CONUS and OCONUS) and shipping these assets to the Contractor’s facility. The Contractor shall indemnify the Government from any and all liability relating to materials returns, and any other related or similar federal, state, local, and foreign country laws and regulations. All Government markings/labels will be removed before the Contractor can recycle or sell material outside this contract.

4.6.5 DISPOSALS

The Contractor shall be responsible for disposing any Contractor-owned material, including material returns. Disposal actions shall be in accordance with all applicable local, state, federal and foreign country laws and regulations, etc. Prior to disposing Contractor-owned material and prior to re-using or selling the Contractor-owned material outside of this contract (including material returns under paragraph 4.6.4 above), the Contractor shall ensure that it eliminates from the material packaging all references to the DoD, this contract number, the NSN, or any other marking that would suggest Government ownership of the material. All costs associated with this disposal are at the expense of the Contractor.

4.6.6 PRODUCT QUALITY DEFICIENCIES (PQDRs) & SUPPLY

DISCREPANCIES (SDRs) The Contractor shall process all PQDR/SDR actions. The Contractor is required to obtain and maintain WEBSDR access at https://home.daas.dla.mil/daashome/websdr.asp

The Contractor shall investigate and resolve PQDR/SDR actions relating to non- conforming or discrepant material. The Contractor shall submit its recommended resolution to the Contracting Officer within fifteen (15) calendar days of being notified of the action by the customer. For Type W SDRs written for shipments that do not have the required information/packaging to enable forward movement (i.e., frustrated shipments), the Contractor shall submit its recommended resolution to the Contracting Officer within five (5) calendar days of being notified of the discrepancy. The Contractor shall track PQDR and SDR receipts and https://home.daas.dla.mil/daashome/websdr.asp resolution and shall include this information in the annual review with the Government. The Contractor shall be responsible for picking up and correcting or replacing any material requiring correction or replacement, and for delivery of conforming goods to the customer.

4.6.6.1 QUALITY METRIC

Quality performance will be measured by the ratio of orders issued to PQDRs/SDRs issued. The baseline ratio (percentage) is 3%.

When the percentage of SDRs grows above 3%, the Government may require a quality improvement plan. If the Contractor is unable to improve quality to reduce the percentage of PQDRs/SDRs to orders, the contract may be terminated under FAR 52.212-4. The Government will also code PQDRs/SDRs as “Government” or “Contractor” fault. The Contractor caused quality issues will be monitored for reimbursement from the Contractor for costs represented in processing/resolving the PQDRs/SDRs.

4.6.7 SURGE AND SUSTAINMENT

Items with surge and sustainment requirements are identified in Appendix G of the solicitation. Surge will be fulfilled at the unit price quoted for the item.

4.6.8 CYBER SECURITY REQUIREMENT

The Contractor shall follow and comply with all National Institute of Standards and Technology (NIST) policies of the contract. At the time the Department of Defense (DoD) imposes the new Cybersecurity Maturity Model Certification (CMMC) process, the Contractor shall comply with the policy and secure the required certification, regardless of the potential that the new policy may not require active DoD contract holders to comply. The Government reserves the right to review contract NIST compliance, which may require additional documentation during contract performance.

5.0 ADDITION OF ITEMS

DLA envisions a potential opportunity to add items within FSG 53 to this contract without seeking competition. Addition of items shall be executed via bilateral modifications. Items should be within the FSCs listed in section 1.0, not sole source, not a QPL item, not contain special requirements (FAT/CSI/Life Support) as indicated in the Quality Matrix (Attachment 3 of the RFP), not be on an IPV contract, and have an annual demand frequency higher than 4.

6.0 DELETION OF ITEMS

The Government may request deletion of items from the contract at any time due to changes in quality or technical requirements, changes in demand, or other situations where it is in the best interest of the Government to remove items from the contract.

When the Government deletes items the buyback provisions outlined in Section 7.0 will apply to residual and committed inventory for these items. Residual inventory is defined as inventory the Contractor has on the shelf at the time of the buyback. Committed inventory is defined as inventory that the Contractor has committed with suppliers for parts in direct support of the CD requirements of the contract. For committed inventory, the Contractor will provide reports of purchase orders that show part number(s), quantity purchased, and expected date of delivery from suppliers. The Contractor shall exclude from Committed inventory and orders that it can cancel with the supplier at no charge. The Contractor shall notify the Contracting Officer of any Committed inventory that could be cancelled with a charge. For such inventory, the Contracting Officer will decide whether to incur the charge or accept the items as committed inventory.

The Contractor shall continue to accept orders for any deleted items until issuance of a bilateral modification that deletes them, or for any duration specified by that modification.

Deletion of items under this provision is not subject to the Termination for Convenience provision of this contract, FAR Clause 52.212-4(1), and will not otherwise result in any liability by the Government to the Contractor.

The Contractor may request deletion of items from the contract. The Contractor will provide documentation supporting the deletion request. The Government will review the list of deletion candidates and supporting documentation. In approximately 30 days after its review and concurrence, if the Government agrees that an item should be deleted, the Government will issue a bilateral modification to remove the items from the contract. If there are open orders for the items being deleted, the Government will review and determine if orders should be retained or cancelled.

Items deleted from the contract at the Contractor’s request are not subject to the buyback provisions outlined in Section 7.0.

7.0 BUYBACKS

In the event of Government-initiated deletion of items, or at end of contract support, the Government will purchase residual and committed inventory up to 100% of the actual demand experienced in the nine (9) months preceding buyback implementation. The Government retains the unilateral right to compute the actual demand figure for the buyback process. The Government may purchase a higher quantity than what is contractually required depending on the circumstances for the individual item. Final buyback quantities will be mutually agreed upon between the Government and the Contractor.

Buyback orders will be issued at the item’s unit price in place at the time the buyback takes place. Buybacks will be processed quarterly.

8.0 PROGRAM MANAGEMENT REVIEWS

The Government and Contractor representatives will conduct Program Management Reviews (PMRs) annually or semi- annually.

During the PMR, the Contractor shall provide status of schedules and support goals, any process improvement initiatives, and provide status on the following elements:

(a) Support Overview – to include overall schedule status (Delays, Concerns)

(b) Metric Performance

(c) Contractor Issues

(d) Item Support Issues (including Unused Former Government Surplus)

(e) Quality/Safety Issues

(f) Obsolescence/DMSMS Issues

(g) Other Issues or Challenges

(h) Opportunities to further the partnership and improve overall parts support

(i) Previous PMR Open Action Items/New Action Item

The Contractor shall prepare minutes for PMR meetings containing a brief summary of each major issue; and identify all agreements achieved, and any open issues which require further coordination or action. These minutes shall be furnished to the Contracting Officer within two weeks after each PMR Meeting.

9.0 REPORTING REQUIREMENTS

Occurrence Reporting. The Contractor shall provide the following information via e-mail to the KO on an individual occurrence basis during the period of performance of the contract:

• Stock Transfer Order (STO) Inspection and Acceptance. The Contractor shall conduct a kind, count, and condition inspection prior to acceptance of inventory received under a STO from the Government. This inspection/acceptance shall occur within 7 business days after delivery to the Contractor’s location. Kind: visual identification per the item description, specification, and NSN/part number, as specified in the PID. Count: visual confirmation of the total quantity received. Condition: visual verification of physical appearance to determine if the inventory meets the criteria for the condition code, or better. If the Contractor should determine non-conformance upon inspection of the inventory, they should submit a SDR requesting disposition.

• Biweekly: Open Order Report: DLA will provide an open order report on/around the 1st and 15th of each month. Within 5 business days, the Contractor shall return the report with updated ship dates and status for all open orders.

• Monthly: The Contractor shall provide an updated STO Master Report in an Excel file to identify updates to open STOs for the transfer of material from DLA to the Contractor.

Required elements:

Section 1: NSN Data: NSN, Description, Item Assumption Date Section 2: STO Request (provided by DLA Aviation Supply): Quantity, Sales UoM, CC, Ship from Plant, Ship to Plant, Ship to DoDAAC, Ship To Storage Location, Date Section 3: Shipping Information (provided by DLA Aviation Procurement): STO#, Document #, Date Created, CBL#, Qty, Date Shipped Section 4: Vendor Accounting: Qty Received, Date Received, EDI 527R SUB, EDI

947I SUB

• Monthly: The Contractor shall submit a month-end closing balances of VMI in a Comma Separated Value (csv) file format to the Contracting Officer within 3 business days following the end of the month. At a minimum, closing balance book records will list:

NSN, Condition Code, Unit of Issue, item Name, Balance on hand at 11:59 PM EST/EDT on the last day of the month, Plant Code, RIC and Storage Location Code, DoDAAC, and date prepared.

• Monthly: The Contractor shall provide a report to track resolution of PQDRs and SDRs.

This report shall include PQDR/SDR number, date of PQDR/SDR, date PQDR/SDR received by Contractor, Customer, Customer Requisition number, NSN, quantity, reported discrepancy, disposition of material, Contractor resolution and date of projected/final resolution.

• Semi-annually/Annually: Program Management Review Minutes: see section 8.0 for requirements.

• Annually: The Contractor shall submit an Annual Physical Inventory Report that reports 100% inventory of all remaining VMI to the Contracting Officer within 3 business days following the end of the Government’s fiscal year (September 30th). At a minimum, the report shall include NSN, Item Name, Location, Unit of Measure, Date, Count, and Condition.

• Annually: The Contractor shall submit an annual Small Business Commitment report to the Contracting Officer within 5 business days following the end of each performance period. The report should be in an Excel format and at a minimum shall include Spend, Business Name, CAGE code, Small/Large, Socio-Economic Status

The Contractor shall provide the Government all requested data (e.g. inventory positions, due-ins, demand forecasts, etc.). The Contractor will work with the Government to generate all required reports and/or analytical tools. The Contractor shall also provide program updates/briefings and all associated data at regular intervals and when requested by the Government.

a. VMI inventory reported monthly and annually by facility DODAAC (include NSN, quantity, disposition of material) in a MS Excel spreadsheet.

10.0 VENDOR MANAGED INVENTORY (VMI)

10.1 VMI refers to DLA-owned material stored at or managed in the custody of

Contractors that perform warehouse management responsibilities under contract with DLA.

10.2 The Contractor will develop a plan for managing VMI that will be approved by

DLA. DLA will identify existing Government-owned inventory which may be transferred to the Contractor as VMI. If there is residual VMI on the existing contract when this contract is awarded, it will be transferred to the Contractor who shall then be accountable for the VMI. The Contractor shall develop and submit its Property Management Plan as part of its proposal. Once the plan is approved by DLA, the plan will be incorporated into the contract and the Contractor shall manage the property in accordance with its approved plan.

A. Inventory will be physically transferred from the Government designated locations to the Contractor for storage and distribution, as follows:

i. Current operational and emergent worldwide support may require the redistribution of government owned OCONUS assets to the Contractor’s CONUS facilities.

ii. Unauthorized customer returns to DLA CONUS stock locations will be examined upon receipt. Condition Code (CC)(A) and serviceable/reparable CC(F) material will be sent to Contractor locations for storage and distribution;

irreparable, unserviceable and obsolete material will be sent to DLA Disposition Services for further processing.

B. The Government will retain title to the inventory. The Contractor must use VMI to satisfy orders until the VMI is depleted; once VMI is depleted, the Contractor shall fill orders from Contractor-owned inventory. VMI must be used only to satisfy Government demands, as identified/issued via this contract.

C. The decision to transfer VMI to the Contractor will be made through bi-lateral agreement between the Contractor and the Government Program Office and will be accomplished in phases, as necessary. In each phase, when a quantity of Government inventory is identified, the inventory will be physically transferred to the Contractor’s facility at Government expense. The Contractor will inspect, count, and reconcile the incoming inventory. A record of this transfer will be maintained by the Contractor and provided to the cognizant administration office and Contracting Officer (KO). Any questions concerning the acceptability of the incoming stock and/or the amount of inventory received will be resolved before the Contractor places the stock into its inventory and creates the record of liability for the inventory from the Government.

D. The Contractor will work with the KO to resolve issues regarding the receipt and acceptance of the DLA inventory. The Government will bear the expense of correction or disposal of any stock damaged prior to acceptance by the Contractor.

After acceptance of the stock by the Contractor, the Contractor will be responsible for and bear the expense of moving the inventory to other contractor locations and for any damaged inventory. Regardless of which party bears the expense, damaged VMI stock is to be disposed of in accordance with the process outlined in Section

4.6.4 of this SOW.

E. The Contractor will establish accountability and manage VMI transactions.

F. After the Contractor accepts the transferred inventory, the Government will start routing requirements to the Contractor via EDI for the Contractor to fill from the inventory.

G. The Contractor shall be responsible and accountable for all Government inventory accepted into stock. The Contractor shall provide for preservation, protection, maintenance, repair and refurbishment of the Government inventory in accordance with sound industrial practice.

H. The Contractor will maintain an auditable inventory of the transferred Government stock. The Government reserves the right to inspect and audit the VMI and the Contractor’s VMI records at any time during the performance of the contract. The standard Government Furnished Property Clauses and Federal Acquisition Regulation (FAR) Part 45 are not applicable to this inventory.

I. The Contractor shall submit the Contractor’s accountability property record closing balances monthly for all DLA-Owned contract items. Results of this inventory check shall be reported in accordance with Section 9.0.

J. The Contractor shall conduct a 100% physical wall to wall inventory and location survey of VMI on an annual basis. Results of this inventory check shall be reported in accordance with Section 9.0.

11.0 END OF CONTRACT SUPPORT

The Contractor shall provide the Government all requested demand, forecast, and spend data and information necessary to prepare a follow-on solicitation. The Contractor may also be asked to provide Contractor information. The Contractor shall participate in meetings with the Government and the new Contractor to ensure an orderly transition from the old contract to the new contract.

12.0 CONTRACT EXPIRATION

Upon contract expiration, the Government will not be required to purchase from the Contractor any inventory purchased by the Contractor to support the requirements of this contract beyond what is provided for in the Buyback Provision, Section 7.0. The Contractor may negotiate a commercial sale to the successor Contractor, but the Government disclaims any responsibility or obligation to facilitate any such sale.

The Contractor shall continue to comply with the delivery requirements of this contract for all orders received up to the expiration date.

LIST OF ATTACHMENTS:

Attachment #1- Schedule of Supplies Attachment #2- PID/Packaging Text