ENCLOSURE 2 - Cost Proposal Instructions.pdf

SPE4AX-22-R-0010

Proposal Submission Instructions

Based on the FAR 15 application to the F Series COI Follow-On, the Contractor is required to submit Certified Cost or Price Data in accordance with FAR 15.403-4. In meeting these requirements, the Contractor is requested to follow the instructions in Table 15-2 of FAR 15.408, Instructions for Submitting Cost/Price Proposals When Certified Cost or Pricing Data Are Required.

The proposal strategy will include a fully certified proposal with ~90% of the total value certified based on actual costs and the remaining ~10% certified based on the process/methodology the Contractor utilized to reach its proposed lot price. DLA expects two (2) pricing groups as noted in the Statement of Work (SOW).

1) Group A: Items with an aggregate of 90% of the estimated contract base period value and/or items forecasted to generate a requisition in the base period. This group shall have discrete unit pricing for each year.

2) Group C: Items with no forecasted requisition during the contract base period and/or an estimated value below $25K with no requisitions forecasted in the first three (3) years of the contract base period. This group will be priced via pricing wedge initially with estimated values and actual costs will be provided during annual reconciliations per the SOW.

The Contractor shall agree the aforementioned proposal methodology will be provided in full, transparent detail to DLA to ensure a fair and reasonable price determination can be made.

In addition, DLA included the below recommendations for proposal submission that offer detailed application of the minimum FAR requirements specified above. The Contractor’s adherence to the FAR requirements and recommendations below will assist both DLA and DCMA in timely review and evaluation of the COI proposal.

Therefore, in addition to the Table 15-2 requirements specified above, it is recommended the proposal shall be prepared utilizing the following proposal instructions:

1. A Consolidated Bill of Material (CBOM) is to include, at a minimum, combined estimated requirements for all periods of performance:

a. For all CBOM Line Items priced based on sole source, non-competitive suppliers over TINA ($2M) provide:

i. Certified cost or pricing data for all suppliers in the form of subcontract proposals must be submitted with the prime proposal submission (IAW FAR 15.403-4(a)(1))

ii. All direct and indirect rates must be supported by budgetary data for each respective year over the entire period of performance. Higher tier suppliers must verify that adequate certified cost or pricing data is provided for all lower tier suppliers over the TINA threshold.

iii. Complete and signed DCMA and DCAA adequacy checklists for all suppliers, if available.

iv. Any waiver requests for certified cost or pricing data must be submitted and approved no less than 15 business days prior to submittal of the prime proposal (IAW FAR 15.403-1(c)(4)).

v. Rationale/explanation of any proposed escalation that deviates from historical price trends on the part.

b. For all CBOM Line Items priced based on commercial quotes, provide:

i. The Commercial Item Determination (CID).

ii. Sales data (preferred method), price analysis (FAR 15.404-1(B)), or market analysis used to determine price reasonableness.

iii. Sales data, market analysis, other documentation used to determine significant commercial (non-government) contract sales which could include the following required supporting documentation:

1. Commercial supplier web sites, catalogs, quotes from which unit prices were determined;

2. Recent (past two years) purchase history for all items priced based on commercial quotes;

3. Identify commercial suppliers (with discount percentage) that offer a discount for preferred customers and/or on government contracts;

4. Identify commercial suppliers with whom the prime anticipates negotiating commercial unit prices;

5. Negotiation history with commercial suppliers- by supplier and in summary.

c. For all CBOM Line Items priced based on competitive quotes, provide:

i. Competitive requests for quotes where only one bid has been received:

1. And where the prime allowed a minimum of 30 days for receipt of proposal, provide cost or pricing data as appropriate, in accordance with paragraph A.1 above (sole source non-competitive suppliers).

2. Where a solicitation was open to industry for less than 30 days and only one bid was received, the prime must re-advertise for a minimum period of an additional 30 days. If, at that time, only one bid is received, refer to instructions provided at paragraph A.1 above (sole source non-competitive suppliers).

ii. Evidence of selection of the supplier who provided the greatest overall benefit (Best Value);

iii. Statement of facts to support the prime contractor's selection of a higher bid supplier;

iv. Other documentation to support costs:

1. Recent purchase history for all proposed items priced based on competitive quotes;

2. RFQ to suppliers to verify prime contractor requested competitive pricing versus cost or pricing data; and

3. Price analysis that demonstrates the proposed unit prices were reasonable.

4. Rationale/explanation of significant price increases from prior PA/PO prices.

5. Rationale/explanation of any proposed escalation that deviates from historical price trends on the part.

d. For all CBOM Line Items priced based on strategic agreements (Long Term

Agreements (LTAs)) provide:

i. Subcontract cost or pricing data to the government as part of the prime's own cost or pricing data, when required by FAR 15.404-3(c);

ii. Documentation the prime completed adequate cost or pricing data analysis (Procurement Financial Analysis (PFA)); (FAR 15.404-1)

iii. Proof the contractor demonstrated continuing reasonableness of the LTA prices included in the proposal.

e. For all CBOM Line Items that are based upon Contractor Affiliates that have been Simplified, provide:

i. An analysis showing the proposed costs are reasonable

ii. A description of the Cost Accounting System

iii. Breakdown of the cost (material/labor)

2. In addition to the CBOM requirements listed above, the Contractor shall also provide the following;

a. A bill of material extract file generated the day the proposal is priced

b. The detailed Value Engineer analysis used to substantiate costs

c. An in-depth analysis of the proposed labor

i. Require more information than just the 3, 6, 9, 12 month averages

ii. Provide a summary of the manufacturing process or the Sequence of

Operations used to manufacture the part

iii. Provide a list of all known Cost Reductions or Process Improvements

d. Identification of all parts that contain rhenium

i. Provide cost trends and substantiation

ii. Explain how this relates cost-wise to the ongoing reclamation project

iii. Rationale for using high Rhenium (N5 material) when low Rhenium (N515 material) alternatives are available.

e. Identification of all revenue sharing agreements and their associate parts

i. The Contractor shall provide necessary cost or pricing data per FAR 15.404- 3(b)(1)

f. Identification and explanation of any productivity factors

i. Include data or analysis that supports the inclusion or exclusion of any proposed productivity factors

3. As set forth at FAR 15.406-2, Certificate of Current Cost or Pricing Data, paragraph (c):

(c) The contracting officer and contractor are encouraged to reach a prior agreement on criteria for establishing closing or cutoff dates when appropriate in order to minimize delays associated with proposal updates. Closing or cutoff dates should be included as part of the data submitted with the proposal and, before agreement on price; data should be updated by the contractor to the latest closing or cutoff dates for which the data are available. Use of cutoff dates coinciding with reports is acceptable, as certain data may not be reasonably available before normal periodic closing dates (e.g., actual indirect costs). Data within the contractor’s or a subcontractor’s organization on matters significant to contractor management and to the Government will be treated as reasonably available. What is significant depends upon the circumstances of each acquisition.

It is the intent of the contracting officer to establish reasonable 'cut off' dates in order to facilitate negotiations and minimize the Contractor’s concerns related to updating proposals and performing 'sweeps' related to their certification. However, it is expected that all data reasonably available after these cut off dates but before award [that might impact negotiations] will be maintained and made readily available/accessible.

Nothing stated above shall be construed as to alleviate the contractor from any responsibilities or requirements provided for in the Federal Acquisition Regulations.

Please direct all comments or questions to the undersigned at 804-279-6621 or Anthony.G.Howard@dla.mil.

Sincerely, Anthony G Howard Contracting Officer