Government Strategy Update for Industry Awareness.docx

Government Strategy Update for Industry Awareness

1 July 2021

As a result of continued strategy discussions, the Government has updated its acquisition strategy to incorporate the following changes. Please note there is a question the Government is requesting feedback on; feedback is requested no later than 9 July 2021.

· The contract will be structured to have two, five-year ordering periods with one option. The option will encompass the second five-year ordering period.

· The basic contract period will be extended from 2 years to 3 years. CLINs will be included within the basic contract period to identify Low-Rate Initial Production (LRIP) originally identified within Option I (now known as Ordering Year 1). The following depicts how the structure will now look based upon these initial changes:

Ordering Period I: Basic contract period (36 months/3 years); Ordering Year I (12 months); Ordering Year II (12 months)

· The basic contract period will include separate CLINs for the first article units, associated non-recurring engineering costs applicable to first article development and testing, data deliverables, travel, post award conference, and the addition of LRIP CLINs able to be executed towards the latter portion of the basic contract period

· The Government’s anticipated ordering strategy for the basic contract period is to issue the orders for the post award conference and travel CLINs for each group immediately upon contract award to satisfy the contract minimum

· The next orders to be issued will encompass the first article units, non-recurring engineering costs applicable to first article development and testing, data deliverables, and travel CLINs

· Should either the Group A or the Group B awardees complete first article testing prior to the end of the basic contract period and receive first article approval, orders may be placed with that awardee for any amount of the quantities identified in the LRIP CLINs

Option I/Ordering Period II: Ordering Year III (12 months); Ordering Year IV (12 months); Ordering Year V (12 months); Ordering Year VI (12 months); Ordering Year VII (12 months)

NOTE: The quantities are still under discussion at this time, and will be provided within the draft RFP once it is released. Each ordering year would be for full production rates; the only lower rate production is the optional LRIP CLIN as part of the basic.

· The initial source selection and resulting contract awards will provide for the pricing of the Basic contract period (36 months) and the Ordering Year I contract period (12 months), for a total of 4 years that will be pre-priced. The remaining ordering years (Ordering Years II-VII) will be awarded on an unpriced basis.

· The Government will negotiate the unpriced ordering years in increments of three years. Ordering Years II-IV will be negotiated and incorporated into the respective contracts during the Ordering Year I period of performance. Ordering Years V-VII will be negotiated and incorporated into the respective contracts during the Ordering Year IV period of performance.

· The “competitive” quantities for the 72 kW GPUs between the “Group A” and “Group B” awardees will now begin competition in Ordering Year I, as the LRIP will be accomplished during the basic contract period.

· In order to meet regulatory requirements for the evaluation of options at the time of award, the Government anticipates a price evaluation of the unpriced ordering years utilizing the following preliminary approach:

· Offerors shall propose to the Basic Contract Period (to include the LRIP CLINs) and Ordering Year I

· The Government shall use the offerors’ proposed Ordering Year I prices and apply both an escalation factor and a Government-developed price risk factor to arrive at evaluated prices for each ordering year. The sum of all offeror-proposed prices and Government-calculated prices will constitute the total evaluated price for evaluation purposes only.

· From a very top level estimation perspective, can your company provide the estimated percentages of unit cost for each of the following per end item (i.e. 144 kW GPU, 144 kW ULB, 72 kW GPU).

· Aluminum

· Copper

· Steel

· Generators

· Engines

· Labor costs

· Other costs not identified above