Q107 - Multi-part question Rev 1_28Oct09.doc

FTSS III – Draft RFP Question 107

Note --- The Government responses and answers are provided embedded in the document and are highlighted in blue text.

Q107 - During the FTSS III pre-proposal conference the subject of recurring costs came up as it referred to the removal of a training device CLIN or long term bailment of a device from the future FTSS III contract. The Government put forth three positions with respect to recurring costs:

a. The Government wants to save money on future contracts by eliminating recurring costs. This is a misrepresentation of the Government’s position. The correct Government position is as follows:

· It is true that the Government seeks to ‘save money’ when there is a reduction in scope and would do so by reducing or eliminating a level of support that is no longer necessary or appropriate.

· As for eliminating recurring costs, the Government stated there is a known intent to remove the 2F110 device for modification for an extended period (greater than a year) and that contractors should plan ahead to place recurring cost in other CLINs/Tasks.

· The Government also stated that there is an internal discussion to move any remaining appropriate costs to the appropriate funding source (in this case, to the Acquisition contract since any work associated with the 2F110 during this period benefits the acquisition community and does not fulfill any training tasks for the sustainment community).

b. The Government would like Training Device CLINs to be stand alone and inclusive of all costs to the maximum extent that it does not drive up Contract, Program/Task Order cost. The Government does not seek to have stand-alone CLIN or Tasks within a CLIN. However, in the case of the 2F110 modification described above, the Government advised the offerors that its funding line would likely be canceled (whether by the Changes Clause, Termination for Convenience or not exercised at a follow on option phase – the process is addressed in other Question responses) and that offerors should consider this when allocating fixed costs. In this case, the device could be priced as a stand-alone task.

c. The Government would like to add the device back into the contract at the same cost as when deleted without negotiations. This is also a misrepresentation of the Government’s position. The Government would not expect to add a device back into a task order at the same task order price prior to deletion. The device would have undergone a modification that could result in a greater or lesser cost for support and would be added into the contract as a new effort.

The following Questions address concerns by numerous contractors as to the intent of the Government's proposed restructuring of contractor pricing methodology as it refers to Site staffing and Site management.

1. Is it the intent of the government to revert back to minimum manning contracts? No.

2. Would the Government consider sharing risk with the contractor and allow separate CLINs for positions that are mandatory contract requirements that cannot be separated under current pricing methodology? The Government intends to implement a management CLIN (to be defined in the Final RFP release) for each site on the E-2C COMS & CIS task order (but not the NASTP COMS) and reducing the risk to both parties. The contractor will have more stable funding for those costs that are not better allocated over all tasks and the Government will have clearly established prices that Funding Sponsors can use for planning in the event of deletions (without the concern to cover for REA’s).

The following contract requirements have traditionally been spread across the total spectrum of training devices at each site:

a. Site manager - Would Government allow a separate pricing CLIN for this Requirement? Yes – for the E-2C COMS/CIS task order, as part of the management CLIN addressed above. A Site Manager is a requirement.

b. Shift Supervisor - Would Government allow a separate pricing CLIN for this Requirement? This is a conditional consideration. A SS becomes a requirement when there is more than one shift proposed.

c. Supply Tech - Would Government allow a separate pricing CLIN for this Requirement? This is a conditional consideration, based in part on how an offeror proposes their manning/staffing. There may be a point where the supply support task is more efficiently accomplished by dedicated staff and, conversely, where dedicated staff is inefficient.

d. Display Tech - Would Government allow a separate pricing CLIN for this Requirement? No. This specialized skill requirement is device dependent.

e. Computer Tech - Would Government allow a separate pricing CLIN for this Requirement? No. This specialized skill requirement is device dependent.

f. Hydraulic Tech - Would Government allow a separate pricing CLIN for this Requirement? No. This specialized skill requirement is device dependent.

g. 2M Repair Tech - Would Government allow a separate pricing CLIN for this Requirement? This is a conditional consideration, based in part on how an offeror proposes their manning/staffing. There may be a point where MMR tasks are more efficiently accomplished by dedicated staff and, conversely, where dedicated staff is inefficient.

3. Management/Support functions that include: Program, Contract, Finance, HR, Procurement, Security, QA, Safety requirements, Etc., that are spread between direct and indirect costs, and across all CLINs will have to be increased, thereby increasing the cost of the program/task order. Would this outcome be acceptable to the Government if it allowed individual CLINS to be removed from the Contract without negotiation and absent recurring costs?

No. This question is based on the above misrepresentations in the offeror’s items a. and c. at the beginning. Further, the Government does not agree with the offeror’s statement regarding direct and indirect costs having to be increased. The offeror’s statement about a mix of direct and indirect costs being applied across all CLINS may be generally true, but typically not on a CLIN by CLIN or task by task basis. Overheads (both direct and indirect) are overwhelmingly applied on the labor base (typically less on material). Since overheads are applied most heavily on labor, it is reasonable that as labor scales up with increased scope, the Government incurs the added overhead, and labor scales down with reduced scope, the Government benefits from a reduced overhead.

4. Is it the intent of the Government to only exercise OHPD, MSH, HPD, and CMS CLINs at the beginning of each new option period?

Not necessarily. That could be said to be a goal, but not a limit. The Government expects to have to pay for services when those services are required, such as the introduction of a new training device mid-way through an option period. Likewise, the Government does not expect to have to pay for services when there is no requirement, such as removal of a training device mid way through an option period (subject to other factors).

If so, what will be the advanced notice given to the contractor for ramp up or ramp down?

Advance notice would be appropriately determined case-by-case, and may differ for CIS and COMS requirements. Adding a duplicate device to a site with an existing trained and experience workforce would require less ramp up time than introducing a new and highly complex device. A ramp down time is likely to be sixty days or greater, to be established in accordance with the associated circumstances and in consideration of the effort required and impact upon the contractor.

5. Is it the intent of the Government to only delete a CLIN at the end of an Option Period?

Not necessarily, as described in #4 above.

If so, what will be the advanced notice given the contractor?

As described in #4 above. In general, the greater the impact, the more consideration would be appropriate.

6. If a CLIN is deleted from the contract at the end of the Option Period how does the Government intend to deal with Recurring positional cost as identified in question 2 above?

The answers in #2 apply. Reasonable fixed costs (as described in #2 above) are more stabilized in the management CLIN.

7. With reference to the Government's position (c) as stated above, would any COMS device removed for a period of time that would exceed a normal device bailment include a new negotiated mobilization period?

The answer for item c. above applies – the offeror’s description is a misrepresentation.

In the case of this specific question, any mobilization consideration is dependent on too many factors and unknowns to make a defined answer inappropriate.

If not, why?

The answer for item c. above applies.

If so, what would be an acceptable MOB period, 30, 60, 90 days?

The answer to #4 above applies.

8. For major air frame/Simulator changes that would affect CIS staffing how much notice would the contractor get? The answer is condition dependent. The greater the impact, the more consideration is appropriate.

9. What would be an acceptable CIS MOB period for retraining/ certification after modification, 30, 60, 90, 120 days as it relates to question 8?

The answer is condition dependent. The Government may require the offerors describe how each conducts their business, how much time each needs and why, since it is part of the value an offeror provides.

10. For major air frame/Simulator changes that would affect CIS staffing and the operational performance or deployment of sensor packages that would require changing the Training curriculum; will the contractor be allowed to redirect CIS hours to support the curriculum revision efforts to maintain stability within the CIS staffing?

The answer is condition dependent, to be determined within each program as it makes sense. The contractor’s workforce stability is a consideration, however it should not be assumed that such redirection would be permitted. Revision and maintenance (R&M) of curricula is not a specific tasking within the FTSS III scope and is expected to be separately contracted. Funding sponsors for COMS and CIS tasking do not receive a direct training benefit when funded resources are expended on other activities, however the R&M funding sponsor may benefit and assume the cost.