PCO Letter to KIS Contractors 20240528.pdf

PCO Letter to KIS Contractors 20240528

28 May 2024

Subject: PCO Letter to KIS Contractors 20240528

Purpose: The Air Force is providing this letter in response to several questions recurring over the first year of performance under the KC-46 Initial Spares (KIS) IDIQ contract and to establish uniformity of understanding. I have structured this letter by contract section for ease of reading.

Please note, it is your responsibility to read and understand not just the base contract and its attachments, but each Delivery Order (DO) and modification you receive. If you have questions or are uncertain as to how to interpret something, please email Ms. Gretchen Burke, KIS Contract Specialist (CS).

Disclaimer: This letter is for informational purposes only. Nothing in this letter constitutes PCO direction. Nothing in this letter will override the T&C of existing contracts, their attachments, or any other information in this FOPR. If a contradiction exists, this document takes lowest precedence.

Section A - Solicitation/Contract Form

1) Evaluation criterion at Ordering Procedures 6.2.2.1.3 is in effect and may be used for all FOPRs.

2) We will provide your draft award to our ACOs for an admin review prior to issuing your DO.

Please inform your ACO and CS soonest if any of your company information has changed.

3) The model contract provides the T&Cs of the DO to be awarded (minus part number (PN) info to be quoted). Our signatures on a DO legally bind you and the Air Force to all applicable T&Cs.

4) Awarded prices are firm and fixed. It is your responsibility to ensure your quote covers your costs. There is no reopener clause in this contract to renegotiate prices after award, nor will one be added.

5) Aftermarket volatility is not a reasonable basis for alleviating you of any performance requirement. Orders may be terminated in part or whole, for convenience (i.e., the Air Force no longer needs the PN) or default (i.e., you fail to perform in some way). The Air Force does not anticipate issuing no-cost cancellations.

Section B - Supplies or Services & Prices or Costs

1) CLINs will remain itemized to allow for partial delivery & invoice. This has proven more beneficial than Lot CLINs, both for your cash flow and for our delivery schedules.

2) Itemizing CLINs via ELINs vs SLINs makes negligible administrative difference to the Air Force. Based on the feedback received so far, the Air Force anticipates SLINs for future DOs.

3) You are obligated to meet the awarded delivery dates. Delivering sooner may be recorded favorably on your annual performance report. Conversely, the Air Force will consider requests for No-Cost Extensions (NCE) on a case-by-case basis; any NCE granted may be recorded adversely on your annual performance report.

Section C - Description/Specifications/Statement of Work

1) The Air Force will consider requests to supply alternate PN on a case-by-case basis. Acceptance of an alternate PN does not entitle you to additional time or monies.

2) SOW 3.2 requires that you supply a Certification of Conformity (CoC) as part of the inspection data for all reparable LRUs; this CoC is defined at SOW Appendix B as “the actual FAA Aircraft Certification Form 8130-3”. That is not a Certificate of Conformance (CoC) per FAR clause 52.246-15, which the Air Force may elect to accept in lieu of standard inspection data at Source (see Section E, below).

3) SOW 3.5.1: Notify Mr. Troy Canavan, KIS PM, of destination, location, and quantities of items delivered no less than 15 days prior to item delivery. You may omit the PCO and CS on those emails. Failure to notify the PM timely can delay Air Force acceptance and invoice processing.

Section D - Packaging and Marking

1) I have confirmed with our Packaging, Handling, Shipping, & Transportation (PHS&T) team that the DDFORM 1653 and AFMC FORM 158 are complete. Refer to the documents referenced in those forms for instructions.

2) You can find more information at the DLA PUBLOG app, which further details Federal Logistics on NSNs, Export Compliance (EAR/ITAR) applicability, Management Prices, and the coded data for PHS&T. https://www.dla.mil/Information-Operations/Services/Applications/PUB-LOG/

3) Coordinate Special Packaging Instructions with the PM as needed. Two documents accompany this letter for informational purposes: SPI Technical Order 00-85B-3, which discusses how SPI are assigned and what they mean, and a list of KIS PN known to have associated SPIs.

Section E- Inspection and Acceptance

1) The FOPR 1 modification of I&A terms for commercial items from Destination to Source was issued to hasten the UGS’s acceptance and invoice processing. Several contractors have affirmed that benefit. Note that your obligation to inspect items for conformity has not changed, nor has your obligation to furnish inspection data to DCMA’s QA team at Source changed.

2) The Air Force anticipates that all I&A will remain at Source. There are different inspection methods and requirements for commercial, noncommercial, and critical safety items that you need to understand; coordinate with DCMA’s QA team for all I&A details.

3) I&A at Source must occur before shipping to the address in Sec F of your DO. Shipping without I&A may require you to take corrective action at your own expense. Coordinate with DCMA’s QA team to schedule I&A at Source.

4) FAR 52.246-15 provides the Air Force an optional method of inspection at Source. CoCs have conditions for use and are designed for low-risk items (typically, commercial). Whether to accept a CoC in lieu of standard inspection data is a discussion the QA, ACO, CS, PCO, and PM would need to have as it involves accepting program risk. The Air Force has not approved CoCs on KIS.

Section F - Deliveries or Performance

1) Free On Board (FOB) is not to be confused with I&A. The Air Force anticipates using FOB Destination for all future orders.

2) The KIS Program does not have a Transportation Account Code (TAC) established. The PM has no intention or budget to establish one.

Section G - Contract Administration Data

1) Submitting accurate invoices and navigating WAWF is your responsibility. In response to feedback received, we have itemized DO CLIN structure to allow you to ship partially and be paid partially. There is no other change required to your DOs to facilitate partial invoicing.

2) Information on your invoice must match information on the latest modification; WAWF and DFAS have no way to compare invoices to legacy T&C and will reject conflicting invoices.

3) We have observed a 48hr lag between the Air Force executing a modification in CON-IT and WAWF updating. This is an estimate for your expectations only.

4) If you have WAWF or DFAS issues, work with the respective helpdesk, your ACO, or the POCs named in the WAWF Instructions of your DO.

5) When performance on your DO ends (i.e., all PN delivered) and you have submitted your final invoice, please initiate the “Quick Closeout” procedures described in FAR 42.708. Work with the CS, PM, and ACO to ensure this process is timely.

Section H - Special Contract Requirements

1) You can be off-ramped from KIS for poor performance or can request to be removed for other reasons, as indicated in the clause “H001 Off-Ramp Procedures” of your base contract.

2) Repeated “no bids” in response to FOPRs can justify the Air Force off-ramping you from KIS (Ordering Procedures 5.2.1 and 9.2.1).

3) Annual performance write-ups account for more than the performance metrics established at SOW Appendix C. Your overall management of contract cost, schedule, and performance (as well as your conduct in working with the Air Force) may factor into your general write-ups.

4) A CPARS report is mandatory if you’ve done >$5M work on KIS in a year. If <$5M for the year, the PM will instead issue a performance report on letterhead and retain a copy locally. There is no other difference in how we will use your performance data on KIS.

5) IUID requirements are at SOW Section 3.3. Radio frequency identification is not considered an equivalent replacement for IUID. Address IUID questions to the PM.

Section I - Contract Clauses

1) There are many clauses included on this contract. We might not need to use them all, or conditions for their use might never arise. Nevertheless, their inclusion protects the parties by explaining rights and obligations under specific circumstances.

2) There are clauses unique to commercial items that do not apply to non-commercial items and vice-versa.

Section J - List of Attachments

1) The Sec J attachment with your awarded PN provides an at-a-glance summary of your order. If at any time, there is a conflict between the information at Sec J and Sec B, Sec B takes precedence.

2) Please note that prices are rounded differently in Excel (Sec J) and CON-IT (Sec B). Rarely, a few cents per PN might need to be removed in Sec B because of those rounding differences. In such cases, the Air Force cannot round up, due to the restrictions of the Anti-Deficiency Act.

The Air Force looks forward to our continued partnerships with all KIS participants and appreciates your commitment to the KC-46 program. Please direct any questions to Ms. Burke.

JACOB M. CROSS, Maj, USAF Contracting Officer

Attachments

1) SPI Technical Order 00-85B-3

2) KIS PN with SPIs