PreproposalMeetingTranscript1109 Final.doc

SOLICITATION NO. QSDLA-K9-10-0001-N

PRE-PROPOSAL MEETING 11/02/09

TRANSCRIPT NOTES

Attached is the transcript from the pre-proposal meeting which occurred on November 2, 2009 in Crystal City, VA. These transcripts have only been modified to the extent necessary to insure that the information is correct. Such modifications to an answer are noted in the transcript.

In addition, based on the amount of questions received regarding certain topics, the Government would like to emphasize the following information:

1. Sourcing Information Necessary for Initial Proposal: There is no sourcing information required to be provided in the offeror’s proposal.

2. Advance Payment: The Government will not provide any advance payment under this contract.

3. No Required Facilities: This Statement of Work does not require the contractor to establish warehousing facilities or maintain inventory. The Government is only seeking sourcing services as defined in the Statement of Work; it does require the contractor to fill any orders received within the established timeframe.

4. Trade Agreement Act Compliance/Location of Sources: The purpose of this contract is to obtain sourcing services in order to locate and establish supplier relationships within the countries listed in the Statement of Work. The Trade Agreements Act does not specifically apply to these services because they are being performed overseas in support of military operations.

5. FOB Terms: These terms shall be presented to the Government as part of the sourcing process. While they generally are expected to be FOB Origin, there are situations where other terms may be necessary. FOB terms shall be established by the Government on an order by order basis.

6. Questions: Questions should be addressed in writing to lorene.clerihew@gsa.gov or alan.searsy@gsa.gov.

GSA PRE-BID CONFERENCE )PRIVATE

SOLICITATION )

QSDLA-K9-10-0001-N )

Pages: 1 through 104

Place: Crystal City, Virginia

Date: November 2, 2009

UNITED STATES GENERAL SERVICES ADMINISTRATION

GSA PRE-BID CONFERENCE )

SOLICITATION )

QSDLA-K9-10-0001-N )

Building 4

2200 Crystal Drive

Crystal City, Virginia

Monday, November 2, 2009

BEFORE: ALAN SEARSY

PARTICIPANTS:

JEFF THURSTON

KEN LATTA

DOUG FRENCH

LORENE CLERIHEW

P R O C E E D I N G S

(9:30 a.m.)

MR. LATTA: I'm Ken Latta. I would like to welcome you to the General Services Administration Headquarters of the Federal Acquisition Service. I'm from the Office of Supply Operations, and I'll be giving a little more detail to give you more information about our organization and the vision for this request for proposal we have out.

I'd like to first just have some general introductions as a part of your welcome. We have here the contracting team from our Fort Worth, Texas Office, Ms. Lorene Clerihew, the Contracting Officer; Alan Searsy, Director; and from our Legal Department at Fort Worth, Ms. Jerry Ann Foster to Alan's right; and then on the end Doug French who works with me in the Office of Supply Operations. I'm the Deputy Director of Office Supply Operations, and Doug is the Director for Distribution Operations.

We do have someone coming to crank the temperature down a few degrees, and if you're too warm, don't hesitate to take your coat off and get comfortable. We'll have some more refreshments rolling in as the afternoon goes on. The restrooms are in the next hall down and to the right as you're heading back down in that direction, first the women's and the men's. If there's anything that you don't see in this room that you need, next door there's another snack bar over there at Briggs if there's other refreshments that you can obtain.

This is the pre-bid conference for the South Caucuses and Central and South Asia Sourcing for U.S. Forces, Afghanistan. This is a pre-bid conference, and these conferences are chaired by the contracting function. And at this point, I would like to have Alan Searsy come up. I would like to also welcome -- we do have a couple of embassies represented here. Kyrgyzstan and Uzbekistan. I'd like to welcome our representatives from those embassies. Alan, if you'd come up, please.

GOVERNMENT ADDED STATEMENT: The two attending embassies were Kazakhstan and Uzbekistan.

MR. SEARSY: We do have some chairs up here in the front if there are several chairs in the various rows here if you'd like to sit down, some of you in the back there. There's two here, and it looks like there's some in these rows here in the third, fourth and fifth rows. My name is Alan Searsy. I'm the Director of Acquisition in the Southwest Supply Center, Fort Worth, Texas. With me, as Ken said, is Lorene Clerihew, Contracting Officer and Jerry Ann Foster, our Regional Counsel from Fort Worth. So I'd like to talk a little bit about the ground rules for the meeting today.

This meeting is for informational purposes only, and it may answer some or all of your questions. All the questions raised and the answers that we give will actually be posted to the request for proposals, and that will be our formal answer to the questions even though we'll try to give verbal answers here today.

The statements and representations that we make during this conference or this meeting are not legally binding. And by that, I mean only the answers that we put in the RFP is what will legally control this acquisition. And again, any changes that we make as a result of this meeting will be issued by amendment to the Request for Proposals.

Did everybody sign in at the back or at the front? Some of you were already on the list. So you didn't need to sign in. But those that weren't on the list that guards' area back over there, please be sure you sign in. And when we get to the question and answer period, when you do ask a question, please state your name and your organization so we know who you're representing. That would be appreciated. And we are transcribing this. So we will post that when -- at a later date with the RFP.

Now I'd like to just go into a brief summary of the RFP before Ken does the presentation about the background of the initiative. Our goal with this RFP is to be able to obtain certain types of commercial products faster and more efficient than we're able to obtain them now, and Ken will go into the rationale behind that and the reasons behind that.

We're looking for a company to provide sourcing services and product delivery for a listing of products, and those are listed in the RFP starting on page, I believe it's page 13. Yeah, starting on page 13. We're looking to do that to have the sourcing services provided for a monthly fee for those services and then of course there'll be a price paid for the products, any products provided as a result of those sourcing services.

This contract does have a 30-day cancellation on either side. So where there's any kind of problems or issues because this is a new concept, either side can cancel within 30 days. That's something very important you all need to consider.

The contract period is for one year with four one-year options to exercise at the discretion of the government. You know, we're -- so that's a possible five-year contract. And I think I'll let it go at that because hopefully everybody has actually had a chance to read the RFP rather than me go through section by section. And now Ken is going to come and discuss the background and provide more information on what we're currently doing and what our vision is for this.

MR. LATTA: We have hard copies of the slides that we're going to go through. Be sure and pick up a copy if you need one before you leave.

When we get through discussing this presentation, I hope that you'll have a good strong idea of this new sourcing relationship that we're seeking to establish. I'm going to give you some background information on GSA and our supply operations function so that you have a sense of the newness of this for us. You'll have a good sense of the areas that we need special help from the contract integrator that results from this effort.

I'm going to talk a little bit about our supply program. I'm going to describe how the supply chain works today. That will give you a basis for understanding the change that we're seeking to foster in this new relationship, show you how the new solution will work. There's some information system aspects of this that are important for you, and then some important notes on our service to the customer in terms of the condition of the product and how we make sure the product reaches them in good condition that we'll be looking to continue for our customers overseas.

GSA was founded in 1949. This was a time in our United States history of our government that was a great time of reorganization and renovation. GSA was created to pull together intelligent management of property in many areas, and we've been doing that in the decade since. If you look today at us, two of the really major functions that we take care of are public buildings and then supplies for the United States government.

The actual law that established us said that we should have an effective, efficient supply system, and that we should coordinate that with the military. If you go forward, you will see agreements between GSA and the United States military on who manages which items. You'll see a lot of close coordination on the development of information systems. Today, several decades later, we have a very highly integrated supply system worldwide which we call the National Supply System. The part of the GSA Federal Acquisition Service which is doing this initiative, Office of Supply Operations, is responsible for two major portions of that supply program. We have a stock program which consists of very large distribution centers that buy from vendors in the United States, stock the material and then ship it to civilian agencies here as well as overseas. We also set up contracts to have materials delivered directly from vendors, and you'll hear the term DVD and another slide you may see special order programs. Those are products going direct from vendors.

Our order processing systems are very much what a consumer experiences in this country. We have telephone operators who will receive phone calls for our customers to place orders. We have Internet web applications for shopping experiences. And then we have a highly integrated computer system with both civilian and the military which has been around since around the 1960s. It's very old but very efficient and elegant technology, and you will hear the term FEDSTRIP and MILSTRIP that refer to this system. It's a wonderful system and highly effective in processing millions of transactions each year in terms of the receipt of orders, issue of orders, exchange of status information, et cetera.

GSA has some very interesting aspects of its supply program. Here in the United States, we experience each year severe forest fires, and it's not well known by the public, but GSA supply program buys the inventory that all those fire fighters use, and we station it in our warehouses in its forward position and caches that the Forest Service has. Fascinating equipment. There are shelters that our fire fighters can zip open and jump in before the fire storm comes over the hill that will protect them.

We have lots of supplies that they use in the camps that are very much like what the military might use. We are very active in disaster support. You've heard of FEMA, Federal Energy Management Agency. We are standing with and behind FEMA to deliver lots of supplies in hurricanes, floods, earthquakes, et cetera, do a lot of planning.

So a lot of supply chain integration goes on inside of GSA as it's dealing with civilian agencies as well as the military. And you probably hear more about the military. But we're very strong in the civilian agency sector.

There you see the term National Supply System. When GSA and the military, Department of Defense sat down to decide who would manage what in accordance with the original laws that set us up, GSA was assigned the products that we term common consumables. They are products that both civilian and military agencies use in large quantities. And in your RFP, one of the exhibits is a list of product assignments, types of products that we manage. And even though in the beginning of the RFP we have the list of products that we're looking for you to come in and submit offers on and as the contract continues over time to bill that, you will see another exhibit that lists other items that we manage. And we think that list is very important because as time goes on and we're learning more about the economies in this part of the world, there may be products that we did not ask for initially that would be very logical for us to establish sourcing relationships with, and we didn't ask for it simply because we didn't know it and there may be enough demand there for our customers in Afghanistan that it makes sense to set up sourcing. So we're looking forward to learning more about the consumer product economies. That's our expertise in the United States, and we look forward to learning that in Central Asia.

The products you see listed there are office products, hand tools and not just wrenches and pliers but also rakes and shovels and picks and axes, that sort of thing. That's our bailiwick. Industrial cleaners, soaps, paints, lot of environmental concerns coming to that. We're staying abreast of our Environmental Protection Agency advances in assuring these products are environmentally responsible.

We don't get involved with furniture. But through us, we have strong relationships with the part of GSA that buys furniture. So there may be possibilities with furniture as we go on. And then the products that you do see listed in great volume in the RFP are the bulk paper products, paper towels, napkins, diningware, toilet tissue, the things that the troops would be using every day, quite a bit of volume there. And I mentioned the full list of products in the other exhibit.

I'd like to take just a moment and go over this slide. You could make this slide up if you had never met us. It's a classic vendor buyer kind of relationship. It starts with the customer and ends with the customer. Up at the upper lefthand corner, we have customers who are sending orders to GSA that we may be shipping directly from our warehouses. We have customers that may be submitting orders to vendors, and the vendors are shipping to the customer. A very important part of our organization are acquisition centers located in New York, Kansas City and Fort Worth where we have the full range of acquisition inventory management engineering to set up the contracts that are both feeding our stock program as well as setting up the contracts that customers use to order from vendors.

You'll hear the term multiple order schedule. That's a type of contract we set up that customers can order direct from vendors. The acquisition center set up the contracts for here, and they coordinate on assuring that we have the proper replenishment of product from the vendors to feed our stock program. A very nice system that's worked very well for decades. Again, you could make it up if you'd never met us.

The next slide copies this slide but very important to note. That's simply a copy of the diagram in the previous slide. A very important insight you should note for us is that for most of GSA's history that model has existed within the United States. GSA is not experienced in doing sourcing with vendors outside the United States. So this is a new journey for us, and we're looking to gain some efficiencies by this new initiative.

For our customers overseas, the classic way that we have operated in the economy is to buy from the vendors here in the United States. And when it gets time to get into the customer overseas, we typically would hand it off to the Department of Defense. They have the means, mechanisms to get the products overseas. There were some exceptions, but most of it would travel through the U.S. military supply chain.

It would make sense, would it not, if we can purchase product closer to the customer's use that we can save an awful lot of time shipping that product all the way around the world and cut a lot of transportation cost. And isn't it nice that since GSA's product responsibilities are the common consumables that you would find anywhere in the world that we should encounter the market forces anywhere in the world that would allow us to obtain good pricing on those products. That's really the vision behind GSA's effort in setting up this new sourcing mechanism.

We're coming into this project frankly quite humbly knowing that there's a lot that we don't know. Along the way, I have asked questions of various people that we're starting to network with to try to understand what the product standards are in other parts of the world. I'll ask dumb questions perhaps just to get myself up the knowledge ladder. I'll ask questions like, well, gee, are there packaging standards that exist that are either from the former Soviet Union or from the European Commission that would be an operation that we should know about. I would be interested in those.

Our philosophy going in is that we may find a supply chain or products that are similar but not exactly the same as those that we operate with here, and we're going to be very open to looking to find solutions that work for our customers in Afghanistan. I'll have another slide a little later and farther along, not too far, that shows a little bit about our information system. But just kind of a prelude to that is we actually have new product numbers set up waiting that when we find products that are good matches, we'll assign them new product numbers to help ease their way through the information system.

So for us, this is an experimental new kind of innovation for us. And I think there's a lot of promise to it. I hope you don't mind flowcharts. This is my way of understanding the world. This is a very simple depiction of this new business model. And what I'm going to do in this slide is to show you the basic model, and then in the next slide I'm going to take this part and shrink it up to the top of the slide and then show you some of the things going on behind the curtain so that you will see more about what the relationship with the GSA contract integrator would look like.

So here on this slide, we've got our customer in Afghanistan, and there's that strange word I mentioned, the MILSTRIP. That's the type of requisition that we're getting from our customer coming to GSA. And when our model is complete, we will be able to take that requisition, send it to our GSA contract integrator who has established a relationship with a Central Asia vendor and the relationship will include payment. The product would go either direct to Afghanistan or via a specified carrier. I'll talk a little bit more about that later. Our options are open. And then the GSA contract integrator will invoice our GSA Finance Office, and ultimately the cost of all of this will come back and be paid to GSA by our customer in Afghanistan.

So we've worked our way through the information system loop to know that we can make this happen. Now let's expand this a little bit.

After the contract is awarded, we'll be looking for the contract integrator to be sending us product proposals, and actually as a part of the response to the RFP proposals, and we'll be reviewing those products from a pricing and characteristic and how they're going to be delivered to make sure they'll do the job for us.

We won't be doing that just in a room by ourselves. We'll be coordinating that with our customers in Afghanistan. We may actually be sending them pictures or descriptions what the paper towel that you're getting today looks like this. It's this thick, this wide, et cetera. We've got something really close to it, boxed a little bit differently. How does this look to you. And we'll be coordinating that with our customers in Afghanistan. Once we've approved that product, it will enter the information system a list of approved products.

In the meantime, the customer in Afghanistan, there's the MILSTRIP word again, sending us the orders, requisition to GSA, and down here we're starting to enter the information system area. We'll have screening filters on these orders coming in where we're starting to pull out orders that can match the products and because we know that there's going to be variation in the size of orders and where we get them from, we're going to have a number of filters which country -- excuse me. Let me back up.

This country really means we're getting orders from all over the world. We're filtering out the orders from Afghanistan. We'll pulling those in, and we're checking the address of the customer to know that it's a customer that we can reach. Think of a data table where we're registering these. And the NSN means national stock number, and then the quantity. It may be that for an order of paper towels that it makes a whole lot of sense to send orders only if there's 300 boxes or more or 500 boxes or more, and we don't have to fiddle with 20 boxes.

So at the beginning, we might set that at 300 or 500 as we're filtering those orders out. Over time, we would expect to build increasing capabilities for smaller orders and start cranking that down, getting more bang for the buck if you will. So that order would then bounce against the list of approved products, and in some cases it may be the same product number. In others, it may be the substitute NSN, and the order would flow. And importantly, as we're building this, it doesn't take us very long to say, ah, this substitute's working very well. So we'll get the word back to the customer in Afghanistan and say, hey, instead of ordering product A, start ordering product B. So from the very beginning of the pipeline, we'll get that in from the very beginning and then start moving it that way. Our customer starts becoming educated to this new supply chain.

There's our contract integrator again who had sent us the product proposals. And from this point, you can see pretty much the same relationship that was in the previous slide. We would anticipate that we would have a very efficient transmission electronically of our requisitions orders to the contract integrator, but that the contractor integrator may require -- may have a variety of relationships that it has fashioned with different vendors. Some vendors may be EDI capable. Some may need faxes, other means of transmitting orders. And that would be the role of the contract integrator to set those relationships up. So the Central Asia vendor would actually receive the purchase order from this party, and then in accordance with the shipping instructions, marking, et cetera, would send that either direct or again via specified carrier. And I will not go over this part since we had already done that.

I'd like to show you a few photos of GSA products. Even though we have not sourced overseas very much, we've done a lot of shipping overseas and over time we've developed a lot of practices that worked quite well in making sure that our product gets anywhere in the world in a serviceable condition.

When one looks at the documents on how we did that, we've had a journey there, too. We've gone through very complicated specifications. Some years ago, there was something we still laugh about. Then Vice President Gore took an ashtray and took a hammer and shattered it, and it was part of a publicity thing about how long the federal specification was to buy the ashtray. So product descriptions have changed to be more commercially focused. But how they're packaged still remains a very important factor.

Carton strength and how the material is secure to the pallet are important for us as are the quality of the pallet. You may have a great product. But if it's not protected as it travels, it may be to not.

Here are just a couple of examples of the use of shrink wrap to secure products on pallets. The product to the right is a favorite of the Navy. That's a wiping rag, and those are really hard to handle on pallets. As you can see, even with the strapping, that's not a real stable load. But we look for products to be secured. And we'll be in this supply chain probably depending less on a lot of written standard documents and more on the satisfaction of our customer. We're going to stay in close contact with our customer. We're also going to be open to solutions that you have. You may have ways that your vendors that you work with in Central Asia package product that we haven't thought of, and we're going to be very interested in looking at those to see if they'll work.

This is an example of a pallet that has held up reasonably well. The pallets that we purchase for use in our distribution centers are actually much stronger, but we rarely let them out the door. We'll buy heavy duty oak pallets, and we're starting to ease into some of the composite materials. But we do require our vendors that are shipping into the distribution program to put the product on pallets that are multi-use. They can withstand handling three and four times as they're transshipped around the world. So the pallet quality will be something that we're looking for as well because once the product goes into Afghanistan, it may be stored in different areas, moved around that country as well.

Another important term that you will encounter in our transactions the unit of issue, and we'll distinguish between a shipping container and a unit of issue. This is an old scale to those of you who've worked in logistics. You can see on the left we've got a unit issue of each which is referring to the pliers. And when you zoom into this marking, it will say exactly how many pliers are in the box at the unit of issue.

We move here to a tool set, and the unit of issue is indeed set and you'll have the same thing. You'll have the number of sets that are in that box. I can see that one of the warehousemen wanted to send me a little joke. They put my initials on that photo with these pins that we get from the AbilityOne Company, and the unit of issue in this box is not each. It's not a pin. It's a dozen. So our computer systems are set up to recognize when these orders are coming in from the customers exactly how many the customer wants in terms of a unit of issue. And then finally, this is a very longstanding paper towel used by the government. That was also an AbilityOne product. That term is a term I'm using. Our supply programs provide jobs for a lot of folks in this country who would find difficulty finding work elsewhere because of various handicaps, and Vision is one of the AbilityOne companies, and those are the paper towels. Unit of issue is box. So the shipping container is often different from the unit of issue.

Page 31 of the RFP summarizes marking requirements as we move into this effort. You'll note that we reference as a requirement Military Standard 129 within the scope of the contract. Those of you who are familiar with Military Standard 129 realize that it's a very complex document. So we're summarizing what we believe will get that product to our customer efficiently.

And I've got an example. This particular shipping label is actually for a product that's being sent into one of our distribution centers. But I'll just take a moment and go over some of the elements. This is actually copied from the RFP. So national stock number. There's the national stock number for a tool item, the pliers. The requisition number would not appear on this document because we would have the purchase order. It would be the equivalent of this but a little bit different construction. But that would be the equivalent on this order coming in to us. Quantity and unit of issue, there's 96, the unit of issue of each. Contract number, let's see, there's GS. I can see that's from Kansas City, Region 6. It's a tool contract. The name of the source, American Towel. And were this a hazardous product, we would be needing to put hazardous information on it to educate every person who touches that product on the supply chain what those characteristics are. Material safety data sheets. We always ship in conformance with the United Nations requirements when we send overseas.

So that's just an illustration of some of the marking that's going on. An important note that we'll be working a level of detail with each product prior to acceptance before we get an order rolling so that we're making sure we're taking care of the customer. At the beginning of this contract, we're not requiring bar coding. It may be that as we get farther into the effort, we'll see opportunities for that. I need to press the button a bit harder, I think.

If this is a strange slide to understand, it may be because I don't understand it, and I'll tell you what's happening here. Once we've ironed out all the details and we've got a product that will match and now it's time to get that product shipped from one of the countries into Afghanistan, of everything we're encountering this is one of the newest for us. When I first started reading about commerce in this part of the world, one of the first things I read is that getting product across borders isn't always easy. And looking around, looking for procedures that apply to what we do, I haven't found a whole lot. So I'm finding that what I'm learning is through networking with people to see how the different countries operate, and I've simply put some of the variables here that we'll look forward to working with our contractor integrator to iron out processes.

And on the left, I show that we might have products coming from more than one country, and I can look ahead and see that we might have products that are moving at a quantity that would be appropriate on a train or perhaps a truckload or something less than a truckload. I don't know that at the beginning we'll deal with anything much that's what we call a partial shipment, a much smaller shipment. But as we get better at what we're doing, we may figure out how to do that. And there may be situations where we're using a U.S. contract carrier where there's a carrier established that the U.S. government already has a contract with. And then these documents we're encountering the custom clearance request. We're aware that there's a lot of activity going on in terms of the management of the diplomatic notes dealing with trains. There's something called the levy exemption waiver, and there may be other documents that we're going to encounter. And I simply have to say with humbleness that on the earlier slide I said that our experience is mostly dealing within the continental United States and plus Alaska and Hawaii that we simply have not had the experience of moving that product in an overseas environment. It's something we simply haven't done. But we can learn it, and we look forward to partnering with our contract integrators and with the various country authorities to make sure that we can do that in the most efficient manner.

I don't have a slide to illustrate this. But I do want to back up just a moment and talk about the products when you're sending us offers. If I go back to the very beginning and say that our goal here is to find ways to save time and cost getting these into Afghanistan and if I transplant the way of life as we know it here in our acquisition engines and product awards, I'm looking ahead and asking myself the question how will GSA be able to make a good rational award on products. How do we do that? And I think the answer is that we'll apply the same skills that we do with our products today. We'll be doing benchmarking of products as they come in not only in terms of quality, but in terms of price. We'll look for sources to see how much that product costs in other parts of the market in which it's normally sold in that part of the world.

We'll also be benchmarking the total cost into Afghanistan with what we have to pay to move that product from here through the transportation across the ocean, and of course sometimes that product moves by air. So we will be looking carefully at price and with a certain amount of variation. If we see that a product is simply not a good deal for us, there's nothing saying we got to make an order on that. But having said that, I feel confident that since we're moving at a shorter distance and we're dealing with products that are already subject to market forces just because it's part of an economy that we'll find products that make sense.

Another detail that you'll read in the RFP is that we're asking for -- and Alan, I'll let you correct me if I don't get the term correct, but we'll be looking initially at FOB origin pricing. That means what does the product cost at the factory door, and we'll want to see that because that allows us to do our benchmark process, our price comparisons in a more knowledgeable way for us. And then we'll be treating the selection of the transportation move into Afghanistan separately. So we're breaking those two out. That also helps some budget processes in our information systems. It's amazing how the baggage of just how you've always done it can affect sometimes what you do. But transportation is treated very differently in our budget systems than the supply budget. So that actually helps us in that part of the process.

I did not have a slide on that exercise. But I wanted to give you a little bit of a sense of that process when it comes in. So we're going into this looking for flexibility, but we will be applying some skills that for us are just the way we normally do business.

I'd like to thank you for your attention to this summary briefing of who we are and where we've come from and what we're expecting to accomplish and just a little bit of the details on how we see this operating from a system and information system flow. And we've been going about an hour and ten minutes here. So I think probably now, let me pause and see -- Alan, do you want to just move directly into questions and answers at this point?

MR. SEARSY: Yeah, I'd like to say one more thing before we go into that.

MR. LATTA: All right.

MR. SEARSY: When you're ready.

MR. LATTA: Okay, sure, you go right ahead.

MR. SEARSY: Thank you. As we go into the question and answer period, we really want this to be a two-way conversation. You may have noticed when we put the solicitation out that we indicated we were going to discuss several things at this meeting, and we'd like input on that. One of the things we indicated was that we wanted your input on performance metrics. The reason we're asking for that, this is a performance based statement of work which means that the contractor is being expected to perform a certain group of tasks, and the government, the federal government's not going to be telling that contractor how to perform those tasks necessarily as long as you meet the requirements that we've mentioned.

And so we'll be paying based on the performance of those tasks. And so we'd like input on how, what kind of performance metrics you might like to see or maybe not like to see but would be reasonable for tasks like this, for sourcing especially.

We'd like input on how we've got this set up for pricing. We've got a monthly fee set up right now in the statement of work, and then paying for the products separately. We'd like input on that if that's creating distortions, unnecessary distortions or things like that, we'd like to know about it.

Also input on delivery strategies. Ken got into a little bit of that. So we're really looking, and we'd be happy to answer any question anybody has. But we'd certainly like to hear specific comments if anybody has them on those issues I just mentioned.

So do we want to go into that now, or --

MR. LATTA: Well, we can certainly start questions and answers. We'll be taking a break in a little while. But it's still early yet. So why don't we go ahead and open up the floor. And I think what I'll do is just start to see if there are any questions based on the details that I provided, and then if yes, we'll go through those. And then we'll move into the specific questions that GSA put into the RFP, and we value your input. If the question is in this document, it's because we sat around talking about it and our opinions may have differed or we thought we needed more input. So we do value your ideas that we could go back and consider.

So let me first ask any questions on any of the slides that I threw up that anyone would like to ask.

AUDIENCE: The samples, is that something that would happen once you were able to award it?

MR. LATTA: We will be looking to satisfy ourselves that -- the question was -- do we want to get the microphone out? Okay. The question was do we anticipate having samples sent out. I think in some cases, yes. I'm not going to say in every case we'll need it. If I can read and I'm not a chemist, so I'll stick to something not quite as complex. But if I can read about the number of plies of paper and the dimensions of a toilet tissue and so forth and particularly if I can tap someone else who can tell me more from looking at it, I may not need to have a sample sent in to me. But sometimes we will. When one gets into the I mentioned industrial cleaners, we have a commodity that includes our product engineers, and those product engineers are in Kansas City and Fort Worth. And very likely we would have specification sheets, if not samples, sent to one of the engineers to look at and give us an opinion.

AUDIENCE: So just to clarify, at what stage would that happen? Would that happen at the pre-bid stage?

MR. SEARSY: Ken, let me address that. No, that would be after the contract is awarded. What we're looking for, we're looking for one contractor to provide sourcing services as we defined in this document, and those services would consist of locating the products that we list on the attachments starting on page 13. And during the sourcing process, I have to award when those tasks are being performed, as Ken mentioned, there will be some of the products we would like to see samples on. Some of them, we may not need samples on. But some of them we probably will.

AUDIENCE: This would really be an ongoing process over the life of the contract as new products are identified.

MR. SEARSY: Yes. Yes sir?

AUDIENCE: David Johnson, Drill Solutions. My question is to that last comment. You're going to have one company that's going to go out and organize all of the potential vendors in Afghanistan, or would it be multiple?

MR. SEARSY: We're seeking to -- we've got in the award document right now in the award criteria that we're seeking one company. We do give ourselves a right in that to award more than one. But the intent is as that company as we've called them a supplier here would provide these sourcing services within the list of countries in the RFP. I believe there are ten countries.

AUDIENCE: Wouldn't that sort of relationship create an incredible amount of power for that one particular company?

Mr. SEARSY: Well, that is why the government when the company provides sourcing for us, we would be determining whether those products are acceptable at the price proposed. That would limit some of that power, as you put it. Let's go with this right here.

AUDIENCE: My name is Dale Picking. I'm ECN from -- coming back to the slide now, I wanted just ask maybe you'll pull up to the previous list involving these ECA contract integrator. Are you talking about there's some company who will be integrating and dealing with the contracts in the region, or who will be meeting and helping out the local criterion?

MR. SEARSY: We envision that the integrator or the integrator company -- where's that on here, Ken?

MR. LATTA: Right here.

MR. SEARSY: Will be the company interfacing with the supply sources within the region. Does that answer your question.

MR. LATTA: And again, the reason we did this and the slide program when I was describing that our experience is not very great doing sourcing. This will provide us skills, access to skills in terms of languages and understanding of those areas. So that company would work for us as our contractor to do those services. Joel, if you can come around. I think this gentlemen here.

AUDIENCE: Thank you. This is Peter Schneis from Dynamic Decisions. I have three questions for you. In locating the source in what you call an ASC areas of working countries, the question is how flexible does the integrator have to be in differentiating a manufacturer versus an assembler or a wholesaler? I think in chasing after, for example, a manufacturer, it will take quite longer time than, say, a wholesaler. In other words, --

MR. SEARSY: No, I understand exactly what you're saying.

AUDIENCE: How flexible that would be.

MR. SEARSY: Okay. What governs the sources that you can use in this contract, there's a law called the Trade Agreements Act, and it requires that the United States government purchase product manufactured or actually the term is substantially transformed is the proper term within what's known as an approved country.

There has been a Trade Agreements Act waiver approved for products substantially transformed and manufactured in the countries listed here. So basically what my answer is to that is that the products either must be from those either manufactured or substantially transformed in those countries or an approved country under the Trade Agreements Act. So theoretically a product could be wholesaled, if you will, from one of those countries provided it came from an acceptable source. Now Ken, did you have --

MR. LATTA: Yeah, and when you're asking what flexibility you have, the RFP says that our preference is for a product that is manufactured or assembled in the country, and we would expect a good effort from the integrator to locate those kinds of products. But if not, then we would want to move on to products that would be from an acceptable source but are demonstrably part of that consumer economy.

GOVERNMENT ADDED STATEMENT: This solicitation is exempt from the Trade Agreements Act due to the fact that it is for services being conducted in support of the military operations overseas.

AUDIENCE: I have a second question. Now shipping and handling the products to, say, Afghanistan, shall we consider insurance, for example? That could be very expensive, isn't it?

MR. LATTA: And I'll go back to Alan's comment that we're going to deal with the question as best we can. But we will also research, and when the written answer comes out you'll probably have a better answer than what I'm going to say right now.

GOVERNMENT ADDED STATEMENT: This issue would be one that would need to be decided on a case by case basis during the sourcing process. Should the contractor(s) propose such an arrangement and the Government determine it was necessary, the Government would expect the contractor to include this cost in the re-imbursible cost of the product.

AUDIENCE: Thank you.

MR. LATTA: Okay. The structure that we've got is for us to be paid when we know the product has been delivered. At the same time, that does not sound to me like a part of the world where insurance is going to be anything but enormously expensive. So there's a lot to weigh here.

In answering the question when it comes out in writing, we'll probably go back to parts of the government that have experience in that area, the Department of Commerce, DOD, et cetera and use some of their knowledge to fashion an answer that we think will be a good balance. So that sounds like a very wishy-washy saying that I don't know. But my guess is that we'll probably not be trying to spend lots of money on insurance if there are other ways of addressing that.

MR. SEARSY: Ken, it would also only apply if we were doing FOB origin, then that issue would not be an issue that we were asking for delivery --

MR. LATTA: That's FOB pricing.

MR. SEARSY: It depends on how we end up asking for delivery. So it's not a clear cut.

MR. LATTA: That's true. That has the choice of the delivery into Afghanistan may affect that as well. So not giving you a good solid answer, but you get the gest of it. So that's a tough one for us. All right, did you have a third question?

AUDIENCE: Well, you kind of answered it already. The second question is about the products.

MR. LATTA: Okay, okay. Joel, and then we'll come back.

AUDIENCE: James Byron here with Amtrak Global Services. A few questions relating to that subject. One, just to clarify what you are looking for in the response to the RFP proposal is not a source or a proposed price. That will be done after the award, is that correct?

MR. LATTA: The submittal of the RFP will also include pricing on as many products on that list that you can manage.

MR. SEARSY: Well, within the time period that we give them.

MR. LATTA: Within the time period. We understand that that entire list can't be worked. But we are interested in seeing some results on that. And when we would move to an award, that would include working through those products and coming to prices that we can agree on to award.

AUDIENCE: But you would need the source of those prices?

MR. LATTA: I'm sorry?

AUDIENCE: You need the source of those prices?

MR. LATTA: Yes, yes.

GOVERNMENT ADDED STATEMENT: The initial answer provided was not correct. This solicitation does not call for offerors to provide sourcing information in their proposals.

AUDIENCE: Okay. Secondly, in the refs and certs, Section K, there are enumerable lists of the exception products concerned with Buy American. Since we don't know the sources of the products you have on the proposals or find out afterwards, how can we possibly fill out those lists.

MR. SEARSY: Well, they're going -- the main purpose of this contract is the actual sourcing effort itself. The sourcing effort that goes on after award is going to be many times the amount that somebody's going to be able to do before they submit this proposal in. So if you -- any product that you do propose during the initial solicitation response you are going to have to have information. You're going to have to be able to complete those refs and certs on those. Obviously, if you couldn't compete those, then you shouldn't be proposing those products at that time.

GOVERNMENT CORRECTED STATEMENT: The Solicitation does not require submission of sourcing or items in the proposal. The Buy American Act Certificate you mentioned clearly contains a notation that it does not apply unless the Clause 52.225-1 Buy American Act is included in the contract. That clause is not included in the solicitation, therefore, it is not necessary to complete that certification. In addition, the next certification, Buy American Act-Free Trade Agreements-Israeli Trade Act, is also not required because the Clause 52.225-3 is not included in this solicitation, as well. The Trade Agreements Act Certificate is also not applicable since we have removed Clause 52.225-5, Trade Agreements

AUDIENCE: Thank you. I have two sets of questions. First of all concerning the delivery process of the products.

MR. SEARSY: Your name, please.

AUDIENCE: John Marks. Is it safe to assume that the receivers will always be the military as opposed to any U.S. government department? The reason I ask that question is the rules and regulations in crossing borders in the region particularly into Afghanistan differ depending on who the receiver is.

MR. LATTA: Most of the destinations would be military because that's who most of our customers are. But I would actually need to find out more about what you just described because my intent would be to deliver to any U.S. government customer in Afghanistan. Now there's another dynamic working here in that the civilian customers are certainly not there in as large a number. And if you remember the slide where we talked about getting product into Afghanistan, we're sensitive to the fact that the size of the order is going to make what's workable or not. So whether we'll down in any great volume to civilians, it will just depend on how complex it is. I would like to as this matures get to where our delivery mechanism works well for virtually all comers. But there's a lot of stuff that has to happen to get there, and I realize that. Does that help?

AUDIENCE: Very much so.

MR. LATTA: Okay.

AUDIENCE: Now that is a very important point because the rules are very different. It's not where you deliver to, but who the receiver is.

MR. LATTA: And I again humbly would welcome any pointers. If you'd like to send an email into the contracting officer, that will help us very much in our acquisition effort about that.

AUDIENCE: I'd be happy to do that.

MR. LATTA: Okay.

AUDIENCE: The second question is and forgive me if this is actually in the set of works. But the final points of delivery within that country, are they likely to be as diverse as for logging basis of international airports? Where are they likely to be?

MR. LATTA: In the slide, actually this slide you'll note that I've got a place in our filtering table for an address code, okay. I would expect that in the early parts of the contract we would be trying to manage this to both the conditions in Afghanistan as were indicated on that as well as what we learn from our integrator as to where the sources can deliver to. So in the beginning, that list of address codes may not be very large, and it may not reach all parts of Afghanistan. But one would certainly expect that concentrations of customers that are high volume would be areas that we would get to first, and then we simply have to roll with the events and the capabilities trying to balance both the conditions there as well as the integrator capabilities.

AUDIENCE: My last question, forgive me. For those of us who are not been vendors to the organization, how do you place orders with the vendor? You talked in the beginning about ADI or other electronic capability. Do you have preferred methods here in the United States? What system do you use?