Final_RFP_Q A.xlsx

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USN T-45 Aircraft Maintenance and Logistics Support
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N00019-12-R-0001
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Industry questions received since formal RFP release and Government responses. 4/29/2013

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Final RFP Q&A

REFERENCEINDUSTRY QUESTIONGOVERNMENT RESPONSE
1SLIN 0011AA, VMTS TD Incorporation, and SLIN 0011AC, DDS TD Incorporation.The Government is requesting pricing of the above two SLINs. In addition, under Section L, the Government further requests detailed response as to how we intend to install/implement these technical directives . Because the RFP refers to the modifications by title and not TD Code/TD Number, we have been unable to locate the applicable directives in the competition library. Please assist us by providing cross reference between TD Title, TD Code and TD Number.The TDs are being loaded to the Competition Library and should all be available and identifiable by Tuesday, 4/30/2013.
2RFP Pg 342, B-3.12Table provides CLIN 0X20 and 0X25 Government estimates. Schedule B appears to require contractor inputs for SLINs for each CLIN yet there is no information provided that directs bidders how to allocate the Government provided cost estimate across the Schedule B SLINs. Please provide guidance on how to allocate the Government provided cost estimate across the Schedule B SLINs or we recommend changing Schedule B to where bidders will provide inputs only at the CLIN level.The SLINs for CLIN 0X20 and 0X25 are informational SLINs only. Offerors should bid only to the CLIN level and not down to individual SLINs for 0X20 and OX25. Under Section L, Volume 3 Price, for Cost Reimbursable CLINs states "For CLINs/SLINs 0X20, 0X21, and 0X25 the Offeror shall provide a separate tab within Attachment L-6 (Section B Price Matrix) Excel workbook that clearly shows the total mark-up or burden rate, and the individual cost elements that make up the total mark-up or burden rate." Markups and burdens to CLIN0X20 and 0X25 (not down to the SLIN level) should be provided in a separate tab in L-6.
3RFP Pg 487RFP asks for the “Offeror’s use of the Small Business Innovation Research (SBIR) program” which will be evaluated. SBIR does not appear to be applicable to the T-45 CLS program. From the SBA.gov website: • SBIR encourages small business to explore their technological potential and provides the incentive to profit from its commercialization. By including qualified small businesses in the nation's R&D arena, high-tech innovation is stimulated and the United States gains entrepreneurial spirit as it meets its specific research and development needs. • SBIR targets the entrepreneurial sector because that is where most innovation and innovators thrive. However, the risk and expense of conducting serious R&D efforts are often beyond the means of many small businesses. By reserving a specific percentage of federal R&D funds for small business, SBIR protects the small business and enables it to compete on the same level as larger businesses. SBIR funds the critical startup and development stages and it encourages the commercialization of the technology, product, or service, which, in turn, stimulates the U.S. economy. Please clarify how SBIR is applicable to the T-45 program and why it is being evaluated?If it is determined that SBIR/STTR technologies are not able to be utilized in the performance of the contract the Offeror shall so state. The RFP will be revised via Solicitation Amendment 1 to clarify.
4AttachmentsIs there a CBA covering T45 CLS personnel at Pax River?As noted in the Draft RFP Q&A posted on 3/22/2013, there is no incumbent CBA applicable to the PAX performance in this RFP.
5CDRL A003Per 4790, Chapter 3.3.4.1.3a; the Monthly Maintenance Plan (MMP) is delivered End of Month (EOM) minus 5 days however CDRL A003, MMP appears to be EOM plus 5 days. Please clarify the requirement.The CDRL will be corrected via Solicitation Amendment 1 to reflect EOM minus(-) five (5) days.
6Section FPlease define the specific dates for the Period of Performance to include: Transition Start Date, Full Performance Start Date, and Start Dates for each Option Year. These are needed to build the pricing model.The exact POP information is not known until contract award. In the meantime, please utilize the anticipated award date noted in clause 5252.215-9503 of Section L to initiate POP timeframes in Clause F-1.
7Attachment L-9.The Resource Distribution Table WBS numbers do not match the Cost Element Structure Definitions. For example,

a. RDT shows 3rd level while Definitions go to 4th level

b. Definitions has a 1.1.1.1 Operator – no such counterpart on the RDT

c. Definitions have a 4.1.2 and 4.1.3 - no such counterpart on the RDT

d. Please clarify the discrepancies so bidders understand how to fill out the RDT.

The WBS Definitions, RDT, and CSDR Plan are tailorable. DCARC mandates that cost shall be reported down to a minimum of 3 levels. If the Offeror intends to report down lower than 3 levels the definitions from 4th level and below are provided as a guide and the Offeror should define what those definitions are.

If an Offeror deems that a certain WBS does not apply to the program, it may be omitted from the RDT and the CSDR Plan.

8Attachment 15 – BOM.In order to provide accurate DMSMS/Obsolescence tracking, the contractor will need indentured BOMs (to include all subcomponent parts, part numbers, cage code, and NSN if available) for each upper level assembly item listed in Attachment 15. When will the Government provide indentured BOMs for each assembly item listed in Attachment 15?
The Government does not possess any BOMs, indentured or otherwise, related to the items listed in Attachment 15.
9Attachment 36Attachment 36 is missing. Please provide Attachment 36.Attachment 36 was posted to FBO on 4/12/2013.
10PWS AVMI Support at NAS PAXPWS Pg 4, 3.6 states “The Contractor shall maintain all test instrumentation, test wiring (orange wiring installed for monitoring of test events), and equipment to include installation of prototype equipment associated with NAS PAX test and evaluation T-45 aircraft.” PWS 11.1.2 requires the contractor to “support AVMI” with work on test instrumentation, test wiring and installation of prototype equipment.

a. Please clarify that the contractor’s role regarding test instrumentation, wiring, and equipment is to support AVMI vice having the contractor maintain and install.

PWS paragraph 3.6 will be revised to the follow via Solicitation Amendment 1 to clarify: "The Contractor shall maintain and install all aircraft equipment except as specifically excluded elsewhere in this contract, to include installation of prototype equipment associated with NAS PAX test and evaluation T-45 aircraft. The Contractor shall support installation of test instrumentation and wiring by the Government Air Vehicle Modification and Instrumentation (AVMI) team and pre- and post-flight checks and data downloads by allowing the AVMI team access to the equipment. "
11Flight Hour Projections in PWS and CLINS 0X01PWS Pg 4, Table 3.8.1. These annual estimated flight hours do not match the flight hours in CLIN 0X01 for all years. Please clarify which are the correct flight hours.
The flight hours stated in the PWS are correct. Amendment 1 will include a revision to the flight hours in Attachment L-6 and Section B 0X01 line items so that the flight hours match what is stated in the PWS.
12PWS Pg 35, 5.11.12“The Contractor shall provide the Government with unlimited access and data rights to the web-based system.” The last part of the sentence (underlined) can be read that the Government wants unlimited data rights to the contractor provided web-based system itself (i.e. operating system data) vice the data within the contractor web-based system.

Please clarify the requirement. Recommend the sentence be changed to read as follows: “The Contractor shall provide the Government with unlimited access and rights to all data maintained in the web-based system.”

This statement refers to the data, not the system. The PWS will be revised to clarify upon issuance of Solicitation Amendment 1.
13Material pricing requirement for IMP and Strip and Paint FFPRFP Pg 341, B-3.7, CLINs 0X07, 0X08, 0X09 requires the unit price to include labor and material. Govt response # 57 dated 22 Mar 2013 states that HAZMAT for Strip & Paint is not to be included in the FFP CLIN price but does not address other materials for the three CLINs.

Request the Government clarify the material requirements to be priced by providing documentation or estimates bidders can use to determine the material requirements.

If the material are provided by the Govt, then recommend deleting and material from the B-3.7 definition. If it is the Government’s intent to have the bidders price the materials for IMPs and S&Ps, then please provide data and/or government estimates. 0X07 and 0X08 IMP: Material required to conduct IMPs will be requisitioned from Government Supply and paid for directly by the Navy or procured through the open market and reimbursed via CLINs 0X25.

0X09 Strip and Paint: HAZMAT for Strip and Paint will be requisitioned from Government Supply and paid for directly by the Navy; therefore no HAZMAT pricing is to be included in the proposed FFP. All other material required for Strip and Paint is to be procured through the open market and reimbursed via CLINs 0X25.

Therefore, the RFP will be revised via Amendment 1 to exclude any material from the FFP of CLINs 0X07, 0X08, and 0X09 and include a SLIN under CLINs 0X25 for reimbursement when material is procured from the open market vs. Government Supply.

14Clause H-1RFP Pg 371, (2.3.2) states If MCR > 90% AND RFT > 90% THEN Performance Metric = (MCR + RFT)/2. Recommend Table H-1-1, Performance Metric column, last cell be changed from > 90 to > 90 to match the formula.
Table H-1-1 is correct as written. The intent is that the Contractor must at least MEET one of the measures and EXCEED the other in order to receive an incentive. If the Contractor simply meets the contract minimums of 90% for both measures, it will not be eligible to receive the Performance Component of the Performance Incentive, but will still be eligible to receive other Component incentive portions (ie Safety, Quality, Sustainment). For example, if MCR=90 and RFT=91, then Performance Metric = 90.5 and the Contractor will be eligible for 90% of the Performance Component Incentive if all other contract minimums are at least met. The Calculation works the same if MCR=91 and RFT=90. If both measures are 90, then the Contractor did not EXCEED minimum requirements on either measure and therefore will not be eligible for that portion of the incentive.
15Section C-2RFP Pg 346. 5.18.8 is not a paragraph in the PWS. Please clarify this CLIN association.C-2 of the RFP will be revised via Solicitation Amendment 1. 5.18.8 is now 5.17.1.1 in the PWS.
16SCA Seniority ListsGovt Response #45 dated 22 Mar 2013 stated seniority lists for CNATRA sites will be provided. When can bidders expect to see these?
IAW FAR 52.222-41(n), seniority lists are provided to the Government from the incumbent Prime Contractor. The Government will then provide to the successor contractor upon commencement of the succeeding contract.
17TDsGovt Response #80 dated 22 Mar 2013 stated TDs for CLIN 0X11 will be added to the Competition Library. To date all four of these are not in the library. When can bidders expect these to be added to the library?
The TDs are being loaded to the Competition Library and should all be available and identifiable by Tuesday, 4/30/2013.
18IMP SpecsCompetition Library, T-45 Integrated Maintenance Program Specification and A001 IMP Strip and Paint Status reports. It is unclear what the historic maintenance hour requirement is to complete each IMP inspection. The A001 reports appear to include many other inspections and mods that make it difficult to determine the staffing requirements for each IMP (1, 2, 3, 4, 5, 6) inspection. Please provide historic data or government estimates for the labor hours required to perform each IMP (1, 2, 3, 4, 5, 6) inspection.
The requested data is unavailable for release. The Specifications are loaded to the competition library and should provide adequate information in order for offerors to estimate and propose.
19RFP Page 395, NAVAIR Clause 5252.227-9507, Notice Regarding The Dissemination Of Export-Controlled Technical Data (OCT 2005);

Discussion: Under the International Traffic in Arms Regulations (ITAR), no defense article may be exported, or technical data or defense services provided to a foreign person in the United States or abroad, without an authorization from the U.S. Department of State. This requirement applies to exports which are on behalf of the U.S. government, including those in support of contracts with the U.S. government which require such exports as a deliverable under or incident to a USG contract (including classified and special access program contracts).

We understand that foreign pilots may be present at some of the four sites contemplated in the RFP for training purposes. We also understand that as part of its efforts to promote cost sharing and increase interoperability of defense and intelligence systems and organizations, the DoD and other agencies of the USG enter into certain defense cooperative agreements with allies and friendly nations. The scope of the articles, data and technology to be provided by the USG under such agreements must be approved via USG foreign disclosure policy mechanisms, and is therefore subject to control by the President by means other than the ITAR.

The purpose of the following questions is to ascertain whether an export authorization will be required by the selected contractor for certain activities that may be directly related or incidental to the RFP requirements:

Questions:

1) Is the presence of the foreign pilots, attending training at the sites contemplated in this RFP, covered under defense cooperative agreements with the foreign pilots’ countries of origin, or Foreign Military Sales (FMS) cases include the scope of training on equipment?

2) Will foreign pilots be trained by the contractor at any of the four locations? If yes, what will the contractor train the foreign pilots on?

3) Will foreign pilots witness contractor personnel performing maintenance services (e.g. witnessing conduct of maintenance, inspections, testing, repair, etc.)?

4) Will the contractor be required to provide any type of assistance to the foreign pilots at any of the four bases? If yes, what type of assistance will be required and at which location?

5) What are all the potential countries of origin of the foreign pilots that may receive training at any of the four bases contemplated in the RFP?1)NETSAFA foreign pilot training through FY 19 includes: Brazil, France, India, Italy, Saudi Arabia, UK, Singapore and Spain. TW6 T45 NFO NETSAFA requirement through FY 19 includes students from: Germany, Saudi Arabia, and Singapore. 2) There is no formal training conducted by CLS contractors for student pilots.; 3) Students will more than likely witness maintenance/work being performed while walking in and around the hangar; however, no syllabus event requires a student to witness maintenance work.; 4) The potential for interaction between CLS contractor and students would include issues such as troubleshooting malfunctions during pre/post flight, gaining access to an aircraft for static walk around, etc., which is typical support for all pilots.; 5) The latest list provided is from last year with requirements from FY12-19. For NFO (this only applies to TW6). T45 operations requirement show students from: Germany, Saudi Arabia, Singapore. The list is subject to change; just because there is a training requirement doesn't mean the country fills the billet.
20RFP Page 403, DFARS Clause 252.204-7008, Export Controlled Items (APR 2010)Attachment 34 was the Boeing CBA in draft now Attachment 34 is VX-23 shared GS. Will a current CBA follow?As noted in the Draft RFP Q&A posted on 3/22/2013, there is no incumbent CBA applicable to the PAX performance in this RFP.
21PWS Section 3 Flight Hour TablePWS flight hours do not match attachment L-6 or section B of the RFPThe flight hours stated in the PWS are correct. Amendment 1 will include a revision to the flight hours in Attachment L-6 and Section B 0X01 line items so that the flight hours match what is stated in the PWS.
22L-7_Vol_3_Prime_CCS_20130315.xls, 'FP & LH Examples & Instructions' tab, Lines 196-197Note A states "For CLIN 0001, SLIN 0001AE (OPTION Fixed Maintenance 96 Individual Aircraft Daily) will be used for the Manning Evaluation. The headcount and hours for this SLIN of CLIN 0001 should be used within this attachment. The cost build-up for SLINs 0001AA, 0001AB, 0001AC and 0001AD of CLIN 0001 is not required to be shown in this attachment." This comment does not seem to match the solicitation instructions.Note A to be deleted via Solicitation Amendment 1.
23L-7_Vol_3_Prime_CCS_20130315.xls, 'FP & LH Examples & Instructions' tabThe examples provided seem to fluctuate between the need for breaking the labor down to the Work Center level. Can these summaries be provided at the CLIN/SLIN level, or do Contractors need to break the costs down all the way to the Work Center level in each CLIN/SLIN?Offerors should break costs down to the Work Center level for each CLIN/SLIN.
24L-7_Vol_3_Prime_CCS_20130315.xls, 'FP & LH Examples & Instructions' tab, Lines 210 and 312Note E. Please confirm that "Attachment L-11" should read "Attachment L-8".Correction made via Solicitation Amendment 1. Now reads "Attachment L-8"
25L-7_Vol_3_Prime_CCS_20130315.xls, 'FP & LH Examples & Instructions' tab, Line 192FFP CLINs don't match the FFP CLINs listed in the solicitationFFP CLINs: XX01 - XX09, XX11, XX12, XX16, XX18, XX22, XX24 & XX25. The FFP CLINs in the Examples tab have been revised via Solicitation Amendment 1 to match Section B.
26L-7_Vol_3_Prime_CCS_20130315.xls, 'FP & LH Examples & Instructions' tab, Line 296LH CLINs don't match the LH CLINs in the solicitationLH CLINS: XX10, XX13, XX14, XX15, XX17 and XX19. The LH CLINs in the Examples tab have been revised via Solicitation Amendment 1to match Section B.
27L-6_Vol_3_B_Matrix.xls, All tabs, Column FHow is column F with heading "Incentive Fee (0X20) applicable to this solicitation?Column F in L-6, should have stated "INDIRECT COSTS, BURDENS & MARKUPS (0X20 & 0X25)". This will be corrected in Amendment 1 to the solicitation.
28PWS 5.12.3.3 & CDRL A030Ref IAW Warranty Tracking (CDRL A030) - CDRL-A030 is listed as RASP Command Inventory Report. What is the correct CDRL for reference ??Correct CDRL is A032; PWS revised via Solicitation Amendment 1.
29PWS 5.12.3.3The Contractor shall produce and deliver the data required for serialized item warranty tracking IAW Warranty Tracking. Is this the same as CDRL-A032 Warranty Items Report or will there be another CDRL generated?Correct CDRL is A032; PWS revised via Solicitation Amendment 1.
30RFP Pg 342, B-4 FAR 52.217-8 Option CLINSThese instructions indicate that quantities for those in the FAR 52.217-8 Option period should be half of those in Incentive Option Year 2. These directions conflict with the Government provided data for 07XX CLINs which are not half of the 06XX CLINs, specifically, CLINs0X05, 0X06, 0X08 and 0X09 (there are rounding differences of 0.5 for many SLINs). Additionally, the Government Estimated Direct Costs for CLINs 0X20, 0X21, and 0X25 on page 342 are not half of the 06XX CLINS.

a. If the intent is to have bidders price 07XX as half of 06XX then recommend all Government provided data be removed from the RFP with direction to bidders to simple enter half of 06XX values into 07XX lines and/or worksheets for:

i. Schedule B

ii. Schedule L-7_Vol_3_Prime_CCS

1. Note: L-5_Vol_2_T-2_Manning_Analysisi does not have columns for the FAR 52.217-8 Option period)

iii. Schedule L-8_Vol_3_Sub_CCS.

CLINs 0705, 0706, 0708, and 0709 do have rounding differences, by about 0.5 for most of the SLINs. Since there cannot be half of an IMP, the resulting estimate is rounded down. CLINs 0720 and 0725 Material costs are half that of CLINs 0620 and 0625 cost, with the addition of inflation and cost growth above inflation estimate.
31Section L.2.0, Proposal FormatThe draft RFP required that all pages should be numbered with section and page numbers. However, the final RFP states, “all pages should be numbered with volume, paragraph and page numbers”.

Question: Due to the possibility of multiple paragraph numbers on a single page, will the Government allow for the pages to be numbered with only the volume and page number OR the proposal section and page number?

The Government will allow the pages to be numbered with the volume, proposal section and page number. This will be revised via Solicitation Amendment 1.
32PWS Section 3.8.1 Estimated Flight Hours and Section B flying hoursTable listed in section 3.8.1 does not match the flying hours listed in Section B. Will the government update the table to reflect Final Solicitation Section B flying hours?
The flight hours stated in the PWS are correct. Amendment 1 will include a revision to the flight hours in Attachment L-6 and Section B line items so that the flight hours match what is stated in the PWS.
33PWS 5.1.8.1.5, Integrated Maintenance Program and S&P Status Reports; PWS 6.1, CDRL; CDRL A011; Section B-3.7The RFP units of measure and CLIN descriptions for 0X07, 0X08, and 0X09 (IMP/Strip and Paint) indicate the contractor is to submit Firm Fixed Prices for these requirements, inclusive of labor and material to perform the tasks required. The required list of data fields for CDRL A011 (IMP and Strip and Paint Status Report) includes planned/actual material cost, planned/actual labor hours, and actual unit costs, along with comments for any overruns incurred.

Question: Is it the Government’s intent for the Contractor to provide this level of detail regarding actual costs for these Firm Fixed Priced items via CDRL A011, in addition to the various financial and manpower reporting requirements found in 6.1 of the Performance Work Statement?

CDRL A011 will be revised via Solicitation Amendment 1 to exclude breakdown of costs that build up the FFP unit prices. Otherwise, with material being excluded from the FFP, the level of detail will be required to report material consumption via CDRL Data Item A011.
34Section I, Contract Clauses, Clauses Incorporated by Reference, Page 402, Clause 52.232-99 (Dev), Providing Accelerated Payment to Small Business Subcontractors (Deviation), AUG 2012.In 02.21.2013 Office of Under Secretary of Defense Memorandum – Rescission of Class Deviation 2012 – O0014-Providing Accelerated Payment to Small Business Subcontractors, the Government rescinds the requirement to clause at 52.232-99 (Deviation) (August 2012) – use of this clause is no longer authorized.

Question: Based on the recent rescission of class deviation cited above, will the Government remove reference to FAR 52.232-99 (Dev) in this solicitation?

Clause deleted via Solicitation Amendment 1.
35sections 5.12.3.2 and 5.12.3.3; and Exhibit A, CDRL.PWS 5.12.3.2 states: “The Contractor shall produce and deliver the data for IUID marking and registration IAW IUID Items Data Report (CDRL A029).” PWS 5.12.3.3 states: “The Contractor shall produce and deliver the data required for serialized item warranty tracking IAW Warranty Tracking (CDRL A030).” However, Exhibit A depicts CDRL A030 as the Radiological Affairs Support Program (RASP) Command Inventory Report and A032 as the Warranty Items Report.

Questions:

1) Should the CDRL reference for A030 actually be located in PWS section 5.14.24 as the RASP Command Inventory Report?

2) Did the Government intend to have a separate serialized item warranty tracking report or should this requirement be incorporated into CDRL A029 or A032?

1) No, PWS Paragraph 5.12.3.3 has been revised to reflect CDRL A032, Warranty Report via Solicitation Amendment 1. 2) The serialized item warranty tracking report is to be part of CDRL A032.
365.18.2.1; PWS 11.0PWS 11.0 states that the contractor shall perform all requirements as described in Section V of the PWS with the additions and exceptions described in Section XI.

PWS 5.18.2.1 states, “the contractor shall perform validation and verification and incorporation and all O-,I-, and D-level TD associated with related SE.

Question: Is the T-45 contractor responsible for incorporation of TD’s on equipment listed in (attachment 34) VX-23 shared GSE?

11.1.6 will be added to the PWS via Solicitation Amendment 1 as follows: "The Contractor shall perform daily preoperational maintenancebe responsible for of VX-23-provided Shared GSE (Attachment 34) and shall turn the equipment back in to VX-23 for Depot-level maintenance and TD incorporation as necessary. The Contractor shall perform Depot-level maintenance or TD incorporations only when specifically covered under a Test Plan." In addition, 7.2.1.2 was added as follows: "The Government will provide D-level maintenance and TD incorporation on the VX-23 provided Shared GSE (Attachment 34)."
37FAR 52.222-41Please provide the timeframe for when Seniority lists for the CNATRA sites supported by CBA workforces will be available.IAW FAR 52.222-41(n), seniority lists are provided to the Government from the incumbent Prime Contractor. The Government will then provide to the successor contractor upon commencement of the succeeding contract.
38Proposal Due DateDue to the delayed Gov responses to questions submitted, additional time is required to prepare a compliant and competitive proposal.The Government will grant an extension. Proposals are now due at 12 Noon on Thursday, 23 May 2013. RFP Amendment 1 will reflect this extension.
39TDs in Competition LibraryReference: In the “Draft RFP Feedback and the Government’s Responses” document, the following response to the question was provided:

Question: “…please provide copies of each TD (VMTS, RAMP, DDS, and MFCD) so bidders can understand the TD requirements and therefore determine labor requirement.”

Response: “Competition library will be populated with TDs.”

Discussion: We have been unable to find the referenced TDs in the competition library.

Question: Will the Government repost the TDs or provide the TD file title convention?The TDs are being loaded to the Competition Library and should all be available and identifiable by Tuesday, 4/30/2013.
40RFP L-1 2.1.1.b(3)For each management/supervisory position in the organization, the Offeror shall describe the following:

i. position descriptions;

ii. qualifications/ certifications; and

iii. supervisory and technical training.

Discussion/Question: Due to the potential numbers of management and supervisory positions within the proposed organization by site, would the government consider removing this requirement from the page count of the Technical Volume and adding the required position descriptions to either the staffing plan (Annex A: Manning) or as an annex in the Technical Volume?

The page count is suggested, and therefore not a requirement. Section L-1, paragraph 1.0 General, states that "... the quality of information is more important that the quantity. Clarity, brevity and logical organization should be emphasized during proposal preparation." An Offeror can exceed the suggested page count to provide the information necessary to respond to the Government's solicitation.
41L-7 and L-8 AttachmentsAttachments L-7 and L-8 roll up sheets do not include a column for the FAR 52.217-8 Option period yet L-7 and L-8 both have worksheets for the FAR 52.217-8 Option period.

a. Please clarify if it is the Government’s intent to not include the FAR 52.217-8 Option period on the roll-up sheets?

b. If there is an error on the roll-up sheets, please provide revised roll-up sheets for L-7 and L-8.

Attachments will be revised via RFP Amendment 1.

3 April 2013 T45CLS Official Solicitation N00019-12-R-0001

H-14 Clause

REFERENCEINDUSTRY QUESTIONGOVERNMENT RESPONSE
42Clause H-14 LIMITATIONS ON SUBCONTRACTS FOR MATERIAL AND SERVICESParagraph (b) of the H-14 clause sets the maximum profit/fee for all subcontracts at every level as not to exceed the lesser of 8% or the rate set forth which the contractor fills in and includes in their proposal submission. Yet, there is no provision in the Total Evaluated Price template provided by the government to account for this subcontractor fee.

Question: Does the Navy intend to include the contractor declared subcontractor fee on material, as will be provided per paragraph (b) of the H-14 clause, in the Total Evaluated Price? If not, does the Navy intend to use any other sort of evaluation process (qualitative or quantitative) to assess the subcontractor fee as part of the award selection?

Please refer to Sections L and M for specific details relating to evaluated price. The Navy does not intend to evaluate reimbursable material CLINS or the contractor declared subcontractor fee on material.
43Clause H-14 LIMITATIONS ON SUBCONTRACTS FOR MATERIAL AND SERVICESThe H-14 Clause imposes a maximum of 8% (lower if a contractor chooses) fee on materials at all levels of the supply chain. This limitation on subcontractor fee will restrict a prime contractor’s ability to procure the necessary parts for the program. The parts suppliers (especially those that enjoy a sole-source position) are likely to refuse to accept the required flow down of Clause H-14, and the result will be that the prime contractor will not be able to procure the parts that are required to keep the fleet of aircraft flying. This inability to procure parts timely could dramatically impact aircraft availability and performance on the contract. This could be construed as an excusable event for calculation of PMF’s while having a significant grounding of the T-45 fleet.

In addition, clause H-14 could force the prime contractor to issue cost-reimbursement subcontracts to material suppliers of non-commercial items so that the prime would be able to verify the amount of the fee. The likelihood that all the affected suppliers would accept such a flow down appears to be remote, particularly in the case of sole-source suppliers. The Goshawk is based on a widely sold airframe and systems worldwide, and the OEMs for the parts have fee rates that are competitive for the marketplace. Even though the airframe is sold internationally, its parts do not meet the strict FAR definition of commercial item since they are sold only to government buyers. The likely refusal of these OEM part suppliers to agree to cost-reimbursable subcontracts is yet another reason why the H-14 Clause will prove impracticable for the prime contractor to administer during contract performance.

Question: Will the Navy remove Clause H-14 from the RFP? Or in the alternative, will the Navy modify Clause H-14 to remove any limitation on subcontractor fee on material for those parts supplied by non-exclusive OEM suppliers.

It is not the Navy’s intent to force the prime contractor to issue cost-reimbursable subcontracts. It is assumed that the prime will document its negotiations with its subcontractors and that profit on Firm Fixed Price subcontracts would be documented. Affordability is the intent. Since the aircraft are sold worldwide and there is a large market, the parts should be considered low risk. The Navy does not intend to remove Clause H-14 from the RFP and the clause applies to all suppliers and subcontractors.
44Clause H-14 LIMITATIONS ON SUBCONTRACTS FOR MATERIAL AND SERVICESClause H-14 uses language that is different from the language in FAR 31.205-26 (Material Costs). Of particular concern is the undefined phrase “or any other entity of the contractor.” Without providing a definition of this phrase, the H-14 clause creates an ambiguity that will make it difficult for a bidder to accurately determine whether the 8% fee on subcontracts is permissible for subcontracts in which there is some degree of prime-sub affiliation or relationship. For example, would a subcontract issued by a joint venture prime to a subcontractor, which also happens to be a minority owner of the joint venture, be considered a subcontract issued to an “entity of the contractor” and therefore ineligible for fee even though this prime and sub are not affiliates under common control? In order to resolve this ambiguity, we suggest that the Government clarify the meaning of the phrase “or any other entity of the contractor” in a way that adopts the meaning of “affiliates of the contractor under a common control” appearing in FAR 31.205-26(e).

Question: Does the Government interpret the phrase “or any other entity of the contractor” in paragraph (d) of Clause H-14 to have the same meaning as the phrase “affiliates of the contractor under a common control” in FAR 31.205-26(e)? If not, would the Government provide a definition of “entity of the contractor” that allows bidders to address examples such as the one provided above?

Paragraph (d) of H14 will be revised via Solicitation Amendment 1 to read as follows:

(d) This clause does not supersede FAR Part 31 for commercial material costs between interdivisional work authorizations (IWAs); however any non-commercial materials or services obtained directly from a division, subsidiary, interdivisional work authorization (IWA) or any affiliates as defined in FAR Part 2.101 shall not be considered subcontracted effort and no profit/fee shall be included at the IWA contractor level for the subject CLINS.

45Clause H-14 LIMITATIONS ON SUBCONTRACTS FOR MATERIAL AND SERVICESClause H-14 would be applied to all non-commercial supply procurements, which is @ 85% of the replenishment and repair of repairables under CLIN 0X20. As a means of controlling cost and lowering risk of cost growth, the Industry "Best Practice" is to buy material using FFP purchase orders. The 8% fee cap is well below the DOD recommended profit on FFP. A significant percentage of the Supply Base may refuse to accept the 8% cap or the H-14 clause flow-down in their FFP purchase orders. This clause may impose supplier "no bids" during execution, which would result in lengthy searches for additional resources, ultimately hindering the Government if aircraft RFT is not met for supply-related reasons. QUESTION: In order to reduce risk and encourage smooth contract execution, would the Government consider limiting the 8% fee cap to just the first tier sub-contractors?The Navy does not intend limit the 8% fee cap to just first tier sub-contractors. It is not the Navy’s intent to force the prime contractor to issue cost-reimbursable subcontracts. It is assumed that the prime will document its negotiations with its subcontractors and that profit on Firm Fixed Price subcontracts would be documented.
46Clause H-14 LIMITATIONS ON SUBCONTRACTS FOR MATERIAL AND SERVICESPlease provide the regulatory basis for the position that a fee greater than 8% for the prime contractor's own effort is deemed unallowable.The 8% limitation was established by NAVAIR as the affordability point.
47Clause H-14 LIMITATIONS ON SUBCONTRACTS FOR MATERIAL AND SERVICESThe Navy’s Final RFP classifies materials CLIN 0X20 as cost-plus-no-fee and severely limits the way in which fee may be applied on subcontracts for materials. The preclusion of prime contractor fee on materials will make it very difficult for a prime contractor to manage materials from the OEMs and lower tier suppliers of those parts, as the prime contractor is not entitled to any profit on a significant portion of the program value. The impact of no fee earned on materials, together with the downside risk posed by the PMFs, would prevent a prime contractor from earning a reasonable profit for the program that is commensurate with the associated programmatic risks.

In addition, the combination of the preclusion of prime contractor fee on materials with the subcontractor fee limitations in the H-14 Clause unfairly discriminates against prime contractors that are also an OEM for any of the T-45 parts. If an OEM were to bid as a prime, or were to be considered an “entity of the contractor” under paragraph (d) the H-14 Clause, the OEM would be entitled to no fee on the materials. In that scenario, neither the bidding entity nor any subsidiaries or sister companies of the OEM prime would be able to earn any fee on the parts, given the H-14 language on “interdivisional work authorizations” (IWAs).

Question: Will the Navy change CLIN 0X20 from Cost-Plus-No-Fee, to Cost-Plus-Fixed-Fee?

The material CLINs on prior and existing contracts have been procured on a cost-reimbursable or Cost-Plus-No-Fee basis. It is the Navy’s intent to continue using this type structure. In accordance with FAR 31.205-26, allowance for materials that are sold or transferred between any division or affiliate of the contractor under a common control shall be on the basis of cost incurred.

3 April 2013 T45CLS Official Solicitation N00019-12-R-0001

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