N00024-17-R-2207_DRAFT_RFP.docx

N00024-17-R-2207 N00024-17-R-2207

ATTENTION:

This is a draft Request For Proposals for the Towing, Salvage, and Rescue Ship (N00024-17-R-2207). Reviewers should be aware that this Draft RFP does not include all sections and attachments that will be part of the final RFP. This Draft RFP is for planning purposes only and shall not be construed as an invitation for bid, request for quotation, request for proposal, or as an obligation on the part of the Government to acquire any products or services. No entitlement to payment of direct or indirect costs or charges by the Government will arise as a result of contractor responses to this announcement. This request does not constitute a solicitation for proposals or the authority to enter into negotiations to award a contract. When and if the Government issues the final RFP, interested contractors will be expected to thoroughly address the requirements thereof regardless of the circumstances surrounding this Draft RFP.

The Government intends to procure eight ships over eight years and is seeking feedback on pricing options (i.e. Firm-Fixed Price (FFP) for eight years, FFP with reopeners, etc.) and typical commercial financing terms.

Section B - Supplies or Services and Prices

CLIN Number 0001

Towing, Salvage and Rescue, Ship 1

FFP

Towing, Salvage and Rescue Detail Design and Construction and Documentation, Ship 1 (See Note A)

FOB: Destination

PURCHASE REQUEST NUMBER: N0002416NR53118

NET AMT

CLIN Number 0002

Data for CLIN 0001

FFP

Set

Data for CLIN 0001

NET AMT

CLIN Number 0003

Towing, Salvage and Rescue, Ship 2

FFP

(See Note A and B) (if exercised)

NET AMT

CLIN Number 0004

Data for CLINs 0003, 0005 through 0010

Set

FOB: Destination

NET AMT

CLIN Number 0005

Towing, Salvage and Rescue, Ship 3

FFP

(See Note A and B) (if exercised)

NET AMT

CLIN Number 0006

Towing, Salvage and Rescue, Ship 4

FFP

(See Note A and B) (if exercised)

NET AMT

CLIN Number 0007

Towing, Salvage and Rescue, Ship 5

FFP

(See Note A and B) (if exercised)

NET AMT

CLIN Number 0008

FP-EPA

Towing, Salvage and Rescue Detail Design and Construction and Documentation, Ship 6 (See Note A and B) (if exercised)

NET AMT

CLIN Number 0009

FP-EPA

Towing, Salvage and Rescue Detail Design and Construction and Documentation, Ship 7 (See Note A and B) (if exercised)

NET AMT

CLIN Number 0010

FP-EPA

Towing, Salvage and Rescue Detail Design and Construction and Documentation, Ship 8 (See Note A and B) (if exercised)

NET AMT

CLIN Number 0011

Spares and Repair Parts, Ship 1

Lot

Provisioned Items Order - Additional Spares, Repair Parts, Special Tools, Support and Test Equipment for CLIN 0001 (See Note C)

NET AMT

CLIN Number 0012

Spares and Repair Parts, Ship 2

Lot

Provisioned Items Order - Additional Spares, Repair Parts, Special Tools, Support and Test Equipment for CLIN 0003 (See Note C)

NET AMT

CLIN Number 0013

Spares and Repair Parts, Ship 3

Lot

Provisioned Items Order - Additional Spares, Repair Parts, Special Tools, Support and Test Equipment for CLIN 0005 (See Note C)

NET AMT

CLIN Number 0014

Spares and Repair Parts, Ship 4

Lot

Provisioned Items Order - Additional Spares, Repair Parts, Special Tools, Support and Test Equipment for CLIN 0006 (See Note C)

NET AMT

CLIN Number 0015

Spares and Repair Parts, Ship 5

Lot

Provisioned Items Order - Additional Spares, Repair Parts, Special Tools, Support and Test Equipment for CLIN 0007 (See Note C)

NET AMT

CLIN Number 0016

Spares and Repair Parts, Ship 6

Lot

Provisioned Items Order - Additional Spares, Repair Parts, Special Tools, Support and Test Equipment for CLIN 0008 (See Note C)

NET AMT

CLIN Number 0017

Spares and Repair Parts, Ship 7

Lot

FOB: Destination

NET AMT

CLIN Number 0018

Spares and Repair Parts, Ship 8

Lot

Provisioned Items Order - Additional Spares, Repair Parts, Special Tools, Support and Test Equipment for CLIN 0010 (See Note C)

NET AMT

CLIN Number 0019

Engineering & Industrial Svcs Ship 1

Labor Hours

Provisioned Items Order – Engineering and Industrial Services for CLIN 0001 (See Notes C and D)

NET AMT

CLIN Number 0020

Engineering & Industrial Svcs Ship 2

Labor Hours

Provisioned Items Order – Engineering and Industrial Services for CLIN 0003 (See Notes C and D)

NET AMT

CLIN Number 0021

Engineering & Industrial Svcs Ship 3

Labor Hours

Provisioned Items Order – Engineering and Industrial Services for CLIN 0005 (See Notes C and D)

NET AMT

CLIN Number 0022

Engineering & Industrial Svcs Ship 4

Labor Hours

Provisioned Items Order – Engineering and Industrial Services for CLIN 0006 (See Notes C and D)

NET AMT

CLIN Number 0023

Engineering & Industrial Svcs Ship 5

Labor Hours

Provisioned Items Order – Engineering and Industrial Services for CLIN 0007 (See Notes C and D)

NET AMT

CLIN Number 0024

Engineering & Industrial Svcs Ship 6

Labor Hours

Provisioned Items Order – Engineering and Industrial Services for CLIN 0008 (See Notes C and D)

NET AMT

CLIN Number 0025

Engineering & Industrial Svcs Ship 7

Labor Hours

Provisioned Items Order – Engineering and Industrial Services for CLIN 0009 (See Notes C and D)

NET AMT

CLIN Number 0026

Engineering & Industrial Svcs Ship 8

Labor Hours

Provisioned Items Order – Engineering and Industrial Services for CLIN 0010 (See Notes C and D)

NET AMT

CLIN Number 0027

UID Ship 1

NET AMT

CLIN Number 0028

UID Ship 2

NET AMT

CLIN Number 0029

UID Ship 3

NET AMT

CLIN Number 0030

UID Ship 4

NET AMT

CLIN Number 0031

UID Ship 5

NET AMT

CLIN Number 0032

UID Ship 6

NET AMT

CLIN Number 0033

UID Ship 7

NET AMT

CLIN Number 0034

UID Ship 8

NET AMT

CLIN Number 0035

Special Studies and Documentation

Provisioned Items Order - Special Studies & Documentation (See Notes C and E)

NET AMT

CLIN Number 0036

Special Purpose Data Licens

FFP

NET AMT

CLAUSES INCORPORATED BY FULL TEXT

HQ B-2-0004 EXPEDITING CONTRACT CLOSEOUT (NAVSEA) (DEC 1995)

(a) As part of the negotiated fixed price or total estimated amount of this contact, both the Government and the Contractor have agreed to waive any entitlement that otherwise might accrue to either party in any residual dollar amount of $500 or less at the time of final contract closeout. The term “residual dollar amount” shall include all money that would otherwise be owed to either party at the end of the contract, except that, amounts connected in any way with taxation, allegations of fraud and/or antitrust violations shall be excluded. For purposes of determining residual dollar amounts, offsets of money owed by one party against money that would otherwise be paid by that party may be considered to the extent permitted by law.

(b) This agreement to waive entitlement to residual dollar amounts has been considered by both parties. It is agreed that the administrative costs for either party associated with collecting such small dollar amounts could exceed the amount to be recovered.

NOTE B - Option item to which the option clause in SECTION I-2 applies and which is to be supplied only if and to the extent said option is exercised.

HQ B-2-0017 REFUNDS (SPARES AND SUPPORT EQUIPMENT) (NAVSEA) (SEP 1990)

(a) In the event that the price of a spare part or item of support equipment delivered under this contract significantly exceeds its intrinsic value, the Contractor agrees to refund the difference. Refunds will only be made for the difference between the intrinsic value of the item at the time an agreement on price was reached and the contract price. Refunds will not be made to recoup the amount of cost decreases that occur over time due to productivity gains (beyond economic purchase quantity considerations) or changes in market conditions.

(b) For purposes of this requirement, the intrinsic value of an item is defined as follows:

(1) If the item is one which is sold or is substantially similar or functionally equivalent to one that is sold in substantial quantities to the general public, intrinsic value is the established catalog or market price, plus the value of any unique requirements, including delivery terms, inspection, packaging, or labeling.

(2) If there is no comparable item sold in substantial quantities to the general public, intrinsic value is defined as the price an individual would expect to pay for the item based upon an economic purchase quantity as defined in FAR 52.207-4, plus the value of any unique requirements, including delivery terms, inspection, packaging or labeling.

(c) At any time up to two years after delivery of a spare part or item of support equipment, the Contracting Officer may notify the Contractor that based on all information available at the time of the notice, the price of the part or item apparently exceeds its intrinsic value.

(d) If notified in accordance with paragraph (c) above, the Contractor agrees to enter into good faith negotiations with the Government to determine if, and in what amount, the Government is entitled to a refund.

(e) If agreement pursuant to paragraph (d) above cannot be reached, and the Navy's return of the new or unused item to the Contractor is practical, the Navy, subject to the Contractor's agreement, may elect to return the item to the Contractor. Upon return of the item to its original point of Government acceptance, the Contractor shall refund in full the price paid. If no agreement pursuant to paragraph (d) above is reached, and return of the item by the Navy is impractical, the Contracting Officer may, with the approval of the Head of the Contracting Activity, issue a Contracting Officer's final decision on the matter, subject to Contractor appeal as provided in the "DISPUTES" clause (FAR 52.233-1).

(f) The Contractor will make refunds, as required under this requirement, in accordance with instructions from the Contracting Officer.

(g) The Contractor shall not be liable for a refund if the Contractor advised the Contracting Officer in a timely manner that the price it would propose for a spare part or item of support equipment exceeded its intrinsic value, and with such advice, specified the estimated proposed price, the estimated intrinsic value and known alternative sources or item, if any, that can meet the requirement.

(h) This requirement does not apply to any spare parts or items of support equipment whose price is determined through adequate price competition. This requirement also does not apply to any spare part or item of support equipment with a unit price in excess of $100,000; or in excess of $25,000 if the Contractor submitted, and certified the currency, accuracy and completeness of, cost or pricing data applicable to the item.

HQ B-2-0022 CONTRACT SUMMARY FOR PAYMENT OFFICE (FIXED PRICE) (FEB 1997)

This entire contract is fixed price.

Note A: The maximum possible award amount (Price Cap) for CLIN 0001 is $64,500,000.00 and for Option CLIN 0003 $65,790,000.00; Option CLIN 0005 $67,106,000.00; Option CLIN 0006 $68,448,000.00; Option CLIN 0007 $69,817,000.00; Option CLIN 0008 $71,213,000.00; Option CLIN 0009 $72,637,000.00; Option CLIN 0010 $74,090,000.00

Note B: Option Items, to which the option clause in Section I applies and which is to be supplied only if and to the extent said option is exercised. The Government is not obligated to order any or all of these items. Exercise of one option will not obligate the Government to the exercise of other options.

Note C: Provisional amounts are subject to adjustment under the clause of this contract entitled “PROVISIONED ITEMS ORDER – ALTERNATE II,” for supplies or other requirements ordered pursuant to said clause. The amounts shown are for planning purposes only. Amount in actual orders, if any orders are issued, will be individually priced. All orders hereunder are to be firm-fixed price. Provisioned Items Orders will be placed, if any, prior to the delivery of each vessel.

Note D: Approximately 500 man-hours labor and $25,000 material will be needed for each ship. These are estimates and do not indicate that the Government will necessarily order this amount or any at all. The actual amount of labor hours and material dollars will be determined in accordance the clause in Section H of this Contract entitled "ENGINEERING & INDUSTRIAL SERVICES.” In the table below, enter the applicable hourly labor rate for each Government fiscal year, which will apply to any work ordered under this item.

CLINS 0019 through 0026 Engineering & Industrial Services Government Fiscal Year Fully Loaded Engineering Rate (per Hour) Fully Loaded Production Rate (per Hour)

Note E: Approximately 300 man-hours and $5,000 material will be needed for each ship. These are estimates and do not indicate that the Government will necessarily order this amount or any at all. The actual amount of labor hours and material dollars will be determined in accordance the clause in Section H of this Contract entitled "SPECIAL STUDIES & DOCUMENTATION.” In the table below, enter the applicable hourly labor rate for each Government fiscal year, which will apply to any work ordered under this item.

(per Hour)

Section C - Descriptions and Specifications

Section C - Descriptions and Specifications

PART 1 – GENERAL STATEMENT OF WORK

PART 2 – CONTRACT LINE ITEM NUMBER (CLIN) DESCRIPTIONS

PART 3 – T-ATS STATEMENT OF WORK, DETAIL DESIGN AND CONSTRUCTION

PART 4 – STANDARD CLAUSES

PART 1 - GENERAL STATEMENT OF WORK

This statement of work defines the effort required for the design, construction, testing, outfitting, configuration management, and program management for the acquisition of up to eight (8) Towing, Salvage, and Rescue Ships, hereafter referred to as “T-ATS” ships. The Contractor shall perform the technical design, construction, testing, delivery, and management for the T-ATS ships in accordance with the provisions of this contract including attachments, revisions, and modifications thereto. All departures from the requirements of this contract shall be fully justified in writing and submitted to the Government for written approval.

PART 2 – CONTRACT LINE ITEM NUMBER (CLIN) DESCRIPTIONS

ITEM 0001, and if exercised, 0003, 0005, 0006, 0007, 0008, 0009, and 0010 - Towing, Salvage and Rescue Ship Detail Design and Construction and Documentation The Contractor shall furnish all resources necessary to perform the Detail Design and Construction of the T-ATS ship(s) at the Contractor’s facilities in accordance with:

The Contractor shall perform the technical, procurement, and other tasks necessary for the detail design and construction of the T-ATS ship(s). The Contractor shall provide the management effort necessary to ensure the on-schedule completion of the Detail Design and Construction. The Contractor shall identify and take steps to correct all problems and potential problems arising during contract performance which could impact the on-schedule completion of the T-ATS Ships.

The award of this contract does not indicate that the Government has approved or certified the design provided with the proposal. The Contractor shall remain fully responsible for delivering the ship(s) which meets the requirements of this Contract.

ITEM 0002, and if exercised, 0004 - Data Data shall be prepared in accordance with this Contract and the Phase I Data Requirements List (DRL), Attachment J-2. This item is Not-Separately Priced (NSP) and costs associated with this Item shall be proposed under the applicable ship (i.e. Items 0001, and if exercised, 0003, 0005, 0006, 0007, 0008, 0009, and 0010).

ITEM 0011, 0012, 0013, 0014, 0015, 0016, 0017, and 0018 - Provisioned Items Order - Additional Spares, Repair Parts, Special Tools, Support and Test Equipment The Contractor shall provide shore-based spares, onboard spares, repair parts, special tools, and test equipment in accordance with the requirements herein. Orders for this effort shall be authorized by the Contracting Officer in accordance with the “PROVISIONED ITEM ORDER – ALTERNATE II” requirement in this contract.

ITEM 0019, 0020, 0021, 0022, 0023, 0024, 0025, and 0026 - Provisioned Items Order – Engineering and Industrial Services In accordance with the clause entitled "ENGINEERING & INDUSTRIAL SERVICES" under Section H of this contract, the Contractor shall provide approximately 500 man-hours of production and production support labor and $25,000 of material per ship to perform Engineering & Industrial Services in support of the T-ATS ship(s). These services are defined as any work authorized by the Procuring Contracting Officer that is required to support the T-ATS ship(s). Orders for this effort will be placed in accordance with the general requirements in Section H of this Contract entitled “ENGINEERING & INDUSTRIAL SERVICES”. The Contractor shall complete the table for fully loaded engineering and production rates under Section B.

ITEM 0027, 0028, 0029, 0030, 0031, 0032, 0033, and 0034 if exercised - Unique Item Identification (UID) and Documentation The Contractor shall provide Unique Item Identification (UID) and Documentation in accordance with DFARS Clause 252.211-7003 and the requirements provided in Clause C-3.080b entitled "ITEM UNIQUE IDENTIFICATION".

ITEM 0035 - Provisioned Items Order - Special Studies and Documentation In accordance with the clause entitled "SPECIAL STUDIES & DOCUMENTATION" under Section H of this contract, the Contractor shall provide approximately 300 man-hours of engineering labor and $5,000 of material to perform Special Studies & Documentation in support of the T-ATS ship(s). Special Studies & Documentation are defined as any work authorized by the Procuring Contracting Officer that is required to support the T-ATS ship(s). Orders for this effort will be placed in accordance with the general requirements in Section H of this Contract entitled “SPECIAL STUDIES & DOCUMENTATION”. The Contractor shall complete the table for fully loaded engineering rates under Section B.

ITEM 0036 if exercised - Special Purpose Data License The Contractor shall provide a special purpose license for the Government to use, modify, reproduce, release, perform, display, or disclose the data furnished under this contract within the Government and to third parties that will operate, maintain, or repair the T-ATS ships. The specific additional rights granted to the Government shall be enumerated in a license agreement made part of the contract.

PART 3 – T-ATS STATEMENT OF WORK, DETAIL DESIGN AND CONSTRUCTION

C-3.042a CONFERENCES, REVIEWS, AND GENERAL MEETINGS A Post Award Conference (PAC), Logistics Guidance Conference (LGC), Shipbuilding Production Progress Conferences (SPPC), a Design Review (DR), and Integrated Logistics Support Management Team (ILSMT) reviews shall be held during DD&C.

The Contractor shall attend and host a Post Award Conference (PAC) conducted with the Government within thirty (30) days of contract award at the Contractor’s facility. The Contractor shall prepare Agendas (DI-001) and Meeting Minutes (DI-002). The purpose of the conference is to review the Contract and technical documents, the technical and schedule requirements including the schedule of reviews, Data Requirements List (DRL) Review, and discuss the roles and working relationships between the Contractor and the Government. The DRL review shall cover data descriptions and Contractor recommended revisions to ensure deliverable data content is adequately specified. The recommended modifications shall not cause an increase in contract price or delay in the delivery schedule.

The Government will convene a LGC at the Contractor’s facility approximately ninety (90) days after contract award. The Contractor shall prepare Agendas (DI-001) and Meeting Minutes (DI-002). The purpose of this conference is to review and discuss the Government’s logistics data requirements, and logistics schedules. The Contractor shall review and discuss its overall planned logistics approach including the Integrated Logistics Support Management Plan (ILSMP) and LGC presentation.

The Contractor shall conduct the initial SPPC meeting at the Contractor’s facility six (6) months after contract award and continuing quarterly through the warranty period of the last ship. The Contractor shall prepare Agendas (DI-001) and Meeting Minutes (DI-002).

The Contractor shall conduct a DR at the Contractor’s facility three (3) months after contract award. The Contractor shall prepare Agendas (DI-001) and Meeting Minutes (DI-002). The Contractor’s Design Agent (if used) and an ABS Engineering representative shall attend the DR.

The Contractor shall conduct ILSMT reviews at the Contractor’s facility concurrently with the SPPC’s through the delivery of the last ship. The Contractor shall prepare Agendas (DI-001) and Meeting Minutes (DI-002). At ILSMT reviews, the Contractor shall address the status of all Contractor-responsible logistics processes, products, tasks, and other associated requirements.

In addition a Production Readiness Review (PRR) shall be convened.

The Contractor shall prepare Agendas (DI-001) and Meeting Minutes (DI-002) for conferences, reviews, working group meetings, and general meetings.

C-3.042b INTEGRATED MASTER SCHEDULE The Contractor shall prepare and maintain an Integrated Master Schedule (DI-003). The Integrated Master Schedule (IMS) shall provide a total integrated overview, depicting all activities and schedule milestones required for the performance of the Contract. Activities shall demonstrate a logical flow of events and be linked where applicable to show relationships with starts and completions. Events shall have minimum-maximum durations with supporting rationale for those tasks identified as moderate or high risk. Major subcontractor efforts shall be integrated into the schedule.

The Contractor shall maintain consistent dates and terminology amongst schedules, and shall depict the critical path required for the performance of the Contract. The following detailed schedules shall be prepared as extractions from the IMS:

1) Detail Design Schedule (DI-003-01)

2) Erection Sequence Schedule (DI-003-02)

3) Drawing Schedule and Documentation Schedule (DI-003-03)

4) Material Ordering Schedule (DI-003-04)

5) Schedule of Major Milestones and Key Events (DI-003-05)

6) Test and Trials Schedule (DI-003-06)

For each submission of detailed schedules in the Integrated Master Schedule, the Contractor shall include the Actual Start and Actual Completion dates for all tasks and events completed to date of that submission.

C-3.042c PURCHASE ORDERS The Contractor shall provide all Purchase Orders and the Contractor shall prepare and maintain Purchase Orders and Purchase Order Index (DI-004).

C-3.042d MASTER EQUIPMENT LIST The Contractor shall prepare, update and maintain a Master Equipment List (DI-005) for the following items:

1. Equipment with procurement costs greater than $5000

2. Oil Content Monitor(s)

3. Pumps (motor greater than 10 HP)

4. All equipment subject to domestic source restrictions in DFARS 225.70 and 225.71, if applicable

The Contractor provided equipment identified on the Master Equipment List will be subject to configuration management and any proposed changes to the equipment listed on the Master Equipment List shall be approved by the Government via the Engineering Change Proposal (ECP) process.

C-3.042e EQUIVALENT EQUIPMENT In the event the Contractor requests to substitute equipment identified in the Contractor’s Ship Specification, the Contractor shall submit an equivalency request in writing to the Government. Such requests shall be made forty-five (45) days in advance of the Contractor's anticipated order of the equipment to allow the Government time to determine equivalency. Any equipment not approved within thirty (30) days will be considered disapproved by the Government.

The Contractor shall prepare an Equivalent Equipment Substitution Request (DI-006) demonstrating all requirements governing the determination of equivalence have been addressed.

C-3.042f DRYDOCKING FACILITIES AND SHIPBUILDING WAYS CERTIFICATION Drydocking, launching, building ways and transfer facilities and methods employed in the performance of this contract shall be certified by either of the two following methods:

1) In accordance with the current version of MIL-STD-1625(SH), Safety Certification for Drydock Facilities and Building Ways for U.S. Navy Ships, in effect on the date of contract award.

2) In accordance with the standards and criteria of an internationally recognized certifying authority acceptable to the Contracting Officer, (examples of such authority include, but are not limited to, ABS, Lloyds Registry of Shipping, Det Norske Veritas) in effect on the date of contract award.

The Contractor shall prepare a Drydocking Facilities and Shipbuilding Ways Certification Report (DI-007).

The Contractor may propose an alternate drydocking/launching method only for those situations not covered by an existing certifying authority, referenced in 1 and 2 above. The documentation to support this proposal shall be as close as practicable to that required by the existing certification criteria and shall identify any potential impact/modification to the ship's structure. Additionally, the Contractor shall submit certification from an independent naval architectural firm, acceptable to the Contracting Officer, which shall certify that the method being proposed, including equipment and procedures, complies with sound naval architectural principles.

C-3.042g LAUNCHING AND DOCKING INFORMATION The Contractor shall prepare Launching and Docking Information (DI-008) describing the facilities and procedures and containing supporting calculations. The Contractor shall convene a Drydocking Meeting and inspection of the facility, with the Government, prior to any drydocking or transfer of the vessel.

C-3.042h SHIP DAMAGE REPORT In the event the ship is damaged (including damage from launching, docking/undocking, collision, mooring, or grounding), the Government shall be notified in writing. The Contractor shall perform an assessment of possible damage. If requested by the Government, the ship shall be drydocked and examined at no expense to the Government. The Contractor shall prepare a Ship Damage Report (DI-009) for each incident.

C-3.042i PRODUCTION READINESS REVIEW The Contractor shall successfully complete a Production Readiness Review (PRR) prior to the authorization by the Contracting Officer for the Start of Construction. Start of Construction is defined as the commencement of steel-cutting for the ship. The purpose of the PRR is to demonstrate to the Government that proper management, engineering, and production requirements are adequately defined and implemented and that design maturity supports initiation of the construction phase.

The Contractor shall notify the Government of the date thirty (30) days prior to PRR. The PRR shall be held not less than fifteen (15) days prior to Start of Construction. The PRR shall be held at the Contractor’s facility. The Government will notify the shipyard within ten (10) days after the PRR whether Start of Construction is authorized.

At the PRR, the Contractor shall demonstrate sufficient design maturity has been achieved to start construction, the flow of production information will sustain production, and the status of material ordering and delivery will support the proposed build schedule. The Contractor shall identify any potential risk areas and shall explain the mitigation for each risk.

The Contractor shall prepare the Production Readiness Review Agenda, Presentation, and Minutes (DI-010).

The following represents the minimum exit criteria for the Production Readiness Review, and form the basis for the Government’s determination for Start of Construction authorization:

1) Regulatory Body requirements: In accordance with the ABS rules for vessels built under survey, the Contractor shall present the status of having satisfied the requirement for submittal and approval of Plans showing the arrangements, scantlings, details of principal parts of the hull structure and welding details prior to commencement of construction. The status of the Plans and all ABS comments shall be addressed by an ABS representative.

2) Status Contract Requirements: The following data items shall be submitted in accordance with the Contract and will be evaluated by the Government at the PRR:

a. DI–003: Schedules (All)

b. DI–015: Classification Society or Regulatory Body Communications

c. DI–052: Engineering Change Proposals

d. DI–053: Non-Engineering Change Proposals

3) Functional Design Completion: The ship’s Functional Design shall be one hundred (100) percent complete. The products that comprise the Functional Design that shall be one hundred (100) percent complete are listed in the table below. These products and documents that comprise the Functional Design shall have a documented resolution to all comments related to contract compliance concerns. The associated DRLs shall be delivered no later than thirty (30) days prior to the commencement of PRR.

Functional Design Products

4) There shall be no open Requests for Variance at PRR.

5) The Contractor shall provide evidence of readiness of the construction facilities.

6) The Contractor shall provide evidence that manning resources are available to support planned production.

7) The Contractor shall have enough production information (i.e., production work packages) to sustain consistent production for a three (3) month period, including that information needed for the main machinery space.

C-3.045a CARE OF THE SHIP The Contractor shall maintain the ship, including all Government Furnished Material (GFM) and Contractor Furnished Material (CFM) in a satisfactory condition during the entire period the ship is in the Contractor's possession. The Contractor shall take shelf life or service life limitations of CFM into account when procuring, handling, storing and installing to maximize useful life to the Government after delivery of the ship.

The Contractor shall provide protection of equipment from the time of procurement until ship delivery. The Contractor shall ensure that all equipment is properly maintained during periods of inactivity. The Contractor shall appropriately warehouse equipment prior to installation on the ship. The following additional requirements apply:

ventilating intake and exhaust openings, but no exposed glass surfaces or fragile protrusions.

Taped on cover, Peelastrip on exposed surfaces.

During construction, the Contractor shall keep the ship free of chips, shavings, refuse, dirt, cigarette butts, water, and other extraneous matter. The Contractor shall keep piping and ducting openings sealed prior to and after installation into the ship. The Contractor shall clean tanks and voids. Tanks and voids shall pass Government inspection before being closed. The Contractor shall remove rubbish from places which are to be permanently closed or which may become inaccessible. Appropriate measures shall be taken to minimize wear and damage incident to construction, and to prevent corrosion or other deterioration. The Contractor shall activate electric motor strip heaters as soon as power can be made available. Otherwise, the Contractor shall provide heat lamps or other heating devices for all electric motors and other equipment subject to damage from condensation.

The Contractor shall protect machine parts, both interior and exterior, against corrosion and deterioration during the interval between manufacturing and ship delivery. Preservative on working parts shall be removed prior to operation of the machinery or equipment. If removal of storage preservative is necessary for testing the machinery or equipment before installation on the ship, the Contractor shall return machinery or equipment to a preserved state and protect the machinery or equipment in accordance with the manufacturer’s instructions. The Contractor shall protect piping, machinery, and equipment from damage such as freezing or other adverse environmental conditions. Equipment, prefabricated parts, furniture, outfit and outfitting material which is stowed in warehouses or on piers during construction of the ship, shall be free of vermin before being placed onboard. The Contractor shall keep clean and protect parts and equipment, including those having working surfaces or passages, or piping for lubricating and hydraulic oil, during manufacture, storage, assembly, and installation.

The Contractor shall protect deck machinery, wire rope and associated equipments from the elements. After manufacture and prior to installation on the ship the Contractor shall protect deck equipment and equipment such as cranes, winches, davits, wire rope, hydraulic rams, block, and fairlead equipment by stowing inside a building/container or sealed by a vacuum pack wrapping as appropriate and approved by the manufacturer. Deck machinery, and equipment installed and bolted to their respective foundations on the ship in the weather or stowed on deck in the weather shall have weather proof covers installed and have all non-CRES parts preserved against corrosion. The Contractor shall coat installed wire rope in accordance with manufacturer's recommendation practices. The Contractor shall coat hydraulic rams exposed to the weather with marine grade grease and covered. Within ten working days after installation on the ship, the Contractor shall energize heater circuits. If ship's power is not available at the time of heater circuit installation, the Contractor shall provide temporary power. The Contractor shall energize all deck machinery, and equipment through their respective motor controllers upon availability of ship's power. Furthermore, the Contractor shall maintain proper hydraulic fluid levels, replace filters, lubricate moving parts and protect wire rope as required by the technical manuals and manufacturers’ recommendations for the equipment. In addition to the general requirements defined above, the Contractor shall protect and maintain clean ship machinery, winches, davits, rams, block and fairlead equipment at all times against dust, moisture, metal chips, sandblasting grit, and other foreign matter.

The Contractor shall thoroughly clean, flush, and verify all vents, ducts, and tanks are free of contaminants and industrial and foreign material prior to use.

During the fabrication, installation, and testing of all piping systems, the Contractor shall keep openings tightly sealed to prevent intrusion of dirt and moisture. The Contractor shall thoroughly clean all piping, fittings, and applicable equipment after fabrication and prior to installation. After installation, the Contractor shall thoroughly clean and flush each system of all foreign matter in accordance with manufacturer’s requirements with the applicable system’s medium, or an approved substitute. The Contractor shall conduct system flushing at the applicable system’s maximum operating pressure and at 150 to 200 percent above normal line velocity. The Contractor shall use line vibrators and temporary strainers. The Contractor shall line temporary strainers with ten micron filter bags (five micron for fuel and hydraulic systems) and shall be inspected every two hours during the flushing activities. The Contractor shall continue flushing until it is demonstrated that two consecutive bags show no signs of dirt, scale, and/or foreign material. Sumps, tanks, and equipment that cannot be adequately flushed shall be hand cleaned and inspected prior to service. Prior to flushing operations, the Contractor shall either remove or blanked off and bypass heat exchangers, control valves, or any other devices capable of trapping or being harmed by foreign matter. As a minimum, the Contractor shall flush fuel oil, lube oil and hydraulic systems in accordance with ASTM D4174-89(1999), Standard Practice for Cleaning, Flushing, and Purification of Petroleum Fluid Hydraulic Systems.

Prior to and during use, ship ventilation systems shall have uptake filters installed and maintained. Ballast tanks, flume tanks and roll stabilization tanks shall be filled with clean fresh water or clean sea water as appropriate. The Contractor shall fill potable water tanks with potable water and the ship's water purification system activated to maintain potable water conditioning. The Contractor shall certify fuels and lubrication oils clean and free of contamination before loading to tanks. Fuel oil shall have the proper preservatives added to prevent biological growth. The Contractor shall provide continuous cathodic protection as soon as the ship is waterborne, using the ship's cathodic protection system or a temporary cathodic protection system.

The Contractor shall inspect and clean the hull and propellers of marine growth to ensure full performance no more than thirty (30) days prior to Builders Sea Trials (BST) and to Acceptance Trials (AT). Prior to AT, all filters shall be as new or replaced with new and the interior and exterior of the ship shall be swept, washed down, and cleaned.

C-3.045b PREPARATION FOR DELIVERY OF THE SHIP The ship shall be delivered with all items such as, but not limited to, equipment, accessories, appliances, plumbing fixtures, walls (interior and exterior), floors and decks, ceilings and overheads, windows, machinery spaces, etc., displaying an obvious appearance of being new and unused. The ship shall be free of dirt and debris associated with construction and adequately prepared for transportation to destination. The ship shall, in addition to the above, also display the highest level of cleanliness such that all areas of the ship can be immediately put to its intended use.

The ship systems shall be in operating condition at delivery of the vessel. Equipment having periodic certification and/or calibration requirements shall have a minimum of eleven (11) months remaining of the certification and/or calibration period at delivery of the vessel. Intercompartment cables not connected to equipment shall have ends sealed and taped off, and shall be individually coiled and secured. Non-consumable items with shelf life or service life limitations shall have a minimum of 75% of their useful life remaining at delivery.

If the ship is in the water for more than one hundred fifty (150) days prior to delivery, the Contractor shall drydock the ship for survey, repair and final hull preservation and painting prior to delivery. The Contractor shall have the Regulatory Bodies witness that drydocking for certification purposes.

At delivery the Contractor shall sound the fuel tanks and lubrication oil tanks in the presence of the Government and calculate the amount of fuel and oil remaining to support the Government purchase of the remaining fuel and oil. The Contractor shall deliver the ship fully outfitted, ready to receive crew, and with approvals and certifications in place. The Contractor shall deliver the ship at a draft and trim condition that is within the limiting requirements for full load condition. Where ballast water is necessary, the Contractor shall achieve the delivery condition through the use of either clean seawater or fresh water ballast or both, but the quantity shall not exceed the ship normal ballast capacity unless specifically approved by the Government. The Contractor shall not use polluted or silt carrying water, such as harbor or river water, to achieve the delivery condition of the ship. The Contractor shall ensure that the delivery condition is restored in accordance with the above criteria where it becomes necessary to obtain a differing temporary condition to clear an obstruction (low bridge, shallow draft, narrow beam clearance, etc.) on the way to open ocean.

C-3.045c GOVERNMENT-FURNISHED INFORMATION GFI is defined as that information essential to the installation, test, operation, and interface support in Schedule C - Government Furnished Information (GFI) List, Attachment J-5, and will be provided to the Contractor detailing required information needed by the Contractor.

C-3.045d ON-SITE GOVERNMENT REPRESENTATIVES/SHIP'S CREW FACILITIES Commencing thirty (30) days after contract award through the Fitting Out Availability (FOA) of the last ship, the Contractor shall provide:

1) Office Facility Requirements – Suitable office facilities and services shall be provided for the on-site Government staff of ten (10) personnel which will include two (2) private offices. In addition, facilities shall also be provided for the Nucleus crew of five (5) personnel. The Nucleus crew will arrive in the shipyard approximately six (6) months prior to delivery. The offices provided shall be located convenient to the ship, management and other shipyard shops and offices. The Contractor shall provide cleaning services at least weekly. Rest rooms and kitchen facilities shall be available within vicinity of the Government office space. The Contractor shall be responsible for pest control.

2) Office Furniture and Equipment – Appropriate office furniture and equipment shall include desk workstations with trash cans for all Government and crew. In addition, ten (10) side chairs and ten (10) white boards shall be provided. A minimum of five (5) Legal size file cabinets and ten (10) book cases shall also be provided.

3) Conference Room – The Contractor shall provide one conference room with doors and tables with seating for at least twelve (12) people. The conference room shall include a speaker phone and teleconferencing capability.

4) Telephone and Internet Service – The Contractor shall provide and maintain telephone with voice mail and high speed internet service for the on-site Government office spaces. Separate lines for internet service shall be provided to each workstation and three (3) internet lines shall be provided for use in the Conference Room.

5) Copier – The Contractor shall provide a multi-function color copier. The copier shall be capable of copying and printing up to 11x17” size paper, double-sided, and scanning.

6) Document waste – The Contractor shall provide a high quality paper shredder to collect business sensitive documentation. Recycle services shall be provided.

7) Parking Spaces – The Contractor shall provide ten (10) designated, secure parking spaces located close to the office facility for the Government personnel. Upon Nucleus crew arrival an additional five (5) parking spaces shall be provided.

8) Access to the Ship and Applicable Facilities – Government and authorized government representatives shall have admission to the plant, access to the vessel(s) where and as required, and be permitted, within the plant and on the vessel(s) to perform and fulfill their respective obligations to the Government.

C-3.045e FITTING OUT AVAILABILITY Immediately following ship delivery, the T-ATS will remain at the Contractor's facility for a period of twenty one (21) days. During the FOA, the Contractor shall provide:

1) Berthing space pier-side for the ship, including the brow and landing platforms, as appropriate, with utilities from shore connections (electricity, fresh water, telephone and internet services via three dedicated telephone lines and a broadband data line, , sewage, bilge, and gray water disposal), daily garbage removal, and material handling services to support final outfitting.

2) An additional five (5) parking spaces near the ship, for authorized Government personnel, ship's force and Government authorized visitors.

3) Fire protection including maintenance of the ship’s fire main pressure in event of ship’s system failure or interruption for repair services.

4) Access to the ship for authorized Government personnel, ship’s force and Government authorized visitors.

C-3.045f FIRE AND FLOODING PREVENTION The Contractor shall prepare and maintain a Fire and Flooding Protection Plan (DI-011). The Shipbuilder shall maintain a plan of fire prevention, fire detection, and firefighting to protect each ship module assembly and the assembled ship prior to delivery. The Shipbuilder shall maintain a plan of flooding prevention, flooding detection, flooding repair and dewatering capability to protect the ship while it is waterborne and prior to delivery. The Contractor shall conduct training drills for the shipyard’s employees at the beginning of construction, and at intervals of not more than each six (6) months thereafter.