Industry Questions for Feedback_8.docx

Government Questions for Industry Feedback 15 April 2021

1. In a previous Q&A document, it was discussed that the Government’s anticipated pricing strategy was to allow offerors to propose to a ceiling price that would be escalated throughout the 10-year contract period. However, this approach is no longer sufficient as a result of continuous acquisition planning and strategy development. The Government is pursuing a strategy that will include two “group” contract awards. The Government anticipates awarding up to two contracts total as a result of the upcoming solicitation:

· Group A will encompass the 144kW GPU, the 72kW GPU and the ULB all on one contract, with one awardee for this group. This group will be competed on a full and open basis.

· Group B will encompass only the 72kW GPU, with one awardee for this group. This group will be competed as a small business set-aside.

The Government anticipates utilizing a combined sole-source and competitive ordering approach throughout the contract periods for the 72kW GPU units only. The Government is currently coordinating with using commands to determine appropriate quantity estimates for each contract period at this time; however, the Government is considering including a contract guarantee of 25% of the annual estimated quantities (based on funding received) for the 72kW GPU to be awarded to each group awardee (i.e., 25% of the annual estimated quantities to Group A awardee, 25% of the annual estimated quantities to Group B awardee), with the remaining 50% of the annual estimated quantities competed utilizing FAR 16.5 ordering procedures (utilizing a mixture of evaluation criteria to include price, past performance, technical, etc. as needed). These contract period guarantees would become effective in Option Period 2 (Basic contract period encompasses the first article testing period, Option Period 1 is expected to be a Low-Rate Initial Production Period).

· As an example using completely arbitrary numbers for simplified math, the Government receives funding for 200 each 72kW GPUs in Option Period 4.

· One order will be placed with the Group A awardee for a quantity of 50 each;

· One order will be placed with the Group B awardee for a quantity of 50 each;

· The remaining 100 each units funding was received for will be competed between the Group A and Group B awardees. Whichever group awardee is determined the best value for the order will be awarded the additional 100 each 72kW GPU units.

The Government has a need for offerors to propose all 10 years for both groups. The requirement for this upfront pricing stems from the anticipation of issuing orders for the contract period ‘guarantees’ on a sole source basis, which will ultimately allow for quicker execution of mission requirements for these items. The Government also understands that there are legitimate concerns to proposing prices that far into the future, and we are looking into various ways to find an acceptable compromise.

1. In addition to COVID-19 uncertainties, unpredictable supply and demand, and unknown fluctuations in material and labor prices, what are other barriers for your company to providing long-term pricing? Has your company run into any significant issues on other DoD or commercial long-term contracts with regard to providing long-term pricing upfront?

1. One potential avenue for allowing price adjustments in the later contract periods is the order competitions that the Government anticipates between the two group awardees for the 72kW GPU units. In other words, the sole source ‘guarantee’ orders would be issued at the pre-priced contract CLIN prices, and then the two contractors would have an opportunity to incorporate any price adjustments within the competitively awarded order. What are some concerns your company may have with this approach? Does this approach ease any concerns with providing long-term pricing?

1. Another potential avenue being discussed amongst the Government team is a potential reopener clause. It is imperative to note that this approach has in no way been vetted or approved by internal review/approval processes. This information is strictly for industry feedback and input purposes to help in the decision process. In order to properly utilize that approach, offerors would have to provide detailed cost element pricing information with their competitive price proposals to detail the cost baseline, which is not a typical requirement for a FFP, competitive effort like the instant effort. Would your company be willing to provide this additional pricing information with the initial proposal submittal?

1. In addition to materials, what are the potential cost element areas that the Government should look into as categories for re-baselining the prices in the later contract periods?

1. Would your company be willing to go through a competitive re-pricing/re-baselining of the pre-priced CLINs as a part of a reopener clause? The Government would require submittal of additional price information, but the analysis could potentially be much more streamlined and potentially not require certified cost and pricing data.

1. The Government anticipates including progress payments as a contract financing option for both Group A and Group B awards. Does the inclusion of contract financing help to ease concerns with long-term pricing?

1. The Government will have the Engineering Change Proposal (ECP) process in place to allow for cost impacts to be negotiated and incorporated as a result of necessary design changes. Does your company have any additional recommendations for reducing both supplier AND consumer risk with proposing all 10 years upfront?

1. It is noted that the previous contracts also contained Economic Price Adjustment (EPA) clauses. Previous feedback obtained on this effort regarding the index to be used identified an unspecific consumer inflation index. However, is there a more specific index (raw materials, etc) that your company would recommend a potential EPA clause be tied to? Would the inclusion of a potential EPA clause help to ease concerns with long-term pricing?

2. Based on your company’s generator production capacities, what are the suggested quantity ranges/quantity range break points? The Government is looking into whether it would be beneficial to allow for offeror-proposed quantity ranges, or if the ranges are similar enough amongst industry to allow for the Government to specify the quantity ranges.

3. In the most recent Q&A document posted, it was noted that the Government was pushing to release the draft ULB, the draft SOW and the draft L&M for industry review and feedback within the next 1-2 weeks. As a result of internal reviews and incorporation of a voluminous amount of stakeholder feedback, the documents aren’t anticipated to be released until late May.