Atch-5_ExhibitG_FHAdjustment.doc

Attchment-5 Exhibit G MQ-1/MQ-9 FLEXIBLE SUSTAINMENT PROCEDURES FOR ANNUAL FLYING HOUR ADJUSTMENTS (DEC 2015)

(a) The basic negotiated cost and fee amounts of this contract are based on flight hour (FH) requirements as levied by the lead command set forth in Attachment 1, Performance Work Statement, dated 15 October 2015, table 1.1. In the event actual flying hours for a given year differ by more than 5% (higher or lower) from anticipated levels, the parties shall negotiate an upward or downward adjustment to the estimated agreed upon cost and fee amounts of this contract. Any upward adjustment must be accompanied by a funded modification. Contracted FHs shall not be increased without a funded modification to increase FH. Negotiated COM is TBN and FEE is TBN and shall be changed as shown in (e) for any adjustments.

(b) The following CLINs are subject to this flight hour adjustment:

Cost Per

DEPOT REPAIR CLIN

Flight Hours Flight Hour(CPFH) CLIN Total

000x (MQ-1 CONUS) 23,004

$ TBD

$ TBD

000x (MQ-1 OCONUS) 145,635

$ TBD

$ TBD

000x (MQ-9 CONUS) 27,509

$ TBD

$ TBD

000x (MQ-9 OCONUS) 122,056

$ TBD

$ TBD

(c) The parties will make an assessment to determine if an adjustment is appropriate no later than 31 August 2016. The cost and fee for a given contract year may be assessed and adjusted no more than twice per year, if warranted under the terms of this clause. This assessment will be based on actual flight hours to date and a projection of the fleet performance remaining for the given fiscal year. Any adjustment pursuant to this clause shall be negotiated and made binding via a bi-lateral modification.

(d) An example of a proposed FH adjustment mod under this clause is as follows: In July of the given contract year, FHs for MQ-1 CONUS are estimated to change from 15,000 FHs to 14,000 FHs, based on actual hours flown and projected FHs for the rest of the given contract year. Since the resultant change is a 1,000 FH decrease, or a 6.6% decrease, then the FHA clause is applicable.

Therefore the decrease shall be as follows:

FROM:

DEPOT REPAIR CLIN Flight Hours Cost Per Flight Hour CLIN Total

0007 (MQ-1 CONUS) 15,000 $ 1685.64 $25,284,673.31

TO:

DEPOT REPAIR CLIN Flight Hours Cost Per Flight Hour CLIN Total

0007 (MQ-1 CONUS) 14,000 $ 1685.64 ` $23,598,960.00

A decrease of $1,685,713.31 for CLIN 007.

(e) As a result of the above CLIN 0007 fee shall be changed in schedule B as follows:

FROM:

CLIN Estimated Cost Fee(8.5%) Total

0007 $ 23,316,997(includes COM) $1,967,676 $25,284,673.31

TO:

CLIN Estimated Cost Fee(8.5%) Total

0007 $21,762,470.62(Includes COM) $1,836,489.38 $23,598,960.00

Estimated Cost above includes Cost Of Money. To compute revised estimated cost and fee, take fee ($1,967,676) and multiply by change in flight hours percentage (in this example 6.6%). Then subtract reduction. In this example fee is reduced from $1,967,676 to $1,836,896.38 a total reduction of $131,186.62 ($1,967,676 multiplied by 6.6%). To get revised estimated cost ($21,762,470.62), subtract revised fee($1,836,489.38) from revised total cost ($23,598,960.00).