FY12 Proposed Aeromedical Airlift Uniform Rates and Rules.pdf

For Official Use Only

22 NOV 11

MEMORANDUM FOR ALL CARRIERS

FROM: USTRANSCOM/TCAQ-P

508 Scott Drive Scott AFB IL 62225-5357

SUBJECT: Notice of Proposed Fiscal Year 2012 (FY12) USTRANSCOM Contingency

Uniform Rates and Rules for Aeromedical Services – Solicitation Number

HTC711-11-R-C002 (SUSPENSE: 7 DEC 11)

1. The Proposed FY12 rates, for the B767ER, are as follows:

Plane Mile Rate (Dollars) FY12 Intl Medium Class Passenger Seat Mile Rate x 240 ACL Reconfiguration Rate $107,772.18 Under Utilization Rate $8,290.17

2. Carriers involved in the Aeromedical Services segment of the CRAF should provide comments and supporting documentation to USTRANSCOM/TCAQ-P, 508 Scott Drive, Scott AFB IL 62225-5357 by close of business 7 DEC 11. It is imperative carriers identify all issues of concern prior to this deadline. Under no circumstances will an extension be granted. If specific information is required on individual cost elements, analysts will provide detailed step-by-step treatment upon carrier request.

3. Please direct any questions or concerns to me at Lucretia.Sanchez@ustranscom.mil or 618-220-7119.

//SIGNED//

LUCRETIA A. SANCHEZ

Chief, Pricing Branch

Attachment:

FY12 Proposed Aeromedical Airlift Uniform Rates and Rules

UNITED STATES TRANSPORTATION COMMAND

508 SCOTT DRIVE

SCOTT AIR FORCE BASE, ILLINOIS 62225-5357

mailto:Lucretia.Sanchez@ustranscom.mil�

Prepared By: United States Transportation Command, Command Acquisition, 508 Scott Drive, Scott AFB IL 62225-5357

UNITED STATES

TRANSPORTATION COMMAND

PROPOSED

AEROMEDICAL AIRLIFT

UNIFORM RATES AND RULES

FISCAL YEAR 2012

Introduction

General Comments

The aeromedical evacuation (AE) segment of CRAF is comprised of B-767ER aircraft.

Air Mobility Command (AMC) purchased 44 AE ship-sets for the B-767 aircraft in FY92.

In times of emergency, USTRANSCOM envisions the conversion of B-767 aircraft into AE aircraft to augment the present organic fleet.

During any contingency, such as CRAF activation, planning does not permit long lead times. Therefore, USTRANSCOM considers the development of AE Rates in the best interest of both the industry and the DoD. Having uniform rates and contract provisions in place precludes the long lead times required for the collection of cost and pricing data, audits, and negotiations of contract terms and conditions during a national emergency situation.

AMC published its first AE Rate in FY94 on Delta’s cost and pricing data. The first AE Rate provided a rate for each directed aircraft mile flown and a daily rate for each day the aircraft was in AE configuration. The AE Rate structure has since evolved into the current rate structure of a plane mile rate, reconfiguration daily rate, and under utilization hourly rate as detailed in Appendix A.

In FY10 USTRANSCOM proposed to utilize the medium class passenger negotiated uniform rate for the AE per mile rate (Rate x 240ACL). No comments were received.

As a result, USTRANSCOM will continue this methodology in all subsequent Aeromedical rates. USTRANSCOM will also continue to establish the reconfiguration daily and under utilization hourly rates and publish those in the Aeromedical Airlift Uniform Rates and Rules document.

Eurocontrol

The historical AE Rates have provided a Eurocontrol surcharge to compensate for extra high costs of missions through Eurocontrolled airspace. However, beginning with the FY05 rate, the surcharge was eliminated. The AE missions flown are more in line with the types of missions that the International Charter Cargo Airlift Service and combi fly (intra-theater hub and spoke operations) as opposed to long-range US-European missions. Therefore, these AE missions will be reimbursed Eurocontrol charges based on actual invoices. Eurocontrol charges are those invoiced by Eurocontrol, Rue De La LOI 72-B-1040, Bruxelles.

Package Overview

Appendix A provides the FY12 final plane mile rate, reconfiguration daily rate, and under utilization hourly rate. Appendix B provides the supporting data used to develop the AE rates.

INDEX OF APPENDICES

No.

Appendix Title Pages

A USTRANSCOM Uniform Negotiated Rates and Rules 2

B Computation of Uniform Rates 1

APPENDIX A

SCHEDULE OF UNIFORM NEGOTIATED RATES AND RULES

FISCAL YEAR 2012

A. RATES. Air transportation services shall be paid at the following rates. In addition, carriers' monthly charter revenues will be adjusted for the variance in fuel price as provided in paragraph B of this Appendix A.

(1) Aeromedical Airlift

B-767ER

Plane Mile Rate (Dollars) FY12 Intl Medium Class Passenger Seat Mile Rate x 240 ACL Reconfiguration Daily Rate $107,772.18 Under Utilization Hourly Rate $8,290.17

Plane Mile Rate: The carrier will be paid a rate per revenue plane mile for each directed aircraft mile and for all miles flown. Plane miles between points are based on Commercial Operations Integrated System (COINS). All nonrevenue flying for carrier maintenance, aborted flights, or other reasons not directed by the government are not considered revenue plane miles.

Reconfiguration Daily Rate: Appendix B, page 2 provides a detail summary of how the reconfiguration daily rate was calculated. The carrier will be paid a daily reconfiguration rate for the time the aircraft is down for modification. The reconfiguration daily rate is a weighted rate based on operating cost of all carriers in the uniform medium class passenger rate category for international service less any cost a carrier would not incur when the aircraft is not flying (all fuel, portion of maintenance, portion of aircraft and traffic servicing, and portion of passenger service).

Under Utilization Hourly Rate: Appendix B, page 2 provides a detail summary of how the under utilization hourly rate was calculated. For planning purposes USTRANSCOM uses 13 hours daily utilization for a minimum 30-day period for B767-300ER and 200ER aircraft called-up under AE CRAF activation. The under utilization rate includes 100 percent for contractor’s fixed cost, general ground property, G&A and profit. Carrier’s maintenance cost, aircraft and traffic servicing cost, and passenger service cost is paid at a reduced rate of 50 percent, 20 percent, and 50 percent, respectively. The carrier would not incur any fuel cost. The days the carrier’s aircraft is down for configuration and reconfiguration would count toward the 30-day minimum time period used to calculate a carrier’s under utilization compensation. A compensation example is provided below.

APPENDIX A

UNDER UTILIZED REVENUE COMPENSATION EXAMPLE FOR B-767-300ER

AIRCRAFT:

• Tail number N321 is activated on the fifth day of November.

• The aircraft operated for 175 flight hours for the next 30 days.

• Planning utilization = 390 hours (30 days x 13 hours).

• Aircraft is down 78 hours (6 days x 13 hours) for modification.

• Actual utilization = 175 hours.

• Under utilized hours = 137 hours (390 hours – (78 hours + 175 hours)).

• $8,290.17 Under Utilization Rate (reference Appendix B, page 2).

• The carrier’s compensation for under utilization is as follows:

• $1,135,753.29 ($8,290.17 x 137 hours).

(2) Eurocontrol.

Eurocontrol applies only to missions where a carrier is required to transit countries with an ICAO prefix of “E” or “L” (e.g., EDAF, LIRA). The AE missions will be reimbursed Eurocontrol charges based on actual invoices. Eurocontrol charges are those invoiced by Eurocontrol, Rue De La LOI 72-B-1040, Bruxelles.

B. FUEL ADJUSTMENTS. The carrier shall be compensated for variance in fuel prices incurred on USTRANSCOM AE missions. Carriers shall submit a monthly fuel report and mileage report in accordance with Appendix 3B (Monthly Fuel Report Summary), 3B-1 (one-way mileage report), and 3B-2 (round-trip mileage report) of the Performance Work Statement for the International Airlift Services in Support of the Department of Defense and the Civil Reserve Air Fleet. Adjustments will be made upward or downward if the price of fuel varies by more than one cent per gallon over the pegged price used in establishing the USTRANSCOM rates.

The required monthly fuel reports will include only the cost incurred for raw fuel, fuel taxes, into-plane fees, and airport fees. The difference between the carrier's monthly average fuel price of all fuel purchased for USTRANSCOM AE missions and the pegged price per gallon used to compute the rates will be multiplied by both the number of contract pay miles during that month and the carrier's fuel burn rate per mile. This process will provide the upward or downward dollar adjustment to the carrier's AE revenues for that month.

APPENDIX B

FY12 Intl Medium Class Passenger Seat Mile Rate $0.14729

B767ER ACL 240

Cost Category

Crew 11.69% $0.01722 $4.13 100% $4.13 Fuel 32.57% $0.04797 $11.51 0% $0.00 Maintenance 13.44% $0.01979 $4.75 50% $2.37 Insurance 0.70% $0.00103 $0.25 100% $0.25 Rent & Misc 7.03% $0.01035 $2.48 100% $2.48 Depreciation & Obsol 2.18% $0.00321 $0.77 100% $0.77 Preop 0.00% $0.00000 $0.00 100% $0.00 Capital Gain/Loss 0.00% $0.00000 $0.00 100% $0.00 Grd Property 0.27% $0.00040 $0.09 100% $0.09 Aircraft & Traffic Service 8.44% $0.01243 $2.98 20% $0.60 Passenger Service 10.05% $0.01481 $3.55 50% $1.78 G&A 3.73% $0.00550 $1.32 100% $1.32 Profit 9.91% $0.01460 $3.50 100% $3.50 Total 100.00% $0.14729 $35.35 $17.30

Reconfiguration Daily Rate

Adjusted FY12 Proposed Aeromedical Rate Per Plane Mile $17.30 x Aircraft Speed 479 x Daily Utilization (MPH) 13 = Daily Reconfiguration Rate $107,772.18

Under Utilization Hourly Rate

Adjusted FY12 Proposed Aeromedical Rate Per Plane Mile $17.30 x Aircraft Speed (MPH) 479 = Under Utilization Rate per Hour $8,290.17

Notes:

Percent of Seat Mile

Rate

COMPUTATION OF RECONFIGURATION DAILY RATE AND UNDER UTILIZATION HOURLY RATE

Fuel cost was totally deleted. Maintenance was adjusted to recognized cost incurred for maintenance burden. Aircraft and traffic servicing cost was adjusted for unincurred landing fees and associated cost for handling of passenger and aircraft while on the ground.

Passenger service cost was reduced for unincurred meal service.

Adjusted

FY12

Proposed Aeromedical

Rate Per Cost

Allowed

FY12

Proposed

Aeromedical Rate Per

Plane Mile

FY12

Proposed

Aeromedical Rate Per Seat Mile