Draft CCAD IPV Gen II PWS.pdf

CCAD Industrial Product Support Vendor (IPV) Generation II

Performance Work Statement (PWS)

Table of Contents

1.0 INTRODUCTION AND SCOPE

1.1 Scope

1.2 Overview

1.3 Expected Outcomes

1.4 Contractor Requirements

1.5 Items of Supply

1.5.1 Covered Items of Supply

1.5.2 Additional Covered Items of Supply

1.6 Addition of Items

1.7 Deletion of Items

1.8 Sourcing

1.9 DLA Sourced to Vendor Sourced

2.0 PERFORMANCE REQUIREMENTS

2.1 General

2.2 Supplier/Manufacturer Network

2.3 Personnel Requirements

2.4 Obtain and Provide Parts

2.4.1 Technical Specifications and Quality Assurance Requirements

2.4.2 Critical Safety Items

2.4.3 Packaging

2.4.4 Sourcing Order of Priority

2.4.5 Exceptions to Sourcing Order of Priority

2.4.6 Material Obtained from Government Sources of Supply

2.4.7 Provide Material to Customers

2.4.8 Kitting (See Appendix XXX for CCAD kit BOMs)

2.4.8 Vendor Managed Inventory

2.4.8.4 Returns and Discrepant Orders

2.4.8.6 EDI transactions

3.0 MATERIAL MANAGEMENT

3.1 Bin Re-Configurations

3.2 Shelf-Life Management

3.3 Manage Customer Owned Overflow Material

3.4 Lateral Stock Movements

3.5 Recommend Changes of Covered Items and/or AQ Levels

3.6 Conduct Spot Buys (All Customers)

3.7 Demand Analysis and Planning Requirements

3.8 Nonconforming Items and Returns

3.8.1 DLA Sourced Items

3.8.2 Vendor Sourced Items

4.0 PERFORMANCE METRICS

4.1 Bin Fill Rate (BFR)

4.3 Bin Fill Rate (BFR) Exceptions

5.0 MANAGEMENT INFORMATION SYSTEM (MIS)

6.0 DELIVERABLES (REPORTS & DATA)

6.1 Daily Receipt Report (Daily)

6.2 Usage Reports (Monthly)

6.3 Empty Bin Report (Weekly)

6.4 Demand Analysis Reports

6.4.1 Six (6) Month Demand Analysis Report (DAR) (Monthly)

6.5 Supply Discrepancy Report (SDR) Report (Bi-Weekly)

6.6 Bench Stock Report (Weekly- Electronic/ Monthly- Hard Copy)

6.7 Shelf-Life Management Report (Quarterly)

6.8 Shop Bin List (Audit) (Ad Hoc)

6.9 Bin Activity and Sourcing Data (Ad Hoc)

6.10 Point of Contact Sign (As Necessary )

6.11 Spot-Buy Form (All Spot Buys)

6.12 Bin Labels (As Required)

6.13 Invoice Summary Document Report (Monthly)

6.14 CCIR Report with Contractor Comments

7.0 SECURITY REQUIREMENTS

7.1 Contractor Personnel Security (DLAD 52.204-9000 (JUL 2015))

7.2 General Requirements

7.3 Applicable Documents

8.0 COMMUNICATION

8.1 Program Management Review (PMR)

9.0 SURGE

10.0 TRANSITION PLAN

10.1 Transition Plan (if required)

10.2 Scheduled Meetings

10.3 Site Activation

10.4 Phase-In

10.5 Preparation and Staging

10.6 Hire Personnel and Form Material Management Structure for Logistics Support .. 37

10.7 Office and Storage Space

10.8 Bins/Storage Units

1.0 INTRODUCTION AND SCOPE

This performance work statement defines the effort required to conduct the Industrial Product-Support Vendor program by DLA Corpus Christi Army Depot, Corpus Christi, TX. The obligations of the contractor and of the government relating to the IPV program at the customer site are set forth in the contract provisions as well as this PWS. In the event of a conflict between the contract provisions and this PWS, this PWS shall take precedence, except to the extent that the provision would be in conflict with the prohibition against altering certain clauses, as set forth in Part 12 of the Federal Acquisition Regulation and any other law or regulation.

1.1 Scope

The scope of this contract is for logistics management in direct support of consumable spare parts, as listed in the Schedule of Items (SOI) Appendix A. The consumable spare parts are Class IX repair parts and required for maintenance tasks of military weapons systems and equipment at the designated customer site. The consumable spare parts will be normally stored at or near the point of use. These parts are sometimes referred to as “bench stock” or “consumable items”. The level of effort and number of consumable parts supplied may vary due to increases or decreases in the customers’ requirements.

The scope of this effort requires the contractor to provide uninterrupted support despite changes in customer requirements for consumable spare parts, production line configurations, bin locations change or supply chain interruptions. The items being supported can be NSNs, non-NSN, Local Stock Numbers (LSNs), General Services Administration (GSA) items or items described by part number or drawing. IPV is designed as a hybrid logistics support system in that the contractor will employ both vendor and government (Defense Logistics Agency (DLA), U. S. Army, General Services Administration (GSA) etc.)

sources of supply in the performance of logistics support. Additionally, this acquisition provides for support of DLA worldwide demand requirements for selected items as identified in Appendix A (SOI).

1.2 Overview

Under this PWS, and its associated final implementation plan, the IPV Contractor will be required to use best commercial practices, coupled with sourcing of supplies from designated sourcing channels to furnish cost efficient, integrated supply chain management of consumable parts required by customers in their maintenance, overhaul, and repair of various weapon systems and other military equipment, together with related supply chain management services and Management Information Systems (MIS).

The broad range of supply chain management tasks for consumable parts required by this effort include planning, sourcing, procuring, distributing, and controlling material and equipment so they are requested in advance, obtained at a reasonable cost and are available when needed. These functions are not limited to:

Supply chain and material management Acquisition, receiving, inventory control, and delivery of items to the end user Bin management Material planning and analysis for CCAD and associated worldwide orders Material shelf-life management for designated shelf-life items Dedicated customer service Quality assurance to ensure parts provided meet specifications MIS to support all transactions and provide management data reports, contract data and invoice/billing requirements as specified Flexibility to meet planned and unplanned production fluctuations Kitting

The receiving functions includes offloading of freight, including the proper handling, inspection (kind, count, condition visual inspection), checking packaging, markings, and reporting discrepancies of all incoming material and routing that material to the end user. Proper identification and classification of material may require in-depth research. The contractor is responsible for maintaining shipping documentation, required certifications, and ensuring required Government source inspection was performed or waived by the Government Quality Assurance Personnel prior to delivery to the end user.

The IPV contractor shall transport parts from the contractor warehouse to shop floor(s) in a manner consistent with best commercial practices, safeguarding the condition of the common hardware at the time of inspection and acceptance.

The Contractors’ MIS must interface with Government systems, to include Distribution Standard System, (DSS) and Warehouse Management System (WMS), Defense Automatic Address System (DAAS) to provide real time supply data/status, allow all material to be tracked and traced, support inventory management, provide management data reports and process MILSTRIP and EC/EDI transactions.

1.3 Expected Outcomes

The scope of this PWS and contract is designed to have the flexibility required to attain the objectives of the DLA Aviation IPV Program, which include the following:

• The reduction in the time required by the customers to accomplish their maintenance, overhaul, and repair of weapon systems and related missions.

• Conduct data analysis to provide Authorized Quantity (AQ) recommendations to the IPV managers that will drive down the material dollar value of inventory without lowering the Bin Fill Rate (BFR) metric.

• The reduction of inventory investment by the respective customer(s), and DLA through the elimination of excess inventory and maintaining only the inventory necessary to meet the contractual metric and carry out the mission of the customer.

• The ability to maintain a 99.0% BFR for all active bins of supply covered by the stock replenishment provisions. The calculation for BFR is described in section 4.2. “Active bins" are defined as bins that have had a replenishment action over the past 24 months.

• Minimize Empty Bins Impacting Production (EBIP) for all items of supply covered by the stock replenishment provisions of this contract as described in section 4.2.

• The capability to take timely actions in response to the Customer(s)’ request for “spot buys” as set forth in this contract.

• The maintenance of an accurate, efficient, and unified MIS that will integrate seamlessly with existing Government systems, to include DSS, WMS, Electronic Data Interface (EDI), DAAS and will be capable of modification to integrate seamlessly with new Government systems or functionalities. The Contractors’ MIS must provide real time supply data/status, allow all material to be tracked and traced, support inventory management, provide management data reports and process MILSTRIP transactions.

• An effective balance between sourcing from the Contractor’s supply chain, i.e. Vendor Sourced Inventory (VSI), and Government/DLA sourced inventory (DSI) to achieve maximum efficiency in supply support for both CCAD and World-Wide Demand (WWD) while supporting the socio-economic goals of Congress, the Department of Defense (DoD), and DLA.

1.4 Contractor Requirements

The Contractor shall:

a. Function as an integrator in providing supplies listed in the SOI.

b. Coordinate and synchronize its supply chain management processes to provide a predictable and reliable supply of items to meet normal requirements.

c. Manage the contractual relationship with its suppliers that will provide the items listed in the SOI in accordance with (IAW) the current Government technical specifications and quality provisions.

d. Ensure that its parts suppliers establish and maintain a system of processes that will provide clear traceability to the actual manufacturer of the parts.

e. Conduct daily bin inspections to ensure adequate reordering of material

f. Ensure that any material designated as Critical Safety Item (CSI) maintains all proper traceability and avoids co-mingling of CSI material.

g. Provide dedicated program customer support.

h. Provide recommendations for Authorized Quantity (AQ) adjustments on a quarterly basis to the

Army COR.

i. Maintain the full list of Government Furnished Facility and Equipment as outlined in Appendix E

j. Provide all required data reports at the cadence described in Section 6.0 below and/or ad hoc data requested by either DLA or the CCAD Customer.

k. Ensure that all applicable and site-specific safety and security requirements are followed per DLA and CCAD policies. Section 7.0 below describes current site-specific security policies.

1.5 Items of Supply

Items of supply will be provided in two ways: (1) to CCAD shops and (2) to worldwide customers in support of worldwide demand requirements defined as items sourced by the contractor for which 40% or more of the WWD is consumed by CCAD supporting its production lines.

1.5.1 Covered Items of Supply

High volume, recurring use items are the primary focus of the support required under this PWS.

However, non-recurring demand, and low volume use items are included, as they are deemed essential to the successful accomplishment of the customer’s mission. Requirements may include “kits” that contain a number of designated consumable parts provided in a single container. The types of items the Contractor will be required to provide are consumable parts that are normally stored at or near the point of use where mechanics and artisans are employed in the maintenance, overhaul and repair of weapon systems and related military equipment. Items covered under this PWS are generally cataloged under, but are not limited to, the following Federal Supply Classes (FSCs): 1005, 1010, 1015, 1025, 1240, 1280, 1290, 1377, 1560, 1620, 1630, 1650, 1660, 1670, 1680, 1730, 2090, 2510, 2520, 2530, 2540, 2590, 2610, 2640, 2805, 2815, 2835, 2840, 2910, 2915, 2920, 2930, 2940, 2990, 3010, 3020, 3030, 3040, 3110, 3120, 3130, 3439, 3455, 3820, 3830, 3940, 4010, 4020, 4030, 4130, 4133, 4140, 4210, 4240, 4310, 4320, 4330, 4540, 4710, 4720, 4730, 4810, 4820, 4910, 4930, 5110, 5120, 5130, 5136, 5305, 5306, 5307, 5310, 5315, 5320, 5325, 5330, 5331, 5335, 5339, 5340, 5344, 5345, 5350, 5355, 5360, 5364, 5365, 5420, 5640, 5805, 5905, 5906, 5910, 5920, 5925, 5930, 5935, 5940, 5945, 5950, 5960, 5961, 5962, 5970, 5975, 5977, 5980, 5985, 5990, 5995, 5999, 6105, 6110, 6115, 6130, 6135, 6140, 6145, 6150, 6160, 6210, 6220, 6230, 6240, 6250, 6260, 6310, 6350, 6365, 6510, 6515, 6530, 6545, 6620, 6625, 6635, 6640, 6645, 6650, 6680, 6685, 6695, 6810, 6830, 6850, 6930, 7240, 7340, 7350, 7510, 7530, 7690, 7920, 8010, 8030, 8115,8125, 8140, 8305, 9150, 9160, 9320, 9330, 9340, 9390, 9505, 9510, 9515, 9520, 9525, 9530, 9535, 9540.

1.5.2 Additional Covered Items of Supply

The scope of this PWS includes IPV items of supply which have not been identified as covered items at the date of contract award, but which are subsequently determined by the customer to be essential to accomplishment of its mission of maintenance, overhaul, or repair of weapon systems or military equipment. At the discretion of the Contracting Officer (KO), after consultation with the Customer, needs for such items may be accomplished under the Spot Buy provision of the contract. Prices and deliveries for these Spot Buy items will be negotiated on a case-by-case basis prior to delivery of the material by the contractor. If the Customer determines that the need for such an item is recurring, it may be added to the SOI as a IPV item.

1.6 Addition of Items

Within ten (10) days after the contractor’s receipt of the contracting officer’s instruction that an item should be added to the contract, the contractor shall commence replenishment to include: establish the item in the contractor’s information system, obtain the storage bin, and initiate a material order.

Unusually large numbers of items being added at one time may require additional time to first purchase bins. The contractor will initially source the item from DLA. Subsequently, the item may become a candidate for vendor sourcing. Items not available from DLA to meet the bin requirement are subject to the spot buy process while they remain DLA sourced.

1.7 Deletion of Items

Within five (5) days after notice from the contracting officer to delete the bin(s), the contractor will suspend replenishment and visibly identify the bin(s) being deleted. The contractor will cancel all due-in shipments. Any due-ins that cannot be cancelled will be received and delivered to the bin prior to disestablishment/removal of the bin. No later than 30 days after authorization of deletion by the contracting officer, the contractor will remove the bin and material from the shop location and deliver all material marked with NSN, P/N and nomenclature to a location designated by the COR for disposition by the government.

1.8 Sourcing

Except as otherwise directed by the contract, or by the KO, the Contractor will utilize DLA provided Approved Materials and Parts List (AMPL) and employ the designated sourcing channel (VSI or DSI), its finances, and its supply chain management capability, to obtain items for support of planned and unplanned requirements under this contract. Under the IPV design, for one or more reasons, the Contractor will be required to obtain a portion of the items from DLA sources, some, or all of which are tied to meeting the socio-economic mandates of Congress, DoD, and DLA.

1.9 DLA Sourced to Vendor Sourced

The contractor may propose to move items from the DLA sourced population to the Vendor sourced population. These changes must be reviewed and approved by the contracting officer.

2.0 PERFORMANCE REQUIREMENTS

2.1 General

The obligations of the Contractor and of the Government relating to the IPV Program at the customer sites are set forth in this PWS and the contract provisions. In the event of a conflict between the contract provisions and this PWS, this PWS shall take precedence, except to the extent that the provision would be in conflict with the prohibition against altering certain clauses, as set forth in Part 12 of the Federal Acquisition Regulation (FAR).

2.2 Supplier/Manufacturer Network

The Contractor represents that it is part of an established, fully integrated, qualified network, that it has extensive experience across a broad spectrum of logistics capabilities; and that, if awarded the contract, it will ensure successful conduct of the tasks in this PWS and the delivery of items in strict accordance with all Government technical specifications and quality requirements. To the extent that the Contractor is not required to use Government sources of supply, the Contractor shall qualify its network of manufacturers under its source selection system, and such suppliers otherwise must meet all requirements for qualification as a source of supply under Government contracts (such as Qualified Products List, Qualified Suppliers List, or other quality assurance demonstration), and the suppliers are not cited on the List of Parties Excluded from Federal Procurement or Non-Procurement Programs (EPLS) website at https://sam.gov/content/entity-information/, within twenty-four (24) hours prior to delivery of material.

2.3 Personnel Requirements

The Contractor will provide certain skilled, experienced, professional and/or technical personnel consistent with the requirements of this Performance Work Statement. This section lists personnel who should be representative of the following labor categories type(s) and are essential for successful accomplishment of the work to be performed under the resultant contract. Personnel categories needed for an effort of this size and complexity include, but are not limited to, the key personnel functions identified below as well as in Section H-909.

Key Personnel Requirements:

a. Program Manager

b. Assistant Program Manager

c. Site Manager

d. Contracts Representative

e. IT Systems Specialist

f. Transition Manager

2.4 Obtain and Provide Parts

2.4.1 Technical Specifications and Quality Assurance Requirements The contractor shall institute a corporate quality assurance program that ensures the parts received from its suppliers and provided to the Government are in strict accordance with the technical specifications and quality assurance requirements as specified by the Government for the item. For the Contractor to determine the technical requirements, required sources of material, and applicable quality standard for a given part, the KO will provide a technical data file monthly. In the event of a conflict between the technical data file and the Product Item Description (PID) the PID shall be deemed the most current and shall be given precedence. The Contractor may make recommendations for alternate, substitute, or replacement parts for a specific NSN IAW the specific provisions of the contract. However, no alternate, substitute, or replacement part may be furnished unless and until the Contractor has been advised by the KO and with concurrence of the IPV Manager of the acceptability of that alternate, substitute, or replacement part. Furthermore, the contractor shall:

a. Utilize the highest standards practiced in the commercial marketplace.

b. Establish suppliers’ qualifications, accomplish supplier delivery, and quality performance reviews.

c. Evaluate processes to ensure 100% technical specification and quality compliance.

d. Ensure that its parts vendors, suppliers, and subcontractors comply with all technical requirements in the technical data file or PID for the specific parts and that such is included in contractual instruments with suppliers throughout their contractor supplier network.

e. Ensure that its parts, vendors, subcontractors, and suppliers establish and maintain a system or process that will provide clear traceability to the actual manufacturer of the parts.

https://sam.gov/content/entity-information

f. Establish and maintain a process for inspection of incoming supplies for compliance with contract requirements. In addition to any physical inspections, the contractor shall ensure that all certifications and traceability documents will be available for DLA-Aviation to review as needed.

Supplies found to be nonconforming shall be segregated from supplies that will be delivered to the customer site bins or other designated storage locations, and in no event shall such nonconforming supplies be furnished under the contract.

g. Conduct periodic audits or reviews of the quality assurance processes and procedures of its vendors, subcontractors, and suppliers, and shall monitor its vendor qualification process on a continuous basis. Additionally, the Government reserves the right to review the contractor’s quality processes.

2.4.2 Critical Safety Items

Critical Safety Items (CSI) shall only be provided from Government sources of supply. The contractor shall not provide CSIs from their commercial sources regardless of the date the item becomes CSI. As part of their ongoing material management and specifically as part of the receiving process, the contractor is required to screen for any CSI on a continuous basis. CSI verification information can be obtained at the Joint Data Repository System located at: https://jdrs.mil. Any VSIs that become CSI shall not be delivered to the Government. If a VSI becomes CSI, the contractor must notify DLA and provide the manufacturer and part number (P/N) for the material in question for a determination by the Government on acceptability of that material. Additionally, said CSI material must maintain traceability and shall not be comingled with other material. Should the manufacturer and P/N not be approved, the Government will buy back material up to 33% of the estimated annual quantity (EAQ) per the provisions of the Qualified Excess Contract Inventory clause cited in the solicitation.

2.4.3 Packaging

2.4.3.1 Delivers to Customer Sites

The Contractor shall ensure that, throughout its supply chain, its vendors, subcontractors, and suppliers preserve, package, and pack all items in a manner that will ensure their preservation and protection IAW best commercial practices. Packaging considerations shall include shelf-life, temperature sensitivity, and fragility of contents. Material will be delivered in accordance with MIL-STD 129 and MIL-STD 130 unless alternate marking approval has been provided by CCAD.

2.4.3.2 WWD Order Deliveries

WWD orders will be packaged IAW the packaging requirements (MIL-STD 2073 and MIL-STD 130) per the technical data provided by the DLA KO.

2.4.4 Sourcing Order of Priority

Unless otherwise authorized or directed by the KO, the Contractor shall apply the following order of priority in providing all parts to all customer sites:

1. Attrition of customer site excess inventories

2. Customer overflow

3. Attrition of DLA excess inventories 4a. DLA sources as set forth in the SOI 4b. Contractor’s supply chain for VSI as designated in the SOI

5. Spot Buy

Attrition levels for #1 and #2 above will be established by the Final Transition Plan. #1 & #2 are temporary material categories. The KO will notify the Contractor in writing or by electronics means when attrition of #1 and/or #2 is no longer required.

2.4.5 Exceptions to Sourcing Order of Priority

If adherence to the sourcing order of priority set forth in PWS 2.4.4 will interfere with the Contractor’s compliance with the performance metrics set forth in the contract, the contractor shall notify the KO by https://jdrs.mil/ written or electronic means of the nature and extent of the interference and may request to deviate from the order of priority.

If the actual quantity ordered by the customer sites (exclusive of quantities ordered via WWD delivery orders (DOs)) in a contract year exceeds the Government EAQ, the Contractor may unilaterally choose to obtain material from the Government source of supply for the balance of that contract year.

NOTE: Nothing in the provisions pertaining to the order of priority for the sourcing of supplies shall mitigate against the mandatory source requirements related to acquisitions from AbilityOne during the entire period of the contract.

2.4.6 Material Obtained from Government Sources of Supply

The Contractor will be issued a Department of Defense Activity Address Code(s) (DoDAAC) that, subject to the terms, provisions, limitations, and conditions set forth elsewhere in this contract, will enable the Contractor to obtain from Government sources parts as designated in the SOI. The contractor will employ MILSTRIP Signal Code B orders to obtain material from the Government. All material obtained from the Government must be delivered to the customers within two (2) business days of receipt by the Contractor.

With the exception of kitting, and Vendor Managed Inventory (VMI) items, no Government sourced material can be held by the contractor for future demands.

2.4.7 Provide Material to Customers

2.4.7.1 Provide Material On Site (Sites: All)

To achieve optimum performance at a customer site, for covered items that are vendor sourced, the Contractor shall employ all available methods of logistics support, including but not limited to, best commercial practices, anticipation of customers’ needs and planning, and the maintenance of information systems for purchasing, quality assurance, inventory control, and distribution. The contract will obtain material IAW the order priority set forth in PWS 2.4.4, and the contract SOI designated sourcing. The Contractor shall establish processes that will maintain the required bin quantity levels, up to the maximum established by the Government via the bin authorized quantity (AQ) that will ensure that the required number of parts will be available to the mechanic or artisan each time they attempt to draw parts from the bin. At the inception of the contract, the bin quantity levels (otherwise referred to as the “authorized quantity” or AQ) will be established by the Customer. The Contractor will be expected to react to changes in customer demand patterns, and to suggest appropriate AQs based on lead times and demand patterns, to mitigate the risk of material shortages and excesses.

2.4.7.2 Provide Material for DLA WWD Orders

For items designated in the SOI as WWD items, the Contractor will deliver ordered items to the DLA Supply Depot(s) or other DLA locations, within the Continental United States, excluding Alaska and Hawaii, in strict accordance with the DOs issued. Supplies covered by the DO shall be sourced through the Contractor’s commercial supply chain. All DOs will be sent electronically IAW Clause Order Limitations FAR 52.126-19. The contractor may stipulate a minimum order quantity and/or minimum dollar value per order. Any orders issued that specify delivery to anywhere other than a DLA distribution location may be rejected by the contractor after notice to the Contracting Officer. Such notice must be made within 10 business days of the date of the order.

• DO/Modification Distribution – Vendors will receive notice of the awards via posting on the DLA Internet Bid Board System (DIBBS) at https://dibbs.bsm.dla.mil. DO’s will be available for viewing on the DIBBS website.

• DIBBS Registration – Registration is required to receive a DIBBS account login and password. If your company experiences difficulties while in DIBBS, please contact the help staff at DibbsBSM@dla.mil.

https://dibbs.bsm.dla.mil/ mailto:DibbsBSM@dla.mil

Delivery times will be negotiated by line item at time of WWD CLIN activation. Inspection/Acceptance requirements will be noted on each DO. Inspection/Acceptance will either be at Origin (Source), or Destination. All inspection requirements will be included in the technical specifications and quality provision data that will be provided by the Government.

2.4.8 Kitting (See Appendix XXX for CCAD kit BOMs)

CCAD will appoint a government kit master who has the responsibility for all kit configuration and kit numbering. CCAD will provide a material list for each kit. The lists shall include the part number, NSN, nomenclature, and quantity for each item in a kit. The Customer shall notify the Contractor of any changes to the material lists. The Customer initiates a kit request for a new kit or change request for an existing kit and forwards to the Contractor. The kit request includes a Bill of Materials (BOM) or a revision to an existing BOM. The Customer kit order will specify the kit number and the quantity of kits ordered. The Contractor will be responsible for procurement of kitting material and maintaining inventory control until the kit is delivered to the Customer. CCAD will provide samples of the type and size of required boxes.

Kits shall be replenished on an as consumed basis with a on hand inventory not to drop below 10 unique units/kits at any point in time.

Any item not currently on the IPV contract and necessary for kits shall be added to the contract per established procedures at the Addition and Deletion of Items clause. The Contractor shall be responsible for providing kit container and labeling materials.

In the event that the Customer elects to institute any variety of kitting processes, the Customer will submit a requirement(s) statement to the IPV Contractor. The IPV Contractor shall evaluate and formally propose any changes to the management fee resulting from the additional kitting requirement. The Government will evaluate any future proposed changes to the management fee to ensure proposed costs are fair and reasonable. Any updated changes will be executed via bilateral modification to the contract.

2.4.8.1 Kitting Invoicing

Prior to invoicing kits, the Contractor will provide the Customer with a data file (format to be specified) which the Customer will use to post the kit order due-in information to their planning system to facilitate the direct billing process. The Contractor will establish direct bill kitting procedures for the customer under the following directives: Total material costs will be IAW current contract pricing. The prices will consist of DLA sourced material, vendor sourced material, or Spot Buys. Total kit prices may vary based on current material pricing and/or partial kit deliveries. The total kit price will consist of the overall kit material costs and a mark-up for MIS and packaging to be negotiated.

2.4.8.2. Kitting Performance Metric

Deliver kits within one-hundred twenty (120) days of receipt of the kit order from the Customer. (BFR provisions do not apply for kits.)

2.4.8 Vendor Managed Inventory

During implementation and throughout contract performance, DLA and the Contractor will identify items that will be supplied as Vendor Managed Inventory (VMI). The following actions and information apply to

VMI:

a. Inventory will be physically transferred from DLA's depots to the Contractor for distribution to the bin locations as required for fulfillment of bin replenishment.

b. Government will retain title to the inventory. The Contractor shall use VMI to satisfy Government demands for only the items designated as Government sourced.

c. The Contractor shall be responsible and accountable for all Government inventory accepted for distribution to the bin locations. The Contractor shall provide (for) preservation, protection, maintenance, and repair of the Government inventory in accordance with sound industrial practice. The Contractor shall 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 performance of the contract. The standard Government Furnished Property clauses and FAR Part 45 are applicable to this inventory.

d. Upon receipt of the VMI, the Contractor shall bear Risk of Loss for VMI in accordance with FAR 52.212-4(j).

e. The contractor shall comply with any additional VMI guidance provided in future modifications.

2.4.8.1 VMI Annual Physical Inventory Control

The Contractor shall conduct an annual physical inventory on 100% of DLA-owned Government property (DLA VMI) using the Wall to Wall blind inventory count procedures. This physical inventory shall be conducted during the 4th Quarter of each Government Fiscal Year (FY) with the DLA COR and/or designated DLA representative as required on site to observe performance of the count and verification of existence and completeness. A minimum 98% physical inventory count accuracy rate of the total items being inventoried (100% for classified or sensitive property) shall be achieved and maintained.

2.4.8.2 Contractor Responsibilities for VMI Annual Physical Inventory Control The Contractor shall perform and is responsible for the following functions:

• Perform Wall to Wall inventory during 4th Quarter of each FY.

• Provide inventory schedule to the Contracting Officer and DLA Program Manager by October 15 of each year.

• Provide count sheets, or a copy of the automated export of the handheld terminals, and/or RFID equipment, or an export report from the warehouse management system used to conduct the inventory to the DLA COR upon completing the blind count. This information will be used to validate the universe of the conducted count. At a minimum, the count sheets must include the following information: date of the count, items counted and quantity counted, who performed the count, who certified the count, and if a recount was required and the adjudication of the recount process.

• After completing the W2W counts, the Contractor shall provide the DLA COR with a “certified” final inventory balance list by NSN/NIIN.

• Conduct research to resolve discrepancies in inventory balances between the results of physical inventory counts and the accountable property system of record (i.e., gain/loss).

• Research all Classified and Sensitive item adjustments, regardless of dollar value; all pilferable item adjustments greater than $2,500; uncontrolled item adjustments between $5,000 and $16,000 with a unit variance greater than 25%; and all uncontrolled item adjustments greater than $16,000.

• Submit a month-end closing on hand balance for all DLA VMI items.

• Apply for/obtain access to DLA Monthly Snapshot Upload Tool for submission of respective month-end inventory balance snapshot.

• Month-end closing on-hand balances shall reflect balances as of 11:59 PM EST on the last day of each month to coincide with the extracted EBS data reflective of the same period in time.

• Provide data extracts for all DLA VMI items regardless of balance, including zero (0) balances.

• The Contractor's Accountable Property System of Record (APSR) site data shall include attributes that relate to EBS data including: EBS Plant Code, NSN or Part Number, Nomenclature, Condition Code, Storage Location (3-digit RIC code), On-Hand Available Quantities, Unit of Issue (UoI), Unit of Measure, APSR Physical Storage Location (bin number, etc.), and Date of Last Inventory. Additionally, Contractor shall provide 60 days of transaction history prior to the date of the snapshot within 48 hours upon request. Transaction history shall include as a minimum: all materiel movements and associated quantities, transaction types, and all condition code changes. If available, also include running balances. (See following example).

VMI Monthly Snapshot format:

2.4.8.3 Government Responsibilities for VMI Annual Physical Inventory Control

The DLA COR is responsible for the following functions:

• Observe performance of W2W count and verification of existence and completeness.

• Prior to the scheduled annual physical inventory, the DLA COR shall coordinate with the

Contractor to ensure all pending transactions are completed by the Contractor prior to the Contractor's APSR pre-inventory report.

• After W2W, the DLA COR shall receive a “certified” final inventory balance list by item from the Contractor.

The Contracting Officer is responsible for the following functions:

• Receive respective inventory schedule from the Contractor.

• Facilitate Contractor access to the DLA Monthly Snapshot Upload Tool.

2.4.8.4 Returns and Discrepant Orders

The Contractor shall maintain a process to handle ISHR returns and complaints. The VMI inventory must be properly identified, packaged, stored, inspected, catalogued, etc., prior to shipment. The Contractor shall respond to requested pick-ups within 24 hours after receiving the request from either DLA COR or ISHR. VMI return candidates (Excess Stock or Quality Issues) will be identified by the Contractor, DLA, and ISHR.

The DLA Program Manager, or DLA COR will approve DLA VMI returns and provide notification of approval to Contractor. The information on each return item will be maintained and tracked by the Contractor. The Contractor will review incoming transactions to approve/process or deny/cancel the request. Risk of loss or damage to VMI provided under this contract shall remain with the Contractor and shall pass to the Government upon receipt of VMI by the Government at specified return location.

2.4.8.5 Financial and Management Control Considerations

The Contractor shall maintain full accountability for DLA and Army materiel that has been turned over to the Contractor and shall provide real time visibility of Government parts. The Contractor shall provide a monthly Inventory Tracking Report for VMI containing the following information:

• Inventory position at the beginning of the month.

• Receipts

• Issues to the bin

• Inventory adjustments approved by the Army COR

• Inventory position at the end of the month

The Contractor shall invoice only after items have been placed in bins UNLESS the Contractor orders materiel in the DLA standard UoI, but the standard UoI does not fit into bins. In these cases, the Contractor shall invoice for the full DLA standard UoI, but part of the materiel will be stored at the Contractor's warehouse as Army-owned inventory to be used in accordance with the sourcing order of priority. Daily, the Contractor shall submit document identifier code D7B post goods issue, billing of customer, after invoicing for Government-owned material.

2.4.8.6 EDI transactions

EDI DOC FROM TO What GFM Data Requirements (ADCs 390/1014/1014 A)

GFM Data Requirements M=Mandatory DoD Rules R=Required by DLA O=Optional unless required by Component Guidance

511R A0A Vendor EBS Requisition for DLA‐sourced material that will turn into redistribution order

GF01: W3

GF02: MDN

value GF03:

Contract Number GF07:

Release Number GF08:

C7 GF09: CLIN value

R R M O O O

527R D6K Vendor EBS Receipt of DLA‐sourced material GF03: Contract Number GF07: Release Number

M O

527R D6B Vendor EBS Used when extenuating circumstances related to receipt of DLA‐ sourced material

GF03: Contract Number GF07: Release Number

M O

856S AS_ Vendor Customer or Disposal

Shipment Status GF01:

C7

GF02:

CLIN

GF03: Contract Number GF07: Release Number

O O M O

867I D7B Vendor EBS Post‐post issue of DLA‐sourced material to customer

REF01: Contract Number REF04‐01: Call or order number REF04‐03: CLIN

M O O

869C AC1 Vendor EBS Request to cancel requisition for DLA‐sourced material (can only be used if redistribution order not yet created)

GF01: W3

GF02: MDN

value GF03:

Contract Number GF07:

Release Number GF08:

C7 GF09: CLIN value

R R M O O O

856S AS_ DSS Vendor Shipment Status GF01:

C7

GF02:

CLIN

GF03: Contract Number GF07: Release Number

O O M O

3.0 MATERIAL MANAGEMENT

3.1 Bin Re-Configurations

On an ad hoc basis, the Customer may request realignment, movement, and or relabeling of bins. The Contractor shall perform such changes within a timeframe agreed to by the Customer and Contractor.

Any bins, racks, labels, or other equipment associated with these changes may be purchased by the Contractor via Spot Buy after approval by the Contracting Officer’s Representative (COR). In instances where the Customer requires a very short turn-around time, an increase in the material management fee may be negotiated. Alternatively, the Contractor may perform the changes as workload permits at no additional cost, within the timeframe agreed to with the Government. The material management fee is applicable to the number of active bins managed, +/- 10% on a per site basis. The material management fee can be renegotiated and updated via a bilateral modification when a change exceeding +/- 10% on a per site basis occurs from the time of contract award.

3.2 Shelf-Life Management

The Contractor shall perform a quarterly audit on all IPV bins that contain shelf-life coded (SLC) material.

The date of the first quarterly audit will be determined during the activation meetings and subsequent audits will be every 90 days thereafter, looking 90 days ahead. The Contractor, using current FEDLOG information disks available via Defense Logistics Information Services (DLIS), shall on a quarterly basis use FEDLOG information to generate a list of all shelf-life material located in IPV bins to audit. The CCAD may include a list of additional IPV items to be treated in the same fashion as DLIS stated shelf-life material. Each bin should have all parts removed from the bin to check that there is no expired shelf-life material in the bin. Each part will be reviewed and the material will only be placed back in the bin if the material is properly marked with an expiration or cure date and has not reached its expiration date. For

940R A2A EBS Vendor Request for DLA‐sourced material to be returned to DLA depot.

N901: Contract Number N907‐01: Call or order number

N907‐03: CLIN

M O O

940R A5J EBS Vendor Request for DLA‐sourced material to be disposed.

NOTE: Request is result of Supply Discrepancy Report (SDR) disposition. Disposals can occur in various ways (at IPV location, via forwarding to DLA plant for transshipment to DRMO, or via shipment directly to DRMO), depending on various factors (contract agreement, IPV location, funding of shipments, and size of the material).

N901: Contract Number N907‐01: Call or order number N907‐03: CLIN

M O O

940R AC6 EBS Vendor Request to cancel a previous request [940 (A2A)] for DLA‐ sourced material to be returned to DLA depot

N901: Contract Number N907‐01: Call or order number

N907‐03: CLIN

M O O

EDI DOC FROM TO What GFM Data Requirements (ADCs 390/1014/1014A

GFM Data Requirements M=Mandatory DoD Rules R=Required by DLA O=Optional unless required by Component Guidance

940R ACJ EBS Vendor Request to cancel a previous request [940 (A5J)] for DLA‐sourced material to be disposed.

N901: Contract Number N907‐01: Call or order number

N907‐03: CLIN

M all bins containing shelf-life material, the shelf-life code will be displayed on the IPV bin labels. The following tasks are to be completed by the Contractor:

1. For material received with a shelf-life expiration date on the package that should not have a shelf-life code (SLC Zero), the Contractor shall affirm the material is improperly marked but still usable (not expired) by posting affirmation at the bench stock site on the clipboard and/or bench stock manual index book, provided by the Government. Material shall be retained in the bench stock bin.

2. For material received with a shelf-life expired date on the package that has a shelf-life code but has not actually expired, the Contractor shall affirm that the material is improperly marked but still usable (not expired) by posting affirmation at the IPV site on the clipboard and/or bench stock manual index book provided by the Government. Material shall be retained in the bench stock bin.

3. For material received with a shelf-life expired date on the package or the expiration date is within 90 days and the Contractor cannot affirm that the material is still usable (not expired) the Contractor shall submit a WEBSDR for disposition and credit of material received. Material shall be held at the Contractor facility until disposition instructions are received.

4. Material received with no shelf -life expiration date that should have a shelf-life code (SLC other than zero), the Contractor shall affirm that the material is improperly marked but still usable (not expired) by posting affirmation at the IPV site on the clipboard and/or IPV manual index book provided by the Government. Material shall be retained in the IPV bin. [NOTE: In some instances, not all material, such as shrink wrap, can have an expiration date affixed to the product. In such cases, the Government shall provide additional guidance]

5. All expired material identified during the audit or routine bin maintenance will be removed by the Contractor and turned over to the Government for disposition.

6. If expired shelf-life material is received from DLA in two consecutive orders for the same NSN, the Contractor may submit a request, with justification, for a Spot-Buy in order to procure material to maintain production.

7. At the completion of each monthly audit, the Contractor shall provide the COR a copy of the report used for the audit with a column used for notes that show any action taken on expired or improperly marked material.

8. The shelf-life management program must include provisions to address the receipt of bulk shelf-life material (ie O-rings, that don’t come individually packed) to ensure they remain in an auditable state as material begins to be consumed; labeling must remain with product.

9. Shelf-Life instructions are found in DOD MANUAL 4140.27, VOLUME 1 DOD SHELF-LIFE MANAGEMENT PROGRAM, DLA Instruction (DLAI) 4145.4 and NAVSUPINST 400.100

10. The Customer shall provide the following to the Contractor:

a. The Government will provide all Shelf-Life List Clip Board Locations and a shelf-life cross reference table and/or IPV manual index book.

b. The Government will establish a permanent location for the shelf-life list clip board and/or

IPV manual index book as well as provide necessary clipboards and/or IPV manual index book at each IPV location. These clip boards/IPV manual index books will be used by the Contractor to provide current shelf-life information pertaining to IPV bins at each specific location.

3.3 Manage Customer Owned Overflow Material

Overflow material is material owned by the Customer but for various reasons, the material is not stored at the point of use on the shop floor. Overflow material is held in another location on the Customer’s site.

The Contractor shall ensure that overflow material is consumed prior to a replenishment delivery from any other source. Overflow material must be recorded and tracked in the Contractor’s information system in order to properly use all overflow material prior to the Contractor obtaining material from any other source.

The movement of material from overflow to the shop bin is recorded and reported as a demand but not invoiced to the Government through the submittal of a Demand History Allocation (DHA). All overflow actions must be recorded in the Contractor’s information system and report in the monthly demand reports to the Government in the formats described in the contract. The current list of overflow items will be provided by the Government prior to the effective date of the contract.

3.4 Lateral Stock Movements

Lateral stock movements are the movement of material among shops. The need may arise to transfer material from one bin to another bin to meet mission needs, fill empty bins, or improve inventory efficiency. The Contractor will recommend the transfers identified by NSN, quantity, and bin location, to the COR. Upon approval from the COR, the Contractor will move the material to the needed location. All lateral transfers must be recorded in the Contractor’s information system and reported in the monthly demand reports to the Government in the formats described in the contract. The Contractor shall track all movements and make necessary supply adjustments to reflect the transfers of material. No financial adjustments, in the form of either invoices or credits are to be made for lateral stock movements.

3.5 Recommend Changes of Covered Items and/or AQ Levels

The Government will determine the bin AQ and provide such to the Contractor within 60 days of contract award. During the course of the contract, the Contractor shall make recommendations to the Customer regarding quarterly AQs adjustments, additions, deletions, or changes to the array of items covered by the contract to correct any potential deficiencies in the supply chain process. The Contractor may make such suggestions to ensure the attainment of 99.0% BFR, and to manage on-hand inventories to eliminate or reduce unnecessary inventories. Contractor recommendations will be sent to the IPV Manager with a copy to the Contracting Officer. The COR shall respond to the Contractor with approval/disapproval and/or suggested edits to the AQ recommendations within five (5) business days.

Once the COR has approved the Contractor’s recommended changes, the Contractor shall implement the changes within 3 business days.

3.6 Conduct Spot Buys (All Customers)

IAW the Spot-Buy clause in the contract, on an “as needed” basis, the Contractor shall acquire and furnish consumables that are not included in the schedule of items covered by the contract at the time the need arises. IAW the sourcing order of priority, upon receipt of the spot-buy requirement, the Contractor shall:

• Generate the spot-buy request form

• Obtain vendor quotes from qualified sources

• Provide completed spot-buy form to the Army COR approval/disapproval of the spot-buy

• Only if disapproved, provide completed spot-buy form to Site IPV Manager for impact statement and resubmission to the KO

• Provide status updates on spot-buy requests/orders as requested

• Deliver spot-buy parts to the customer for KO approved spot-buys

• Complete a Demand History Allocation (DHA) submission for spot-buys

• Provide DHA submission data to the Customer on a monthly basis

3.7 Demand Analysis and Planning Requirements

To provide optimum support to the customer site, the contractor shall employ best commercial practices to plan, obtain and distribute…