CONUS Subsistence Prime Vendor Pilot Request for Information (RFI) 9-26-2024.docx

CONUS Subsistence Prime Vendor CONUS Restructuring Request for Information (RFI) This is a request for information (RFI). The Defense Logistics Agency (DLA) Troop Support’s Contiguous United States (CONUS) Subsistence Prime Vendor (SPV) Program is interested in industry’s comments regarding a single contract for full line food service support to our military and other federally funded customers in larger region (e.g. Missouri, Arkansas, Louisiana, Tennessee, Mississippi, Alabama, North Carolina, South Carolina, Georgia and Florida) than the current structure of the SPV program, where regions typically consist of one (1) to two (2) states, particularly concerning benefits and cost savings. Military and other authorized customers include, but are not limited to, the Air Force, Army, Marines, Navy (land-based customers) and Coast Guard. Navy ships are not included in this RFI.

This RFI will have no impact on current CONUS solicitations that are being solicited and the resultant awards. The sole purpose of this RFI is to conduct additional market research for a larger region ONLY, which is a follow-up to four (4) prior RFIs concerning the proposed restructuring of CONUS regions, “CONUS PV RFI - Notice ID: CONUSRFI12-16-19” posted on December 16, 2019, “CONUS PV RFI – CONUSRFI06-22-21” posted on June 22, 2021, “CONUS Subsistence Prime Vendor Southeast Pilot Request for Information (RFI),” posted on October 03, 2022 and “DLA CONUS SPV Southeast Pilot Request for Information (RFI) #2,” posted on March 23, 2023. This RFI contemplates a single enlarged zone comprised of DLA customers in several states, and a resulting future solicitation aimed at a single award/awardee responsible for full line food distribution support for the multi-state zone.

There is no solicitation available at this time. The Government will not pay for any information received in response to this RFI, nor will the Government compensate any respondent for any cost incurred in developing the information provided to the Government. This RFI does not constitute a commitment from the Government and any information provided in response to this market survey will be used for informational purposes only and will not be released. Any proprietary information submitted will be protected in accordance with applicable laws, if appropriately marked. Participation is not a promise for future business with the Government. As mentioned above, the sole purpose of this RFI is to conduct additional Market Research.

CONUS SPV support includes, but is not limited to, sourcing food items; receiving and consolidating product; warehousing and inventory management; quality control, quality assurance, and inspections; transportation and security of product; personnel management; meeting required delivery dates and fill rates; and extensive reporting requirements. CONUS SPV support is subject to several applicable regulations, including the Berry Amendment, 10 U.S.C. 4862, which generally requires that food items purchased by the Department of Defense must be grown, reprocessed, or produced in the United States or its possessions. The effective period of the proposed contract would be for a term of five (5) years, with three (3) tier periods. There shall be a 24-month Tier (inclusive of up to 120-day implementation period), followed by two (2) 18-month Tiers.

The Office of the Secretary of Defense (OSD) launched a Category Management effort to identify ways to reduce spending across various categories, including the DLA Troop Support’s Food and Beverage support. One of the findings of this effort was the potential savings associated with consolidating the supplier base. To that end, DLA Troop Support anticipates identifying several states to make up an enlarged region to maintain customer support while consolidating the supplier base.

Please respond to the following:

1. Provide a brief description of your company (name, address, type of business, business size, CAGE Code if applicable, country of origin).

2. Does your firm currently have any commercial and/or government business across several states in one region? Does your firm have any past contracts across several states in one region? If so, describe your firm’s experience.

3. Can your firm successfully perform the volume of business required to service customers across several states? How many states in what region could your firm support?

4. If your firm is a small business, would your firm be interested in and able to support a larger, multi-state zone? Would your firm need to partner with other companies/small businesses to perform successfully? If a partnership would be necessary, how would this partnership be implemented?

5. Where are your warehouses presently located? What is the dollar value of product going through your warehouses on an annual basis? What is the geographical range for delivery of product out of each of your warehouses?

6. What are the potential concerns that you see that may impede/impact your ability to deliver the necessary supplies to customers in an enlarged zone?

7. What length of implementation period would be needed for a contract that encompasses a larger zone consisting of several states?

8. If a solicitation is issued for SPV CONUS for a larger Zone, pricing may be divided into two categories, delivered price and distribution price. Delivered price means the most recent manufacturer, grower, or private label holder commercial price per unit to the Contractor, inclusive of all standard freight, that is input in the contractor’s purchasing system as the starting basis for its pricing to customers prior to the application of any specific distribution fees, rebates, discounts, limited discounts, or other financial agreements with the Contractor’s customers. Distribution Price means the firm fixed price portion of the Contract Unit price, offered as a dollar amount per unit of issue, rounded up or down to the nearest cent. The distribution price is the only method for the Contractor to bill the Government for all aspects of contract performance other than delivered price; including but not limited to, the performance requirements of the statement of work (SOW) for the applicable SPV solicitation and resulting contract. Delivered price is distinct from and not to be included in the distribution price.

a. Would your firm be able to provide one distribution price for each distribution category for the a multi-state zone? Pricing tiers are anticipated to be used, which would allow for staggered distribution pricing, as is done on current DLA Subsistence Prime Vendor solicitations. For example, a 5-year performance period may be divided into one 2-year tier and two 18-month tiers for purposes of allowing for an offeror to submit different distribution prices per tier.

9. Due to the fact that the anticipated multiple state zone is larger than the zones DLA Troop Support’s CONUS SPV Program currently maintains, DLA Troop Support expects that contractors would require the use of multiple warehouses to fulfill requirements within a zone. This would impact the delivered price portion of unit prices within a zone. This RFI contemplates multiple possible delivered price models as summarized below, and solicits input from industry on other alternatives. Does your firm currently service one account out of multiple warehouses? Would this be different for Government vs commercial customers?

A. Under the first possible scenario, the delivered price portion of unit price would be established based on a weighting of the quantity of the item stocked at each warehouse location. The example used assumes the item is stocked at three separate warehouses used by an offeror within the zone.

$5.94 (sum of weighted prices)

If your firm would need to utilize multiple warehouses/distribution centers to support a larger zone, would the above process be feasible for all items, both for the proposal and a resulting contract? It would need to be auditable.

B. A second potential delivered price model would designate a single location for purposes of delivered pricing under any resulting contract, meaning that delivered price of product could be based on a single warehouse location, specifically the one expected to have the most volume in performing the contract. Currently, how much does pricing vary between warehouses? Would you be able to provide one delivered price for any item that is housed at multiple warehouses, and apply that delivered price/product price to all places of performance being proposed?

C. As another potential alternative, can your firm provide a proposed pricing structure that would be practical while providing the most uniform and auditable delivered pricing possible for all customers within a zone? For example, would an Economic Price Adjustment based on an index (such as the Producer Price Index) be feasible? Or any other ideas?

D. If your firm has any suggestions with regard to proposed pricing structures based on product location at more than one warehouse, please submit such and describe in detail. How is your firm currently pricing for its commercial or non-DLA accounts, particularly where more than one warehouse is used?

E. As an alternative to the options above which are focused on delivered price, can your firm provide a single unit price per item (i.e., no more delivered or distribution price)?

(i) Are you currently using such a single unit price model in any commercial or non-DLA business?

(ii) Given the 5-year term of the proposed contract, an adjustment mechanism for a fixed single unit price would likely be required. Based on your existing commercial business, do you use such an adjustment? If so, how is it applied over a wide range of items? If not using an adjustment, how long do you hold single unit prices?

10. DLA Troop Support’s CONUS SPV contracts currently contain approximately 38 distribution categories. We are contemplating reducing the number of distribution categories to 10. The distribution categories would be as follows:

A. Would your firm be capable of providing pricing for a reduced number of distribution categories?

B. Do you anticipate this change affecting the overall pricing of distribution categories? If so, would this change increase or decrease distribution category pricing?

11. Do you foresee any costs savings to the Government having a larger region consisting of several states on one solicitation, with the intent to make one award? If so, what do you estimate the cost savings to be in terms of a total dollar value and a percentage of the total dollar value for a five-year period? NOTE: Please identify the cost savings by area and overall, if applicable. Also, please identify what is attributed to the cost savings.

In addition to potential cost savings, do you foresee that the Government may be able to receive benefits in any of the following areas:

1. Quality improvements that will save time or improve or enhance performance or efficiency

2. Reduction in acquisition cycle times

3. Better terms and conditions; or

4. Any other benefit

12. Presently, contracts call for orders to be delivered on a “skip day” basis (the 2nd day thereafter), at a minimum, e.g. Monday orders shall be delivered no later than Wednesday when orders are submitted by the customer by 2:00pm local time. In the interest of fill rates, we are contemplating allowing for a longer order lead time. Would your firm be able to support a 5 to 7-day lead time? Deliveries would be made with a 5 to 7-day turnaround (orders placed Monday will be delivered the following Monday) when orders are submitted by the customer by 2:00pm local time. Frequency of delivery would remain as it is now, which is generally two to three days per week for most customers.

13. The RFI proposes a purchase order fill rate of 97% for non-catch-weight and catch-weight items. The RFI also proposes a distribution price reduction of 5% (rounded to two places after decimal) if the fill rate requirement of 97% is not met for each month thereafter, until the fill rate of 97% is met. Would your firm be able to maintain a purchase order fill rate of 97% for non-catch-weight and catch-weight items?

14. From a contractor perspective, how would a procurement of this nature save time or improve/enhance performance/efficiency during the solicitation stage of this acquisition?

15. For the larger zone contemplated, would your firm be able to support biweekly or monthly delivered price changes?

16. Would your firm be willing to utilize a single catalog of items for the proposed zone?

17. Please provide any other input or comments you have on the contract model described above.

We encourage, appreciate, and would like to thank you in advance for your participation. Your responses, comments, suggestions and ideas regarding support for our customers are requested by close of business on 10/16/2024. Please respond to Joseph Hauser and Rebecca Gostkowski via e-mail to the following addresses: joseph.hauser@dla.mil and rebecca.gostkowski@dla.mil.