Vendor_Questions_and_Government_Responses_Amendment_08.pdf

F108 Mod 13/15 Additional Vendor Questions - 24 May 2019

Question Number

Question Gov't Response

Can USAF provide copies of or directions where to locate the following referenced safety related documents?

MIL-STD-882E, AFI 91-301 and AFI 94-204

Mil Standards can be obtained via the internet at www.ds.dla.mil; AFI 91-301 has been replaced with AFI 91-202, all AFI's can be found at www.e-publishing.af.mil.

Since there are no electronic parts in the Mod 13/15, can USAF confirm the Counterfeit Protection Plan (CPP) is not applicable to this workscope?

The counterfeit Protection Plan has been removed as a requirements for this acquisition.

The Unit Acquisition Cost amount is used to determine the BER threshold of an asset. Can USAF clarify the source for the $1,692,010 cost?

Last time the Governent purchased a new manufactured Mod 13/15 was in 2012, the BER was developed using the price at that time with an escalation for out years applied to calculate current year dollars for BER.

Can USAF provide any additional details regarding the LPT population that could be subject to overhaul which still contain blades subject to SB 72-0745?

The OEM was contacted. While the suspect batch numbers are listed in the Service Bullentin, the percentage released to the commerical fleets vs. military F108s is not known. The blades are not tracked, so determining what has already been cleared is not possible

5 Will the SOW/RFP be modified as a result of this second round of questions? Yes

Can USAF clarify who is responsible for the shipping costs for return shipments of completed modules back to Tinker? Section

1.29 of the SOW is unclear on how return shipments are paid for. Attachment 4 states FOB Origin - Pre Paid Freight, however there is a Transportation Fund account number also referenced in Attachment 4. Is the contractor responsible to pay for shipments back to Tinker?

There is a Transportation Code for cost of transportation and the code will be in the contract and Transportation Document attachments.

7 Can the USAF provide the number of LPTs dispositioned as BER over the last 5 years? Zero - there have been no incednets for BER in the last five years.

8 Will the USAF reconsider providing historical part scrap rates?

Historical scrap and repair data is incorporated into this solicitation amendment. See attached spreadsheet

Will the USAF reconsider providing a listing USAF approved DERs and/or Deviations? Are approved DERs/Deviations applicable to the fleet or just a single module 13/15?

The 421st is not aware of any approved DERs. Deviations, if approved, are done per single module and addressed on a form DD1694.

As a follow-up to Q&A Questions 26 & 71: Can the USAF provide a summary of engine removal reasons for LPTs remanufactured under current contract? As an example:

FOD: xx High EGT: xx Over Temp: xx Performance Restoration: xx Etc: xx

Data from the last 3 years:

FOD: Compressor delamination, 120 Removals High EGT: 33 Removals Over Temp: 27 Removals LPT Stage 4 Shingling: 13 Removals

Follow-up to PreProposal Conference Question 36 (will the USAF provide a list of USAF approved vendors):

NSN 2840-01-229-5786PN Respectfully request you advise all approved vendors as of this date.

NSN 2840-01-229-5786PN Respectfully request you advise all vendors with pending SAR approvals

Currently, there are enough approved vendors and vendors with submitted SAR packages in review for approval to determine adequate competition.

Overtemp engine can be as costly and do as much, or more, damage as a FOD engine. The frequency of receiving an overtemp engine is much higher than received a FOD engine. How many overtemp englines were brought in for cause in the last three years?

There were 27 engines brought in for overtemp condition in the last 3 years

Early production prototype modules are infrequently input for remanufacture and require configuration upgrades. These module part numbers are not found in any manual. Are these modules to be considered outside the scope of the contract? If no, how do you expect potential bidders to incorporate this unreimbursed expense in their bids?

While it may be possible to find early configurations, USAF documentation indicates that the engines known to have protype hardward have been upgraded.

There are a very large number of F108 issues considered outside of normal engine operations maintenance such as blade unlatch, attributed to known design (stage 1 blades) and USAF maintenance practices (stage 4 blades), and damage associated with Overtemp and FOD, issues which are experienced by both the USAF and commercial fleets. Additionally, the USAF fleet has inherent issues in modules such as the stg 1 blade Service Bulletin CFM56-2B SB 72-0745, preproduction modules requiring upgrade due to atypical assembly part numbered components, and LLP disks found with production irregularities from the manufacturer that necessitated full module LLP disk replacement. All these issues are known by the USAF. Prior questions submitted to the USAF have asked about these issues and the Government has followed up with responses of “not an issue” or “we don‘t know.”

Contractor has advised the Government of supply supportability concerns exacerbated by the factors above and the yield of repaired parts from both commercial used and USAF modules.

All issues on the current contract deemed outside normal engine operations, to include but not limited to, SB 72-0745, preproduction modules, and other USAF module issues are being handled by an over and above charge on the current contract.

Simply stated, these conditions cannot be anticipated or quantified without Government fully sharing fleet data.

If the USAF is unable to quantify planning factors for these conditions, how do you expect prospective bidders to price the risk into their bids?

Potential bidders have various levels of experience in this market and may or may not price or plan for today’s known but unquantified risks.

How is the Air Force going to establish the competitive range and fairly assess price reasonableness and realism where the risks identified above are largely unknown to competitors?

This requirement is for remanufacture and therefore O&A will not be considered.

Informaiton has been provided above on removal drivers over the past 3 years

Follow-up to Question 61:

Reference OEM Service Bulletins for Replacement of CFM-56 Stage 1 LPT Blades (CFM56-2B Version is SB72-0745), how many defective blades are in the USAF fleet?

Government Response Question 61:

The Government is unable to provide this information.

Follow-up Questions to Government Response to Question 61:

Contractor respectfully requests Tinker AFB contact the OEM to determine overall defective blade impact on USAF fleet of CFM56- 2A engines and share the data with prospective bidders. This information should facilitate establishing a replacement rate.

The OEM was contacted. While the suspect batch numbers are listed in the Service Bullentin, the percentage released to the commerical fleets vs. military F108s is not known. The blades are not tracked, so determining what has already been cleared is not possible

Follow-up to Question 62: Market research supports the OEM defective blade Service Bulletins are driving extreme market shortages of Stage 1 reparable blades, is the USAF willing to share risk by paying for new blades in the modules?

Government Response Question 62:

No.

Follow-up Questions to Government Response to Question 62:

Reference CFM56-2B SB 72-0745, Replacement of Stage 1 LPT Blade 301-330-114-0 and 301-330-115-0.

Market availability of replacement blades are influenced by the variations of the same service bulletin effecting operators of CFM56-2, -2A, -2B, -3, -3B, and -3C engines. All these engines utilize the same blades, PN 301-330-114-0 and 301-330-115-0.

Recognizing the volume of commercially operating CFM56 engines coupled with significant commercial engine cycle times and 100,939 batches of OEM suspect blades sold to the operating public, one easily understands how the market has come to be flooded with suspect blades.

SB 72-0745 R2 recommends compliance before the Stage 1 LPT blade experiences 12000 cycles since new and recommends removal time that matches the Stage 1 disk life limit – a noted change from the R1 compliance direction. One might think SB 72- 0745 exposure would be equivalent to the LLP change frequency, .16% and the unknown number of affected blades per engine.

***This assumption only works if the module is experiencing a first time repair event.*** Maintaining blade set integrity is not an ESM requirement nor a SOW requirement. Therefore, the .16% event factor has greatly increased. The known volume of SB 72- 0745 blades encountered during module remanufacture efforts have varied but include full bladed disk sets of 1st stage blades, i.e., 174 each 1st stage blades.

Will the Government consider adding a separate line item to address funding of SB 72-0745 blades? Similar to what is accomplished today, contractor would advise the quantity of suspect blades, the Government would advise if the blades were to be replaced or repaired. If replacement is requested, the Government would fund the CLIN accordingly?

Average rate of 30-40% replacement for Stage 1 Blades; The government has provided, with this ammendment, historical data sufficient to estimate yearly replacement rate. Because this requirement is for remanufacturing there is no need for separate CLINs or SubCLINs for piece parts required to remanufactur the whole part.

Follow-up to Question 64:

The CFM56-3 engine experiences the documented phenomenon of first stage LPT blade unlatch. The DFM56-2B and CFM -3 share the same blades and design. Do you experience the same phenomenon with CFM 56-2B modules? If so, at what frequency? How is the contractor engaged in this issue?

Government Response Question 64:

The USAF has not seen this occurrence with any frequency.

Follow-up Questions to Government Response to Question 64:

Contractor requests the Government explain the response to Question 64 as it does not take into account assets returned to the contractor for unlatch investigation. The unlatch frequency drove Tinker F108 Engineering to revise the SOW to include a depot level engine teardown inspection as a remanufacture procedure during the overhaul of the module assembly.

Is 1st stage LPT blade unlatch an issue associated with the CFM56-2B Module 13s?

How is the contractor engaged and would the Government consider unlatch as a contractor warranty issue?

There have been no engine removals for the last 3yrs for Stage 1 shingeling Within the last 3 years, DR records indicate that there were 6 stage 1 shingle events prior to engine release from Depot Unlatch is a warranty issue before it is released to the field. Please refer to historical data as incorporated in this ammendment.

Question 64:

The CFM56 engine experiences a documented engine shop manual (ESM) condition identified as shingling and unlatch of the LPT blades.

What is the known frequency of shingling/unlatch associated with the Module 13/15 program?

How will this condition be managed and how will the contractor be engaged?

There have been no engine removals for the last 3yrs for Stage 1 shingeling Within the last 3 years, DR records indicate that there were 6 stage 1 shingle events prior to engine release from Depot Unlatch is a warranty issue before it is released to the field For the current Stage 4 Blade issue, it is still under investigation. once this has been fully analysed the data will be released and addressed as necessary at a future date. Any change or modification to the contract as a result of this analysis should be considered within scope of the final award for this acquisition.

Question 66:

How is the USAF going to help address supply chain problems associated with availability of OEM repair detail components and consumables materials: for example, LPT Stage 2-4 nozzle segments?

This acquisiton is not a Government Furnished Material contract. The contractor will be responsible for acquiring all components needed to remanufacture each module.

Questions 67:

Market evaluations confirm a decline in yield for Stage 1 and Stage 2 blades (as well as other stages) for commercial unserviceable material, will the Government share risk over the life of the contract by paying for new blades?

New and or refurbished (used) blades should be used to in considering total remanufactured price. There will not be a separate CLIN for Blades or piece parts.

Question :

Would the Government clearly identify what module conditions and resulting workscope are to be priced within the CLIN firm fixed price?

Data from the last 3 years:

FOD: Compressor delamination, 120 Removals High EGT: 33 Removals Over Temp: 27 Removals LPT Stage 4 Shingling: 13 Removals

Question :

How does the Government intend to structure the contract to address the conditions found to be outside the workscope of the firm-fixed price?

This will be a remanufacture contract and therefore no Over & Above will be allowed.

Question :

Market condition have deteriorated drastically and virtually overnight.

• OEM Nov. 2018 Catalog Price for a stage 1 blade, PN 301-330-114-0, is $1682.00 ea. (See Figure 1)

• The world-wide broker for CFM new part blades is now charging $5100.00 each. (See Figure 2) This is an example of the market fluctuations the USAF is requiring the contractor to bear on a firm-fixed price contract.

The only way the Government will control cost is to procure directly from the sole-source OEM and impose FAR Part 15 requirements to ensure fair and reasonable pricing and availability.

How is the Government going to handle this situation so that prospective bidders can provide a reasonable and balanced proposal?

The USAF is providing an estimated blade replacement qty, it is the contractor's decsion on which condition the blades are purchased (commericial used vs new manufacture). This is not a GFM contract.

For non-Life Limited Part (LLP) reparable material, separate CLINS should be established that provide scrap bands should it be determined that a greater % of parts cannot be repaired per the OEM manual and have to be replaced by either commercial used or OEM new. This is particularly important since the commercial used market is drying up.

This is a remanufacture contract, IAW FAR 22.1003-6, The item or equipment is required to be completely or substantially torn down into individual component parts. The tech data provided in the SOW: CFM56-2B ESM 72-54 and CFM56-2B ESM 72-56, are for piece part inspection and remanufacture. The USAF is providing an estimated blade replacement qty, it is the contractor's decsion on which condition the blades are purchased (commericial used vs new manufacture).

For LLP material either establish separate CLINs for replacement or have the Equitable Price Adjustment (EPA) allow for LLP replacements greater than 10% over current factor of 0.16%

See answer to #24 above

Establish separate FFP CLIN pricing for non-routine repairs (FOD or other internal failures) as follows:

a. Upfront inspection

b. Minimum Workscope

c. Performance Workscope

d. Full Overhaul Workscope

See answer to #24 above

Is there any requirement for the contractor to send scrapped hardware back to USAF?

No, there is no requirement to return scrapped hardware, unless the USAF specifically asks for the scrapped material for investigations, analysis, etc. If the USAF requests the scrapped hardware, the contractor will be notified before receiving the module.

Is there a possibility once the contract starts that USAF would want scrapped material returned for review purposes or precious metal reclamation?

See anser to #27 above

Is the USAF expectation of the Disassembly section of the statement of work that the LPT will be broken down to the piece part level? Or is it to only go to the piece part level as required? See SOW 1.10, 1.10 Disassembly: The Contractor shall disassemble each Module 13/15 to expose hardware requiring remanufacture or replacement due to cause or life limits. The Contractor shall inspect and remanufacture or replace, as necessary to meet United States Air Force (USAF) build requirements – CFM56-2B ESM 72-54 and CFM56-2B ESM 72-56, all additional hardware exposed during disassembly.

This is a remanufacture contract, IAW FAR 22.1003-6, The item or equipment is required to be completely or substantially torn down into individual component parts. The tech data provided in the SOW: CFM56-2B ESM 72-54 and CFM56-2B ESM 72-56, are for piece part inspection and remanufacture.

30 Follow up questions as of 20 June 2019

To define the scope of SB applicability can the ESN # be provided for F108-100 engines that are to be inducted for overhaul? If not, how many (or what percentage) of F108 engines in the active fleet were introduced before 1989?

No, the ESNs cannot be provided. The engines are removed for cause and are not planned removals. There is not an easily accessable way to provide this data.

32 Please provide a list of approved DER repairs for module 13/15 There are no approved DER's for this action at this time; please refer to Para 1.16 of the SOW for future deviations.

33 Please provide a list of all active and approved PMA parts currently being used on Mod 13/15 The USAF is not actively approving PMA parts and will not approve any on the current contract. If a PMA currently exists, it would have been approved as an alternate only and we have no way of knowing what was purchased or what was installed.

Can you provide clarification on the Stage 1 Blade Scrap rate percentages. Does the historical scrap rate provided include the requirements of SB 72-0745 issued in 2014? Specifically, does the 30-40% scrap rate encompass remanufacture efforts that were done with the Service Bulletin incorporated as a requirement? Or, does the 30-40% scrap rate reflect scrap rates that were observed as normal remanufacturing work where the Service Bulletin requirement had not been incorporated? Possibly it reflects a split time period if the Service Bulletin was incorporated as a remanufacture requirement some time after the last remanufacture contract was issued?

Yes.

The range is an average for all Stage 1 Blade issues.

Regarding Deviations. I understand the response that if they are approved, they are handled on the SF1694. Are you able to clarify if any deviations have been approved and if so, provide any details on the deviations?

See answer to #32 above.

36 The BER section was removed. Could you clarify why that section was removed?

This is a Remanufacture Supply contract and not a repair contract. The government does not expect to induct any module so badly damaged so as to exceed the BER. If, at any time a module is inducted for remanufacture in which the contractor finds work or parts that exceed the SOW for remanufacture, the contractor shall notify the PCO in writting for disposition.

Original Question - The CFM56 engine experiences a documented engine shop manual (ESM) condition identified as shingling and unlatch of the LPT blades.

What is the known frequency of shingling/unlatch associated with the Module 13/15 program?

Follow Up Questions - Q1: If the Government is unaware of the results of the investigation today, how would a contractor assess this cost?

Q2: Is the Government advising there may be a modification to include additional work scope after contract award?

Q3: Is the Government suggesting the contractor make pricing assumptions based upon unknown circumstances, unknown conditions, and unknown outcomes?

Q4: How is the Government going to handle this situation so that the prospective bidders can provide a reasonable and balanced proposal?

The frequency is unknown and still under investigation. The government does not expect the shingling and unlatching of blades in the Stage 4 LPT to impact the remanufacturing price.

The issue is currently experienced at one Air Force Training Base and affects a small percentage of the fleet.

Q1 The investigation is for Stage 4 Blades only. At this time there is no indication that remanufacturing changes will be made as a result of the investigation.

Q2-Q4: If the need arises, a modification to the awarded contract will be negotiated and considered in scope of the remanufature SOW, see Para 1.13 of the SOW, to address results and concerns of the investigation. The government anticipates the knowledge and experience of the qualified vendors to have sufficient expertise and capabilities to price the requirements of this solicitation without concern of the current invetigation.

Original Question - Will the Government consider adding a separate line item to address funding of SB 72-0745 blades?

Follow up Questions - Q1: If the government has no way of determining the purchased population of SB 72-0745 defective blades, how is the contractor to assess OEM (warranty) blade cost with any degree of accuracy?

Q2: Outside of OEM historical records, no one would be able to determine how many defective blades were sold to the USAF.

Does the OEM have direct log-in access into the CEMS system? Does the OEM have current access to the engine serial number history?

Q3: How is the Government going to determine price reasonableness while requiring the contractor to include SB 72-0745 strict requirements (100% blade removal) within the remanufacture CLIN? The inclusion of SB 72-0745 in the remanufacture CLIN ensures the USAF will have challenges to any resulting award.

Q4: How is the Government going to determine price realism within the remanufacture CLIN while requiring the contractor to include SB 72-0745? There is no basis to establish the (WARRANTY) quantity of defective blades sold to the USAF by the OEM, therefore the Government cannot adequately determine realism in a manner that would ensure there would be no challenges to any resulting award.

Q1: There is an amendment to add a sub-clin for New Stage 1 Blades.

Q2: Any contractor requried to perform CEMS reporting should have access to CEMS. The government, nor the OEM have accurate reporting history to determine number of blades affect by the SB and any associated engine the blades are installed.

Q3, Q4: The ammendment this Q&A is integrated with includes a Sub-CLIN for New Stage 1 Blades. By pricing the blades seperate from the remanufacture, the government expects to mitigate any risk associated with the uncertantity of number of blades affected by SB 72- 0745.

Would the Government consider the following changes to the existing solicitation:

1. Add separate CLINs for SB 72-0745 Blade Replacement

2. 000X, New OEM Blades 000X, Used Serviceable Blades

3. Incentivize the contractor to procure used reparable/serviceable blades

4. Add a CDRL specifically addressing the reporting of SB 72-0745 blades removed from each module. The CLIN/CDRL/SOW would include DCMA audit at the time of source inspection/acceptance to ensure strict compliance with the usage of the SB blade CLINs.

5. Add reporting/audit requirement to the SOW addressing the CDRL requirements.

Note: At a minimum, the USAF would have viable data to pursue warranty settlement with the OEM (on behalf of the taxpayer).

There is an amendment to add a sub-clin for New Stage 1 Blades.

40 Follow up questions as of 18 July 2019

SOW: Will new purchase OEM blades be considered usable as is, or, do the new purchase OEM blades need to be inspected and potentially re-worked to meet the SOW twist angle requirements?

All blades, new and remanufactured, must have the twist angle verified prior to installation. if the blade twist is not within standards/tolerance as specified in the SOW, even new blades from the OEM, then the contractor must bring them into compliance before installation.

Newly added blade CLIN Considerations

• First run “cold start” OEM blades are currently priced at $5100.00 each.

• USAF Module 13/15 LPT stage 1 blade demand will drive continued OEM production for new OEM blades.

• Contract demand forecasting will remain consistent over the next 5 year IDIQ contract period.

• Under normal circumstances, a stable demand over a 5-year period would suggest a downward price adjustment but there is truly no way of knowing how the OEM might behave.

• The degree of price risk to both the Government and potential contractors is excessive when you consider (1) a 40% scrap rate, and (2) the inclusion of an OEM warranty service bulletin with a high degree of volume unpredictability.

• Risk Mitigation for both the Government and the Contractor would be the utilization of CFM/Aviall List Price based upon ___(current purchase order)___.

Contractor Questions:

Would the Government consider structuring the blade CLIN as identified below?

(1) Blade Unit Price: NSP (The Government shall pay the Contractor for newly purchased Stage 1 LPT blades incorporated into the F108 Module 13 at purchase order prices effective at the time of purchase or Government defined unit price?

TO BE NEGOTIATED AS NECESSARY

(2) Procurement Fee: ______ (A fixed percentage for Basic & Options I-IV) For purposes of evaluating TEP, the proposed contractor fee would be used as the only blade evaluating factor. This would require a revised pricing matrix.

As depicted in the ammendment to the solicitation that incorporates this Q&A, the Sub-CLIN for new blades will be priced for the base year only. The government reserves the right to negotiate any option year(s) price for new blades or provide option year(s) new blades as Government Furnished Material (GFM), which ever is most reasonable to the government.

Regarding the changes regarding the CLIN for the blades, we are not 100% clear on what the language means and how this change should be interpreted.

Page 5, Reference Item 0001AA: “Determination to use new LPT Stg 1 Blades will be made by the ACO/PCO. Will not be funded at time of Award. Will be funded on individual Delivery Order as required.”

Is the intent to fund the full BEQ annually under a single Delivery Order for Item 0001AA? The quantity noted in the BEQ of 10,080 appears equates to a 40% scrap rate based on a total of 720 modules. Or is the “Individual Delivery Order” related to the individual modules being sent out for repair? Funding the full BEQ amount would be extremely beneficial to allow orders to be placed, get the supply chain started and have blades on hand to support the requirements and Turn Around Time as modules come in for repair.

If the BEQ will not be funded as a single item and the intent is to fund blades on a per module basis while in the repair process, our concern is the negative effect on the Turn Around Time of the module as well as the lead time required to place orders for parts.

What if the BEQ quantity of 10,080 is too low and the scrap rate drives a higher demand? Will the USAF increase the BEQ to account for a higher scrap rate or is the contractor supposed to take on that risk and factor it into our overhaul price? Is USAF only willing to cover up to 40% scrap rate on the Stage 1 Blades? Its not clear how we should interpret this.

The BEQ is an estimated quantity, actual quantities will be exact as depicted on individual FFP Purchase/Delivery Orders. Because the actual "new blade" quantity cannot be accurately determined before the remanufacture process of the LPT Module 13/15, the contractor shall identify and report to the government through the ACO/PCO and designated engineering authority specific blade replacement per module. Within 48 hours of notification, the government will provide response and modify the Purchase/Delivery Order with quantity and total price for the "new blade" Sub-CLIN.

F108 13 15 Vendor Questions