N00024-22-R-2203_0003_Conformed.pdf

CODE

(Hour)

PAGE(S)

until 02:00 PM local time 19 Apr 2022

X

A X B X C X D

EX

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G F 193 - 202

203 - 244 X H 245 - 256

RATING PAGE OF PAGES

7. ISSUED BY

(Date)

IMPORTANT - Award will be made on this Form, or on Standard Form 26, or by other authorized official written notice.

Previous Edition is Unusable 33-134 STANDARD FORM 33 (REV. 9-97)

Prescribed by GSA FAR (48 CFR) 53.214(c)

DO-A3 1 256

(If other than Item 7)

15A. NAME 16. NAME AND TITLE OF PERSON AUTHORIZED TO

AND

ADDRESS

SIGN OFFER (Type or print)

OF

OFFEROR

AMENDMENT NO. DATE

15B. TELEPHONE NO (Include area code) 17. SIGNATURE15C. CHECK IF REMITTANCE ADDRESS

IS DIFFERENT FROM ABOVE - ENTER

SUCH ADDRESS IN SCHEDULE.

18. OFFER DATE

1. THIS CONTRACT IS A RATED ORDER

UNDER DPAS (15 CFR 700)

2. CONTRACT NO.

N00024 8. ADDRESS OFFER TO

See Item 7

9. Sealed offers in original and 5 copies for furnishing the supplies or services in the Schedule will be received at the place specified in Item 8, or if handcarried, in the depository located in

CAUTION - LATE Submissions, Modifications, and Withdrawals: See Section L, Provision No. 52.214-7 or 52.215-1. All offers are subject to all terms and

Section L conditions contained in this solicitation.

10. FOR INFORMATION

CALL:

A. NAME (NO COLLECT CALLS)

11. TABLE OF CONTENTS

SOLICITATION/ CONTRACT FORM

SUPPLIES OR SERVICES AND PRICES/ COSTS

2 - 29

X I CONTRACT CLAUSES

DESCRIPTION/ SPECS./ WORK STATEMENT X

PACKAGING AND MARKING

30 - 139

J LIST OF ATTACHMENTS

INSPECTION AND ACCEPTANCE

DELIVERIES OR PERFORMANCE

141 - 146 147 - 149

X K

REPRESENTATIONS, CERTIFICATIONS AND

OTHER STATEMENTS OF OFFERORS

CONTRACT ADMINISTRATION DATA 150 - 157 X

SPECIAL CONTRACT REQUIREMENTS

OFFER (Must be fully completed by offeror) 158 - 162 X M

L INSTRS., CONDS., AND NOTICES TO OFFERORS

EVALUATION FACTORS FOR AWARD

NOTE: Item 12 does not apply if the solicitation includes the provisions at 52.214-16, Minimum Bid Acceptance Period.

is inserted by the offeror) from the date for receipt of offers specified above, to furnish any or all items upon which prices are offered at the price set opposite each item, delivered at the designated point(s), within the time specified in the schedule.

13. DISCOUNT FOR PROMPT PAYMENT

(See Section I, Clause No. 52.232-8)

14. ACKNOWLEDGMENT OF AMENDMENTS

(The offeror acknowledges receipt of amendments

AMENDMENT NO. DATE

to the SOLICITATION for offerors and related documents numbered and dated):

FACILITY

12. In compliance with the above, the undersigned agrees, if this offer is accepted within calendar days (60 calendar days unless a different period

SOLICITATION, OFFER AND AWARD

X

(X) SEC. DESCRIPTION (X) SEC. DESCRIPTION PAGE(S)

PART I - THE SCHEDULE

26. NAME OF CONTRACTING OFFICER (Type or print) 27. UNITED STATES OF AMERICA 28. AWARD DATE

EMAIL:TEL: (Signature of Contracting Officer)

CODE CODE

B. TELEPHONE (Include area code) C. E-MAIL ADDRESS

AWARD (To be completed by Government)

19. ACCEPTED AS TO ITEMS NUMBERED 20. AMOUNT 21. ACCOUNTING AND APPROPRIATION

22. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION:

10 U.S.C. 2304(c)( ) 41 U.S.C. 253(c)( ) (4 copies unless otherwise specified)

23. SUBMIT INVOICES TO ADDRESS SHOWN IN ITEM

24. ADMINISTERED BY (If other than Item 7) CODE 25. PAYMENT WILL BE MADE BY CODE

PART IV - REPRESENTATIONS AND INSTRUCTIONS

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS

163 - 191

PART II - CONTRACT CLAUSES

NAVAL SEA SYSTEMS COMMAND (HQ)

1333 ISAAC HULL AVE SE

WASHINGTON NAVY YARD DC 20376-2020

FAX:

TEL:

FAX:

TEL:

NOTE: In sealed bid solicitations "offer" and "offeror" mean "bid" and "bidder".

SOLICITATION

6. REQUISITION/PURCHASE NO.5. DATE ISSUED

19 Nov 2021

4. TYPE OF SOLICITATION

SEALED BID (IFB)

NEGOTIATED (RFP)

[ X ]

3. SOLICITATION NO.

N0002422R2203

Section B - Supplies or Services and Prices

ITEM NO SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE AMOUNT

CLIN

Number

1 Each

T-AGOS 25 Class - Ship 1

FPI

Detail Design and Construction (DD&C)

SEE NOTES A & C

FOB: Origin (Shipping Point)

PSC CD: 1925

TARGET COST

TARGET PROFIT

TOTAL TARGET PRICE

CEILING PRICE

SHARE RATIO ABOVE TARGET

SHARE RATIO BELOW TARGET

1 Lot

Special Incentive

FFP

Weight Control (CLIN 1001)

SEE NOTES E & I

NET AMT

OPTION T-AGOS 25 Class - Ship 2

SEE NOTES A, B, & C

TOTAL TARGET PRICE

CEILING PRICE

OPTION Special Incentive

FFP

Weight Control (CLIN 2001)

SEE NOTES E & I

OPTION T-AGOS 25 Class - Ship 3

TOTAL TARGET PRICE

CEILING PRICE

OPTION T-AGOS 25 Class - Ship 4

TOTAL TARGET PRICE

CEILING PRICE

OPTION T-AGOS 25 Class - Ship 5

TOTAL TARGET PRICE

CEILING PRICE

OPTION T-AGOS 25 Class - Ship 6

TOTAL TARGET PRICE

CEILING PRICE

OPTION T-AGOS 25 Class - Ship 7

TOTAL TARGET PRICE

CEILING PRICE

Data T-AGOS 25 Class - Ships 1-7

Not Separately Priced (NSP) Data Requirement CLINs 1001, 2001, 3001, 4001, 5001, 6001, & 7001

SEE NOTE D

FOB: Destination

25,000 Hours

OPTION Special Studies Order(s)

FFP

Analyses and reviews in support of the T-AGOS 25 CLASS Program

SEE NOTES E & F

OPTION Eng & Ind Support Order(s)

FFP

Engineering and Industrial Support Order(s). Additional Government Requirements.

SEE NOTES E & G

OPTION PIO

FFP

Provisional Items Orders

SEE NOTES E & H

MSIP

FFP

Post Delivery Mission System Installation Period (MSIP) in support of CLINs 1001, 2001, 3001, 4001, 5001, 6001, & 7001.

SEE NOTE E

8006AA

240 Days

OPTION MSIP for CLIN 1001

FFP

Post Delivery Mission System Installation Period (MSIP) in support of CLIN 1001.

8006AB

OPTION MSIP for CLIN 2001

FFP

Post Delivery Mission System Installation Period (MSIP) in support of CLIN 2001.

8006AC

OPTION MSIP for CLIN 3001

FFP

Post Delivery Mission System Installation Period (MSIP) in support of CLIN 3001.

8006AD

OPTION MSIP for CLIN 4001

FFP

Post Delivery Mission System Installation Period (MSIP) in support of CLIN 4001.

8006AE

OPTION MSIP for CLIN 5001

FFP

Post Delivery Mission System Installation Period (MSIP) in support of CLIN 5001.

8006AF

OPTION MSIP for CLIN 6001

FFP

Post Delivery Mission System Installation Period (MSIP) in support of CLIN 6001.

8006AG

OPTION MSIP for CLIN 7001

FFP

Post Delivery Mission System Installation Period (MSIP) in support of CLIN 7001.

OPTION Data Rights Buy-Out

FFP

Purchase of Data Rights / Licenses.

SEE NOTES E & J

NOTE A – INCENTIVE PRICE REVISION – FIRM TARGET

The final price of this line item will be subject to adjustment per the Section I clause FAR 52.216-16, “Incentive Price Revision—Firm Target” and the Section B requirement entitled B-216-H001, “Clarifications to the Incentive Price Revision Clause (FAR 52.216-16).”

NOTE B – T-AGOS 25 CLASS SHIP - FPI OPTIONS (Applicable to OPTION ITEMS 2001, 3001, 4001, 5001, 6001 and 7001 only)

Options for T-AGOS 25 Class Ships #2 through #7 under this contract shall be exercised, if at all, in ascending numerical order (i.e., 2001, 3001, 4001, 5001, 6001, 7001) starting from the first available unexpired option. An available unexpired option is defined as an option that has not previously been exercised, and which has not yet expired per the latest option exercise date set forth in the Section I clause FAR 52.217-7.

NOTE C – T-AGOS 25 CLASS SHIP OPTIONS (Applicable to CLIN 1001 and OPTION ITEMS 2001, 3001, 4001, 5001, 6001 and 7001 only)

The applicable FPI CLINs have the below breakout:

Ceiling: 120% Share Ratio: 50/50 Profit: The offeror’s profit shall be reflected in Attachment J-4. The Offeror shall use a profit no less than zero percent (0%) and no more than twelve percent (12%).

NOTE D – DATA (Applicable to CLIN 8001 only)

CLIN 8001 is Not Separately Priced (NSP) and is included in the applicable ship CLINs.

NOTE E – T-AGOS 25 CLASS - FFP OPTIONS (Applicable to OPTION ITEMS 2002, 8002, 8003, 8004, 8006, and 8007 only)

FFP Option Items (i.e., 2002, 8002, 8003, 8004, 8006, & 8007), 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 exercise any or all of these items. Exercise of one option will not obligate the Government to the exercise of other options.

NOTE F – SPECIAL STUDIES ORDER(S) (Applicable to OPTION ITEM 8002 only)

Approximately 25,000 man-hours of labor will be needed for CLIN 8002. This is an estimate and does not indicate that the Government will necessarily order this amount or any at all. The table below, will be populated from Offerors proposed values in Attachment J-4. The hourly fully burdened labor rate is inclusive of profit for each calendar year and will apply to any work ordered under this item.

CLIN 8002 Special Studies Order(s)

Fully Burdened Rate Supervisory ($ per Hour)

Fully Burdened Rate Sr.

Engineer ($ per Hour)

Fully Burdened Rate Engineer ($ per Hour)

CY 2022 $TBD* $TBD* $TBD*

CY 2023 $TBD* $TBD* $TBD*

CY 2024 $TBD* $TBD* $TBD*

CY 2025 $TBD* $TBD* $TBD*

CY 2026 $TBD* $TBD* $TBD*

CY 2027 $TBD* $TBD* $TBD*

CY 2028 $TBD* $TBD* $TBD*

CY 2029 $TBD* $TBD* $TBD*

CY 2030 $TBD* $TBD* $TBD*

CY 2031 $TBD* $TBD* $TBD*

CY 2032 $TBD* $TBD* $TBD*

CY 2033 $TBD* $TBD* $TBD*

*This table will be filled in by the Government from the Contractor’s Contract Pricing Tables, Attachment J-4 at award.

NOTE G – ENGINEERING AND INDUSTRIAL SUPPORT ORDER(S) (Applicable to OPTION ITEM 8003 only)

Approximately 25,000 man-hours and $500,000 material may be needed under CLIN 8003. These are estimates and do not indicate that the Government will necessarily order this amount or any at all. The table below, will be populated from Offerors proposed values in Attachment J-4. The hourly fully burdened labor rate and material handling rate is inclusive of profit for each Government calendar year and will apply to any work ordered under this item.

CLIN 8003 Engineering and Industrial Support Orders

Fully Burdened Rate Engineer ($ per Hour)

Fully Burdened Rate Production ($ per Hour)

Material Handling Percent

CY 2022 $TBD* $TBD* % TBD*

CY 2023 $TBD* $TBD* % TBD*

CY 2024 $TBD* $TBD* % TBD*

CY 2025 $TBD* $TBD* % TBD*

CY 2026 $TBD* $TBD* % TBD*

CY 2027 $TBD* $TBD* % TBD*

CY 2028 $TBD* $TBD* % TBD*

CY 2029 $TBD* $TBD* % TBD*

CY 2030 $TBD* $TBD* % TBD*

CY 2031 $TBD* $TBD* % TBD*

CY 2032 $TBD* $TBD* % TBD*

CY 2033 $TBD* $TBD* % TBD*

*This table will be filled in by the Government from the Contractor’s Contract Pricing Tables, Attachment J-4 at

NOTE H – PROVISIONED ITEMS ORDERS (Applicable to OPTION ITEM 8004 only)

The total estimated burdened dollar amount of Provisioned Items Order (PIO) under this contract is $95,000,000 (Shore Based Spares, Spare and Repair Parts, Special Tools and Test Equipment). It is understood and agreed that the Government has no obligation under this contract to issue any orders hereunder. Orders will be placed in accordance with the terms and conditions of Section C clause “C-217-H003 PROVISIONED ITEMS ORDERS -

ALTERNATE II (NAVSEA)(OCT 2018).” In the table below, enter the applicable fully burdened material handling rate for each Government fiscal year, which will apply to any work ordered under this item. The negotiated profit for any PIO under this contract shall be limited to 6%.

CLIN 8004 Provisioned Items Orders Material Handling

Percent Profit Cap

CY 2022 % TBD* 6%

CY 2023 % TBD* 6%

CY 2024 % TBD* 6%

CY 2025 % TBD* 6%

CY 2026 % TBD* 6%

CY 2027 % TBD* 6%

CY 2028 % TBD* 6%

CY 2029 % TBD* 6%

CY 2030 % TBD* 6%

CY 2031 % TBD* 6%

CY 2032 % TBD* 6%

CY 2033 % TBD* 6%

*This table will be filled in by the Government from the Contractor’s Contract Pricing Tables, Attachment J-4 at

NOTE I – DETERMINATION OF PERFORMANCE INCENTIVE (Applicable to CLIN 1002 and OPTION ITEM 2002 only)

The amount of incentive fee earned will be determined per T-AGOS 25 ship and T-AGOS 26 ship Incentive Plan, referenced in section B-1. For administrative purposes, any earned performance incentive fee will be funded under this line item.

NOTE J – DATA RIGHTS BUY-OUT (Applicable to OPTION ITEM 8007 only)

The Offeror shall fill this in with their proposed cumulative price for those rights which the Offeror is willing to sell in accordance with Section M.4.3.9 which states - the Government desires at least Government Purpose Rights (GPR) license, as defined at DFARS 252.227-7013 and - 7014, in all non-commercial technical data and computer software. The cumulative buy out price is a summation of the Section J series of Attachments labeled J-21b, J-22b, J-23b, and J-24b.

B-1 DETERMINATION OF SPECIAL INCENTIVE (Applicable to CLIN 1002 and OPTION ITEM 2002 only)

A. General

1. The Contractor’s efforts to control weight on T-AGOS 25 Class is of paramount importance to the Government. Therefore, it is in the Government's best interest to incentivize and reward Contractor efforts that substantially contribute to effective implementation of weight control.

2. Accordingly, in addition to any profit or other compensation which may be paid to the Contractor, pursuant to other clause(s) of this contract, the Contractor may earn additional incentive fee, as determined by the Government (PMS325) in consultation with the Procuring Contracting Officer (PCO), NAVSEA 02, pursuant to the procedures set forth in this clause.

3. Any incentive or portion thereof, in Table A below, which is not earned in accordance with the terms of the incentive, will not roll over or be available for any other incentive or any subsequent period, event or milestone.

B. Special Incentive Areas of Emphasis

The Contractor will be evaluated on the following:

1. Weight Control of T-AGOS 25 Ship

2. Weight Control of T-AGOS 26 Ship

The amount of incentive fee payable to the Contractor, pursuant to this clause, shall be determined in accordance with the procedures set forth in paragraph D using the evaluation factors set forth in paragraph C below. The total incentive fee amount available pursuant to this clause is $5,000,000 as outlined in Table A below.

TABLE A

INCENTIVE DESCRIPTION INCENTIVE VALUE

1. Weight Control of T-AGOS 25 Ship $ 3,000,000

2. Weight Control of T-AGOS 26 Ship $ 2,000,000

TOTAL SPECIAL INCENTIVE $ 5,000,000

C. Evaluation Factors

Award of this special incentive fee will be based on the below distinct objectives:

Weight Control of T-AGOS 25 and T-AGOS 26 Ship

Evaluation of incentive fee will be based on the Contractor Responsible Full Load condition in the approved Final Weight Report, as defined in C-211-H015 titled WEIGHT CONTROL FOR SURFACE SHIPS--ALTERNATE I (NAVSEA) (OCT 2018). For every whole increment of 2 cm mean draft below the not to exceed mean draft value, the Contractor will earn an incentive fee of $300,000 for that increment, up to $3,000,000 for the T-AGOS 25 ship, and an incentive fee of $200,000 for that increment, up to $2,000,000 for the T-AGOS 26 ship. The mean draft for the Full Load condition shall be determined using the same hydrostatic model used for the approved Stability Test, Trim and Stability Booklet and Onboard Trim and Stability Software. Also, in order to earn the full incentive for each 2 cm increment of draft reduction, the Full Load condition must be within the trim and list limits, and have a vertical center of gravity, including the effects of free surface, that will allow the ship to meet all intact and damage stability requirements in all specified loading conditions.

D. Incentive Fee Determination Procedures

1. PMS325 in coordination with the PCO will determine the Special Incentive Fee earned by the Contractor.

2. Within thirty (30) working days after receipt and acceptance of the Final Weight Report for the T-AGOS 25 ship and Final Weight Report for the T-AGOS 26 ship, the Government will determine the incentive fee to be paid to the Contractor based upon the evaluation process outlined above.

3. Within thirty (30) working days of receiving the determination, the PCO will issue a unilateral modification to the contract to provide the Special Incentive Fee.

E. Finality of Incentive Fee Determining Official’s Determination of the Special Incentive Fee

The determination of the amount of the Special Incentive fee, if any, to be paid to the Contractor is a unilateral decision made solely at the discretion of the Government consistent with procedures outlined above.

F. Payment Of Special Incentive

The Contractor will be paid the special incentive amount(s) earned upon the receipt of an executed contract modification awarding the special incentive and submittal of proper invoices to the cognizant Payment Office. The Contractor’s invoice shall show the amount of special performance incentive payable by contract line item. The Contractor’s invoice must cite the appropriate accounting data in order for payment to be affected.

CLAUSES INCORPORATED BY FULL TEXT

B-215-H002 REFUNDS (SPARES AND SUPPORT EQUIPMENT) (NAVSEA) (OCT 2018)

(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 not be made to recoup the amount of cost decreases that occur over time due to productivity gains (excluding 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 shall 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 if the Contractor submitted, and certified the currency, accuracy and completeness of, cost or pricing data applicable to the item.

(End of text)

B-216-H001 CLARIFICATIONS TO THE INCENTIVE PRICE REVISION CLAUSE (FAR 52.216-16)--BASIC

(NAVSEA) (OCT 2018)

(a) In accordance with the terms of paragraph (e) (1) of the clause entitled “Incentive Price Revision-Firm Target (FAR 52.216-16)”, the parties hereby agree that the amounts determined in accordance with the following contract requirements shall not be considered costs incurred or to be incurred for the purpose of negotiating the total final cost or establishing the total final price:

(i) Any amounts paid or to be paid pursuant to paragraphs (b), (c), and (e) of the contract requirement entitled "Insurance-Property Loss or Damage-Liability to Third Persons".

(ii) Any amounts paid or to be paid pursuant to the contract requirement entitled "Additional Insurance Provisions".

(iii) Any amounts paid or to be paid pursuant to the contract requirement entitled "Indemnification Under Public Law 85-804 (FAR 52.250-1)" [If authorized for and incorporated into this contract].

(iv) Any other text or clause of this contract which expressly provides for an amount to be reimbursed or paid to the Contractor by the Government or to be refunded or paid by the Contractor to the Government, other than through an adjustment of the contract price.

(b) The Total Final Price shall be established by adjusting the total final negotiated cost determined in paragraph (d)

(1) of the Incentive Price Revision–Firm Target clause of this contract by an amount for profit or loss determined as follows:

(i) Subtract the amount determined in accordance with the contract requirement, “Economic Price Adjustments” (EPA) adjustment (positive or negative) to calculate the EPA adjusted total final cost: then:

(ii) Calculate the amount for profit or loss as follows:

WHEN THE EPA ADJUSTED THE AMOUNT FOR PROFIT

TOTAL FINAL NEGOTIATED OR LOSS IS:

COST IS:

Equal to the total target cost ----- Total Target Profit.

Greater than the total target cost ----- Total Target Profit less See Below Breakout percent of the amount by which the EPA adjusted total final negotiated cost exceeds the total target cost.

CLINs 1001, 2001, 3001, 4001, 5001, 6001, and 7001: 50 Percent

Less than the total target cost ----- Total Target Profit plus See Below Breakout percent of the amount by which the EPA adjusted total final negotiated cost is less than the total target cost.

CLINs 1001, 2001, 3001, 4001, 5001, 6001, and 7001: 50 Percent

(iii) The Total Final Price shall be the sum of: (A) the EPA adjusted total final negotiated cost, calculated in accordance with paragraph (i) above, and (B) the amount for profit or loss calculated in accordance with paragraph

(ii) above; provided, however, that in no event shall the total final price exceed the Ceiling Price set forth in Section B of the Contract; and provided further that in no event shall the total amount determined in accordance with the contract requirement entitled “Economic Price Adjustments,” when added to the Total Final Price, calculated as set forth herein, exceed the sum of the Section B Ceiling Price.

(c) The Total Final Price of the items referred to above shall be evidenced by a modification to this contract signed by the Contractor and the Contracting Officer. Such price shall not be subject to revision notwithstanding any changes in the cost of performing the contract, with the following exceptions:

(i) insofar as the parties may agree in writing, prior to the determination of the Total Final Price, (A) to exclude any specific elements of cost from the Total Final Price and (B) to a procedure to provide subsequent disposition of such elements; and

(ii) to the extent any adjustment or credit is explicitly permitted or required by this or any other clause of this contract.

(d) The contractor's obligation under this Contract concerning payments and interest penalties are those found in “Payments” clause of this contract. .

B-216-H003 ECONOMIC PRICE ADJUSTMENTS--BASIC (NAVSEA) (OCT 2018)(MODIFIED)

(a) Economic price adjustments (EPA) shall only be made in accordance with this contract requirement. The provisions of this contract requirement shall result in no adjustment to the Section B amounts of the target cost, target profit, target price, or ceiling price for any ship awarded under this contract. The tables referenced within this contract requirement are contained in Attachment J-17, Economic Price Adjustment Tables. The Contractor hereby agrees that the indices (including composite weights) used herein are proper and appropriate for this contract’s requirements.

(1) Cost Category

For each ship, costs subject to EPA include one hundred percent (100%) of allowable direct material costs.

“Material costs” shall have the meaning set forth in Part 31 of the Federal Acquisition Regulation (FAR) and Part 231 of the Defense FAR Supplement in effect on the effective date of this contract.

Note: Facilities Capital Cost of Money (FCCM) is not to be included; or otherwise subject to EPA.

(2) Period Costs

The actual costs considered for an EPA are those identified in paragraph (1). “Cost Category” that are to be incurred from Contract Award, or obligation of installment funding, as applicable, for the Ship Construction CLIN, through twelve (12) months after the last day of the month in which the applicable ship’s delivery is scheduled to occur as specified in Section F of this contract; or twelve (12) months after the last day of the month in which the applicable ship’s actual delivery occurs; or the point at which the applicable ship’s total costs incurred less EPA, after application of the shareline provision, exceeds the ceiling price as specified in Section B, whichever is earliest. In no event shall an EPA be applied to costs incurred subsequent to said earliest event.

(3) Computations

EPA shall be computed on an individual ship basis. EPA shall be made on a comparison of the average projected index value and average actual index value of the specified “Cost Category Index.” Projected index values are those determined in accordance with paragraph b)2 of this contract requirement and shown in Table 1. Actual index values used in an EPA under this contract requirement shall be determined from the indices identified below:

a) Direct Material Cost Index: A composite of the following (Composite Index base: January 2022 = 100):

INDEX

COMPOSITE

WEIGHT

Steel Plates and Shapes 12% General Purpose Machinery and Equipment 40% Electrical Machinery and Equipment 28% Industrial Commodities 20%

Note: Tables 3a and ab describe the method for calculating actual and projected monthly Composite Direct Material Cost Index values.

b) Worksheet for making EPA calculations is provided as Table 1, entitled “Economic Price Adjustment for Direct Material Costs.” Table 1 shall be completed for each ship as follows:

1. Column (1) – Computation Period: EPA for direct labor, indirect, and direct material costs shall be computed on a calendar year basis for each ship awarded or any option ship for which the option is exercised, under this contract. The computation periods for each ship shall begin, and end, as specified in paragraph (2) above entitled, “Period Costs.” If necessary, computation periods will be modified to account for partial year periods. Column (1), if necessary to account for partial periods, is to be modified for partial year computation periods.

2. Column (2) – Projected Index Value: The projected index value shall be the index value as set forth in Column (2) for each computation period. The projected index values in column (2) reflect the average of the projected index values for the months of January through December, rounded to one decimal place, for Direct Material Cost Category of the applicable computation period, as set out in Table 2.

For partial year computation periods, the projected index value is calculated by averaging the projected value indexes, set out in Table 2 for the applicable months within the partial year computation period using the formula set forth in paragraph b)3 below. Column (2) is to be modified, if necessary to account for partial periods, using the resultant partial year projected index value.

Note: Table 3b describe the method for calculating projected monthly Composite Direct Material Cost Index values.

3. Partial Year Index Formula

PYIV = X/N

Where:

PYIV = Partial Year Index Value

X = Sum of each monthly index value within the partial year computation period.

N = Number of months in the partial year computation period.

4. Column (3) - Tolerance Band: The tolerance band values are set forth in column (3) for each computation period and each cost category. For the period from Contract Award /obligation of installment funding, as applicable, through calendar year 2025, a tolerance band of plus or minus (5.0%) of the projected index values is established by multiplying (95.0%) and (105.0%) by the projected index values determined in accordance with paragraph b)2. For calendar years 2026 through 2029, a tolerance band of plus or minus (4.0%) of the projected index values is established by multiplying (96.0% and 104.0%) by the projected index values determined in accordance with paragraph d)2. For calendar years 2030 and beyond, a tolerance band of plus or minus (3.0%) of the projected index values is established by multiplying (97.0% and 103.0% ) by the projected index values determined in accordance with paragraph d) 2.

5. Column (4) – Actual Index Value: When actual monthly index values for an entire computation period have been published, the average of the actual index values for the months of January through December, rounded to one decimal place, of the applicable year for the Direct Material Cost Category Index shall be entered in the actual index value column (4) of Table 1 (see note below). If necessary, to account for partial year computation periods, see paragraph b) 3 above. The resultant value for the Direct Material Cost Category Index shall be entered in the Actual Index Value column (4) of Table 1.

If the actual index value falls within the tolerance band, no economic price adjustment will be entered in Column (8) for the computation period.

Note: BLS indices ECI – Tables 3a describes the method for calculating actual monthly Composite Direct Material Cost Index values.

6. Column (5) – Index Difference: If the actual index value is outside the tolerance band, the index difference is the difference between the actual index value and, (a) the lower tolerance band index value if the actual index value is less than the lower tolerance band index value or (b) the upper tolerance band index value if the actual index value is greater than the upper tolerance band index value.

7. Column (6) – Index change: The index change is the index difference divided by the applicable (lower or upper) tolerance band index value described in the preceding paragraph b)6.

8.Column (7) – Actual Costs: For the applicable computation period, the applicable “Cost Category” actual costs as defined in paragraph (1), entitled “Cost Category” shall be entered in Table 1. “Actual costs” shall include only “incurred” costs and “allowable” costs as defined in paragraph (f) of the contract requirement entitled “Payments”, except that “incurred” costs for material is to include the valid amounts of billings received from vendors during the specified computation period involved irrespective of whether the Contractor has paid the full amount of such billings. All actual costs identified in column (7) shall be subject to audit and inspection by the Contracting Officer in accordance with paragraph (h) of the contract requirement entitled “Payments”.

9.Column (8) – Period Adjustment: Period Adjustment for each computation period is determined by multiplying the index change (column (6)) by the actual costs (column (7)) for the computation period as defined in this contract requirement. An entry of zero will be made if the Actual Index Value falls within the tolerance band. Period adjustments where the actual index value is less than the lower tolerance band value shall be a negative number. Period adjustments where the actual index value is greater than the upper tolerance band shall be a positive number.

c) Total EPA Amount: Total EPA Amount is the sum of the period adjustments for all computation periods for the category covered by this requirement.

(4) Administrative Procedures:

Calculations required by this contract requirement will be made by the Contractor using Table 1 as applicable and submitted on an annual basis to the Administrative Contracting officer within thirty (30) days after publication of all the specified indices for the computation period.

The Administrative Contracting officer (ACO) shall verify calculations provided by the Contractor and forward copies of Table 1 to the Procuring Contracting Officer and the Program Office Financial Manager. The parties agree to execute a bilateral modification each year reflecting the updated cumulative EPA adjustments as of the date of agreement on Table 1.

Any subsequent changes resulting from (a) the publication of revised or final indices, (b) revised actual costs, or (c) an agreed to “Total Final Negotiated Cost” in accordance with the Incentive Price Revision clause of this contract shall be reflected in updated Table 1.

Nothing contained in this contract requirement shall be considered as prohibiting changes in the contract prices made pursuant to any other provisions of this contract.

In the event the Bureau of Labor Statistics discontinues publication or changes the content of any index used in this contract requirement, the parties shall mutually agree on an appropriate substitute for the affected index for use in determining economic price adjustments in accordance with this contract requirement. In the event the BLS alters its methods of calculating or reporting an index used in this requirement (including a change in the base period), the appropriate adjustments shall be made by the parties to put the revised index on a comparable basis with the index as calculated before the change.

Further, the Contractor agrees that if it makes material changes to its accounting system that materially alter the effect of this contract requirement, it will disclose and agree to enter into good faith negotiations to equitably account for such changes.

Any dispute arising under this contract requirement shall be determined in accordance with and subject to the provisions of the “Disputes” clause of this contract.

CLAUSES INCORPORATED BY FULL TEXT

B-232-H001 PAYMENTS--BASIC (JAN 2019)

(a) Computation of Payments

(1) Until such time as physical progress in the performance of work on a vessel is fifty percent (50%) complete, the Government, upon submission by the Contractor of invoices certified by the Contractor as hereinafter provided, will promptly make payments, on account of the total contract price(s), at ninety percent (90%) of the amount determined by multiplying the allocated total contract price of such vessel by the percentage of physical progress in the performance of work on such vessel as certified by the Contractor subject to the approval of the Supervisor;

provided, that no such payment shall be made in an amount which when added to the total of all payments previously made with respect to such vessel under paragraph (a) of this requirement exceeds one hundred percent (100%) of the allowable costs certified by the Contractor on the related invoice to have been incurred in the performance of work on such vessel.

(2) After the percentage of physical progress in the performance of work on a vessel has reached fifty percent

(50%), the Government, upon submission by the Contractor of invoices certified by the Contractor as hereinafter provided, will promptly make payments, on account of the total contract price(s), of one hundred percent (100%) of the amount determined by: (i) multiplying the allocated total contract price of such vessel by the percentage of physical progress in the performance of work on such vessel as certified by the Contractor subject to the approval of the Supervisor, and (ii) subtracting from that product five percent (5%) of the allocated total contract price of such vessel; provided, that no such payment shall be made in an amount which when added to the total of all payments made previously with respect to such vessel under paragraph (a) of this requirement exceeds one hundred five percent (105%) of the allowable costs certified by the Contractor on the related invoice to have been incurred in the performance of work on such vessel; provided, further, that the Contractor furnishes data on actual cumulative costs and estimated future costs acceptable to the Supervisor which demonstrates to the satisfaction of the Supervisor that the Contractor will make a profit of at least five percent (5%) on completion of the contract, and the Contractor provides updated information on a quarterly basis. If updated data indicate the Contractor will not make a profit of at least five percent (5%) on completion of the contract, the progress payments shall be adjusted retroactively so that the total of all payments made with respect to the vessel under paragraph (a) of this requirement shall not exceed one hundred percent (100%) of the allowable costs certified by the Contractor on the related invoice to have been incurred in the performance of work on such vessel.

(b) Billing Price

(1) For the purpose of this requirement, until the establishment of the total final price(s) in accordance with paragraph (d) of the clause of this contract entitled "Incentive Price Revision--Firm Target (FAR 52.216-16)", the term "total contract price" means the billing price; initially the billing price shall be the initial total contract target price(s), and thereafter the billing price shall be revised as provided in paragraph (b)(2) below. After establishment of the total final price(s) in accordance with paragraph (d) of the "Incentive Price Revision--Firm Target (FAR 52.216-16)" clause, the billing price shall be the total final price(s) so established.

(2) Within fifteen (15) days after each calendar quarter the Contractor shall submit in writing a proposed revised billing price which shall be established as follows:

(i) The Contractor shall certify to the Contracting Officer the percentage of physical progress in the performance of the contract as a whole as of the end of the calendar quarter. Such percentage of physical progress shall be expressed as a decimal carried to four decimal places and shall be subject to the approval of the Supervisor.

(ii) The revised billing price shall be the sum of a projected final cost(s), and a projected profit, and the

Total EPA Amount (positive or negative), as determined in the contract requirement entitled “Economic Price Adjustment”, computed as follows:

(A) A projected final cost shall be computed by (i) determining the cumulative sum of the costs as of the end of the calendar quarter, and (ii) dividing this amount by the percentage of physical progress certified and approved as set forth in subparagraph (i) above. From this amount, the Total EPA Amount (positive or negative) incurred through the end of the applicable billing period, as determined in the contract requirement entitled “Economic Price Adjustment” will be subtracted.

(B) A projected profit shall be determined by applying to the projected final cost(s) as calculated in paragraph 2(ii)(A), the incentive formula set forth in paragraph (d)(2) of the "Incentive Price Revision--Firm Target (FAR 52.216-16)" clause.

(C) The sum of the projected final cost, as calculated in paragraph (A), and the projected profit, as calculated in paragraph (B), shall not exceed the total Ceiling Price set forth in Section B.

(D) The sum of (C) above and the EPA Adjustment amount (positive or negative) shall be the revised billing price; provided that in no event shall the revised billing price exceed the sum of (i) the product of four point zero (4.0) percentage points applied to the Section B Target Cost plus (ii) the Section B Ceiling Price.

(iii) The revised billing price determined as stated above shall be set forth separately in a supplemental agreement to this contract, which also shall set forth the computations upon which the revision of the billing price is based.

(iv) Any revision of the billing prices shall not affect the determination of the total final price(s) under paragraph (d) of the "Incentive Price Revision--Firm Target (FAR 52.216-16)" clause. After execution of the contract modification referred to in subparagraph (d)(3) of said clause, the total amount paid or to be paid on all invoices or vouchers shall be adjusted to reflect the total final price(s), and any additional payments, refunds, or credits resulting therefrom shall be promptly made.

(c) Allocated Total Contract Price of Each Vessel For the purpose of this requirement, the allocated total contract price of each vessel shall be established by multiplying the total contract price(s) by a percentage, expressed as a decimal carried to four decimal places, equal to that fraction whose numerator is the original unit target price of the vessel and whose denominator is the original total target price. The resulting dollar amount shall be rounded to the nearest one hundred thousand dollar ($100,000), upward or downward; provided that in no event shall the sum of the allocated total contract price of the vessel(s) exceed the total contract price(s). The aforesaid percentages of each vessel shall be revised, by contract modification, in the event that either:

(1) Equitable adjustments to the unit target prices of the vessels result in unit target prices of a substantially different proportion to the total target prices than previously provided for under this subparagraph (c); or

(2) Incurred costs indicate that a revision to the percentages is appropriate; provided, however, any such revision shall not be made more frequently than at the end of a calendar quarter unless the total contract price(s) is(are) limited to the contract ceiling price(s) and the contract ceiling price(s) is(are) adjusted during the calendar quarter.

(d) Invoices Invoices may be submitted every two weeks, but not more frequently; provided, however, that if after contract award more frequent progress payments are approved by the cognizant Government authority, this requirement shall be modified accordingly without additional consideration by the Contractor to the Government for such modification. No payment will be required to be made upon invoices aggregating less than five thousand dollars ($5,000).

The Contractor shall certify on each invoice:

(1) The percentage of physical progress in the performance of work on the vessel as a decimal carried to four places; and

(2) The allowable costs incurred in the performance of the work on the vessel as of the date the invoice is submitted. Such certification shall provide for cost category reporting in accordance with the Contractor's normal accounting system and shall be broken down into direct material, direct labor, and indirect costs.

(e) Physical Progress and Weighting Factors

(1) Within sixty (60) days after contract award the Contractor shall submit a progressing system description for review and approval by the Contracting Officer. Upon approval of such system, progress payments shall be in accordance with the approved system. Subsequent revisions to the approved system shall be submitted to the Contracting Officer for approval prior to implementation.

(2) The mutually agreed upon weighting factors for the categories of labor and material for each vessel are set forth in Attachment J-16, to this contract. The weighting factors shall be revised quarterly concurrent with the billing price revisions specified in paragraph (b). Notwithstanding the above, revision of weighting factors may be requested by either party when factual data indicate that the weighting factors then in use are no longer representative of the actual labor and material distribution. Revisions of weighting factors shall be supported by detailed (estimated final) direct material, direct labor, and indirect costs and additional data concerning the cause of the change in the weighting factors. Any change in the weighting factors shall be set forth in a supplemental agreement to this contract.

(f) Incurred Costs For the purpose of this contract requirement, "incurred costs" are those costs identified through the use of the accrual method of accounting, as supported by the records maintained by the Contractor and which are allowable in accordance with Part 31 of the Federal Acquisition Regulation (FAR) and Part 231 of the Department of Defense FAR Supplement (DFARS) in effect on the effective date of this contract and include only:

(1) Costs for items or services purchased directly for the contract that have been paid by cash, check, or other form of actual payment; or when the Contractor is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid, for items or services purchased directly for the contract and associated financing payments to subcontractors provided payments will be made;

(i) In accordance with the terms and conditions of a subcontract or invoice; and

(ii) Ordinarily prior to the submission of the Contractor's next payment request to the Government; and

(2) Costs incurred, but not necessarily paid, for materials issued from the Contractor's stores inventory and placed in the production process for use on the contract, for direct labor, for direct travel, for other direct in-house costs and for properly allocable and allowable overhead (indirect) costs, all as shown by records maintained by the Contractor for the purpose of obtaining payment under Government contracts, provided that the Contractor is not delinquent in payment of costs of contract performance in the ordinary course of business; and

(3) With respect to allocated and allowable costs of pension contributions, when pension contributions are paid by the Contractor to the retirement fund less frequently than quarterly, accruals of the costs of these pension contributions shall be excluded from the Contractor's incurred costs until such costs are paid. If pension contributions are paid on a quarterly or more frequent basis, accruals of such costs may be included in the Contractor's incurred costs, provided that the pension contributions are paid to the retirement fund within thirty (30) days after the close of the period covered by payment. If payments are not paid within such thirty (30) day period, pension contributions shall be excluded from the Contractor's incurred costs until payment therefor has been made.

(4) Incurred costs shall not include any costs which are required under any requirement of this contract “”to be reimbursed or paid by the Government to the Contractor or by the Contractor to the Government other than through an equitable adjustment in the contract price(s).

(5) If an overpayment is made relative to this paragraph (f), interest shall be charged at the prevailing per annum rate established by the Secretary of the Treasury, pursuant to Public Law 92-41, from the date such overpayment is made until the date the overpayment is fully recovered.

(g) Retentions

(1) Upon preliminary acceptance of each vessel and upon the submission of properly certified invoices, the

Government will pay to the Contractor the amount withheld under paragraph (a) of this requirement in respect of that vessel in excess of (i) a performance reserve in the amount of one and one-half percent (1.5%) of the total contract price for such vessel, or (ii) one hundred thousand dollars ($100,000), whichever is greater. If at any time it shall appear to the Government that the amount of performance reserve may be insufficient to meet the cost to the Government of finishing any unfinished work under the contract for which the Contractor is responsible, or of correcting defects for which the Contractor is responsible which are discovered prior to preliminary acceptance or during the guaranty period of any vessel, the Government may, in making payments under this requirement, deduct or withhold such additional amounts as it may determine to be necessary to render such reserve adequate; provided, that any additional amounts deducted or withheld on account of defects which are discovered during the guaranty period of the vessel shall not exceed the limit of the Contractor’s liability as set forth in the contract requirement entitled “Limitation Of Contractor’s Liability For Correction Of Defects”, reduced by the amounts of the cost incurred by the Contractor for work on such vessel because of Contractor responsible deficiencies which are discovered during the guaranty period of the vessel.

(2) The Government may, in its discretion, make payments prior to final settlement on account of the reserves established under this requirement, subject to such conditions precedent as the Contracting Officer may prescribe.

(3) The Government shall, at the time of final settlement, in accordance with the provisions of the contract requirement entitled “Final Settlement”, pay the Contractor the balance owing to it under the contract promptly after the amount of such balance shall have been determined.

(h) Certifications and Audits

At any time or times prior to final payment under this contract, the Contracting Officer may have any invoices and statements or certifications of costs audited. The Contracting Officer may require the Contractor to submit, or make available for examination by the Contracting Officer or his designated representative, the supporting documentation upon which invoices, statements or certifications of costs are based. Each payment theretofore made shall be subject to reduction as necessary to reflect the exclusion of amounts included in the invoices or statements or certifications of costs which are found by the Contracting Officer, on the basis of such audit, not to constitute allowable costs.

Any payment may be reduced for overpayments, or increased for underpayments on preceding invoices.

(i) Reduction or Suspension The Contracting Officer may reduce or suspend payments after finding on substantial evidence any of the following conditions:

(1) The…