CG_ALCINST_4200.3B.pdf

Master document maintained electronically.

All printed copies are considered reference material only.

Distribution Statement A: Approved for public release. Distribution is unlimited.

Commanding Officer United States Coast Guard Aviation Logistics Center

1664 Weeksville Road Elizabeth City, NC 27909 Staff Symbol: esd-pqa Phone: 252-384-7229 Fax: 252-384-7231

CG ALCINST 4200.3B

10 MAY 2016

COAST GUARD AVIATION LOGISTICS CENTER INSTRUCTION 4200.3B

Subj:

Ref:

ALC SPARE PARTS BREAKOUT/NEW PRODUCT DEVELOPMENT PROGRAM

(a) Coast Guard Uniform Supply Operations Manual, COMDTINST M4121.4 (series)

(b) Spare Parts Breakout Program, COMDTINST M4408.8 (series)

1. PURPOSE. This instruction sets forth the Coast Guard Aviation Logistics Center (ALC) Spare Parts

Breakout (SPBO) and New Product Development (NPD) Program.

2. ACTION. The Chief of Policy and Quality Assurance (PQA) Branch, Engineering Services Division

(ESD), will review this program and instruction as necessary to ensure it is being properly and effectively administered. Each Product Line Manager shall designate a SPBO Manager to facilitate their respective breakout efforts. All inventory managers, equipment specialists, procurement personnel, and their supervisors shall comply with this instruction.

3. DIRECTIVES AFFECTED. The ALCINST 4200.3A dated 1 January 2011 is hereby cancelled.

4. DISCUSSION. The objective of this program is to reduce the procurement cost of systems, system parts, and aeronautical parts while maintaining the integrity of the aircraft. The effort of the

SPBO/NPD will be to constantly strive to improve the quality, reliability, and lifecycle costs of parts procured by ALC. Savings may be achieved through breakout of replacement parts, reverse engineering, improved design, development and qualification of new sources, breakout or improvement of repair procedures and lead times. The SPBO program has several goals: to enhance competitive procurement; to identify alternate sources of supply for parts that are not meeting the lifecycle requirements or are not adequately performing the function they were designed to perform or no longer available; to work with small business representatives in procurement to ensure that small businesses are given an opportunity to compete, and to increase standardization of Coast

Guard spare parts. These objectives serve as a means of achieving the overall ends of Coast Guard logistics: increased availability, improved reliability, and lower cost for spare parts used by the Coast

Guard.

5. DISCLAIMER. This guidance is not a substitute for applicable legal requirements, nor is it itself a rule. It is intended to provide operational guidance for Coast Guard personnel and is not intended to nor does it impose legally-binding requirements on any party outside the Coast

Guard.

6. MAJOR CHANGES. Changes are as follows:

a. Added a glossary to include terms frequently associated with the SPBO process, see

Enclosure (1), Glossary of Terms.

b. Added requirement to archive Vendor Surveys to the ALC web site.

7. ENVIRONMENTAL ASPECT AND IMPACT CONSIDERATIONS.

a. The development of this directive and the general policies contained within it have been thoroughly reviewed by the originating office and are categorically excluded under current

USCG categorical exclusion (CE) (#4) from further environmental analysis, in accordance with

Section 2.B.2 and Figure 2-1 of the National Environmental Policy Act Implementing

Procedures and Policy for Considering Environmental Impacts, COMDTINST M16475.1

(series).

b. This directive will not have any of the following significant cumulative impacts on the human environment, substantial controversy or substantial change to existing environmental conditions, or inconsistencies with any Federal, State, or local laws or administrative determinations relating to the environment. All future specific actions resulting from the general policies in this

Manual must be individually evaluated for compliance with the National Environmental

Policy Act (NEPA), Council on Environmental Policy NEPA regulations at 20 CFT Parts

1500-1508, DHS and Coast Guard NEPA policy, and compliance with all other environmental mandates.

c. Efforts shall be made to minimize the use, generation, storage, and disposal of hazardous material during a part’s life cycle while maintaining the airworthiness of aircraft. Personnel involved in decisions in developing product requirements, including maintenance requirements or manufacturing processes, shall consider the environmental impact of these processes.

Environmental impact of manufacturers shall also be considered in the vendor evaluation process.

8. DISTRIBUTION. No paper distribution will be made of this Instruction. An electronic version will be loaded on the ALC website, ALC Instructions webpage.

https://cg.portal.uscg.mil/units/alc/Lists/ALC%20Instructions%20v2/AllItems.aspx

9. PROCEDURE. The following policy and procedures will be used to conduct the SPBO process.

a. Reference (a), Chapter 9, requires Inventory Control Points (ICPs) to develop internal procedures to accomplish the responsibilities and objectives of the SPBO program.

b. Reference (b), provides rationale for the program and guidance to logistics centers to accomplish SPBO of all parts subject to breakout within their managed inventory. It modifies the

SPBO program described in the Defense Federal Acquisition Regulation Supplement (DFARS), Appendix E – DOD Spare Parts Breakout Program.

c. Breakout and competitive acquisition is performed within the following criteria:

https://cg.portal.uscg.mil/units/alc/Lists/ALC%20Instructions%20v2/AllItems.aspx

(1) The Cognizant Design Control Activity (DCA) for Coast Guard managed aircraft material is the respective ALC Aircraft Product Line (PL) Engineering Officer (EO).

(2) The breakout effort in the PL is managed by the product line engineering cell.

(3) ALC’s aircraft PL EO determines the Flight Critical (FC) status of an item. It is the EO’s discretion if that authority is delegated to the Maintenance Officer (MO).

(4) Flight critical items may only be procured through sources approved from an original equipment manufacturer (OEM) or a vendor acceptable to ALC’s aircraft PL EO.

(5) Supply Item Change Records (SICRs) are prepared by following SICR Preparation and

Routing Procedures, ALC Instruction 5213.1 (series).

(6) Each aircraft product line contracting cell performs solicitation and buys.

d. Limited Screen Breakout will be conducted during the buy cycle. When a buy is initiated in the product line supply cell, the applicable inventory manager will review the item’s procurement data package for competitive status. In formulating the procurement request, the Acquisition

Method Code (AMC), Acquisition Method Source Code (AMSC), and Source Maintenance

Recovery (SMR) codes will be strictly followed. Items selected for Limited Screen Breakout will be presented to the SPBO manager or supply cell equipment specialist as applicable. Flight

Critical items may only be procured through sources approved from an original equipment manufacturer (OEM) or a vendor approved by the PL EO.

(1) Whenever practicable, efforts to accomplish a Limited Screen Breakout should include, but are not limited to, the following:

(a) A review of all available technical data.

(b) Visual review of the item by competent technical personnel.

(c) Characteristics screen to the Defense Logistics Supply Center (DLSC).

(2) Questions involving the accuracy or currency of the AMC, AMSC or SMR codes will be resolved by forwarding the procurement data package to the SPBO manager.

e. The Full Screen Breakout does not lend itself to a specific timeframe for the review of a particular item. Therefore, the review will be initiated based on projected buy requirements and not solely at the time of a particular procurement. Requests from other areas such as Inventory

Management or Product Line Management may also initiate a Full Screen effort. The majority of the items undergoing Full Screen review are highly complex components, requiring extensive review of the available technical data. In addition, SPBO managers are responsible to develop specific quality assurance requirements to ensure the integrity of the newly manufactured part.

Flight Critical items may only be procured through sources approved from an original equipment manufacturer (OEM) or a vendor approved by the PL EO.

(1) Full Screen reviews are accomplished via different techniques, dependent upon the type of equipment and the technology under which the part was initially developed. The purpose of this process is to constantly improve the quality of the parts procured. Additionally, the

SPBO managers may pursue qualification of alternate source(s) for the manufacture of an

“Identical Copy” when overcharging for the part is suspected. This procedure eliminates the costly and time-consuming effort of qualifying a newly designed part. In some cases, this program will produce multiple alternate sources of supply. As with the evolution of any new program, the major limiting factor will be resources.

(2) Generally the SPBO manager will conduct Full Screen Breakout reviews for specific items as required, based on input from the aircraft product lines and supply cells. The following criteria should be used in prioritizing candidates for Full Screen Breakout:

(a) Excess lead-time and/or cost avoidance.

(b) There is a forecasted buy in the apportionment or budget year which will exceed $2,500 for consumables and $10,000 for repairable items.

(c) The system being supported is expected to remain in service during the next five years.

(d) There is good reason to believe that technical data and rights could be obtained, and the potential exists for promoting interests other than the prime or actual manufacturer.

f. The PL SPBO manager shall:

(1) Determine if breakout is justified by comparing cost, lead-times, availability, vendor status and usage.

(2) Identify the source of funding; Operational Expenses (OE) or Acquisition, Construction and Improvements (AC&I).

(3) Develop a list of possible vendors by conducting market research. This may include checking with other product lines, researching the ALC Vendor Survey database, reviewing saved vendor information, and Internet searches.

(4) Obtain necessary technical data such as prints, samples, engineering specifications, etc.

(5) Ensure technical data is not proprietary.

(6) Narrow the possible vendor list based on references, past performance, qualifications, certifications, quality systems, and background checks.

(7) Request potential vendor’s provide copies of quality manual, certifications, certifying documents and samples (if available).

(8) Send information package to several possible vendors for price and lead-time quotes.

(9) Narrow the list of vendors to one or two leading candidates.

(10) Determine prime candidate.

(11) Perform vendor audit (site survey) if necessary

(12) Procure first article with options for additional articles, if required.

(13) ALC will perform required inspections and form, fit, and function on required aircraft.

(14) Gain engineering approval for proposed part from respective product line engineering.

(15) If approved, complete SICR process to add new part to supply.

(16) Identify alternate sources of supply that are able to manufacture spare and/or repair parts which satisfy all form, fit, and function requirements and can be procured competitively. This effort requires a significant level of engineering review with primary consideration given to the criticality of the component and safety of flight. The SPBO managers are the primary point of contact for all companies wishing to qualify to manufacture and/or repair parts for

Coast Guard aircraft. Evaluations are made with the procedures specified in paragraphs 8.a and 8.b. In situations where an active procurement is in process, the primary point of contact for new companies will be the Contracting Officer.

(17) Use the SPBO procedure for parts manufactured at ALC without the vendor steps.

g. Limiting factors to the success of this program are is the quality and completeness of technical data and the ability to retrieve/release accessible technical data. The Contracting

Officer, in concert with Scientific and Technical Information (STINFO) and the Freedom of

Information Act (FOIA) guidelines, may approve the release of technical data during the procurement cycle. Prior to release of any proprietary data, Coast Guard legal staff may be consulted.

h. Every effort shall be made to ensure that spare parts are procured at the best value, while not jeopardizing quality or safety of flight. The use of airworthy commercial specifications or standard military specifications/military standard parts will be maximized. Advantage will be taken of systems already available throughout DOD or other government agencies. Newly manufactured commercial items will be procured from sources able to provide a certificate of airworthiness, FAA 8130 (Preferred), or certificate of conformance and full traceability to an approved manufacturer. Items made to USCG or DOD specifications shall be procured from sources with traceability to USCG or DOD qualified manufacturers. Vendors supplying items produced in accordance with a standard, such as an Army Navy (AN) bolt or Military Standard

(MS) fitting, are required to furnish a certificate of conformance with the applicable standard along with complete traceability. Documents and certifications required by this paragraph shall be retained in the purchase order or contract file for the item.

i. When applicable an FAA Parts Manufacturing Authority (PMA) may be authorized providing the vendor provides a complete data package ensuring that the part meets or exceeds OEM specifications for PL EO review and approval. PMA parts shall not be purchased without PL EO approval.

j. Follow a unified and interactive approach to the management and technical activities needed in examining spares for potential competitive breakout. Promote the need in all acquisition planning and management documents that adequate technical data, down to and including production drawings (as defined in ASME Y14 (series) and MIL-STD-31000(series)), and associated data rights are clearly identified. This is to ensure adequate life-cycle support and to facilitate competition through spare parts breakout process.

k. Each division SPBO manager shall maintain SPBO/NPD data customized to their division’s requirements.

(1) Ensure technical data is not proprietary.

(2) Narrow the possible vendor list based on references, reputation, qualifications, certifications, quality systems, and background checks.

(3) Issue solicitation (if applicable). Request vendor/s provide copies of quality manual, certifications, certifying documents and samples (if available).

(4) Send information package to several possible vendors for price and lead-time quotes.

(5) Narrow the list of vendors to one or two leading candidates.

(6) Determine prime candidate.

(7) Perform vendor audit (site survey) if necessary.

(8) Procure first article with options for additional articles, if required.

(9) ALC will perform required inspections and form, fit, and function on required aircraft.

(10) Gain engineering approval for proposed part from respective product line engineering.

(11) If approved, complete SICR process to add new part to supply.

l. Site Surveys and Vendor Approval.

(1) A site survey is required when the government has no satisfactory history with the manufacturer and for any of the following conditions:

(a) Critical Safety Item (CSI)/Flight Safety Critical Aircraft Part (FSCAP).

(b) Vendors having quality or delivery issues.

(c) Prototypes requiring technical assistance from Engineering.

(d) Contracts with durations over three years.

(e) Awards over $1,000,000.

(2) The ALC Vendor Survey, Form ALC ESD32, will be used, either filled out in person, on site, or mailed out beforehand to identify areas that require focus.

(3) Items required prior to performing a site survey:

(a) Copy of the vendor’s Quality Manual.

(b) Copy of certifications (FAA, OEM authorized repair center, ISO 9001 (ISO 14001, AS

9110, OHSAS 18001 if applicable)).

(c) Capabilities list.

(d) Company information to include, description, number of employees, and dollar value of revenue. Complete necessary forms located at http//www.bpn.gov.

(e) Past performance to include point of contact, name and phone number, and any current government contracts plus contract number and whether the company has ever been disbarred for any reason.

(4) All Vendor Surveys shall be uploaded to the ALC Vendor Survey Database located in the Asset Logistics Management Information System (ALMIS), Aviation Technical

Information Management System (ATIMS) application.

(5) SPBO managers will conduct an analysis of each company and provide a recommendation to the respective PL EO based on the evaluation of the data available. Recommendations should be submitted in the form of a Trip Report (ALCINST 5050.1 (series)).

10. RECORDS MANAGEMENT CONSIDERATIONS. This Instruction has been thoroughly reviewed during the directives clearance process, and it has been determined there are no further records scheduling requirements, in accordance with Federal Records Act, 44 U.S.C.

3101 et seq., NARA requirements, and Information and Life Cycle Management Manual, COMDTINST M5212.12 (series). This policy does not have any significant or substantial change to existing records management requirements.

11. FORMS/REPORTS. Forms listed in this instruction; Vendor Survey, Form ALC ESD32, Supply Item Change Record, Form ALC3200-3, and Form, Fit, and Function, ALC Form

ESD4, are located on the ALC website under ALC ADOBE forms.

https://cg.portal.uscg.mil/units/alc/almis/ALC%20Forms/Forms/ALC%20Adobe%20Forms.as px https://cg.portal.uscg.mil/units/alc/almis/ALC%20Forms/Forms/ALC%20Adobe%20Forms.aspx https://cg.portal.uscg.mil/units/alc/almis/ALC%20Forms/Forms/ALC%20Adobe%20Forms.aspx

12. REQUEST FOR CHANGES. This Instruction will be maintained by the Engineering Services

Division. It will be reviewed annually and updated as necessary. Submit any requested changes to ESD-PQA.

J. F. MARTIN

Captain, U.S. Coast Guard

Aviation Logistics Center

Encl: (1) Glossary of Terms

Distribution:

ALC Website

Encl (1) to CG ALCINST 4200.3B

Master document maintained electronically.

Glossary of Terms

Acquisition Method Code (AMC). A single digit numerical code to describe to the contracting officer and other government personnel the results of a technical review of a part and its suitability for breakout.

Acquisition Method Suffix Code (AMSC). A single digit alpha code that provides the contracting officer and other government personnel with engineering, manufacturing, and technical information further describing suitability/non-suitability for breakout.

Actual Manufacturer. An individual, activity or organization that performs the physical fabrication processes that produce the part or other items of supply for the government. The actual manufacturer must produce the parts in-house. The actual manufacturer may or may not be the design control activity.

Annual Buy Quantity. The forecast quantity of a part required for the next 12 months.

Annual Buy Value. Cost of an item multiplied by the annual demand for that item.

Breakout. The improvement of the acquisition status of a part resulting from a technical review and a deliberate management decision. Examples are the competitive acquisition of a spare part previously purchased noncompetitively and the direct purchase of a part previously purchased from a prime contractor who is not the actual manufacturer of the part.

Cage Code. A five position alphanumeric codes with a number in the first and last positions, excluding the letters I and O assigned to U. S. organizations which manufacture and/or control the design of items supplied to the Government Military or Civil Agency or assigned to U. S.

organizations primarily for identifying contractors in the mechanical interchange of data. It identifies a given facility at a specific location.

Competition. A contract action where two or more responsible sources, acting independently, can be solicited to satisfy the government's requirements. (See definitions for limited competition and full and open competition.)

Consumable Item. An item or substance that upon installation loses its identity and is normally consumed in use or cannot be economically repaired. Consumable items may be flight critical.

Design Control Activity. A contractor or government activity having responsibility for the design of the given part, and for the preparation and currency of engineering drawings and other technical data for that part. The design control activity may or may not be the Original Equipment Manufacturer

(OEM).

Federal Aviation Administration Airworthiness Approval Tag (8130-3). A form used by manufacturers to identify parts and to ensure traceability and Federal Aviation Administration

(FAA) approval.

Criticality Code. A code that indicates any part, assembly, or installation containing a critical characteristic whose failure, malfunction, or absence could cause an uncommanded engine shutdown or a catastrophic failure resulting in loss or serious damage to the aircraft or an unsafe condition.

Full Screen Breakout. A detailed parts breakout process, including data collection, data evaluation, data completion, technical evaluation, economic evaluation, and supply feedback, used to determine if parts can be purchased directly from the actual manufacturer(s) or can be competed.

Limited Screen Breakout. A parts breakout process covering only selected points of data and technical evaluations, and should only be used to support immediate buy requirements.

Original Equipment Manufacturer (OEM). A contractor responsible for the original design and production/assembly of the major system or subsystem into which other manufacturers’ components are assembled. May or may not be the design control activity. May or may not be the Prime. See

Prime Contractor.

Parts Manufacture Approval. Allows a company to produce and sell FAA approved aircraft articles that are eligible for installation on FAA type certified aircraft.

Prime Contractor. A contractor having responsibility for design control and/or delivery of a system/equipment such as aircraft, engines, ships, tanks, vehicles, guns and missiles, ground communications and electronics systems, and test equipment. May or may not be the OEM. E.g.

American Euro copter is the prime contractor for the MH-65.

Qualified Manufacturer. An individual, activity, or organization qualified to manufacture a specific part. Approval may come from the following sources: FAA, Parts Manufacturer Approval

(PMA), DOD agencies, OEM, or CG ALC Product Line Division Engineering Branch.

Repairable Item. A durable item when unserviceable can be economically restored to a serviceable condition through regular repair procedures.

Reverse Engineering. A process of developing an exact copy of an item through review of available technical data and physical disassembly and analysis of the original item and its components.

Source Maintenance Recovery (SMR) Code. A code assigned by ALC personnel that displays the source, acquisition, replacement, repair and condemnation criteria.

Supply Item Change Request (SICR). The method by which Product Line Engineering notifies

Aviation Logistics Division (ALD) of changes or additions to aircraft component parts. The SICRs are managed by the Product Line (PL) designated SICR Manager, approved by Engineering Officer and forwarded to ALD to effect changes in the Asset Maintenance Management Information System

(AMMIS) database.

Traceability. Documented evidence that the item to be supplied was/will be manufactured and/or maintained by the prime contractor, approved manufacturer, or FAA certificate holder is identical to the product that was initially manufactured, and is in full compliance with all specifications, drawings, storage, packaging, and handling requirements, and other associated requirements.

Additional documentation is required to demonstrate, to the government’s satisfaction, the

Government’s ability to obtain all information necessary to trace the items back to the item’s manufacturer in the event of the item failure. The manufacturing process information includes, date and place of actual manufacturing and additional information as appropriate, such as verification of all aspects of material, manufacture, special processes, personnel certifications, assembly, inspection, installation and repair.