DFTS_Solicitation_Q_and_As__156-199.pdf

Question Response 156 Reference: Historical Transportation Data, 15.xls

Why does the agency identify a shipment traveling from New Cumberland, Pennsylvania to Mechanicsburg, Pennsylvania, a distance of seven miles, as having traveled using Equipment Type QQ?

The government views this shipment as an anomaly, and this shipment is not representative of equipment type QQ shipments.

157 Reference: DFTS Pricing Sheet - TL, Air, Sched, 2B2 -LPL (Air); 5-Zip

Attachment 2 says that this spreadsheet includes “pricing for shipments requiring air transportation.” Why does the agency classify a shipment from zip code 17070 to zip code 17003 as one “requiring air transportation”?

See Amendment 5 as this lane has been removed.

158 Reference: DFTS Questions and Answers, Question 3

The government currently has contracts with small package and heavyweight integrators who, pursuant to customary commercial practices, define their next day and second day services as “Next Day Air” and “Second Day Air,” respectively. There are a number of shipments that never travel via airplane. In defining Air as “freight transported by aircraft,” the agency is departing from customary commercial practices (the same practices recognized in the domestic delivery services contracts). Why does the agency believe this departure from customary commercial practices is necessary?

Per Amendment 7, the government is following commercial practice.

159 Reference: DFTS Questions and Answers, Question 13

a. The agency states that it seeks pricing for air shipments for all SLINs listed in tab 2B4-LPL “in case it is determined necessary to move freight by aircraft.”

Why does the agency seek air rates for shipments that, because of the close proximity between origin and destination locations, will never travel via airplane?

b. Is it permissible for contractors to submit “N/A” for such routes?

Per Amendment 7, the government is following commercial practice.

160 Reference: DFTS Questions and Answers, Questions 8-29

In response to question #8, the agency states that Equipment Type and Mode are the same. In response to question #29, it states that “Mode and equipment type are not the same.” Please clarify.

The government lists the equipment code used for loading, for example AV1, AV3, AF1 and AF3. The contractor sends back the appropriate EDI mode code.

161 Reference: DFTS Questions and Answers, Question 11

a. The agency states that “air rates only apply when freight is transported by aircraft.” However, the agency also acknowledges “that industry defines ‘Air’ as a time definite level of service.” Is the agency in this contract departing from the customary commercial practices with regard to the definition of “Air”?

b. Why does the agency believe it is necessary to depart from the customary commercial practices with regard to the definition of “Air.”

c. The government currently has commercial contracts with small package and heavyweight integrators for domestic delivery services. Pursuant to standard commercial terms, these integrators provide the government with next day morning, next day afternoon, second day and third day deliveries, as well as “ground delivery.” Because these integrators each have the right to determine how deliveries will be routed, they often ship the expedited freight via surface transportation only, yet such deliveries are not billed under the “ground delivery” rates under the contract. They are billed in accordance with the “air” rates. In the DFTS contract, however, it appears that all expedited deliveries that travel on the ground must be billed under a ground rate (TL or LTL). This is a departure from the customary commercial practices that the government recognizes in its domestic delivery services contracts. Why does the agency believe this departure from customary commercial practices is necessary?

a-c) Per Amendment 7, the government is following commercial practice.

162 Reference: DFTS Questions and Answers, Question 19

a. Since the agency will not consider changing the Air mode to a time-definite service level mode, will it consider creating a new category for time-definite shipments that may be fulfilled by any means necessary to meet the MDD?

b. Without a category other than Air, TL, and LTL, is it the agency’s position that all expedited ground transportation must be classified as TL (since there is no EXP accessorial for LTL)?

c. Suppose a shipment of 500 pounds, fitting on a standard pallet must go 1,300 miles and be delivered in two days. Since this is quicker than the standard transit times for LTL and EXP is not available, LTL is not an option.

The shipment must travel via air (priced by the contractor to arrive next day, per the agency’s instruction) or TL (with an EXP accessorial). However, a single shipment of just 500 pounds does not meet the definition of TL as stated in the answer to question 18. Must the contractor send the shipment via next-day air, at a significantly increased cost, or use an entire truck to carry the one piece of freight, also at a significantly increased cost?

d. If the contractor places the freight in the above example on a cargo van, may it still charge the TL rate? If not, what mode or rate applies?

e. Does the government consider its responses to questions 11, 12, and 13 as being consistent with customary commercial practices?

a-e) Per Amendment 7, the government is following commercial practice.

163 Reference: DFTS Questions and Answers 1-76, Question 33

a. The agency states that while it recognizes “that industry defines ‘Air’ as a time definite level of service,” it does not “interpret the industry’s definition of ‘Air’ to allow a Contractor to bill the Government an air accessorial if the cargo has not traveled by an aircraft.” Does the government consider its position to be consistent with customary commercial practices?

Per Amendment 7, the government is following commercial practice.

164 Reference: DFTS Questions and Answers 1-76, Question 68

a. What is the definition of “end of business day?” Is it 5:00 p.m.?

b. Some bases stop receiving deliveries earlier than 5:00 p.m. How should the contractor handle a shipment with a next day MDD to a base with a noon closing time? Will the agency extend the MDD to the second day?

c. According to the historic shipping information provided, next-day air is not the sole service level of the air shipments. Industry experience shows that next-day air is much more expensive than second-day or third-day air. For second-and third-day shipments traveling cross country, LTL cannot satisfy the delivery dates. The industry recognizes substituted-motor-for-air service as a viable mode between LTL (which cannot meet the MDD) and next-day air, which is significantly more expensive. Why is the agency eliminating second-day and third-day air options from the contractor’s pricing in favor of the most expensive next-day air service?

d. Does the government consider its position to be consistent with customary commercial practices?

Per the MFTURP, Appendix D (Section J): Overnight Service is defined as "Shipment to be delivered to consignee during consignee's normal operating hours, as listed in the TFG, on the next business day following the consignors requested pickup date of shipment." Aemdment 7 answers the remaining questions.

a. The definition of "end of business day" is dependent on the "consignee's normal operating hours , as listed in the TFG".

Per the MFTURP, Section F, Item 425: "Transit time for TSP-provided services shown below start on the consignor’s requested pickup date and time IAW the operating hours contained in the Transportation Facilities Guide (TFG)." and "When the consignor requests Overnight (D1) service with a before–12:00 p.m.

delivery, the TSP is entitled to a charge of DEL(1)$______ per hundred pounds (CWT) subject to a minimum charge of DEL(2)

b. In the example of a base with a noon closing time, DEL accessorial could be requested by the contractor. For other pre- 5:00 pm. closing times, the contractor is responsible for delivery in accordance with the TFG.

c. Amendment 7 addresses this concern. Time-Definite Service Level is mode neutral. The revised pricing worksheet now requests rates for Next Day, Second Day, and Third Day Time- Definite Service.

d. Amendment 7 incorporporates commercial practices to address this concern.

165 Reference: DFTS Questions and Answers, Question 69

a. The agency has stated that it does not “interpret the industry’s definition of ‘Air’ to allow a Contractor to bill the Government an air accessorial if the cargo has not traveled by an aircraft.” Integrated carriers who are approved government vendors routinely assess premium charges for “oversized freight” regardless of whether the freight travels by airplane or truck. For example, one of the prime integrators currently under contract with the government assesses premium charges for freight with any dimension exceeding sixty inches, no matter the equipment used and even if traveling via ground. Under the proposed DFTS accessorial table, however, freight with a height of sixty-one inches may not incur an oversized charge if traveling by ground. Is the agency in this contract departing from the customary commercial practices with regard to how to bill for oversized freight?

b. Why does the agency believe it is necessary to depart from the customary commercial practices with regard to how to bill for oversized freight?

a-b) Per Amendment 7, the government is following commercial practice.

166 Reference: DFTS Questions and Answers, Question 90

The government states that it is for the contractor to determine how to obtain from its subcontractors the particular equipment used in any shipment, but this is contrary to customary commercial practices. Vendors like those integrators under contract with the government determine how deliveries are to be made and are under no obligation to report the equipment used for any specific delivery. Indeed, they are even unwilling and/or unable to provide such information. Why does the agency believe it is necessary to depart from customary commercial practices by requiring the contractor to impose new reporting obligations on its subcontractors.

a-c)Per Amendment 7, the government is following commercial practice.

167 Reference: DFTS Questions and Answers, Question 86

a. How should the contractor treat air freight that is simply too big to fly with an integrator or on commercial cargo aircraft? Will the contractor receive enough time to transport the freight by TL or LTL? If not, is the intent for the contractor to move via chartered aircraft? If the expectation is not TL, LTL, or chartered aircraft, what means of transportation should be used?

b. Are contractors to factor in potential charter rates into their overall next-day air rates?

c. The response to Question No. 86 also directs contractors to refer to MFTURP. However, in response to question 3 released February 18, 2015, the agency states that MFTURP does not apply. Please clarify to state whether MFTURP applies to the DFTS contract. If it does not apply, why does the agency feel it is necessary to depart from customary commercial practices?

d. In response to question 3 released February 18, 2015, the agency states that DFTS is a FAR-based contract. What aspect of FAR prevents the application of MFTURP?

a. Amendment 7 addresses this concern.

b. No.

c. The MFTURP does not have to be followed by FAR-based contracts; however the MFTURP is a guide used where applicable.

d. None

168 Reference Appendix B, Air Section, and USTRANSCOM Answers to Questions 3, 24, and 33.

a. In answer 3, USTRANSCOM, for the first time, defined “air transportation” as “freight transported by aircraft.” In answer 24, USTRANSCOM refused to consider changing the Air mode to a “time definite service level.” In answer 33, USTRANSCOM acknowledges that its definition of “air,” which requires specific equipment as opposed to a service level, is inconsistent with the commercial industry.

a1.What is the Government’s need to purchase express transportation services based on equipment, such as on an aircraft, rather than the express service levels that commercial air carriers offer?

a2. Why is procurement of commercial transportation services based only on service level, without reference to mode, especially as it relates to USTRANSCOM’s new definition of “air,” inconsistent with the Government’s needs?

a3. Why does USTRANSCOM need to purchase “air” transportation that only flies on an aircraft?

a1-3)Per Amendment, the government is following commercial practice.

170 Reference Appendix B, Air Section, and USTRANSCOM Answers to Questions 3, 24, and 33.

a. Pursuant to FAR 12.302, has USTRANSCOM obtained a waiver so that it may require terms and conditions that are inconsistent with customary commercial practice?

a.1. If so, we request that the waiver be produced to all offerors, with trade secrets redacted.

a.2. If the Government is even able to obtain services on such a basis, is the Government willing to pay a price premium in return for its stated need? If so, why? Has it considered how the price premium will impact its ability to attract FMS business to the contract?

a.3. If the Government is even able to obtain services on such a basis, is the Government’s stated need worth the operational impacts? If so, why?

a1-3) Amendment 7 of solicitation has addressed these concerns.

Time-Definite Service Level is mode neutral and commercial practice.

169 Reference Appendix B, Air Section, and USTRANSCOM Answers to Questions 3, 24, and 33.

a. Pursuant to FAR 12.302(a), has USTRANSCOM conducted appropriate market research to determine whether integrated air carriers will agree to perform in the manner required to comply with USTRANSCOM’s noncommercial terms and conditions?

a1. Has USTRANSCOM performed market research to determine whether integrated air carriers will agree to transport shipments tendered as “air” only by aircraft? If so, without revealing trade secrets, what were the results of the market research? Note that our understanding, based in part on discussions with air carriers and in part on commercial air carrier agreements, is that integrated air carriers will agree to ship only pursuant to a service level and will not agree to ensure that shipments tendered as “air” fly in an aircraft.

a.2. Has USTRANSCOM performed market research to determine whether integrated air carriers will agree to track and report which shipments travel by USTRANSCOM’s definition of “air” and which travel only by ground? If so, without revealing trade secrets, what were the results of the market research?

Note that our understanding is that integrated air carriers have refused to systemically track and report to the contractor whether air shipments travel exclusively by ground. See Jim Ball Pontiac-Buick-GMC, Inc. v. DHL Express (USA), Inc., Case No. 08-CV-761F (W.D.N.Y. March 26, 2015) (“DHL’s system does not enable it to determine that a particular package travelled solely by truck.”).

a.3. Has USTRANSCOM performed market research to determine whether, if the large integrated air carriers refuse to ship in accordance with the DFTS Solicitation’s noncommercial terms and conditions, the Government’s operational needs for express service are capable of being met? If so, what did the research reveal?

a1-3) Amendment 7 of solicitation has addressed this concern.

171 Reference Appendix B, Air Section, and USTRANSCOM Answers to Questions 3, 24, and 33.

Why has USTRANSCOM failed to incorporate the definition provided for “air” and the application of “air” accessorials in the Contract or PWS itself?

Amendment 7 alleviates this concern now that time-definite service level is incorporated.

172 Reference Attachment 2B, 2B2 – LPL (Air); 5-Zip and Answers 7, 8, and 127

a. In response to a question that asked, “Why does the government list ‘Equipment Type’ as Air for these shipments,” the Agency Responded:

“DoD shipper systems lists "air" as an equipment type and if "air" is returned via the EDI 220 by the contractor, the Government expects the shipment to move via an aircraft and not via LTL/TL modes (other than the truck to get the shipment to the airport).”

a.1. Based on Answer 8, it appears that USTRANSCOM recognizes that “air” is both a mode and an equipment type. Does USTRANSCOM interpret “air” as both a mode and an equipment type? If so, does the fact that air is also an equipment type mean that the shipper can reject or require transportation by “air?”

a.2. If the shipper selects QQ, which pursuant to Answer 127, “indicates the shipment will be moved in an aircraft,” is the contractor required to ensure that the shipment moves in an aircraft, or, may the contractor move the shipment via substituted motor-for-air service, provided it charges accordingly and follows the Government’s process for change in mode?

a.3. What is the process for the contractor to challenge the equipment selection of the shipper, especially when it relates to shipment via air?

a.4. The Solicitation and resulting contract, as currently interpreted, give the shipper the power to dictate “air” equipment and require that the shipment move on an aircraft, thereby destroying mode neutrality. Department of Defense Instruction (“DoDI”) 4500.57 requires that: “[t]o the maximum extent practicable, FAR and non-FAR procurements [of transportation services] will be performance-based, mode-neutral, and time-definite....” Has USTRANSCOM received the necessary approvals within DoD to impose the requirement to ship via “air” that travels only on an aircraft?

a.5. If the shipper dictates “QQ” equipment, which under the Government’s interpretation requires the shipment to move on an aircraft and the package fails to make the MDD as a result of the selection, for example because substituted-motor-for-air service would have been faster, will the failure to meet the MDD be counted against the contractor’s on-time deliveries?

a.6. If the contractor selects the “air” mode on the EDI 220, is the contractor required to ensure that the shipment is transported on an aircraft?

a.7. Under what circumstances could the contractor select the air mode on the EDI 220 and subsequently move the shipment via substituted motor-for-air service, which presumably would ship under TL or LTL?

a.8. What approvals or procedures are required for a contractor who selects the “air” mode on the EDI 220 to change the mode and equipment to ground?

a.9. Could the contractor adjust the documents to reflect what the Solicitation now apparently requires to be treated as a mode change after the fact, or must a mode change be requested and approved prior to shipment?

a10. If an air carrier uses substituted motor-for-air service in lieu of flying on an aircraft with no notice, will USTRANSCOM compensate the contractor for the transportation and if so, under what mode(s)?

a.11. Does USTRANSCOM acknowledge that any administrative process surrounding the conversion of an “air” shipment to “ground” requirement is inconsistent with commercial terms and conditions of integrated air carriers, which offer express services levels in which the carrier determines the routing, method, and mode of transportation of all shipments and reserves the right to route shipments in the way they deem appropriate and divert any shipment for any reason to facilitate delivery? a.12. What is the Government need that is driving shippers, rather than the contractor and its air carriers, to make decisions about whether an air carrier may ship via air or ground in order to make the MDD?

a.13. What market research has USTRANSCOM performed to determine the impact that the increased administrative burden related to obtaining approvals for what USTRANSCOM is now treating as a change in mode will have on: (a) operations and timely delivery; and (b) pricing?

A1. Yes, air can be both a mode and an equipment type. Yes.

A2-A4. Amendment 7 alleviates these concerns now that time-definite service level is incorporated.

A5. The shipper does not indicate QQ. Amendment 7 alleviates this concern now that time-definite service level is incorporated.

A6. No, see Amendment 7.

A7. Mode shifts are authorized.

A8 -13. Amendment 7 of solicitation has addressed these concerns. Time-Definite Service Level is mode neutral and commercial practice.

173 Reference Attachment-1 PWS, ¶ 1.3.6.6., and Answers 27 and 28

In the answer to Question 28, USTRANSCOM has responded that mode and equipment are not the same. Yet in Answer 3 (among others), USTRANSCOM defined “air transportation” as “freight transported by aircraft,” which itself is a reference to particular equipment and not to a service level. Must the contractor obtain permission from the shipper for shipping product on ground equipment versus an airplane?

Amendment 7 of solicitation has addressed these concerns.

174 Reference Attachment-1 PWS, ¶ 1.3.6.6., and Answers 27 and 28

3.2. Does USTRANSCOM acknowledge that any requirement for the contractor and its subcontractors to obtain prior approval to change from movement on an airplane to ground is inconsistent with commercial terms and conditions of integrated air carriers, which offer express services levels in which the carrier determines the routing, method, and mode of transportation of all shipments and reserves the right to route shipments in the way they deem appropriate and divert any shipment for any reason to facilitate delivery?

Amendment 7 of solicitation has addressed these concerns.

175 Reference Attachment-1 PWS, ¶ 1.3.6.6., and Answers 27 and 28

a. PWS 1.3.3.1.1 states that, “The Contractor may mode shift unless site conditions prevent the use of certain equipment (e.g., rail, space constraints). . .

. The Contractor must provide the shipping site Transportation Office a two week notice when carrier changes are necessary.”

a.1. What is the definition of “mode shift?”

a.2. If the contractor selects the “air” mode on the 220 under USTRANSCOM’s new definition of “air,” and subsequently changes the transportation method to LTL or TL, is this action a permissible “mode shift?”

a.3. Is advance notice required for such a mode shift? If so, how long is that notice?

a.4. PWS 1.3.3.1.1 references a requirement of two weeks for “carrier changes.” What carrier changes are subject to the two week requirement?

a.5. The PWS reference to “mode shift” occurs under “Task Area 3, Subtask 1

– Truck Load (TL) and Less than Truck Load (LTL).” Is “mode shift” also authorized for “air” shipments, as currently defined?

a1-5) Per Amendment 7, the government is following commercial practice.

176 Reference Attachment 1 – PWS ¶ 1.3.2.6 Task Area 2, Subtask 6 – Freight Payment; see PWS ¶ 1.3.7.5.5; PWS at 16, and Answer to Question 97

USTRANSCOM has indicated that it will not request a revision to Syncada to identify and track mode shift. If the 220 identifies the mode as “air” and the air carrier moves by substituted motor-for-air service, which should be ground, what process must the contractor follow to obtain payment?

Per Amendment 7, mode shift from air to substituted motor-for-air service is a commecial practice allowed in the solicitation.

177 Reference Attachment 1 – PWS ¶ 1.3.2.6 Task Area 2, Subtask 6 – Freight Payment; see PWS ¶ 1.3.7.5.5; PWS at 16, and Answer to Question 97

Would USTRANSCOM interpret a mode shift after the 220 as nonconforming and reject all payment, under any mode?

Mode shifts after the EDI 220 should be coordinated with the shipper. A revised EDI 220 is required.

178 Reference PWS ¶ 1.3.3.5 Task Area 3, Subtask 5 – Level of Service Requirements, PWS at 20-21.

PWS 1.3.3.5 contemplates that the determination of “mode” is static and established once it is entered on the 220. If the air mode were defined as a level of service, in which air and substituted motor-for-air were both eligible to be considered “air,” this requirement would not cause an issue. However, air carriers reserve the right to divert shipments from air to ground at the last minute because weather may affect the ability of a shipment to move on air and ground differently and the decision may be made after the original mode is determined. We encourage USTRANSCOM to adopt procedures that provide the necessary flexibility to use integrated commercial air carriers.

Amendment 7 of solicitation has addressed these concerns.

179 Reference Attachment 1 – PWS ¶ 1.21. p. 3 and Answer to Question 18

a. USTRANSCOM answered the question regarding the definition of Truckload by reference to the word itself. What is the definition of Truck Load

(“TL”)?

b. How is the definition of TL different than the definition of LTL?

c. Is substituted motor-for-air service transported pursuant to an air waybill by an air carrier with an air SCAC Code eligible to be billed as LTL? If so, in what circumstances?

d. Is substituted motor-for-air service transported pursuant to an air waybill by an air carrier with an air SCAC Code eligible to be billed as TL? If so, in what circumstances?

e. If the contractor orders TL and there is additional space in the truck, may the trucking company ship additional cargo and still receive the TL rate?

a-b. The definition of truckload and less-than-truckload comes directly from the Defense Transportation Regulation Less Truckload: A quantity of cargo less than that required for the application of a truckload rate. Also called "less than truckload."

Truckload:. A quantity of cargo required for the application of a truckload rate. Also, a motor vehicle loaded to its carrying capacity.

c-d. Amendment 7 of solicitation has addressed these concerns.

e. It is impermissable to charge the Government twice for one truckload.

180 13.1. Given that USTRANSCOM has refused to include substituted motor-for-air service in the “air” mode, as is the commercial industry practice, would it consider adding a new line haul rate for such transportation?

Amendment 7 of solicitation has addressed this concern.

181 Reference Answer to Question 10

a. USTRANSCOM indicated that “[t]he Government may challenge the use of "air" mode/equipment for shipments over short distances (e.g. less than 500 miles).” Who in the Government is authorized to issue the challenge?

b. What is the process for the challenge?

c. Who has the authority to resolve the challenge?

d. If the shipper issues the challenge, is the contractor required to follow the shipper’s directions?

e. If the contractor follows the Government’s directions and, as a result of the Government’s directions, the shipment fails to make the MDD, will that failure count against the contractor’s on-time deliveries?

f. Would the challenge process occur before or after the shipment, or both?

g. Could the shipper require that a shipment travel in an aircraft?

a-g) Per Amendment 7, the government is following commercial practice.

182 Reference PWS ¶ 1.3.3.5

a. USTRANSCOM requires the contractor to “select the most cost effective level of service and mode to meet the shipment requirements.” If the contractor tenders a shipment to an air carrier mode, which, in turn, uses substituted motor-for-air service and the application of accessorials (such as EXP or dual driver) makes ground transportation more expensive, what documentation will USTRANSCOM require to support the higher rate? Would a statement from the air carrier that the use of substituted motor-for-air service was necessary to ensure on-time delivery suffice?

Amendment 7 of solicitation has addressed these concerns.

183 Will USTRANSCOM consider providing an enlargement of time to respond to the RFP so that offerors have an opportunity to determine whether the industry is willing to perform a contract under the current terms and conditions?

No.

185 Reference PWS ¶ 1.3.6.1.1.3

a. “For Roller Bed Trucks as outlined during site unique discussions and as updated per PWS terms,” the contractor has 20 minutes from receipt of the EDI 219 to complete the paperwork, including selection of mode and carrier, rendering a change in mode, equipment code, or carrier change almost impossible. We suggest that this this requirement be changed to 4 hours, as is the case for all other shipments.

b. What is the Government’s need for receipt of the EDI 220 within 20 minutes where there have been “site unique discussions” related to Roller Beds, despite the fact that all other shipments allow for a 4 hour response?

c. Is the site unique Roller Bed Truck schedule automatically considered the “lowest cost option available to satisfy the requirement”/“least expensive mode to meet the MDD,” even if another mode, equipment, or carrier would have resulted in a lower cost? If so, we request that USTRANSCOM modify PWS ¶

1.3.6.1.1.3 to clarify this point.

d. Will the contractor be held liable if, with the benefit of hindsight and time, it becomes apparent that the site unique Roller Bed Truck schedule was not the “lowest cost option available to satisfy the requirement?”

a. These are pre-arranged shipments and the coordination has already been accomplished; therefore, the requirement shall not be changed to 4 hours. b.

So the Government can close out the shipment and move the trailer away from the dock.

c. The Contractor is encouraged to submit an unique approach within their proposal to reduce costs.

d. If USTRANSCOM directs the contractor to use the site unique Roller Bed Truck schedule, USTRANSCOM will not hold the Contractor liable, for not providing the "lowest cost option available to satisfy the requirement."

186 Reference: Historical Transportation Data, 15.xls

In order to appropriately consider risk liability/insurance, it's imperative to have an average value of a LTL shipment. Can the government provide an estimated value of a LTL shipment?

The average value of a LTL shipment is approximately $210.00.

184 Reference PWS ¶ 1.3.6.1.1

a. Pursuant to PWS 1.3.6.1.1, Option 3, where there are “pre-arranged Air/LTL schedules agreed to during site unique discussions,” the contractor must return the EDI 220 within 20 minutes of receipt of the EDI 219, rendering an equipment code change almost impossible. If, for example, there are 50 shipments received as QQ at the same time, and the contractor identifies opportunities to change equipment codes in order to move the freight via the lowest cost option available to meet the required delivery date (as is required), it would be difficult and costly to confirm capacity on each shipment, update the 220 on each effected shipment, and respond within the 20 minute timeframe. Twenty minutes to make these decisions would be impractical for the contractor and costly for the Government. We suggest that this requirement be changed to 4 hours, as is the case for all other shipments.

b. What is the Government’s need for receipt of the EDI 220 within 20 minutes in pre-arranged Air/LTL schedules where all other shipments allow for a 4 hour response?

c. Is the contractor required to use the pre-arranged Air/LTL schedule even where such a shipment would result in a high cost to the government?

d. Is the pre-arranged Air/LTL schedule automatically considered the “lowest cost option available to satisfy the requirement”/ “least expensive mode to meet the MDD,” even if another mode, equipment, or carrier would have resulted in a lower cost? If so, we request that USTRANSCOM modify PWS ¶ 1.3.6.1.1.1 to clarify this point.

e. Will the contractor be held liable if, with the benefit of hindsight and time, it becomes apparent that the pre-arranged Air/LTL schedule was not the “lowest cost option available to satisfy the requirement?”

f. If the pre-arranged mode is “Air” and the air carrier uses substituted motor-for-air service to transport the shipment, will the Government compensate the contractor for the transportation? If so, under what mode?

a. These are pre-arranged shipments and the coordination has already been accomplished; therefore, the requirement shall not be changed to 4 hours. b.

See Amendment 7, the times have been revised.

c-f. Amendment 7 of solicitation has addressed these concerns.

Contractor is required to select the cheapest mode possible to meet

MDD.

188 Reference: Solicitation Question 133 The response to questions published on May 14 contains the following verbiage:

"Your interpretation of the historical volumes included in the Pricing Rate Table failed to recognize that the rate table includes shipping data history for DCMA as well as DLA. The historical data provided in the two years of excel worksheets only includes historic DTCI volumes in which DCMA did not participate. USTRANSCOM will not revise the estimated volume in the pricing rate table."

Please provide the shipping data history for DCMA that is referenced above.

We understand that the data is included in the pricing matrix, but given the fact that it is mixed with "estimates" in certain lanes, it is not useful for analysis in this format. Please provide the data as a separate file for comparison and lid ti ith th D t l d id d f DLA

The shipping data history for DCMA has been posted to FedBizOpps as of 19 May 2015.

189 Reference: Attachment 2, Pricing Rate Table

We understand that the Customer will have some percentage of shipments that will fall in the Tier I category of service (4 hours response time and pick up times of 8 hours) and we are prepared to provide this level of service.

The current pricing matrix has 50% of the freight falling in this category and 25% in categories 2 and 3 respectively. Unfortunately pricing for the Tier 1 category can be very subjective on a 3PL contract. The vast majority of freight in our industry would fall in Tiers 2 or 3. By placing a 50% weight on Tier 1, the Government will unrealistically distort the TEP.

In a non-disaster, non-contingency environment, an organization (Commercial or Gov't) having 50% of their shipments in the Tier 1 category would reflect an anomaly in the overall distribution system, as well as unnecessary freight spend for that organization. Our experience and discussions with DoD and DLA shipping reflect much more predictability on truckload shipments. We believe that it would be much more advantageous to the government to place 50% of the shipments in Tier 3 and 25% of the shipments in Tiers 2 and 1 respectively.

The rationale for the TEP was based on current and projected DLA and DCMA practices. The Pricing Rate Table will remain unchanged.

187 Reference: TRANSFARS 5552.216-9006 ECONOMIC PRICE

ADJUSTMENT FOR SCHEDULED SERVICES MULTIMODAL (JUL 2013).

a) Please confirm that IN and IN+I will always be based in IHS GII Forecast Index for the respective NAICS covered under this contract.

The following note from the Example on page 23 is concerning:

(1) "*NOTE: Since IHS develops a forecast for the index, it is likely that the actual/historical index values will not be the same as the previously forecasted index values."

(2) The note seems to indicate that the actual/historical index from the current year will be compared to the forecast for the index in the future year. This would not be an equitable comparison since the current year actuals will influence the future year forecast. Comparing actual/historical index to a forecast could cause the Adjusted Unit Price to increase as market prices fall and to decrease as market prices rise. By comparing a current year actual index to a future year forecasted index, the Government would unnecessarily expose itself and the Offerer to errors in IHS forecast predictions and does not effectively "protect the contractor and government against signifi.rnnt market fluctuations."

(3) Therefore, in order to make and equitable comparison, we suggest the following statement be applied to the formula listed in TRANSFARS 5552.216-9006:

[Eq 1] [( IN+1 /IN) - l] x AFN Effective Unit Price Adjustment [Eq 2] PN x (I +Effective Unit Price Adjustment)= Adjusted Unit Price Where:

PN =The current effective prices listed in the Schedule, where the subscript '·N" represents the current contract performance period.

IN Index for the current contract period: 4-quarter average of the index for the currentcontract performance period IN+I =Index for the adjustment period: 4-quarter average of the index for the future contract period AFN =The Adjustment Factor according to the table in paragraph 2.

Amendment 7 of the Solicitation revises TRANSFARS 5552.216- 9006. Under paragraph 4 IN now reads:

"IN = Index for the current contract period: For the first economic price adjustment from the first annual base year period to the second annual base year period, this index will represent the 4-quarter average of the actual/historical index values for the first annual base year period. For each successive adjustment, the index value used for variable IN+1 in the previous year’s adjustment will become the value used for IN for the current year’s adjustment."

190 Reference: Attachment 2, Pricing Rate Table What we are finding is that with the State-to-State lanes with the four (4) per year estimate, combined with the fact that 50% ofloads are assigned to Tier 1, the majority of the TEP (over 80%) is based on speculation as opposed to real market rates.

It is impossible to predetermine with certainty a State-to-State rate (especially with the Tier 1 constraints) without knowing pickup and drop off locations at least to the 3 digit level. This makes the price evaluation subject to gamesmanship and makes it a less productive tool in determining the best offerer for DFTS.

This has a counterproductive effect for the Government because it will reward the Offerer that takes the most risk-the most risk with Government moves.

This is could lead to future performance issues on the contract.

Understanding the Government need to evaluate the lanes based on the response to the previous RFI, we recommend the following adjustment in order to provide a better product for evaluation:

First would be to reverse the weighting so that 50% gets weighed in Tier 3 vs.

Tier 1. The second would be to reduce the State-to-State lanes to an estimated volume of 1 with .5 weighed in Tier 3 and .25 weighed in Tier 2 and 1 respectively.

State to state rates are very important for the requirement. The Government has incorporated as many 3-zip and 5-zip lanes as practicable. The Government needs to ensure that it has rates on file that cover CONUS, Canada, and Alaska. Having these rates on file ensures mission readiness. It is impossible to predict every lane scenario down to the 3-zip level. The Pricing Rate Table will remain unchanged.

191 The RFP states that the shipper may choose between three (3) options for Shipment Confirmation and pick-up times. The contractor shall have the capability to respond to the shipment request and pick-up the shipment within the timeframes listed in the RFP. Please advice what segment and data elements will display the required response time. In addition, will the pick-up time be sent in the G62 segment?

1. The "Required Response Time" is depicted in the EDI 219D Implementation Convention (IC) at Index 7.

This is the NTE segment titled, "Rate Structure Tier Requested." In the NTE segment at Index 7-02, one of the following values will be passed in the 219D to communicate the required response time:

4 - EDI 220D response must be returned to shipper system within 4 hours from 219 submission.

12 - EDI 220D response must be returned to shipper system within 12 hours from 219 submission.

24 - EDI 220D response must be returned to shipper system within 24 hours from 219 submission.

2. Pick-up time(s) are sent in a G62 segment of the 219D.

Specifically, both the Earliest and Latest Pick-up dates and times are passed in the G62 segment titled, "Requested Pick-up Date." This segment is located in Index 12 of the EDI 219D IC.

192 Reference: Attachment 1, PWS, Appendix L

The PWS APP L references an IT System Baseline (Data Exchange). In the graphic is a view of a "pre-alert". However, there is no reference to a pre-alert sequence in the PWS 1.3.7.5.6.5 Table 1. In the DTCI User's guide v2.1 Dec 11, page 13, indicates there is a process in place between DDC (DSS) and the "coordinator" which we interpret to be the incumbent so they may do optimization planning.

Does the Government expect to continue this process?

Appendix L has been revised to remove "pre-alerts," as pre-alerts are not part of DFTS.

193 Request the government provides EDI specifications for: 214, 210, 219, 220, 854, 858 and 997. What specific format the government expects from the offerers?

Please refer to paragraph 1.3.7.5.6.6 (EDI 214) in the PWS and use the link, http://www.transcom.mil/dteb You will find most of the specifications under the tab, "DOD Transportation ICs" but please note the following specifics:

1. 214 - IC on website, latest version is 4.

2. 210 - not used by shipper systems, no IC in DTEB. Recommend use of standard X12

3. 219 - DFTS will use the 219D; IC will be posted to website shortly.

4. 220 - DFTS will use the 220D; IC will be posted to website shortly.

5. 854 - not used by shipper systems, no IC in DTEB.

6. 858 - IC on website, DFTS will use the 858R (latest version is 3; however, version 4 is in development)

7. 997 - no IC in DTEB. Recommend use of base X12 format.

194 Reference: USTRANSCOM Answers to Questions 131

USTRANSCOM responded that offerors are unable to apply commercial rounding rules and that no rounding rules apply to the Solicitation. Because, per PWS Attachment 2, the price will be determined by calculating a fixed price per a variable that may be represented in other than whole numbers (for example, per pound for Less than Planeload (“LPL”); hundredweight for LTL;

or per miles for truckload), rounding is required to calculate a price that represents the nearest penny. Applying a percentage to a number has the potential to create decimal outcomes that are too long, and sometimes infinite, which disrupts the input to, and matching capability of, common systems (i.e.

Syncada). It is commercial practice to round pricing up or down to the nearest penny. For example, without rounding, a shipment may total $354.7129, which we would round to $354.71. If, however, the shipment totaled $354.7199, we would round that price to $354.72. Is such rounding acceptable?

Yes, it is acceptable to round up or down to the nearest penny as applied in commercial practice.

195 Reference: Question 148, Reference PWS ¶ 1.3.6.10.2

USTRANSCOM has clearly indicated that the contractor must absorb the costs and liability of repacking if there is a change in mode. Is this still true if the shipper packaged the shipment for ground prior to, for example, the contractor’s selection of air to make the MDD?

No, in that case that Government would not require the Contract to absorb the costs.

196 Reference: Rate Table Instructions, page 3, Number 9

a) In the rate table instructions on page 3, number 9, it states: ”Schedule “2B1

– TL (Various); Various” also allows proposed pricing for a “minimum charge.” Offerors should not propose a minimum charge that results in the corresponding per unit rate becoming prohibitive and irrelevant. The minimum charge pricing is not considered in the development of the Total Evaluated Price.” If the Government will incur the charge during performance, it should evaluate the price in some manner. Will the Government consider a mechanism to factor in the fact that some percentage of shipments will bear this additional charge? If the Government will evaluate the minimum charge, in what manner will it do so?

b) For short distance five to five and three to three zip lanes where minimum fees apply, should the contractor convert the minimum charge into a CPM or offer the market rate CPM?

Example:

Distance-100 miles Min Fee - $600 Min Conversion - $600/100 = $6/mile Market Rate - $2/mile Should the offeror price this as $6/mile or $2/mile for evaluation purposes?

(a) IAW with paragraph 5 of Attachment 2, Pricing Schedules and Instructions, the minimum charges will not be factored into the Total Evaluated Price calculation. However, the minimum charges will be evaluated for fair and reasonableness.

(b) For the full truckload 5-zip to 5-zip and 3-zip to 3-zip line items, the Government is amending the solicitation to eliminate the minimum pricing option (see Amendment 7). For these line items, since the origin and destinations are known with a higher degree of certainty, offerors are expected to price these line items with a competitive per mile rate reflective of the associated distance.

197 Reference: Amendment 7

1. Does the government intend to revise the equipment codes in light of the recent changes to create a time-definite service mode?

No.

198 Reference: Question 31

2. The agency said it did not believe that an EXP accessorial was necessary for LTL, but then the agency later added one. In light of the recent changes creating a time-definite service mode, we believe the EXP LTL accessorial is no longer necessary. Will the government remove such accessorial?

No, in some cases expedited LTL may be the least expensive means of travel to meet the MDD. As such, the Government will not remove the accessorial.

199 Please provide offerers access to the exact forcasting index that you plan to use in DFTS.

a) We have contacted IHS and they are unable to provide the ''derived, composite index based on input cost and demand indices from the IHS Global Insight Pricing and Purchasing Industry Forecasting for the North American Industrial Classification System (NAICS) code 484122, General Freight Trucking, Long Distance, Less-ThanTruckload." Referenced in 5552.216-9006

ECONOMIC PRICE ADJUSTMENT FOR SCHEDULED SERVICES --

MULTIMODAL (JUL 2013) and Amendment 4. Apparently this is not a forecast/Index that they generally publish and is not currently available to offerers.

b) Committing to seven (7) years of pricing constitutes a significant risk. The EPA is key to protecting both the Gov't and the Offerer. It is critical that offerers are afforded sufficient opportunity to understand the basis of the EPA chosen by the Government.

c) IHS recommended, and we concur, thta the Government base the EPA on PPI4841221 - PPI, Long-Distance LTL General Freight Trucking, and PPI481112 - PPI, Scheduled Freight Air Transportation. Both of which are readily available by UIS and are tied historically to the Bureau of Labor Statistics indexes.

a-c) The derived, composite index is an index that is calculated based on indices reported from IHS. Therefore, offerors will not obtain the "derived, composite index" from IHS. However, they can create the composite index based on the formula in the EPA clause using indices obtained from IHS. The indices obtained from IHS used to create the composite index include (1) the input cost index exclusive of fuel for the identified NAICS, and (2) the demand index for the identified NAICS. The input cost index (exclusive of fuel) is weighted 69% while the demand index is weighted 31%.

Furthermore, offerors can refer to Attachment 12 of the solicitation incorporated under Amendment 7 for instructions in obtaining IHS Index Values.