Final_Combined_PROS_V_Industry_Day_Brief _v._1.pptx

I n t e g r i t y - S e r v i c e - E x c e l l e n c e The FMS Provider of Choice, today and tomorrow

Industry Days 20-21 Aug 2014

Agenda Wednesday - 20 August 2014

Thursday - 21 August 2014

0830-1600 One-on-One Sessions with Contractors

Good Morning and on behalf of Brigadier General Lanni, the Air Force Security Assistance Center’s Commander, welcome to the Parts and Repair Ordering System (PROS) Re-Acquisition Industry Day. I am Deb Massar, the Program Manager for the Re-Acquisition effort.

The agenda is very basic. This morning you will receive an overview briefing of the PROS program from me, and a briefing on the acquisition process from the contracting officer. I would ask that you listen to the entire briefing before asking questions. You should all have received index cards. We ask that you write your questions on the index cards and turn them in before you leave. If you think of questions after you leave, we ask that we receive them no later than 16 Sep 04. All of the questions and responses will be posted on the Pre-Award Information Exchange System (PIXS). If time permits, we will attempt to answer some of your questions this morning. However, the responses are not official until they are posted on PIXS.

This afternoon and tomorrow, we will hold one-on-one sessions with those who have requested them.

We hope the briefings give you a better understanding of the program and what we are looking for in the PROS IV program

Air Force Security Assistance and Cooperation Ms. Cynthia Hertenstein Deputy Director, AFLCMC/WF 20 August 2014 Approved for Public Release PA Case Number: 88ABW-2014-3773

Air Force Security Assistance and Cooperation Directorate

Advancing national security by building global partnerships one case at a time

AFLCMC … Providing the Warfighter’s Edge For Official Use Only

AFSAC

Mission and Vision Mission: Advancing National Security by building global partnerships one case at a time

Vision: The best Security Assistance organization in the world

Speed with Discipline Unity of Purpose Trust and Confidence

Foreign Military Sales (FMS)… The Big Picture Security Assistance Building Partnership Capacity It’s About Relationships

Why Do We Do It?

Provide For Interoperability Promote Mutual National Security

TOTAL ACTIVE FMS

COUNTRIES: 106

NATO ORGS: 7

REGIONAL ORG: 1

CASES: 2750

VALUE: $145.5 B

As of 1 Aug 2014 USAF FMS Portfolio

Parts and Repair Ordering System (PROS) Prior to 1990 - 60% of FMS requisitions cancelled - lack of organic support Since 1990 - less than 10% cancelled due to contractor’s inability to locate qualified source

PROS is a major procurement contract Supports +100 FMS customers Tri-Service program (Air Force, Navy, Army) Managed by the AFLCMC, AFSAC, Wright-Patterson AFB OH 5th generation contract and over 24 years of successful support Provides support for DoD non-standard and hard-to-support standard supply, maintenance, and task order requirements

Tri-service program supports logistics requirements

AF – 75%

Navy – 25%

Provides support for non-standard and hard-to-support standard items Supply – purchase spares and end items Maintenance – repair, overhaul, upgrade, modifications Task Orders – studies, analysis, site surveys, familiarization training, etc

PROS III (2006 - 2012) – Supported 142K requisitions

PROS IV (2012 - Current) – Over 57K requisitions PROS Cont

AFSAC

Breadth of Mission Cradle-to-Grave Support…

For a Full Range of Weapon Systems…

Summary AFSAC Directorate… Building Global Partnerships Promoting National Security Leading Foreign Military Sales Enterprise

Chad Vorhis Deputy Program Manager Chad.vorhis@us.af.mil 20 August 2014

PROS Program Overview

Ground Rules PROS Mission Concept/Background Program Overview Customer Expectations

Overview

Here’s an outline of topics I will be discussing.

Nothing stated in this meeting is contractually binding. Any discussion or suggested information at this meeting which pertains to the proposed effort are for discussion purposes only. Any costs incurred prior to receipt of a contract signed by the Contracting Officer is at your own risk. All government changes or direction will be forwarded in writing by the appropriate Contracting Officer.

Please hold questions for formal question/answer session upon completion of general briefings

All questions and answers discussed at this event will be documented and posted to www.fbo.gov Questions requiring more research will be included in this posting

Questions concerning PROS V should be addressed solely to the Contracting Officer or Contract Negotiator listed in the FBO postings

Potential offerors should not disclose proprietary data/information at this event Ground Rules

Mission: Provide our Foreign Military Sales (FMS) customers world-class logistics support for non-standard and hard-to-support standard item requirements Non-standard Item = An item that is NOT actively managed, procured, stocked, stored or issued within the United States Air Force (USAF) Logistics System Standard Item = An item that is actively managed, procured, stocked, stored or issued within the USAF Logistics System

Commitment: Provide allied customers the best value by focusing on:

Competitive pricing Timely support Superior service Quality program management

Please review the PROS Mission Statement; it falls in line with the AFSAC mission and vision. The partnerships that we form with Industry must also work toward supporting the mission.

1950s A-37 T-33 T-37 C-7 T-38 A-7 F-104 1960s C-130 F-111 F-4 F-5 707 1970s 1990s and beyond

767 C-17 JSF

1940s C-47

F-16 F-15 E-3 KC-135

1980s

FMS Aircraft Supported

The USG is committed to supporting its friends and allies. This chart depicts some of the various aircraft the FMS customers are flying today. Some of them are no longer in the USAF inventory. Nevertheless, we are still committed to support them.

Material (list not all-inclusive) Clothing - flight jackets Computer equipment - laptops Aircraft components - wings, heads-up displays, tires, propellers Navy ship components Engine components Tactical vehicles Fire trucks Support Equipment

FMS Material Supported

The USG is committed to supporting its friends and allies. This chart depicts some of the various aircraft the FMS customers are flying today. Some of them are no longer in the USAF inventory. Nevertheless, we are still committed to support them.

PROS Concept/Background

Prior to 1990, 60% of FMS requisitions were cancelled due to lack of organic support

PROS is a major procurement contract Tri-Service program for 100+ FMS customers (no USG customers) Managed by the AFLCMC, AFSAC, Wright-Patterson AFB OH Supports DoD non-standard and hard-to-support standard requirements 5th Generation contract and over 24 years of successful support Less than 10% of FMS requisitions cancelled due to lack of qualified source

*Data as of 15 Aug 2014

We found in the late 1980’s that the FMS customers were having difficulty getting support for their older weapon systems and other non-standard support requirements. AFSAC created the Non-Standard Item Parts & Repair System (NIPARS) – provided strictly non-standard support The follow-on to NIPARS was PROS, an enhancement to NIPARS, incorporated supporting “hard to get” standard item requirements when the US System Of Supply was not able to provide support in a timely manner.

And the follow-on to PROS I was PROS II

PROS V Program Overview Program Purpose: PROS V will be a Tri-Service Program established to support the FMS customers non-standard and hard-to-support standard item requirements

Contractor Responsibilities: Ensuring the quality of supply and maintenance material adhere to the following:

Nonstandard items:

Meet or exceed commercial, Federal Aviation Authority (FAA) or Original Equipment Manufacturer (OEM) design specifications

Standard Items:

Use of only USAF approved and qualified sources for AF standard items Use of Haystack/Logiquest sources with documented traceability to the OEM for Navy and Army standard items

One-year warranty for all parts and repair

PROS is a procurement tool which supplements the DoD supply system. PROS III will be set-up to support USAF, Army, and Navy non-standard FMS requirements. PROS III will be a Tri-Service Program.

Any item that is not actively managed by the DoD is considered non-standard and is eligible for support under the PROS program.

PROS is also available to support standard items when the DoD SOS determines timely support is not available.

Service Areas

The PROS Team contracts for the procurement of spare parts and end items. Includes package buys and Price and Availability (P&A) and any other associated efforts with supply contract actions.

The PROS Team contracts for repair, overhaul, upgrade, modification, calibration/testing and Test, Teardown and Inspection (TTI) The PROS Team provides support for studies, analysis and technical services which may include minimal material items or maintenance support in conjunction with other requirements

SERVICE AREAS

Non-Standard Items Any item that is not actively managed by a USAF Source of Supply (SoS) is a potential candidate for PROS supply support Input by the FMS customer directly to PROS

Hard-To-Support Standard Items An item that is actively managed by the USAF is a potential candidate for PROS IF the USG SoS is unable to provide supply support Customer routes requisition to the applicable USAF SoS, if source unable to support, customer is given the option to pass to PROS Must include USAF approved source data

Supply Area Eligibility

Supply Area Eligibility:

The next charts go over the process flow for supply, maintenance, and Task Orders

Customer inputs requisition into

SAMIS

SoS determines support not available; Passes to PROS contractor with approved sources (AF items only)

Std Item Nonstd Item Contractor provides quote to customer Customer approves quote

Contractor awards contract

Material is shipped/ contractor submits invoice

Contractor finds source

Supply Process Flow

Non-Standard Items Any item the USAF SoS does not provide maintenance support for is a potential candidate for PROS Input by the FMS customer directly to PROS

Hard-To-Support Standard Items An item that is actively managed by the USAF is a potential candidate for PROS IF the USG SoS is unable to provide maintenance support ALL PROS standard repair requisitions are input by the AFSAC PROS Program Management Office (PMO) and will include the USAF approved source data

All maintenance efforts are repair and return Same item is returned to the customer that was shipped for maintenance

Maintenance Service Area Eligibility

Customer inputs non-standard rqn to contractor

Contractor provides shipping instructions Customer approves quote Contractor awards contract for Inspection

Contractor awards repair contract Inspection performed Contractor provides quote for repair Customer approves repair quote

AFSAC inputs standard rqn to contractor

Contractor provides quote for inspection

Material is shipped/ contractor submits invoice PROS V Program Overview Maintenance Process Flow

Customer ships asset

Provides customers with a means to procure specialized support Familiarization training Studies Labor for installation of material procured through PROS Site surveys

Task Orders

Customer submits requirement to AFSAC

AFSAC PMO determines supportability See Supply/Maint Process Flow Use existing PROS supply/maint processes Input requirement as Task Order AFSAC negotiates/ approves contractor’s proposal/support plan or Contractor defines method of supporting the requirement SOO is forwarded to PROS contractor Customer approves support plan and price Task Order Executed

Task Order Flow

Current Breakout of Orders

Little or no customer forecasting of future requirements Most requirements for low order quantities

PROS V Program Overview Statistics

Currently, 75% of the PROS volume are supply orders and 25% are maintenance

Some important points to note are:

FMS customers choose Level of Service (LOS):

HLS (Higher Level of Support) Urgent Routine

Contractor Fill-fees tied to on-contract award timeframes

Key Performance Indicators:

Competitive Pricing Timely Support (on-contract award timeframes, on-time shipments) Quality Service (responsiveness to customer) Effective Program Management

PROS V Program Overview Parameters

Under the PROS program, the FMS customers choose from three different Levels of Support, based on their desires NMCS, Urgent, Routine

The customer pays a fill-fee for the level of service provided

The Key Performance Indicators for PROS III will be:

Competitive Prices, Timely Support, Quality Service and Effective Program Management Competitive prices is most important to our customers

Performance will be incentivized through an Award Fee

Customer Expectations Timely, thorough communications Active management of requisitions to contract award/shipment Timely contract awards On-time shipments Competitive prices for material/services Reasonable fill fees Quality products/services Effective Supply Discrepancy Report Management

Now you have seen an overview of the process flows for the three primary PROS service categories.

Under PROS III, these categories will not change, however, as we work with our foreign customers on the PROS III Requirements Development they have made it clear what their concerns and expectations are:

They want competitive prices – but not at the expense of good quality material

They want the lowest fill-fees possible – they are concerned when the fill-fee exceeds the cost of the item

Fast Turn-Around-Time – However, sometimes a longer TAT is acceptable for a better price on the material

They want quality products and services- When they receive deficient material, they want fast, effective SDR management, and they want assurance the SDR will be resolved expeditiously

They want timely, thorough communications and They want a contract that is flexible enough to meet their unique requirements – but not at the expense of higher cost to the program

Ultimate Goal

Provide FMS partners with a contracting vehicle which:

Fulfills their non-standard and hard-to-support standard requirements Provides exceptional customer support

Program Factors

Potential bidders must consider:

Highly labor intensive program Non-standard material

Now you have seen an overview of the process flows for the three primary PROS service categories.

Under PROS III, these categories will not change, however, as we work with our foreign customers on the PROS III Requirements Development they have made it clear what their concerns and expectations are:

They want competitive prices – but not at the expense of good quality material

They want the lowest fill-fees possible – they are concerned when the fill-fee exceeds the cost of the item

Fast Turn-Around-Time – However, sometimes a longer TAT is acceptable for a better price on the material

They want quality products and services- When they receive deficient material, they want fast, effective SDR management, and they want assurance the SDR will be resolved expeditiously

They want timely, thorough communications and They want a contract that is flexible enough to meet their unique requirements – but not at the expense of higher cost to the program

Tracy Riley Contracting Officer Tracy.riley@us.af.mil 20 August 2014

PROS Acquisition Overview

Contracting Mission

WFG provides contracting solutions for our international partners in support of the Air Force Global Partnership Strategy.

Overview Why are we here today?

Acquisition Schedule Source Selection Procedures Contract Structure What you should know Requested industry feedback

Why are we here today?

Current contract ordering period ends 4 June 2017 PROS is very popular with our foreign partners Unanticipated contract volume has caused a total contract value issue—may exceed our total contract value prior to the end of the ordering period To date we have 58,000+ requisitions FMS customers are purchasing through PROS at a much greater rate than projected Re-compete may be needed to avoid a break in service

Acquisition Schedule Tentative schedule

Source Selection Procedures

IAW Air Force Federal Acquisition Regulation Supplement (AFFARS) 5315.3 Mandatory Procedures, 27 March 2013 http://farsite.hill.af.mil

DoD Source Selection Procedures, 4 March 2011

All information pertaining to the PROS V Source Selection will be posted on www.fbo.gov

*Questions concerning PROS V should be addressed solely to the Contracting Officer or Contract Negotiator listed in the FBO postings

Contract Structure Current contract structure:

Five year ordering period; 3 year base period and two one-year options; five year closeout period Indefinite Delivery/Indefinite Quantity Contract (IDIQ) Firm Fixed Price (FFP) fill fee for contractor FFP CLIN for task orders for studies and training Cost Reimbursable CLIN for material (pass through—no markup)

PROS V contract structure:

- Pursuing approval of longer period of performance; with an additional five year closeout period

USG welcomes industry input on planned PoP, contract type, CLIN and OPI structure

What you should know… This is a commercial procurement services contract

The service you provide is that of procuring items

This is not an easy contract to perform Requested items are HARD to find—many are obsolete Research on incoming requisitions may be extensive Negotiations with vendors may be time consuming Qualifying vendors is not an easy or quick process—large pool Traceability documentation to the OEM is required

Profit potential for this contract Contract value is large, but the largest portion is pass through material costs with no markup Profit is dependent on your fill fees, not the cost of the items acquired There are Objective Performance Incentives

What you should know…

A steep learning curve exists due to PROS specific processes

Labor intensive process, full automation not possible

Invoices not processed through Wide Area Work Flow (WAWF) You are paid within 30 days IAW the Prompt Payment Act Your vendors will also want to be paid within 30 days Invoices are processed through the Security Assistance Management Information System (SAMIS)

There will be a requirement for storage/handling of classified items/material

Requested Industry Feedback

Longer PoP—if approved, how will industry share cost efficiencies with USG?

Incentives—what areas should be incentivized?

Transition period—is one needed? How long?

Requisition flow from incumbent to awardee?

CLIN structure?

Question/Answer Session image5.png image3.jpeg image4.png image6.jpeg image7.jpeg image8.jpeg image9.jpeg image10.png image11.jpg image12.jpeg image13.jpeg image14.jpeg image21.jpeg image22.jpeg image23.jpeg image24.png image15.jpeg image16.png image17.png image18.jpeg image19.jpeg image20.png image31.jpeg image25.jpeg image26.jpeg image27.jpeg image28.jpeg image29.png image30.jpeg image32.png image33.jpeg image34.png image35.jpeg image36.jpeg image37.wmf image38.wmf image39.wmf image40.png image41.jpeg image42.png image43.jpeg image44.emf image1.jpeg image2.png