Rough Draft Lighting and Electrical SOW.docx

SECTION C – REQUIREMENTS

DRAFT

Statement of Work (SOW)

Federal Stock Groups 62 and 59 (FSG 62 and 59), Lighting and Electrical Components

In Support of All U.S. Military, Foreign Military, and Non-Military Customers

Source Selection Information – See FAR 2.101 and 3.104 Controlled Unclassified Information

Table of Contents

1.0 SCOPE, CONTRACT DETAILS & RESPONSIBILITIES

1.1 Scope

This Statement of Work (SOW) defines the scope of effort to provide performance-based material support for Federal Stock Groups 62 and 59 (FSG 62 and 59), Lighting and Electrical Components. The Contractor shall provide supplies and perform associated supply chain management functions in support of all Defense Logistics Agency (DLA) worldwide customers including Foreign Military Sales (FMS). The target population consists of National Stock Numbers (NSNs) or “items” that are segmented into the population categories (or “baskets”) listed below. Lists for each basket are included at Appendix TBD of the solicitation. (APPENDIX WILL BE INLCUDED IN THE ACTUAL SOLICITATION)

1.1.1 Core Customer Direct (CD) and Military Retail Stock Replenishment under Time Definite Delivery (TDD) shipment requirements where Contractor shall prepare delivery orders for shipment to DLA customers within one to three days after receipt of order (ARO). Core is intended to primarily support CD and Retail customers but may be used to support DLA Wholesale Stock locations if both Government and Contractor mutually agree. This agreement will be finalized via bilateral modification which identifies the Core items that will support the Wholesale Stock locations. Core items that support Wholesale Stock locations will be prepared for shipment to DLA within 60 days ARO. Contractor shall use Vendor Shipment Module (VSM (Section 2.7.3)) or Shipping Instruction Request (SIR (Section 2.7.6)), as applicable, for shipment processing. CD orders will be delivered directly to DLA customers and Military Retail Stock Replenishment orders will be delivered to the DLA Retail Stock Depot(s) to support demands at the retail sites. The CD requirement for TDD standards is based on DLAD 11.402-90, Time Definite Delivery (TDD) standards. The Contractor shall perform multiple supply chain management functions necessary to ensure the items are delivered directly to the customer in accordance with the metrics identified in Section 7.0 of this SOW. Such supply chain functions include, but are not limited to, material forecasting, acquisition, storage, packaging, and readying the material for shipment through VSM or SIR, warehousing, planning, forecasting, and delivery order shipment preparation responsibilities for these NSNs.

1.1.2 DLA Direct Production Lead Time (PLT) away shipment to DLA stock locations. The Contractor shall use VSM or SIR, as applicable, for shipment processing to Customer and DLA Direct (DD) locations specified on each delivery order within the PLT for each item. The determination of CD or DD is based on shipping address for each item. For CD items, the Contractor will ship directly to DLA customers. For DD items, the Contractor will ship directly to DLA warehouses. To stabilize deliveries, initial DLA Direct basket PLTs will be the greater of, the historical PLT of record plus 60 days, or the FSC Average PLT plus 60 days, except in cases in which Contracting Officer and Contractor agreed to a different PLT. The 60 additional days is to allow contractor Administrative Lead Time needed to obtain quotes and provide PLT updates to DLA. To align contract lead times to current supplier lead times, the contractor may provide a revised PLT for each item in the DLA Direct basket. The contractor may submit revised PLTs for the same item multiple times over the life of the contract. However, to minimize the administrative burden, the contractor is encouraged to only provide a revised PLT when its suppliers PLT deviates significantly from the DO PLT. The contractor must submit its PLT change request to the Contracting Officer within 45 days of receipt of the order which prompted the PLT change request. The Contracting Officer will have 30 days to issue a modification to implement the revised PLT. If necessary, the Contracting Officer may request additional supporting documentation. The contractor must supply the requested documentation within 5 business days of receipt of the request. If the contractor fails to provide sufficient documentation within 5 business days, the modification to revise the PLT will be delayed by the number of days it takes for the contractor to provide the requested documentation.

1.1.3 DLA Direct Nuclear basket is created to house items in the DLA Direct basket with a Weapons Systems Designator Code (WSDC) of 21N and/or 23N after they are moved via modification. These items will have a fixed PLT of 120 days and current unit pricing will be maintained. The Contractor shall use VSM or SIR, as applicable, for shipment processing to Customer and DLA Direct (DD) locations specified on each delivery order within the PLT for each item. Contractor is not permitted to submit revised PLTs for DLA Direct Nuclear items. DLA Direct Basket items will be included in DLA Direct metric calculations.

1.1.4 Most items will begin as DLA Direct items after contract award. Items can be transitioned to the Core basket only after the following criteria have been met:

1. The contractor has successfully delivered the item as DLA Direct

2. The contractor has built an inventory level of equivalent to 1 PLT

3. DLA stock of the item has been depleted

1.1.5 Items that meet the following criteria will begin as Core basket items immediately after contract award:

1. Items with a shelf life code indicated as 18 months or less

2. Items with an AAC J, or other characteristic, that indicates the items are not stocked

Items will be migrate between baskets as detailed in section 6 below.

1.2 Contract Type, Term, & Administration

The resultant contract between DLA (or “Government”) and the Contractor shall be an Indefinite Delivery Indefinite Quantity Fixed Price Contract with Economic Price Adjustments.

The contract has a potential ten-year duration. The contract will have a one (1) year Transition Period and a base period of three years with two three-year option periods, to be exercised at the discretion of the Government. The base period of three years will begin upon the conclusion of the Transition Period.

DLA Aviation, located in Richmond, VA, will maintain administration of the basic contract and will be responsible for contract performance measurement.

The Guaranteed Minimum (GM) for the total contract will be set at $1,000.00.

1.3 Pricing

(1) Appendix TBD of the solicitation – Total Evaluated Price (TEP) Model, a Microsoft Excel document, shall be utilized for proposal submissions of unit prices, rebates, fees, and specific item order quantities.

(2) Fixed and variable fees may be proposed by the Contractor as they relate to the level of performance required to support customer demands over the 10-year life of the contract. The awarded Transition and Management Fees, as outlined within Appendix TBD (This list will be provided later if a solicitation is issued) of the solicitation, TEP Model, are revised to allow for the submission of monthly invoices (12 equal increments) to begin one month after the beginning of the 12-month transition and performance periods. The awarded Throughput Fee percentage will be applied to the negotiated unit prices of the DLA Direct items and will be part of the unit prices for each performance period and paid via daily delivery orders. Likewise, the awarded Core item unit prices will be paid via delivery orders.

a. Transition Fee: Contractors may propose a one-time transition fee to cover transition and implementation costs for the first year of the contract.

b. Management Fee: Contractors may propose a management fee for the Core and DLA Direct baskets of items to cover the costs of managing the Core material and the fixed costs of managing the DLA Direct material. This is a fixed fee applicable to each basket of items.

c. Throughput Fee: Contractors may propose a throughput fee for the DLA Direct basket of items which represents variable costs associated with management of these items. This is a variable fee applicable to each unit price of the DLA Direct basket.

d. Core Fee: Contractors may propose a core fee for items in the core basket. This fixed fee will be applied to each item and will represent the cost associated with inventory management and shipping. The Core Fee is fixed percentage applied to material costs for Core basket items and covers the additional costs associated with warehousing the Core basket items.

(3) Economic Order Quantities (EOQs) may be proposed by the Contractor to ensure optimal ordering quantities. EOQs are highly suggested for items with Estimated Annual Demand (EAD) of 1.

a. EOQs: Contractors may propose EOQs to provide the Government quantity-based discounts for items that are expected to experience a dramatic shift in customer demand.

2.0 TRANSITION PERIOD & OPERATIONAL CAPABILITY

2.1 Transition Period

A one-year Transition Period is required. During the Transition Period, the Contractor shall take actions detailed in its Contractor Transition Plan (Section 2.2) to assure satisfactory performance beginning on the contract start date.

The Contractor will conduct a kickoff meeting at DLA Aviation, Richmond within the first 30 calendar days of the Transition Period to discuss the gap analysis (Section 2.3(c)) and detail the proposed Transition Plan, including key milestones and timelines for completing Transition Plan deliverables.

In the event the Contractor does not meet Transition milestones as negotiated and/or cannot become fully operational within the Transition Period, the contract will be subject to termination for convenience at no cost to the Government, in accordance with FAR clause 52.212-4(l), Termination for the Government’s convenience.

2.2 Contractor Transition Plan

The Contractor shall immediately implement its Contractor Transition Plan upon award. The Contract Transition Plan shall detail milestones that include, but are not limited to:

a. Implement a Supplier Management Plan to address ramp up time and pathway to meet contract performance requirements at the conclusion of the Transition Period.

b. Hold an Industry Day to maximize small business participation in this acquisition.

c. Develop adequate stock of items to fully support these items at the conclusion of the transition.

d. Conduct and verify a gap analysis and identify any long lead time items that could potentially become unsupportable during the transition (creating a gap in coverage) and coordinate actions with DLA to ensure material is available (Section 2.5).

e. Submit Transition Period-specific reporting each week including, but not limited to the reporting listed in Section 2.4.

f. Support Transition Period meetings with DLA (Section 2.6).

g. Demonstrate ability to integrate and interface with IT systems, including EDI and VSM (Section 2.7).

2.3 Data Provided to Contractor

The Contractor shall be provided with the following reports on a weekly basis for the Core NSN population and on a monthly basis for the DLA Direct NSN population for import into Contractor system:

a. Demand history to be used for demand planning

b. On hand inventory levels

c. Material movement between DLA stock locations

d. On order/due in positions

2.4 Transition Period Reporting by Contractor

The Contractor shall submit weekly written status reports to update the DLA Contracting Officer detailing their progression toward the implementation milestones. This includes, but is not limited to, personnel hired for specific tasks and in place, material(s) acquired, progress on supplier agreements, initial forecasting / demand planning / gap analysis reports, warehousing locations to support the contract, security access, etc.

The reporting requirements for the Transition Period are in addition to the reporting requirements outlined in Section 10.0.

2.5 Transition Period Gap Analysis

Within the first 30 calendar days of receipt of the contract, the Contractor will have conducted a gap analysis and identified any long lead time items that could potentially become unsupportable during the Transition Period and/or the three-year base year creating a gap in coverage and coordinate actions with the Government to ensure availability.

2.6 Transition Period Meetings

During the Transition Period, the Contractor shall meet with DLA on a weekly basis, or as mutually agreed upon, to ensure progress within the Contractor’s Transition Plan milestones are being accomplished. Meetings can be in person or via teleconference to assess whether the Contractor is on track to complete Transition Period activities by the end of the Transition Period.

2.7 System Interface & Integration

During the Transition Period, the Contractor shall complete the following system interface and integration activities and become operational in the IT systems outlined below.

a. Complete all testing to facilitate receipt of EDI transactions

b. Interface with DLA data via e-mail flat-file sharing

c. Import from DLA the demand history via e-mail and/or DoD SAFE to be used for demand planning

d. Import from DLA on-hand inventory levels

e. Import from DLA on-order/due in positions

f. Confirm Contractor's order pack date is a trackable and reportable data field with the flexibility to be included into EDI transmissions.

2.7.1 EDI Electronic Data Interchange (EDI) is the exchange of routine business transactions in a computer-processible format, covering such traditional applications as inquiries, planning, purchasing, acknowledgements, pricing, order status, scheduling, test results, shipping and receiving, invoices, payments and financial reporting. Additional standards cover interchange of data relating to security, administrative data, trading partner information, specifications, contracts, production data, and distribution and sales activities.

The American National Standards Institute (ANSI) X12 Standard will be utilized for formatting the EDI transactions. Information regarding EDI, ANSI X12 transactions, and Defense Automated Addressing System (DAAS) approved Value Added Networks (VANs) can be obtained from https://www.transactionservices.dla.mil/daashome/edi.asp.

Value Added Networks (VANs) are private network providers that facilitate EDI services.

EDI Transactions

a. EDI 850 Delivery Order (DO)

b. EDI 856 Shipment Notice/Manifest Transaction Set

c. EDI 997 Functional Acknowledgement

As the data sharing and communication processes are further defined during contract implementation, the EDI transactions required as listed above may be modified or supplemented through mutual agreement of the parties via bilateral contract modification. Subject to mutual agreement, the Contractor shall use (or upgrade to) the latest EDI transactions as they become available.

2.7.2 DIBBS In addition to EDI submission, delivery orders will be available through the DLA Bid Board System (DIBBS) website at https://www.dibbs.bsm.dla.mil. The Contractor may set up a DIBBS account in order to receive email notification of orders.

2.7.3 VSM Vendor Shipment Module (VSM) is a DLA, web-based system that integrates shipments into the Defense Transportation System (DTS). The Contractor shall utilize VSM to process all delivery orders. The Contractor shall create a VSM profile. To create a profile, contact the DLA Distribution (Code: TOT (1-800-456-5507)) which will assign a unique User Name and Password to access the website at https://vsm.distribution.dla.mil/net. The Military Shipping Label (MSL) and carrier information/shipping instructions should be available in VSM within 24 hours of initial shipment registry. The carriers chosen by the Government will be responsible for shipping from the consolidated container point (CCP), port of embarkation (POE) or Freight Forwarder point to the OCONUS customer destination.

2.7.4 Vendors can access the Wide Area Work Flow system (WAWF) for invoicing, receipting and other services through the Procurement Integrated Enterprise Environment (PIEE) at (https://piee.eb.mil/ ). WAWF is a secure web-based system for electronic invoicing, receipt and acceptance. Access WAWF for additional information on getting setup. Additionally, the Contractor shall have an account in the Systems for Award Management (SAM) at https://www.sam.gov in order to register in WAWF within the PIEE.

2.7.5 Shipping Instruction Requests (SIR) eTool is used by Defense Contract Management Agency (DCMA) Transportation Officers to process and track of shipping instructions requests submitted by contractors. Access https://www.dcma.mil/WBT for additional information

3.0 CONTRACT ORDERING

DLA will submit DOs to the Contractor via EDI Transaction 850. Ordering will begin following completion of the Transition Period or in accordance with the Contractor’s Transition Plan if the Contractor’s Transition Plan allows for ordering prior to completion of the Transition Period.

The obligations of the parties and terms and conditions will remain in effect for any order that remains open after the expiration date of the final ordering period of the contract.

DLA Aviation, Richmond, VA may issue and administer order for contract NSNs listed in Appendix TBD of the solicitation. Ordering authority for any additional DLA or Military Service may be added by bilateral modification to the basic contract.

3.1 Ordering Contract Numbers

Ordering contract numbers will be established under the resultant basic contract number to accommodate contract NSNs for the purpose of ordering. There will be multiple ordering contract numbers assigned to each of the three baskets and will be provided to the Contractor at time of award. During the course of the contract, new ordering contract numbers may need to be established and will be coordinated with the Contractor and implemented via bilateral modification to the contract.

3.2 Payment Office

The payment office set forth in Block 12, Page 1 of the contract is applicable to all individual delivery orders.

3.3 Freight on Board (FOB) and Inspection/Acceptance (I/A)

a. FOB: Origin (see FAR Clause 52.247-30, F.O.B. Origin, Contractor’s Facility) and Destination (Add FAR Clause)

b. I/A: Destination for Non-FMS orders and Origin for FMS orders unless the Contracting Officer specifically request an alternate I/A. For example, I/A Origin to address previous quality discrepancies.

3.4 Shipping Addresses

The Contractor shall utilize DLA’s VSM (Section 2.7.3) for all DOs in order to obtain current shipping addresses.

3.5 Partial Quantity Deliveries

The Contractor is authorized to deliver partial quantity shipments and/or early shipments provided there is no additional cost to the Government. However, unless the Contractor is specifically directed otherwise, the partial shipments must be shipped against the delivery order with the earliest delivery date. This statement does not apply to Government- requested expedites where an additional fee may apply. Partial fulfillment of a requisition is considered incomplete for performance metric purposes.

3.6 Cancellations

Delivery order cancellations shall be in accordance with subsection (l) of FAR Clause 52.212-4, Contract Terms and Conditions - Commercial Items.

3.7 Inventory and Warehouse Management

The Contractor shall have access to DLA inventory levels and delivery schedules to ensure the Contractor meets or exceeds the requirements of this contract.

The Government shall provide the following reports on a weekly basis for the Core NSN population and on a monthly basis for the DLA Direct NSN population for import into Contractor system:

a. Demand history to be used for demand planning

b. On hand inventory levels

c. Material movement between DLA stock locations

d. On order/due in positions

4.0 ADDITION OF ITEMS AND SERVICES

As the partnership between DLA and the Contractor evolves and matures, DLA envisions a potential opportunity to add additional items within FSGs 62 and/or 59 and services relating to the supportability of those items without seeking competition.

4.1 Addition of Items and/or Services

DLA or the Contractor may propose the addition of FSG 62 and/or 59 items and/or services to either basket. Addition of items and/or services shall be executed via bilateral modification.

New items proposed will initially be added to the DLA Direct basket. Items may migrate to the Core basket as outlined in Section 6.0.

5.0 DELETION OF ITEMS

5.1 DLA Deletion of Items

The Government may request deletion of items from the contract at any time due to changes in quality or technical requirements, changes in demand, or other situations where it is in the best interest of the Government to remove items from the contract.

When the Government deletes items from the Core basket, the buyback provisions outlined in Section 9.0 will apply to residual and committed inventory for these items. Residual inventory is defined as inventory the Contractor has on the shelf at the time of the buyback in order to support the CD requirements of the Core basket. Committed inventory is defined as inventory that the Contractor has committed with suppliers for parts in direct support of the CD requirements of the Core basket. For committed inventory, the Contractor will provide reports of purchase orders that show part number(s), quantity purchased, and expected date of delivery from suppliers.

In situations when a delivery order is issued for a DLA Direct item for less than the supplier’s Minimum Order Quantity (MOQ), the contractor may submit supporting documentation and rationale for an MOQ. DLA will review and will either increase the delivery order or cancel the order with the contractor and seek to procure the item elsewhere. The Government may also determine the need to delete the item from the solicitation in accordance with this Section.

The Contractor shall continue to accept orders for any deleted items until issuance of a bilateral modification that deletes them, or for any duration specified by that modification. Deletion of items under this provision is not subject to the Termination for Convenience provision of this contract, FAR Clause 52.212-4(1), and will not otherwise result in any liability by the Government to the Contractor.

5.2 Contractor Deletion of Items

The Contractor may request deletion of items from the contract. The Contractor will provide documentation supporting the deletion request. The Government will review the list of deletion candidates and supporting documentation. In approximately 30 days after its review and concurrence, if the Government agrees that an item should be deleted, the Government will issue a bilateral modification to remove the items from the contract. If there are open orders for the items being deleted, the Government will review and determine if orders should be retained or cancelled.

Items deleted from the contract at the Contractor’s request are not subject to the buyback provisions outlined in Section 9.0.

6.0 NSN MIGRATION ACROSS BASKETS

The scope of this contract provides for support for the FSG 62 and 59 items listed in Appendix TBD of the solicitation that are segmented into two baskets: Core and DLA Direct.

As demand and situational changes occur during the contract term, the migration of NSNs across baskets may be necessary for optimal support of DLA customers. NSN migration across baskets shall be negotiated between the Government and the Contractor and a bilateral modification will be issued. Both DLA and the Contractor will be able to propose NSN basket changes on an annual basis. For example, the Contractor may request to move an NSN from the DLA Direct basket to the Core basket as purchases increase and DLA may request to move an NSN from the Core basket to the DLA Direct basket based on demand and supportability changes.

Migration Screening Criteria:

Items migrated from DLA Direct to Core must:

· Have minimum Annual Demand Frequency of four (4) per year

· Inspection and Acceptance at Destination (Place of Inspection Code (PIC) of

· Support Customer Direct (CD) and Retail Replenishment Requirements

· Be capable of being stored in Auto-Store

Items migrated from Core to DLA Direct Migrations must:

· Items have ADF less than four (4) per year

· Items must have zero (0) stock

· Items in Core basket with contractor stock may be considered for migration to DLA Direct at the end of each 3-year base and option period if both contractor and DLA agree to buyback that would reduce Contractor’s stock to zero (0)

Cadence:

· Normally executed annually

· A one-time migration will be executed to move items between baskets based on the criteria above.

Migration Pricing:

DLA Direct to Core Pricing: Contractor must have a Purchase Order (PO) within the past 3-years and the PO unit price will be the basis for the material costs. If a Contractor PO was not issued in the last 3-years, then Contractor must get quotes to establish the material costs for that item.

DLA Direct to Core Unit prices will be equal to material cost plus TBD% Core fee.

Core to DLA Direct Pricing: If Contractor has current purchase order/quotes, these purchase orders/quotes will be the material costs. If Contractor does NOT have current purchase orders/quotes, then the DLA historical price will be the material price.

Core to DLA Direct Unit Prices will be equal to material costs, adjusted for inflation market conditions, plus TBD% Throughput fee.

7.0 PERFORMANCE METRICS

The Contractor shall support, and be responsible to fulfill, all demand from DLA worldwide customers, including FMS customers. However, FMS orders will be excluded from metrics to allow sufficient time to coordinate inspections with DCMA. Contractor performance shall be measured on a quarterly (3-month) basis and reconciled on an annual (12-month) basis, referred to as the performance period.

7.1 Performance Periods

For administrative purposes, 12-month performance periods will be established for the 3- year base period and the two, 3-year option periods.

7.2 Core Basket Performance Metrics

Contractor performance for the Core basket shall be measured based on a combination of Customer Direct Availability (CDA) and delinquency of delivery orders. For the Core basket, a primary data element to measuring performance is the Contractor’s pack date, or the date that the Contractor has packed delivery order item(s) in a shipping box sealed for shipment.

7.2.1 Customer Direct Availability

Contractor CDA is the percentage result of comparing the date when the Contractor has a delivery order packed and ready (pack date) for VSM processing to the delivery order due date (Contract Delivery Date (CDD)).

The CDA performance metric target is 90% for the Core basket. The CDA metric will be measured beginning with the first performance period and will be measured for each performance period of the contract.

CDA will be calculated as follows:

Total Orders Pass CDA Metric / Total Orders Due in Quarter = CDA %

Example:

If 100 orders are due in the performance period and 95 orders are shipped within the required timeframe then the CDA performance is 95%.

When a contractor’s orders recorded pack date is past the CDD or the total quantity of the order is not ready for shipment, the order will receive a CDA "fail" rating. All orders with a CDD in the performance period will be measured with the exception of orders that are cancelled as outlined in Section 7.8, Requisition Cancellations (Core).

7.2.1.1 CDA Incentives and Disincentives

CDA incentives and disincentives will apply if the required CDA performance metric is either improved upon or not achieved in the 12-month performance period. The incentive and disincentive scale follows and applies to items and sales within the Core basket only:

EXAMPLE ONLY

Incentive and Disincentive Table

CDA

In the following examples for CDA incentives and disincentives, the Contractor’s annual sales to Government for the Core basket are $100,000,000.

Example of CDA Incentive: If for Year 3, the CDA performance level for the performance period is 93.00% , the Contractor would receive a .56% incentive on its total material sales. In this example, the monetary incentive would be $560,000.

Example of CDA Disincentive: If for Year 9, the final CDA performance level for the performance period is 88.50%, the Contractor would experience a .23% disincentive on its total material sales. In this example the monetary disincentive would be $230,000.

7.2.2 Delinquent Orders Disincentives

Contractor performance shall also be measured on the delinquency of delivery orders. A delivery order is considered delinquent if the Contractor's pack date is past the CDD of the delivery order.

For each performance period, completed Core Basket orders will be categorized by the number of calendar days the orders were late. The degree of disincentive increases proportionate with the age of the late orders as shown in the following delinquency disincentive chart:

EXAMPLE ONLY

*As shown in the table above, each time a late order exceeds an additional 365 days, an additional 1% disincentive applies. For instance, if an order breaches 730 days, an additional 1% disincentive will apply to that order, for a total disincentive for the order of 4%. If an order exceeds 1,095 days, an additional 1% disincentive will apply to that order for a total disincentive of 5%, and so on until the order is delivered or mutually agreed to be cancelled.

The calculation of the late order disincentive is as follows:

[($ Sum of Late Orders in Category A) x (Disincentive % for Category A)] [($ Sum of Late Orders in Category B) x (Disincentive % for Category B)] [($ Sum of Late Orders in Category C) x (Disincentive % for Category C)] [($ Sum of Late Orders in Category D) x (Disincentive % for Category D)] [($ Sum of Late Orders in Category E) x (Disincentive % for Category E)] Disincentive Example: Total value of orders included in the CDA metric and completed after their CDDs: $17,100,000

EXAMPLE ONLY

$297,000

Late order disincentive = $297,000 *Category E may have multiple Disincentive Categories based on age of orders exceeding 365 days multiple times as described above.

The late order disincentive will be tracked monthly beginning in Performance Period 1 for all orders included in the CDA metric that are completed after their CDDs. The disincentive will be assessed for each 12-month performance period beginning with the Base Period following completion of Performance period 1. A quarterly report of delinquent orders will be provided by the contractor to DLA with a recovery plan and new CDD.

7.3 DLA Direct Basket Performance Metric

Contractor performance for the DLA Direct basket shall be measured based on the On Time Delivery (OTD) rate of orders. The OTD metric is 100%. For the DLA Direct basket, the primary data element to measuring performance is the delivery date.

7.3.1 On Time Delivery (OTD)

Contractor performance of the DLA Direct basket shall be measured by On Time Delivery (OTD) with a 100% performance metric. OTD will be measured quarterly. For OTD metric calculation, OTD will be measured on all orders with CDDs within the 12-month performance period. This metric calculates the percentage of delivery orders that were delivered on time.

When the total quantity of material for a delivery order is received by DLA or the customer on or before the scheduled delivery date, the order will be considered on time. If the delivery order’s receipt date is after the scheduled delivery date and/or the total quantity of the order is not received, the order will be considered late. The percentage of delivery orders that are on time divided by the total number of orders will determine the OTD percentage rate.

Total Orders Met Scheduled Delivery Date / Total Orders Due in Performance Period = OTD% Example: There were 9,500 orders due in a 3-month Performance Period. 8,900 were packed and shipped on time:

8,900 met scheduled delivery date / 9,500 total orders due = 93.6% OTD

7.3.2 Late Orders

Contractor performance shall also be measured on the lateness of delivery orders. A delivery order is considered late if the Contractor fails to meet the Scheduled Delivery Date of a delivery order. A quarterly report of delinquent orders will be provided by the contractor to DLA with a recovery plan and new CDD.

7.4 Application of Metrics

Performance metrics will apply to all items in the Core and DLA Direct baskets as outlined above. DLA will track Contractor performance upon the start of Performance Period 1.

7.5 Measuring Performance and Metric Reconciliation

Contractor performance and applicable incentives and disincentives will be measured and reported by DLA in 12-month performance periods utilizing DLA and Contractor data reflected in data reports generated by DLA and the Contractor. Results will be shared with the Contractor via a Performance Period Report. The Contractor will have a challenge period to dispute initial performance scores, see Metric Challenge Process section below. Performance Period Reports containing details of the performance metrics and any applied incentives and disincentives will be reconciled at the end of each contract year to determine monetary payments due. Annual reconciliation will be completed within 90 calendar days after contract year end, unless extended by mutual agreement. A bilateral modification will be issued to report the findings of the reconciliation and any monetary payments due. If DLA owes the Contractor, a delivery order will be issued to the Contractor, in accordance with a material related type Contract Line Item Number (CLIN), for the monetary amount mutually agreed upon in the bilateral modification. If the Contractor owes DLA, DLA will submit a Request for Reimbursement Letter to the Contractor for the monetary amount mutually agreed upon in the bilateral modification.

7.6 Incentive and Disincentive Payment Process

For each performance period, a bilateral modification will be issued to show the final incentive paid or disincentive taken. If DLA owes the Contractor, a delivery order will be issued to the Contractor, in accordance with a material related type Contract Line Item Number (CLIN), for the monetary amount mutually agreed upon in the bilateral modification. If the contractor is required to make a payment to the Government, it will be done at the end of the 12-month period via the aforementioned bilateral modification and a Request for Reimbursement Letter will detail the amount due to the Government, the address where the payment is to be sent, the required due date, and any other pertinent information required for payment processing. The amount owed by one party to the other will be the net amount owed after combining the Cost Containment share with all incentives and disincentives and will be reflected in a bilateral modification.

7.7 Delivery Order Cancellations (DLA Direct)

Delivery order cancellations are applicable to the DLA Direct basket only. Any order that is due in the 12-month performance period of evaluation and is cancelled in the same period will not be evaluated for performance in that period. If an order was evaluated for performance in one performance period and the same order is cancelled in a future performance period, there will be no adjustments made in performance score or disincentive. Once a performance period is evaluated for performance and the amounts due are mutually agreed upon and reconciled, a bilateral modification will be issued.

Once the modification is executed, the performance period reported on the modification is closed.

7.8 Requisition Cancellations (Core)

Requisition cancellations are applicable to the Core basket only. Metric calculations assume all requisitions cancelled are cancelled due to non-availability of material and subsequent material workaround solutions. For cancellations of requisitions, the following applies:

If the cancellation occurs within the CDA metric timeframe, it is not counted towards the metric calculation - i.e. the customer/requisitioner cancelled the order too fast for the system to respond one way or the other.

If the cancellation occurs after the CDA metric timeframe, but a positive issue is made, it will count as a contract metric fill - i.e. the system responded as required.

If the cancellation occurs after the CDA metric timeframe, and a positive issue is not made, it is counted as a contract metric miss - i.e. it was cancelled due to material workaround solutions providing alternate sources of material.

7.9 Metric Challenge Process

A challenge period will be opened at the end of each performance period which will allow the contractor to take exception to the performance score in written response to the Performance Period Report. The Contracting Officer will provide the Performance Period Report within 45 days from the end of the performance period. If a delivery order that failed the metric is challenged, it is the Contractor’s responsibility to present information to the Contracting Officer so that a thorough review of the problem can occur. The contractor has 30 days from the date the report is received to provide the Contracting Officer with documentation to support the challenges. If a back and forth exchange of data or discussion are required, the period may be extended. No response from the contractor within these 30 days will be considered acceptance of the performance measurement for the quarter, and a bilateral modification will be issued.

The Contractor may request relief for the following events:

7.9.1 Severe Weather Events Hurricanes, floods, and other severe weather events that cause a significant delay or shut down of facilities shall be communicated to the Contracting Officer within 1 to 2 days of the event.

7.9.2 EDI Order Issues If the Contractor receives an order via EDI with a Contract Delivery Date in the past, the Contractor shall notify the Contracting Officer when the issue is realized. For Core basket CDA performance, these orders will be granted metric relief up to three days based on original CDD of the order and the Contractor has material ready to ship.

7.9.3 Other delays beyond the control of the Contractor and not due to any fault or negligence of the Contractor.

The contractor will provide rationale supporting the relief requested for the above events, and the rationale shall be sent and received by the Contracting Officer as soon as the delay is encountered. The Contracting Officer will issue a determination of whether to grant relief to the contractor within 15 business days of receipt of request.

8.0 SMALL BUSINESS COMMITMENT METRIC

The Contractor is expected to and will commit to include small business participation under the contract by ensuring small businesses are awarded subcontracts for this contract. This metric applies to the entire contract spend, both Core and DLA Direct baskets. The Contractor (unless the Contractor is a small business) shall submit a Small Business Subcontracting Plan in accordance with FAR 52.219-9. In addition, to ensure that the small business community continues to be utilized in support of FSG 62 and 59, a Small Business Commitment Metric is applicable to all size businesses and will be established by the Government to evaluate the Contractor’s small business participation throughout contract performance. The Contractor shall ensure at least 25% of total value of all orders are fulfilled by small businesses over the evaluated performance periods as outlined in Section 7.1. To encourage the Contractor to improve small business participation, the Government shall award the Contractor an incentive fee for small business participation above and beyond the 25% metric. Small business commitment less than 25% will result in disincentives set in place by the Government. Small business incentives and disincentives are further discussed in Sections 8.3 and 8.4.

In Appendix TBD of the solicitation, the Government has detailed all small businesses utilized by DLA in the past, specific to each NSN. In addition, the Contractor is encouraged to utilize the Small Business Administration (SBA) subnet to post subcontracting opportunities related to this contract. The Contractor may also utilize the Dynamic Small Business Search database in System for Award Management (SAM) to search for small businesses across small business socio-economic categories if the current small business source is unavailable.

8.1 Application of Small Business Commitment Metric

The Small Business Commitment Metric will apply to all items in the Core and DLA Direct baskets. DLA will track small business utilization beginning in Performance Period 1. Incentives and disincentives measurement will become applicable for orders created on the first day of contract performance, after the Transition Period has ended.

8.2 Small Business Commitment Metric Documentation

The Contractor shall provide spend data documentation supporting their utilization of small business for each 12-month performance period. Documentation is due no later than 15 days following the last day of the performance period. Documentation shall include spend data by contractor purchase order and the type of small business utilized (i.e. women- owned, service-disabled veteran owned). An example of documentation shall be submitted with the proposal.

The Small Business Commitment Metric will be finalized in tandem with the Core and DLA Direct basket performance metrics, 90 calendar days after the last day of each performance period.

8.3 Small Business Participation Commitment Document

The Contractor is required to submit a Small Business Participation Commitment Document with the proposal. The Small Business Participation Commitment Document shall address the Contractor’s strategy for meeting the 25% Small Business Commitment Metric and it shall include proposed incentive targets, via an incremental incentive scale, to achieve up to 60% small business participation. The Small Business Participation Commitment Document shall also detail techniques the Contractor will utilize to assure small business participation throughout contract performance, e.g., industry days, notices in commercial publications, and similar efforts.

8.4 Small Business Incentives and Disincentives

As stated in Section 8.3, the Contractor shall propose an incremental incentive scale to achieve up to 60% small business participation. The incentive scale shall include incremental targets starting with 26.00% up through 60.00%. The following incentive scale is included in the Contractor’s proposal and is incorporated into the SOW:

EXAMPLE ONLY

The Government has set forth the following incremental disincentive scale for small business participation that falls below 25%:

EXAMPLE ONLY

The disincentive will be applied to the total value of all orders, inclusive of all management and throughput fees, issued during the 12-month performance period being measured for both the Core and DLA Direct baskets. The disincentive may be recouped via reduction of existing or future orders, or through request for payment via other means.

9.0 BUYBACK PLAN

9.1 Buyback Volume

In the event of Government-initiated deletion of items or end of contract support, the Government will purchase residual and committed inventory up to 100% of the actual demand experienced in the nine (9) months preceding buyback implementation. The Government retains the unilateral right to compute the actual demand figure for the buyback process, in accordance with the criteria stated above. The Government may purchase a higher quantity than what is contractually required depending on the circumstances for the individual item. Final buyback quantities will be mutually agreed upon between the Government and the Contractor.

9.2 Buyback Execution

The Government will issue a bilateral modification to formularize agreement of buyback quantities and then conduct internal and/or external coordination to develop its disposition for each buyback item. The contractor will hold the material during this time. No later than 180 days after the buyback modification is issued, the Government will provide its disposition to the Contractor which will be:

1) Government Issues Buyback Delivery Orders

2) Government Instructs Contractor to dispose of the material

All buyback orders must be issued to the Contractor before the final expiration date of the contract. See Section 12.0 Contract Closeout and Exit for details on final expiration of the contract.

9.3 Buyback Unit Price

Buyback orders will be issued with the item’s unit price in place at the time the buyback takes place.

10.0 CONTRACTOR RESPONSIBILITIES

The Contractor shall be responsible for supporting the target population’s two baskets of items. The items in these baskets are identified in Appendix TBD of the solicitation.

The Contractor shall utilize VSM to coordinate all shipments for all NSNs in the entire target population.

The Contractor shall ensure all NSNs meet the Government technical and specification requirements and comply with Contractor quality standards as outlined in Section 10.3.

The Contractor will not knowingly procure and supply counterfeit parts or materiel. The Contractor shall take the necessary actions to mitigate counterfeit occurrences. If counterfeit products or materiel are found, the supplier shall investigate and report incidents to the Government Industry Data Exchange Program (GIDEP) system at http://www.gidep.org. The Contractor shall provide similar guidance to sub-vendors and sub-suppliers to ensure supply chain integrity.

The following sections detail Contractor reporting requirements required for submission to the PCO based on the periodicity specified. All reports shall contain the minimum elements identified and be submitted in a Microsoft Excel format (for raw data) and Microsoft PowerPoint or Word (for charts pertaining to raw data), unless otherwise directed by the PCO.

Additional reporting elements may be required by the PCO throughout the contract term and shall be mutually agreed to with the Contractor via bilateral modification.

These reporting requirements are further detailed in the Contract Data Requirements Lists (CDRLs) provided. CDRLs, DD Form 1423, are used to delineate any requirement for data which must be provided by the contractor as deliverable items. This can include, but is not limited to, Transition Period Status Report, etc.