Draft SECTION H C12.docx

H-1 SMALL BUSINESS SUBCONTRACTING REQUIREMENTS AND INCENTIVES (APR 2012)

a) This clause does not apply to small businesses. The magnitude of this contract may require many business concerns to team, partner, and/or subcontract with other business concerns (large and small). The Government has set a small business subcontracting requirement of at least 28% of the obligated dollars for this contract. All large business prime contractors are required to meet and maintain the small business subcontracting requirement throughout the life of the contract. The higher of the contractor proposed small business subcontracting target or the Government requirement will be considered the small business subcontract requirement.

Small Business subcontracting requirements will be expressed in terms of percent of contract value in addition to percent of subcontracted amount. Large businesses are required to subcontract 28% of the total contract value for the C-12 acquisition to small businesses. First-tier (subcontractor one level below prime contractor) awards may be considered in meeting or exceeding requirements. No lower tier will be considered. The small business subcontracting requirement will be reviewed annually and rated as an element of the Contractor Performance Assessment Reporting Systems (CPARS). IAW DFARS 219.705-4, any small business goal that is not a positive goal shall be justified. The contractor's expressed targets will be incorporated into and become part of the contract. The contractor will be required to provide reports on SDB subcontractor participation in accordance with FAR clause 52.219-28.

For this contract, the Offerer has proposed a small business subcontract target of Taken from Proposal % of the total obligated dollars for this contract.

Data regarding each Contractor's subcontractor performance will be obtained in a Small Business Participation Report as follows: after contract award, prime contractors shall report its achievement in meeting subcontracting requirements through submission of documentation supporting actual total contract dollars subcontracted to small business concerns. This Small Business Participation Report shall include information in Small Business Participation Report and be submitted as directed in Reporting Requirements so that the Government can determine the extent of compliance by the prime contractor. Additional reporting is required in accordance with DFARS 252.219-7003, which requires the Contractor to report annually its achievement in meeting subcontracting requirements through submission of the Individual Subcontract Report (ISR) and the Summary Subcontract Report (SSR) using the web-based Electronic Subcontracting Reporting System (eSRS) http://www.esrs.gov.

b) If it is determined that a prime contractor is not meeting the requirement specified in paragraph (a) at the time of submission of the Small Business Participation Report, the contractor shall be required to submit a "get well plan" to the Air Force within 30 calendar days thereafter. The "get well plan" shall set forth the remedial actions the contractor intends to take to meet the Small Business Subcontracting Requirement within the next 6 months. This "get well plan" must be approved by the Contracting Officer.

c) The Contractor's performance in failing to meet, meeting, or exceeding proposed subcontracting requirement in paragraph (a) above, will be reflected in the annual contract CPARS and the Government's determination on exercise of options.

d) Failure to meet the subcontracting requirements of the contract may have a negative impact on the CPAR rating. It may also negatively impact the determination of the Government to exercise options on this contract and may be handled as any other contract breach. Conversely, exceeding the small business participation and subcontracting plan requirements may result in a favorable CPARS rating and have a positive impact on past performance ratings.

H.2 OVER AND ABOVE WORK PROCEDURES (OCT 2011)

Written authorization to proceed prior to using over and above CLINs must be received in the form of a work request issued by the Administrative Contracting Officer (ACO) or Procuring Contracting Officer (PCO) before performance. The contractor shall prepare work request proposals with breakouts of all direct and indirect costs for the necessary over and above work CLIN in the format and details described by the ACO, and submit them to the designated Government Contracting Officer's Representative (COR). As a minimum, proposals must be identified to the contract, be serially numbered, and specify impact to the delivery schedule. When applicable to aircraft, they shall be consecutively numbered on separate series for each aircraft (if applicable). Upon request of the ACO, the contractor shall also prepare consolidated work request proposals covering previously approved over and above items.

Negotiations for O&A work, to include all required labor, material and subcontractor efforts, will be completed prior to commencement of work whenever practicable, but in no case later than the time of completion of 40% of the work. If an item has a fixed price on the contract, that price shall be used for the Over and Above price.

a) Fixed Hourly Rate Items: The price negotiated by the ACO shall be based on "hands on" labor hours multiplied by the contract fixed hourly rate. The number of "hands on" labor hours required shall be negotiated between the contractor and the ACO. "Hands on" labor hours to be used in negotiated fixed hourly rate items are restricted to those defined below. The fixed hourly rate includes charges for: "hands on" labor cost; any labor cost not included in the definition of "hands on" labor for which the contractor accounts as direct labor; burdens; general and administrative expenses; and other allowable costs and profit. The fixed hourly rate does not include direct parts and materials.

For the purposes of negotiating prices for the fixed hourly rate items, the "hands on" labor hours to which the fixed hourly rate is applied, are limited to only that labor performed by personnel actually engaged in the direct performance of work required. "Hands on" labor shall not include any labor performed by support of supervisory type personnel, such as, but not limited to: timekeepers, payroll clerks, purchasing, material handling, quality control, storing and issuing personnel. Quality control personnel are considered as those personnel who apply standards to finish work/products to determine that finish production work is serviceable in all respects.

b) Fixed Material Handling Rate Items: The price negotiated by the ACO shall be based on material proposed multiplied by the contract fixed material handling rate. The material required shall be negotiated between the contractor and the ACO. "Materials" are those parts or materials purchased, supplied, manufactured, or fabricated by the Contractor for the sole purpose of incorporating them into or making them apart of the end products or components thereof covered by this contract. The Material Handling Rate includes charges for: burdens; general and administrative expenses; and other allowable costs and profit. For pricing of material, the Contractor shall provide support (Purchase Order, Quote, etc.) for the quantity needed. The Contractor shall provide the basis for the material purchase based on the following order of precedence:

1. An open purchase order with deliveries in the year of use.

2. An open purchase order with deliveries in a previous year.

3. A closed purchase order.

4. A quote for the specific material/part.

If the price is based on a closed purchase order or expired quote that is not reflective of the anticipated need for the FY, the contractor will provide price justification or the price may be adjusted to reflect the anticipated need for the FY prior to application of the markup. The specified CLINs in Section B of the contract that use the material handling rate for O&A tasks shall be multiplied by the material handling rate currently on contract.

The anticipated or negotiated hours, when multiplied by the fixed hourly rate plus any material costs multiplied by the material handling rate, constitute the firm fixed price for the over and above work.

c) Subcontract Markup Factor: The price negotiated by the ACO shall be based on the subcontract effort proposed multiplied by the contract fixed subcontract markup factor. The subcontract effort shall be negotiated between the prime contractor and the ACO. "Subcontract" means any agreement (other than one involving an employer-employee relationship) entered into by a Government Prime Contractor calling for supplies and/or services required for performance of the contract or contract modification. The Subcontract Markup Rate includes charges for: burdens; general and administrative expenses; and other allowable costs and profit.

For pricing subcontracts, the Contractor shall provide support (Purchase Order, Quote, etc.) for the subcontract effort needed The Contractor shall provide the basis for subcontract price based on the following order of precedence:

1. An open purchase order with deliveries in the year of use.

2. An open purchase order with deliveries in a previous year.

3. A closed purchase order.

4 .A quote for the specific material/part.

If the price is based on a closed purchase order or expired quote that is not reflective of the anticipated need for the FY, the contractor will provide price justification or the price may be adjusted to reflect the anticipated need for the FY prior to application of the markup. The specified CLINs in Section B of the contract that use the subcontractor markup factor for O&A tasks shall be multiplied by the subcontractor markup factor currently on contract. The anticipated or subcontract effort, when multiplied by the subcontractor markup factor constitutes the firm fixed price for the over and above work.

At any time during contract performance, when sufficient data becomes available on a repetitive task being performed in the fixed hourly rate category, either the contractor or Procuring Contracting Officer (PCO) may request a negotiation to establish a firm-fixed price (fixed price per event item) for that item for the remaining life of the contract. The ACO shall advise the PCO of all such agreements in order that changes can be incorporated in periodic contract modification(s).

The Contractor shall notify the Government (PCO and ACO) in writing whenever he/she believes that the cost he/she expects to incur within the succeeding thirty (30) days will exceed 75% of the obligated amount for each CLIN. The Contractor shall also notify the Government (PCO and ACO) in writing at any other time he/she expects the costs will be substantially greater or less than the obligated amount. The Contractor shall not expend effort or costs greater than 100% of the obligated amount on each line item for each contract action.

The Government reserves the right to increase or decrease the funds allocated on each CLIN on a unilateral basis by modification to the contract. In no event shall the Contracting Officer decrease the funds below the amount incurred by the Contractor at the time of the notice of decrease. To the extent the schedule sets forth an amount to cover the estimated cost for a specified item, the Government shall not be obligated to pay the Contractor any amount in excess of the amount set forth in the schedule.

H.3 BASE SUPPORT (AUG 2011)

a) Base support shall be provided by the Government to the Contractor in accordance with thisprovision. Failure by the Contractor to comply with the requirements of this provision shall release the Government, without prejudice, from its obligation to provide base support by the date(s) required. If warranted, and if the Contractor has complied with the requirements of this provision, an equitable adjustment shall be made if the Government fails to provide base support by the date(s) required.

b) Base support includes Government-controlled working space, material, equipment, services(including automatic data processing), or other support (excluding use of the Defense Switched Network (DSN)) which the Government determines can be made available at, or through, any Air Force installation where this contract shall be performed. All Government property in the possession of the Contractor, provided through the base support provision, shall be used and managed in accordance with the Government Property clauses.

c) Unless otherwise stipulated in the contract schedule, support shall be provided on a no-charge-for-use basis and the value shall be a part of the Government's contract consideration. The Contractor agrees to immediately report to the PCO (with a copy to the cognizant ACO) inadequacies, defective Government-Furnished Property (GFP), or non-availability of support stipulated by the contract schedule, together with a recommended plan for obtaining the required support. The Government agrees to determine (within 10 workdays) the validity and extent of the involved requirement and the method by which it shall be fulfilled (e.g., purchase, rental, lease, GFP, etc.). Facilities shall not be purchased under this provision. Additionally, the Contractor (or authorized representative) shall not purchase, or otherwise furnish any base support requirement provided by the provision (or authorize others to do so), without prior written approval of the Contracting Officer regarding the price, terms, and conditions of the proposed purchase, or approval of other arrangements.

d) The Government support to be furnished under this contract is included in the PWS Appendix E of the RFP/Contract award. Because of the nature and location(s) of the work performed, the value of such equipment is undeterminable. The Contractor shall not incur any cost resulting from nonsupport prior to Contracting Officer concurrence in accordance with this provision.

H.4 INDEMNIFICATION OF GOVERNMENT ASSETS (SEP 2014)

By written acceptance of this clause by the contractor and execution of this contract by the United States Government, the contractor hereby agrees to indemnify and hold harmless the US Government against any and all losses, claims, liabilities, and expenses, for aircraft costs and aircraft component costs logistically supported under this contract, which are in the possession, care, custody, or control of the contractor while on the contractor's premises, vendor/subcontractor premises or the Main Operating Bases (MOBs) identified in the contract schedule under places of performance. Additionally, the contractor is required to comply with the existing base safety procedures of the MOBs. Reimbursement of any damage to or loss of an aircraft will not exceed the replacement cost of that particular aircraft, including all modifications and improvements. Third party claims are excluded from this provision. Acts of God are expressly excluded unless provisions to cover these occurrences are covered by the Contractor's insurance policies

H.5 PAYMENTS FOR TRAVEL AND PER DIEM (AUG 2011)

Any payment for travel and per diem cost in support of the C-12 Program mission requirement for which a contractor is entitled to be paid, shall be made upon the submission of properly certified invoices, supported by such other evidence as required by the Administrative Contracting Officer (ACO), covering expenditures for which payment is sought. Payment shall be in accordance with FAR 31.205-46. The contractor shall utilize Joint Federal Travel Regulations (JFTR) rules or actual costs, whichever is less, when submitting travel vouchers. Travel expenses shall be reimbursed at actual cost (any overheads, subcontractor costs/add-ins, bulks, fees, or profit shall not be paid on travel costs). Any additional costs added to travel shall be approved in advance by the PCO/ACO.

H.6 CHANGESINAIRCRAFTFLEET,QUANTITY,ORLOCATION (MAR 2014)

Any changes in the location and quantity of aircraft may nonetheless be required to be logistically supported under this contract. The parties agree to enter into good faith negotiations, if necessary, to determine the impact of increasing or decreasing aircraft quantities or locations covered by the contract. Changes in quantity and location may be driven by many factors including but not limited to aircraft retirement decisions.

H.7 FLIGHT AUTHORIZATION (AUG 2011)

Contractor representatives are authorized to be a passenger on the aircraft when the local Commander determines the need for on-board capability. This provision applies primarily to missions involving travel to remote areas away from the home base, or the demonstration of in-flight malfunctions that cannot be demonstrated on the ground. Unusual circumstances may dictate that the local Commander approves Contractor technical representatives as passengers on the aircraft for other reasons. When applicable, regulations or directives require that orders (or other formal documentation) be issued to implement this clause of the contract. The local Commander is responsible to provide the required orders or other documentation.