H20 Draft PWS.docx

CONTINATION SHEET

REFERENCE NO. OF DOCUMENT BEING CONTINUED

SOLICITATION SPE7MX-14-R-

PAGE

NAME OF OFFEROR OR CONTRACTOR

SECTION C

PERFORMANCE WORK STATEMENT (PWS)

SPE7M25RXXXX

WATER PURIFICATION SYSTEMS

1.0 General Information

This solicitation provides logistics and parts support for Water Purification weapon systems. The contractor will assume total supply chain management for the parts listed in Attachment 1 and supply the required parts in accordance with the requirements of this performance work statement.

1.1 Objective

The Water Purification Initiative establishes a contractual partnership between private sector supplier and the Government to improve the level of material availability, readiness and overall support by increasing the availability of consumable assets to military services/ customers worldwide. The partnership between the contractor and DLA under the water purification contract will enable optimum support by leveraging commercial best practices into the DLA logistics processes. Under the water purification contract, DLA’s strategic objectives, which are to be achieved through contract performance, are to consistently provide responsive best value supplies and to its end customers. This shall be accomplished by satisfying customer demands on time, providing accurate forecasting through supplier management, eliminating delinquent items, and establishing a reliable warehousing and distribution network. Ultimately, the strategic objective is to improve supply chain performance so as to improve the readiness of the Water Purification based worldwide customers.

1.2 Contractor Responsibilities

The contractor shall:

1. Facilitate sharing of maintenance forecast data and other relevant logistics information.

2. For each NSN in CLIN 0001, forecast demand and establish an appropriate asset/stocking level and Position.

3. Function as a source of supply for the population of NSNs listed in the schedule of supplies.

4. Coordinate and synchronize its logistics and production processes to provide a predictable and reliable supply of items to meet normal, contingency and surge requirements.

5. Purchase all the assets needed to meet stocking objectives for normal and contingency requirements.

6. Manage the contractual relationships of the Original Equipment Manufacturers (OEMs) and suppliers that will provide the NSNs listed in the schedule of supplies.

7. Manage and provide the warehousing network.

8. Manage the supplier base (maintaining sources of supply with emphasis on expanding small business participation).

9. Perform obsolescence management.

10. Provide dedicated program customer service.

1.3 Acronyms/Definitions: The following list is commonly used acronyms and abbreviations:

· AMC: Acquisition Method Code

· AMSC: Acquisition Method Suffix Code

· ANSI: American National Standard Institute

· Business Day: A 24-hour period after the triggering event, applicable time zone, not including weekends and holidays.

· CAGE: Commercial and Government Entity

· CDRL: Contract Data Requirements List

· cFolders: A government website where a contractor may access drawings. https://pcf1x.bsm.dla.mil/cFolders

· CI: Configuration Items

· Contractor: The prime contract holder also referred to as Prime Awardee.

· Contract Calendar Year: is (i) a period of 365 consecutive days (366 days in a leap year) commencing on the date of contract, or (ii) a period of 365 consecutive days (366 days in a leap year) commencing on the first day following the last day of the preceding contract calendar year. If any contract period consists of more than one contract calendar year, the Government's estimated quantities for that contract period will be the estimated annual quantity multiplied by the number of years in the period, unless the annual estimates are adjusted pursuant to Consumption Reports delivered by the Contractor. The contract year shall expire at 12:00 midnight, Eastern Standard Time (EST) on the date described herein.

· CONUS: Contiguous United States

· Critical Application Item (CAl): An item essential to weapon system performance or operation, or the preservation of life or safety of operating personnel, as determined by the military services.

· Critical Safety Item (CSl): All parts whose failure would cause loss of life, permanent disability or major injury, loss of a system, or significant equipment damage.

· CUI: Controlled Unclassified Information

· Customer: A specific Army/Military activity supported under the O-RCC contract.

· DCMA: Defense Contract Management Agency

· DFARS: Defense Federal Acquisition Regulation Supplement

· DFAS: Defense Finance and Accounting Service

· DIBBS: DLA Internet Bid Board System (https://www.dibbs.bsm.dla.mil)

· DLA: Defense Logistics Agency

· DLAD: Defense Logistics Acquisition Directive

· DoD: Department of Defense

· ECP: Engineering Change Proposal

· EDI: Electronic Data Interchange

· Engineering Support Activity (ESA): The military service organization designated as responsible for engineering support and technical decisions for a given part or component in that service.

· Estimated Annual Quantities: At the start of the contract and when new items are added to this contract, the Government's projected needs for each NSN are stated in terms of "estimated annual quantities". The estimated annual quantities are estimates only and represent the Government's good faith estimate of the quantities the Government anticipates will be required for distribution during a contract calendar year at the DLA Land and Maritime customer site(s) designated in this contract. The estimated annual quantities are for evaluation purposes only. This information is provided to assist contractors in developing their proposals, however the Government neither warrants nor guarantees that the Contractor will realize any of the estimated annual quantities provided herein during the performance of the contract.

· FAR: Federal Acquisition Regulation

· FAT: First Article Test

· FDT: First Destination Transportation

· Federal Supply Class (FSC): Federal materiel classification groupings

· FMS: Foreign Military Sales

· F.O.B.: Free On Board; without charge to the purchaser for delivery on board or into a carrier at a specified point or location.

· FSG: Federal Supply Group

· IDIQ: Indefinite-Delivery Indefinite-Quantity

· Interchangeability: Includes all specified requirements for form, fit, function, interface, and compatibility of the specified part. For an alternate or substitute part to be interchangeable with the specified part, it must possess the same functional and physical characteristics as to be equivalent in performance and durability of the specified part, and it must be capable of being exchanged one for the other without alteration of the part, or of adjoining parts, and without selection for fit and performance. The alternate or substitute part, in all respects, must interface, and be compatible with, any and all parts, assemblies, sub- assemblies, etc., with which the specified part interfaces.

· ISO: International Standards Organization

· KO: Refers to Contracting Officer and may also be designated or used interchangeably with "CO" within this document.

· LTC: Long Term Contract

· Safety Data Sheet (SDS): A document that contains information on the potential health effects of exposure to chemicals, or other potentially dangerous substances, and on safe working procedures users should adhere to when handling chemical products.

· National Stock Number (NSN): The 13-digit materiel identifier consisting of a four- digit Federal Supply Class (FSC) and a nine-digit National Item Identification Number (NHN).

· NIST: National Institute of Standards and Technology

· NOR: Notice of Revision

· Obsolete Part: A part that is no longer in current or continuous production, and for which necessary manufacturing tooling is not available for the resumption of manufacture of the part.

· OCONUS: Outside the contiguous United States

· POC: Point of Contact

· Prime Awardee: Vendor which is awarded an O-RCC contract

· Product Item Description (PID): The AID identifies those firms that have received prior source approval from the cognizant Military Service's Engineering Support Activity (ESA). The requiring Military Service defines or specifies the technical requirements of the item being procured and maintains the accuracy of the PID. Please refer to attachment 3.

· PLT: Production Lot Test (when reference to testing) or Production Lead-Time (when reference to delivery)

· QAR: Quality Assurance Representative

· Qualified Manufactures List (QML): A list of manufacturers of products that have successfully completed the formal qualification process (including all specified periodic tests) that examines, tests, and verifies that a specific manufacturer meets all the applicable specification requirements.

· Qualified Products List (QPL): A list of products or families of products that have successfully completed the formal qualification process (including all specified periodic tests) that examines, tests, and verifies that a specific product design meets all the applicable specification requirements.

· Qualified Suppliers List for Distributors (QSLD): A list of suppliers' qualified processes and materials at each facility that have been successfully subjected to a defined set of qualification and periodic tests using processes, worst case designs or materials, to verify the end product's design, performance, quality, and reliability meet all the applicable specification requirements.

· Qualified Suppliers List for Manufacturers (QSLM): A list of suppliers' qualified processes and materials at each facility that have been successfully subjected to a defined set of qualification and periodic tests using processes, worst-case designs or materials, to verify the end product's design, performance, quality, and reliability meet all the applicable specification requirements.

· Special Procedures Coding (SPC): The SPC code permits the identification of critical items that require special processing, e.g., Aircraft Launch & Recovery Equipment (ALRE), Individual Repair Parts Ordering Data (IRPOD), Critical Safety Item (CSI), Intercontinental Ballistic Missile (ICBM).

· SPRS: Supplier Performance Risk System

· Technical Data Package (TDP): A technical description of an item adequate for supporting an acquisition strategy, production, engineering, and logistics support. The description defines the required design configuration and procedures required to ensure adequacy of item performance. It consists of all applicable technical data such as drawings and associated list, specifications, standards, quality assurance requirements, software and package details.

· WSDC: Weapon System Designator Code

1.4 Implementation and Execution Phases

1.4.1 Implementation Phase

The implementation phase begins upon the effective date of contract award and ends no later than 120 days after effective date of contract award, and the Contractor shall perform any effort necessary to meet all requirements set forth in the PWS for the implementation phase to include any corrective actions needed for the contractor to be ready of execution of the contract requirements. During the Implementation Phase the Contractor shall put in place the infrastructure, material/inventory, EDI capabilities, systems, and processes necessary for the Contractor to meet the forecasted demands. The government will also need to attrite all inventories for these items. In the event that an NSN has government stocks, the Government reserves the right to delay the start of the Execution Phase for an NSN until those stocks are depleted.

Within _____ days (Offeror fill-in – Government required is 60 days after effective date of contract award), the contractor shall have EDI capabilities and systems ready to support the contract. Within _____ days (Offeror fill-in – Government required is 90 days after effective date of contract award), the contractor shall make their warehouses available for inspection. The implementation stage shall last no more than _____ days (Offeror fill-in – Government required is 120 days after effective date of contract award).

The contractor will be notified at the time of award if there will be delay to the start of the Execution Phase for an NSN. DLA will draw down existing stock, to include purchase orders in the pipeline, and turn on NSNs for customer direct orders when existing Government inventory has been depleted to required levels (for some NSNs the Government may maintain inventory for special programs). Customer direct delivery orders will not be issued until an NSN is turned on. The Government will provide stock on hand and due-in data during initial stages of the contract, directly to the contractor at time of award and periodically as determined necessary by the contractor and the Government thereafter, until an NSN is turned on.

Once an NSN is turned on, the awardee shall be ready to fulfill customer direct orders not later than _____ days (Offeror fill-in – Government required is 30 Days) after effective date of contract award. If the awarded offeror fails to implement the activities described in its Implementation Plan within the times specified as to endanger timely and successful completion of the Implementation Phase, the Contracting Officer may terminate this contract and award to the next eligible offeror to this solicitation. If, within 2 years after award, this contract is terminated, the Government will request the most highly rated unsuccessful offerors to revive their offers. The Government will re-open discussions with those unsuccessful offerors agreeing to revive their offers and will re-award the requirement. The offeror must state in its proposal whether it may be agreeable to this procedure.

1.4.2 Execution Phase

Upon day 121 after the effective date of contract award, the contractor shall perform all requirements set for in the contract in accordance with performance requirements, for all NSNs listed in CLIN 0001 of Attachment 1, and in accordance with each delivery/task order issued by the Government. Additionally, in the event an item is needed prior to day 121 and 90 days after receipt of written notice issued by the contracting officer, the contractor shall perform all requirements set forth in the contract in accordance with performance requirements, for the NSN(s) identified by the contracting officer, and in accordance with each delivery/task order issued by the Government.

1.5 Addition/Deletion of Items/Part Number Changes and Customer Changes, Procurement Note L27- Addition/Deletion of Items. During the course of the contract and in support of changing Water Purification customer requirements, NSNs may be added, deleted from the contract (due to obsolescence, technical issues), or transferred from inactive to active status. When items are added/deleted or transferred from inactive to active status in the contract, the NSN will be adjusted in the metric calculations. Many of these customers are mobile and therefore ship to addresses will not be static. Changes to the customer profile will be accomplished at no cost to the Government

1.6 Other Than Cost Price Data

The government requires that the contractor provide, on request, their buying price, all their indirect cost rates, the profit rate, and any other add-on fees pertaining to items which are purchased by the offeror and passed through to the government. Further the method of deriving the indirect rates shall be disclosed to include the makeup of the bases and pools. The contractor shall also, on request, describe the methodology used to determine their purchase was fair and reasonable (competition, should cost, like item etc.). For items manufactured by the contractor, a cost breakdown shall be provided (upon DLA request) along with a short narrative describing the process. The information on the indirect cost rates shall be the same as described for pass-through items. Profit rate shall also be required. In the event the government decides an audit type review of any facet of the pricing process is necessary, by DCAA, DCMA or other government activity, full cooperation shall be required. Although the above describes various data types that the government may find is needed to establish price reasonableness, the list is not all inclusive. The contracting officer may require information other than certified cost or pricing data/other than cost and pricing information adequate for evaluating the reasonableness of prices. It is solely within the Contracting Officer’s purview to determine what “other than cost & pricing” information is necessary to determine price reasonableness.

2.0 Program Requirements

2.1 The contractor shall implement the management, systems, infrastructure, personnel, and inventory necessary to meet the customer’s needs for the NSNs listed in CLIN 0001 identified in the schedule of supplies. The contractor shall have access to government historical data for performing the forecasting requirement; however, the Government makes no guarantees or warranties to the accuracy or completeness of the data and the contractor shall independently assess the usefulness and accuracy of the data provided in developing the forecasts. The contractor shall forecast, purchase and stock the required NSNs in sufficient quantities to meet the normal and spike demand requirements of the customer.

2.2 The contractor is required to provide on-time delivery of conforming parts, in the correct quantity, to the specified destination for each delivery order issued against the basic contract. If the contract fails to comply with the delivery order issued under and the terms of the basic contract, the Government reserves the right to take any appropriate contract administrative action allowed under the terms of this contract.

2.3 The contractor shall forecast quarterly demands and optimum stocking level quantities based on customer requirements for 100% of the items identified under CLIN 0001 in the Section B spreadsheet, Attachment I to the solicitation. The contractor shall maintain adequate stock levels to meet the needs of the customer and the Time Definite Delivery (TDD) metrics in paragraph 2.5.

2.4 Program Review Board (PRB) Meetings

Performance Review Boards (PRBs) will be held at 90 days and 180 days after start date to discuss forecasting projections, assess contractor performance, and action item(s) with this Program Manager. For the remainder of the contract period, meetings will be held on (at least) a yearly basis to assess contractor performance, discuss forecasting projections, action item(s), and foster solutions to problems encountered during and after contract implementation. These PRBs will occur 30 days after the end of each performance period. There will be an exchange of issues before this meeting and agenda of items for discussion provided by the government to the contractor The Contractor shall provide status of schedules, program goals, and any process improvement initiatives. The reviews shall provide the Government with the Contractor’s progress and performance on all tasks defined in this PWS. The PRB will be co-chaired by DLA Land and Maritime and the Contractor. The Contractor shall develop an agenda and distribute the agenda to perspective attendees no later than 15 days before the PRB. Meeting slides and resulting minutes for these reviews shall be submitted in Contractor’s format and made available in electronic format by e-mail or access through the Contractor’s website to the attendees. The Contractor will provide PRB minutes within 14 days after each PRB. Other Program Reviews may be conducted as mutually agreed between the Government and the Contractor.

During the review the Contractor shall provide status on the following elements:

1. Program overview including overall schedule status

2. On-time delivery issues

3. Fill Rate issues

4. Quality/ safety issues

5. Configuration management issues

6. Quality assurance issues

7. Customer support service

8. Repair issues

9. Production issues

10. Transportation issues

11. Sub-vendor/industrial base issues

12. FMS issues (if applicable)

13. Demand data by NSN and location

14. Other issues, i.e. compliance with packaging and marking, compliance with Berry Amendment, etc.

15. Previous PRB open action items/new action item.

2.5 Delivery Requirement -

Customer Direct Orders include CONUS, OCONUS, and FMS shipments. The contractor has successfully filled a CONUS, OCONUS, or FMS demand, when after receipt of a delivery order; the contractor has delivered the correct product to the customer designated site, within the Time Definite Delivery (TDD) requirements set forth below. Partial deliveries shall not constitute compliance with the delivery requirement. Unless otherwise specified below, your proposal will be deemed to offer delivery in accordance with the required schedule. Delivery will be based on date of award/order and not on receipt of award/order. All orders are to be delivered as specified, except for the Federal holidays shown below. For Transportation Priority Category 1 delivery orders, if a holiday occurs during the required delivery period, one additional calendar day will be added to the Time Definite Delivery chart. The contractor must accept every order issued. Customer delivery will be tracked by the Government.

2.5.1 Partial deliveries shall not constitute compliance with the delivery requirement. Partial deliveries are encouraged when a delivery for the total quantity cannot be achieved within the required timeframe.

2.5.2 OTD (On Time Delivery) Rate Metric: Contractor performance will be measured by On Time Delivery Rate (OTD) metric. For the OTD rate metric, delivery will be based on date of award/order and not on receipt of award/order. The minimum required OTD performance is 95% and timely delivery of each order is required. There will be two OTD monthly measurements. One measurement will be calculated for Transportation Priority Category 1 (OTDTPC1) orders and another measurement will be calculated for all other orders (OTDAOO). If the awardee is not performing at or above 95% for both metrics, the Government may take appropriate contract administrative actions to include terminating the contract for default. The fill rate is 100% throughout the entire contract period for all requirements.

2.5.3 Measurement: Measured and reported monthly, OTD represents the percentage of orders that were delivered on time in a particular month. Although tracking and reporting for OTD rate will start upon the issuance of the first delivery order, the initial performance period will start on day 121 of the contract and continue for six months after that date. Subsequent performance periods are on an annual basis from the established contract date and ending with the final performance period date. Delivery Orders will be measured in the month or year in which the order is due.

Monthly OTD% = (TDelivered/TDue) x 100 Where: OTD% = OTD Rate (rounded to the nearest tenth) TDelivered = Total Orders Delivered within the required time frame TDue = Total Orders Due

2.5.3.1 For the purpose of measuring performance of the TDD requirement ("OTD" Rate Metric) for items with FOB Origin in the FDT Program (see Section B Spreadsheet), "delivery" will be understood to occur when the vendor has entered their shipping information into Vendor Shipment Module (VSM). However, if the items are not ready for shipment when the government furnished vehicle arrives, then the contractor will receive a negative performance review and will be required to reimburse any charges and/or fees assessed against the Government by the carrier for the non-use of the ordered vehicle. This paragraph applies only to the measurement of performance (the OTD Rate Metric) and is not to be read to change the terms of delivery at C16 First Destination Transportation (FDT) Program, Government-Arranged Transportation for Manual Awards.

2.5.4 Exceptions: A ramp-up period will be provided for each new NSN that is added to the contract. The ramp-up period will be based on the NSN’s PLT, and no order will be issued for the new NSN until its ramp-up period expires. OTD will only be calculated for orders issued after the first PLT. Delivery orders cancelled through no fault of the contractor shall be removed from the monthly metric calculation of OTD. Delivery orders that could not be delivered due to a Government caused delay (including NSNs under quality/technical review), acts of God or of the public enemy, acts of the Government in either its sovereign or contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather shall also be removed from the monthly metric calculation of OTD. The burden of proof is on the contractor if it alleges that any of these situations occurred.

2.5.5 Reporting:

The contractor is required to provide On-Time Delivery (OTD) of conforming parts within 14 days after the end of the preceding month. For tracking purposes, the issuance date of award/order will start the OTD tracking. The Carrier Tracking Data will be used to determine the date of delivery, which ends the OTD period. The contractor will be required to utilize and access the Vendor Shipment Module (VSM) for shipping information. Carrier tracking data must be provided for each shipment. The contractor will have 14 days to challenge individual delivery orders that negatively impact the metric calculations. Challenges shall be in writing and addressed to the Contracting Officer. The challenge shall include the contractor’s rationale for removing the individual delivery order from the metrics calculation and all supporting evidence. The Contracting Officer will make the final decision to the challenge request within 14 days after receipt. If the contractor does not submit a timely challenge, then no adjustment will be made to the monthly metric.

2.6 Contractor's Progress, Status and Management Report: The contractor shall maintain accurate performance records and submit to the Contracting Officer a monthly report detailing performance, progress and management initiatives and plan of action on problem areas, such as backorder status. The Government will track the contractor’s performance.

2.7 Liaison Support The contractor shall interface with the government to facilitate (1) improved delivery performance; (2) decrease costs, (3) supply chain alliances, and (4) improved customer service. The contractor shall provide a dedicated customer support personnel that are accessible to customer at all times; twenty-four hours a day, seven days a week.

2.8 Domestic Sourcing Requirement

The contractor shall periodically assess and monitor supplier’s compliance with domestic sourcing requirement, particularly the Berry Amendment. This shall be done at a minimum on a monthly basis.

3.0 System Interface and Integration

Order placement shall be by Electronic Data Interchange (EDI) transmissions in accordance with ANSI X12 Standards through a registered Value-Added Network (VAN). Issuance of an EDI transmissions or email notification from the Contracting Officer constitutes a binding order. Manual Delivery Orders will be issued for items requiring government furnished tooling, or for other special or unique requirements. The Contractor is required to commence performance upon receipt of a binding order.

In general, the process will work as follows: The Government customer will submit requisitions, requisition follow-ups and requisition cancellations to DLA Land and Maritime. The customer requirements will be then forwarded to the contractor via a Delivery Order issued from the Enterprise Business Systems (EBS) that will be formatting (translating) the Government requisitions into the appropriate EDI transaction set. The following EDI transactions sets may be used:

· EDI 944 (Receipt of inventory)

· EDI 945 (Shipment of inventory)

· EDI 947 (Inventory adjustments)

· EDI 846 (Inventory inquiry)

· EDI 214 (Transportation Carrier shipment status message)

· EDI 850 (Purchase/delivery order)

· EDI 856 (Shipment notice manifest)

· EDI 997 (Functional acknowledgement)

· EDI 810 (Invoicing)

4.0 Quality Requirements

4.1. The contractor shall institute a program that ensures the supplies received from its sub-contractors are in strict accordance with the technical and quality requirements specified for each NSN. Under all circumstances, regardless of the source of supply, all products shall conform to the most recent technical requirements and comply with all clauses and provisions included in this solicitation. Unless otherwise provided by the contract or this PWS, or as otherwise authorized by the contracting officer in writing, the contractor shall:

4.1.1. Establish suppliers’ parts qualifications, accomplish supplier delivery and quality performance reviews, and shall evaluate processes to ensure 100% quality compliance.

4.1.2. Ensure that its parts’ vendors, suppliers and sub-contractors comply with all applicable Government technical requirements.

4.1.3. Ensure that its sub-contractors incorporate a system for obtaining, handling and supplying Original Equipment Manufacturers (OEM) certified parts, and that such system is included in contractual instruments with sub-contractors throughout the entire supply chain.

4.1.4. Ensure that its sub-contractors establish and maintain a system or process that will provide clear traceability to the actual manufacturer of the parts. If the contractor is not the manufacturer of the supplies, evidence must be retained that documents the supplies were produced by an approved manufacturer.

4.1.6. Alternate Release Procedures

4.1.6.1. For NSNs that require source inspection, the Government may authorize Alternate Release Procedures (ARP) or permit the contractor to perform their own inspections on an NSN-by-NSN basis, upon request by the Contractor. ARP means that a DCMA Quality Assurance Representative will not perform standard Government source inspection (i.e. the DCMA has no inspection requirements and/or duties). Under ARP, the Prime contractor is responsible for completing all required inspections. Records documenting that all required inspections have been processed and approved/certified shall be maintained and made available for review by the Contracting Officer or designee, as deemed appropriate, from the effective date of award until four years after payment on the final delivery order issued. For NSNs where ARP is authorized and the WAWF Receiving Report indicates ARP applies (the ARP box is checked at the top of the WAWF receiving report), the prime contractor is not required to include or attach the ARP statement required by DFARS 246.471(b)(3) with the shipping documentation.

4.1.6.2. ARP does not apply to NSNs that are First Article Test (FAT) or Critical Safety Items (CSI). The DCMA will conduct inspections on NSNs identified as FAT or CSI. Orders will be issued containing the applicable testing and/or inspection requirements for the DCMA to take action on for FAT or CSI NSNs. Note: The DCMA will not engage in inspections on FAT NSNs if the source is waived or becomes waived on these requirements, at which point ARP will apply for those instances where source inspection is required.

4.1.6.3. NSNs other than FAT or CSI, which require source inspection, may at the discretion of the Contracting Officer be removed from ARP and orders will be issued containing the applicable testing and/or inspection requirements for the DCMA to take action on.

4.1.6.4. Until Alternate Release Procedures (ARP) or relaxed inspection requirements are approved by DLA Land and Maritime and DCMA, the contractor is required to have inspections conducted for all NSNs that require source inspection per the codes specified within subject solicitation. For non-FMS orders, the inspections will take place at the place of manufacture of the item(s) and can be for an entire lot of items prior to shipment to either the vendor’s distribution warehouse or the destination called out in a delivery order issued for the item. The DCMA for the awardee will issue Letters of Delegation to the cognizant DMCA Quality Assurance Representative for the manufacture of the item to perform required testing and /or inspection. When the awardee notifies DLA Land and Maritime that the lot of items will be ready for inspection, DLA Land and Maritime will issue an order that will only include the applicable testing and/or inspection requirements for DCMA to take action on. For FMS orders, inspection will take place at the facility holding the material prior to order shipment.

At the end of the implementation phase, the awardee will provide DLA Land and Maritime with the place of inspection for all items that will require source inspection after that point. The Government reserves the right to require origin inspection on any NSN, at any time during the duration of the contract, which will require the awardee to provide the place of inspection for that NSN(s) at such time.

4.1.6.5. First Article Testing (FAT)- Contractor or Government: For NSNs that require FAT, it is expected the offeror will supply a waived source with their initial pricing proposal. A contractor, electing to supply the product of a non-waived source for an NSN that requires FAT, will assume the responsibility of ensuring the item of the non-waived source becomes approved in accordance with the terms of the contract while the contractor continues to meet the required delivery schedule. If there is a FAT charge applicable at time of initial offer, the costs must be provided on the PEL tab titled “FAT”. If waived sources are lost or FAT requirements are added to an NSN, the Government will negotiate, in good faith, the cost of testing or the NSN may be removed from the contract at the discretion of the Government, at no cost to either the Government or the contractor. Note: Lost sources do not include situations where the awardee chooses not to use the waived source because of a price increase. If an awardee attempts to add a new waived source after award and previously waived sources were not lost, the awardee assumes all costs involved with approving source. As applicable, specific FAT requirements will be detailed in the order, or in the drawing contained in cFolders.

4.1.6.6. Critical Safety Items (CSI)- For each CSI acquisition, a proposal shall include the exact item cited in the PID, exclusively from a source cited in the PID. Only sources listed as approved sources in the PID, or dealer/distributors (Non-Manufacturer) offering the product of an approved source, shall be considered (unless the item is a 1G). Traceability documentation shall be submitted for review and approval to the Contracting Officer PRIOR to any award. After contract award, the item supplied for delivery orders must be the same as previously approved unless a change, to include new traceability, is approved by the Contracting Officer.

4.1.6.7. Hazardous Materials include any material defined as such under Federal Standard No. 313. The Standard is available from the Specification Unit of the General Services Administration (GSA), (Unit 3FBP-W), 7th & D Streets, N.W., Washington D.C. 20407. Notwithstanding the above, Hazardous Materials procured on this contract shall also meet the definition of Replenishment Parts and Industrial Hardware. The Contractor shall segregate HAZMAT by Hazard Characteristics Code (HCC) and handle HAZMAT to prevent risks to personnel or to the facility in which it is processed. The Contractor shall record the applicable Safety Data Sheet (SDS) number and HCC in DSS for each HAZMAT item processed. HAZMAT is generally classified by the primary hazard characteristic since it is not practical to provide a completely detailed, item-by-item listing of this material and their storage requirements.

The ten broad categories of HAZMAT storage are:

A- Radioactive C- Corrosive D- Oxidizer E- Explosive F- Flammable G- Gas, Compressed L- Low Hazard (General Purpose) P- Peroxide, Organic R- Reactive T- Poison The Contractor shall obtain Safety Data Sheets (SDS) and Hazard Warning Labels for use when necessary or appropriate. The Contractor shall maintain records with respect to the use of such sheets or labels. The Contractor shall ensure that under circumstances where it becomes necessary for the Contractor and/or its vendors, subcontractors or suppliers to handle, transfer, ship, store or distribute hazardous materials, in order to meet the provisions of this contract, that the Contractor, vendor, subcontractor or supplier shall have been thoroughly trained in the treatment to be accorded hazardous materials and operate in strict accordance with local operating instructions regarding the handling of hazardous materials.

4.2. The contractor shall maintain a documented system to control the quality of the product supplied to the customer. The contractor is required to provide 100% conforming product, in the correct quantities. The contractor shall establish a process for inspection of incoming supplies for compliance with contract requirements. In addition to any physical inspections, the contractor shall ensure that all certifications and traceability documents will be available to DLA for review, as needed. Supplies found to be nonconforming shall be segregated from supplies to be delivered to the customer, and in no event shall such nonconforming supplies be furnished under the contract. The contractor shall conduct periodic audits or reviews of the quality assurance processes and procedures of its sub-contractors and shall monitor its vendor qualification process on a continuous basis. Additionally, DLA reserves the right to review and audit the contractor’s quality processes to include entering the contractor’s facility. The contractor will be given written notification and allowed adequate time to prepare for a visit.

4.3. Supplies are nonconforming when they are defective in material or workmanship or are otherwise not in conformity with the contract requirements. If the material delivered to the customer under this contract does not meet quality or contract requirements, the customer will be required to notify the Government. The Government will notify the contractor with instructions on how to correct the issue. The cost of replacement parts and the storing of the nonconforming parts will be the responsibility of the contractor. Defective parts returned to a contractor should not be stored at Government expense and should not be subsequently supplied to the Government again (after repair, etc.) without prior written approval by the KO. Additionally, if any portion of delivered supplies is determined to be nonconforming, the Government may reject the entire lot/set. The burden to demonstrate 100% conforming product rests with the awardee. The Government reserves the right to terminate for cause in whole or part per FAR 52.212-4 (m).

4.4. Inspection requirements will be determined by the NSN’s coding.

4.5. All technical and/or quality issues or questions that develop during the contract period that will prevent the delivery of material should be provided to the KO as soon as possible. This includes questions or issues as a result of first article testing, waived sources, etc. The Government will normally respond in 10 days with an actionable response or notice of continuation in the case of Engineering Support Activity (ESA) consultation.

4.6. For Government drawing NSNs that do not require FAT, the contractor will require its subcontractors to comply with all testing and inspection requirements specified in the technical data packages.

5.0. Industrial Preparedness - Obsolete Material/Configuration Change Notification

5.1. For the purposes of this action, an “obsolete” item is an item that is no longer in production or will no longer be produced or is scheduled to have production discontinued within the next 12 months by the Government’s approved source of supply per this solicitation’s item descriptions.

5.2. The awardee will be significantly involved in the Engineering Change Proposal (ECP) process along with the provisioning military service. As such, the contractor shall notify the Contracting Officer immediately upon discovering the unavailability of obsolete materials or components. In addition, the contractor shall notify the Contracting Officer immediately upon determining whether there has been a configuration change to the project’s vehicles which would alter the items needed to support the project’s vehicles. All pertinent information resulting from the part number change/part obsolescence such as, part numbers affected, specific vehicles affected, updated supplier information, updated part numbers, updated drawing information, timeline of updated part(s) implementation, or any other relevant information shall be provided to the Contracting Officer as soon as it is available.

5.2.1. Should there be an opportunity to purchase the technical data package of an obsolete item, the Government retains the right of first refusal to purchase the data package.

5.2.2. Should an obsolete item be inadvertently ordered, the contractor is responsible for notifying the Contracting Officer the item is obsolete. The obsolete material shall not be shipped to the customer. If an item is to become obsolete within 180 days of an order, the contractor shall notify the Contracting Officer so the order can be confirmed with the customer. If an obsolete item is shipped to the customer for any reason, it will be returned to the contractor at the contractor’s expense and the contractor will refund the purchase price of the item to the Government.

5.2.3. Should an incorrect item be ordered due to a configuration/part number update/change, the contractor is responsible for notifying the Contracting Officer of the issue. The incorrect parts shall not be shipped to the customer. If incorrect parts are shipped to the customer due to a configuration/part number update/change, the part(s) will be returned to the contractor at the contractor’s expense and the contractor will refund the purchase price of the item to the Government.

5.2.4. Please note, Procurement Note C02 Manufacturing Phase Out or Discontinuation of Production, Diminishing Sources and Obsolete Materials or Components. (DEC 2016) also applies to the solicitation and any resulting award.

5.2.5. Configuration Change/Obsolete Inventory Disposition – Regardless of the initiating party (Government or contractor-initiated action) of any configuration change or obsolescence incident, the Government is under no obligation to purchase inventory that may be left in the contractor’s stock/possession as a result of any configuration change or obsolescence incident.

6.0 Transportation/Marking/Packaging

For non-FDT or non-FMS shipments, delivery shall be FOB Destination. The contractor is responsible for shipment of materials from the contractor’s facility to the customer within CONUS. Delivery shall be FOB Destination to the designated Consolidation Containerization Point (CCP) for all OCONUS customers. FMS shipments will be FOB Origin. For FDT program transportation requirements, see Procurement note C16 First Destination Transportation (FDT) Program, Government-Arranged Transportation for Manual Awards and C17 First Destination Transportation (FDT) Program – Shipments Originating from Outside the Contiguous United States. The contractor shall utilize Vendor Shipment Module (VSM) to ship the required items. The contractor shall establish a VSM profile at the VSM website. Any questions in establishing an account should be directed to the Defense Distribution Center (DDC) at 1-800-456-5507 or delivery@dla.mil. The contractor shall package and label IAW requirements listed with the PIDs and applicable clauses.

Notes:

1. If the NSN has Special Packaging Instruction (SPI), MOP “HM” or “ZZ” or “GX” or any other specialized method of preservation and/or OPI is “A” or “M”- all military packaging requirements will remain the same – no matter the destination of shipments.

2. CONUS customer direct shipments will be commercial packaging unless any items listed within #1 is applicable.

3. OCONUS customer direct shipments and FMS shipments will be Military packaging due to environmental conditions.

7.0 Contract Closeout

At the end of the contract, the Contractor shall manage its inventory so as to minimize the amount of excess or unused inventory. The Contractor should seek to sell all other inventory to the commercial marketplace. In the event the Government ends the contract before contract year five (option periods), the government may purchase up to three months of customer direct demands against the contract in remaining stock at the end of the contract. The three months of customer direct demands will be calculated using the average monthly demand rate for months 19 through 30 of the contract times 3. If the Government purchases remaining stock, this inventory will be shipped to a CONUS location at the CLIN 0001 price. The Government will provide packaging requirements and shipping locations at such time.

The term “excess or unused inventory” includes supplies that have been identified to this contract and which are:

a. In the contractor’s inventory.

b. Held for the account of the contractor under this contract and are supplies which the contractor and its suppliers or subcontractors acquired in good faith based upon estimated quantities established for this contract.

7.1 Options/Exit Plan/Transition Period

Option Period 1 (12 months): the Government will notify the awardee at least twelve (12) months in advance of the base period expiration if it intends to exercise option period 1 or allow the contract to expire at the end of the four-year base period. If the option is not invoked, the transition shall begin six (6) months in advance of the base period expiration. If the Government invokes option period 1, the transition shall begin six (6) months in advance of the option period 1 expiration.

To the extent possible and other than in the event of termination, twelve (12) months before expiration of the base period or option period 1 (if invoked), the Government and the Contractor shall establish a joint Exit Transition Integrated Product Team (IPT). The Exit IPT shall develop the schedule, milestones, costs (if applicable), and performance requirements for an orderly transition of the H2O Program element to Government control, to performance under another contract, or performance on a follow-on contract.

Contract Exit commences upon six (6) months in advance of the base period expiration or option period 1 (if invoked), or, in the event of termination for the Government’s convenience or for cause, upon the Contractor’s receipt of a termination notice from the Government, whichever occurs first. Within 30 days of the commencement of Contract Exit and at the end of the base period contract term as directed by the Contracting Officer, the Contractor shall provide at no additional cost to the Government in writing the current status and the projected status as of the end of Execution Phase for the quantity and identification of Contractor inventories available at the end of the contract.

8.0. Termination

If a contractor is failing to support any one or more NSNs under their contract with timely delivery of conforming parts, the KO may do a partial termination of the contract for cause to remove those items or a complete termination of the contract for cause, as provided by clause FAR 52.212-4.