Questions_and_Answers_--_SAQMMA17R0168.docx

U.S. Department of State Solicitation SAQMMA17R0168 Global Security Engineering and Supply Chain Solicitation Questions and Answers

Note to prospective Offerors: The Contracting Officer notes that where duplicate or similar questions were received, they have been consolidated or revised for efficiency and clarity.

Will the Government accept 11” x 17” paper for the Phase II Technical Proposal, on a limited basis (for key graphics), to allow for detailed graphics or process description where needed?

Yes. See amended RFP Attachment 28, which reflects this change.

If percentages are required, please include instructions for submission.

See amended RFP Attachment 28, which now requires percentages of participation for proposed subcontractors/teaming partners.

Please add language to the requirement to indicate “employee of the Offeror or proposed subcontractor”.

RFP Attachment 28 as issued states, "Offeror shall include in its proposal a binding bilateral employment agreement for each proposed key personnel that is not at time of proposal submission an employee of the Offeror (or a proposed subcontractor, which the Offeror shall identify)."

• Target Cost (less costs of Catalog and Non-Catalog Items)

• Target Cost of required Catalog items

• Target Fee Pool

• Maximum Fee Pool

• Minimum Fee Pool

• Cancellation ceiling

• Contractor's Participation for Cost Underruns

• Contractor's Participation for Cost Overruns

• The second paragraph states that for the purpose of determining the total (target) evaluated price the Government will only consider the following elements:

• The proposed Target Cost (less direct cost of Accepted materials); plus

• The proposed Target Cost for each Catalog item multiplied by the estimated catalog purchase quantities in RFP Attachment 32 - Projected Annual Catalog Order Quantities; plus

• A “plug” number of $100,000,000.00 per annum which shall represent the estimated direct cost of required non-catalog items; plus the proposed Target Fee Pool.

Please explain how, Maximum Fee Pool, Minimum Fee Pool, Cancellation ceiling, Offeror’s Participation for Cost Underruns, Offeror’s Participation for Cost Overruns will be used/weighted in the Government’s overall evaluation of the Cost/Price Factor.

As stated in RFP Attachment 31, the Government will evaluate those cost/price elements for fair and reasonableness (i.e. are the proposed cost elements too high) and for realism (i.e. are the proposed cost elements too low).

In the absence of adding the clause, please explain the basis for its exclusion.

Clause 52.228-7 Insurance Liability to Third Persons was removed from the final solicitation (and will remain omitted from the solicitation and resultant contract) at the insistence of agency counsel because there is no agency regulation permitting its use.

If the requirements increase over what is stated in the solicitation, what is the process to adjust the target cost?

How does the Government plan to provide ongoing projections for program needs (e.g. project/task orders, TDB projects, and additional facility requirements) so that the contractor may determine if an adjustment is needed to the target cost and associated fee pools?

While we recognize that the FAR provision for changes permits contractors to request a contract change as a result of increases in scope of work, the process would be lagging. Please explain the process the Government will implement to proactively manage the ever-changing environment that is contemplated under the resulting contract?

The quantities and historical information in the solicitation is for background or evaluation purposes only and creates no obligation on the part of the Government, nor any contractor entitlement to adjustment in the event those quantities are not realized during performance. Changes and Disputes shall be handled in accordance with the applicable RFP clauses.

Please clarify whether “Target Cost” as used in this section refers to the “Target Cost (less cost for Catalog and Non-catalog items)”, the “Target Cost of required Catalog items”, the “Target Cost of required Non-catalog items”, all of these or some combination thereof.

The "Target Cost" on which the fee percentage shall be based is the sum of the Target Cost (less cost of Catalog and Non-Catalog Items), the Target Cost of required Catalog Items, and the Target Cost of required Non-catalog Items, (i.e. the combination of all target cost elements).

Any potential cost incentive tied to the procurement of a single source or sole source Catalog item is based upon the price of a single vendor. No alternative pricing is available and there is no incentive for the vendor/manufacturer to reduce their price since they are the only source. Further, the Offeror cannot substitute alternate items as they are not approved for use within the DS security architecture.

Please explain how the Government envisions that the Offeror will be able to recognize a cost incentive in this scenario?

Unlike a retail or wholesale company that occupies a position near the consumer-end of the supply chain, the Government seeks a partner with the capability to negotiate costs with manufacturers and distributors closer to the supplier end of the chain, so that the final price (including the negotiated direct cost from the manufacturer, the GSE&SC contractor's indirect costs and other operating costs, and the GSE&SC contractor's fee) is a fair and reasonable price. (This role combined with the other PWS requirements is sometimes described as a "third-party" or "fourth-party" logistics provider). With that said, even for the most highly qualified company, it is possible that cost savings may not be achievable for all items.

end items, and the contractor’s profit/fee. (The contractor’s direct costs of the deliverable end items may include subcontractors’ direct costs, subcontractors’ indirect costs, and subcontractors’ profit/fee, as applicable, subject to other clauses of this contract.)"

Accordingly, please include the following language in the referenced section to state: A letter of commitment or offer letter is acceptable for States with at-will employment laws?

The RFP requires a binding bilateral employment agreement; that is, an agreement binding both parties in the event the contract is won by the Offeror. Of course no agreement may compel a person to work (specific performance amounting to a violation of the Thirteenth Amendment to the Constitution), but it could provide for remedies in the event the individual decides not to abide by his/her promise (i.e. damages for breach). So the agreement need only, in the event of the contract being won by the Offeror, bind the Offeror to offer employment to the individual (at specified terms) and bind the individual to accept that Offer, the breach of either action giving some legal remedy. In other words, it may be binding in that it offers remedies (e.g. suit for damages) in the event of breach. The Offeror should comply with all applicable laws.

and performance incentives) under maximum cost variation above target cost. At that point, cost overruns are so high that the fee does not continue to decrease based on the share ratio; instead, the Government pays the minimum fee (and all allowable costs).

Bidders will build their target costs associated with supporting the Government provided quantities for Catalog and Government-provided value of $100M per year for Non-catalog forecasted procurement amounts.

Please explain the basis for the contractor to proactively adjust the target costs' associated with order fulfillment in this ever changing environment?

The Target Cost (less costs of Catalog and Non-Catalog Items) is not subject to adjustment on the basis of catalog or non-catalog items actually delivered for mission fulfillment.

For Non-catalog items, the contractor provides a quote to the Government Purchase request. Federal Procurement generally requires that the contractor provide a quote to the Government that represents the best value which is typically the lowest available cost.

If the target cost is established at the time the item is quoted and the quote represents the lowest available price, how will the contractor recognize any cost incentive?

As stated in the RFP, the Target Cost of required Non-catalog Items is derived from a fair and reasonable market unit price. "Fair and reasonable" does not necessarily mean the lowest price; and although there is no standard definition for the concept, it may be generally understood as the price that a prudent and competent buyer would be willing to pay given available knowledge of the market conditions and the terms of the purchase. In understanding how "fair and reasonable" may be determined, Offerors should consider published Government guidance on Contractor Purchasing System Review (CPSR) Guides as well as the content at FAR subpart 15.4 Contract Pricing. With that said, even for the most highly qualified company, it is possible that cost savings may not be achievable for all items.

Will the Government accept 8 years of directly relevant experience in lieu of a Bachelor’s degree?

No.

Please confirm that offerors are to map to the appropriate DOL WD labor categories for their location and that the Government will incorporate the appropriate WD Schedule(s) upon award.

RFP clause 52.222-49 Service Contract Labor Standards - Place of Performance Unknown (MAY 2014) states the following:

"(a) This contract is subject to the Service Contract Labor Standards statute, and the place of performance was unknown when the solicitation was issued. In addition to places or areas identified in wage determinations, if any, attached to the solicitation, wage determinations have also been requested for the following: ________ [insert places or areas]. The Contracting Officer will request wage determinations for additional places or areas of performance if asked to do so in writing by 15 days from the date of issuance of the solicitation [insert time and date].

(b) Offerors who intend to perform in a place or area of performance for which a wage determination has not been attached or requested may nevertheless submit bids or proposals. However, a wage determination shall be requested and incorporated in the resultant contract retroactive to the date of contract award, and there shall be no adjustment in the contract price."

Further, please include language that addresses the payment of the Minimum Fee Pool.

RFP section B-094 addresses invoicing and payment of fee.

Portions of the RFP imply that the target costs will be established (and therefore any available cost incentive) at the Part level for Catalog items (Attachment 32) and the Purchase Order level for Non-catalog items (Attachment 31, Page 8). This appears to be inconsistent with the language in section B-096 that indicates that both the cost estimates and fee pools are established annually. Please clarify if the target costs and any associated Cost Incentive will be managed/recognized and the Part number or PO level or at the annual Target Cost for Catalog and Non-catalog items. Is it the Government’s intent to manage the fee pools as a percent of the target cost (less cost of Catalog and Non-catalog items) plus the associated percentages for target costs for required Catalog and Non-catalog as the costs for Catalog and Non-catalog items are incurred?

If so, will this apply at the Purchase Order (PO) Level, the PO Line level, or at the individual item (unit) level for Catalog and Non-catalog items?

Please see amended RFP Att. 32 that clarifies the purpose of the unit costs. The proposed unit costs in Att. 32 are used for evaluation purposes as well as in the calculation of Target Cost for catalog items. Cost overruns and underruns are not assessed at the unit (or project) level, but for the contract overall. (The CO did not identify anywhere in Attachment 31 that indicated Target Cost would be calculated or assessed at the "Purchase Order" or project level for non -catalog items.) The Target Cost and Fee apply to the entire 5-year contract period (with a separate Target Cost and Fee for the 5-year Award Term Period). The fee is paid with each invoice at the Target rate pursuant to RFP clause 52.216-10(c)(1) and RFP section B-094(b). At the end of every six months (revised from one per year to once per 6 months in response to another RFP Question) during the 5-year contract, the Target Cost is calculated (calculation being necessary due to the fluctuation of quantities needed to meet the mission), the cost incentive trend to-date is calculated based on Target Cost and actual costs incurred to-date, and the Delivery and Performance incentives are calculated to-date based on their respective contract sections. These semi-annual calculations are cumulative throughout the 5-year base period but to not carry over into the Award Term period, which has its own semi-annual cycle and 5-year period. See amended RFP section B-094 to reflect that this now semi-annual calculation does not result in actual payment or credit of fee for overruns or underruns to-date. (Final payment or credit of fee for overruns or underruns happens at the end of the 5-year contract period.) However, the fee payment rate during performance may be increased or decreased from the Target rate, based on overrun/underrun trends identified semi-annually, as provided by RFP clause 52.216-10(c)(1).

The actual direct costs associated with Catalog and Non-catalog items will be driven primarily by the types and quantities of these items ordered by the Government and may vary significantly over the course of the contract.

Will the Government proactively ensure that the Target Fee Pool remains consistent with Target Costs associated with Catalog and Non-catalog items?

The $100M figure for non-catalog items is for evaluation purposes only, as are the evaluation quantities for catalog items in RFP Attachment 32. The Target Cost will be calculated based on actual quantities delivered, as shown in the RFP Schedule Line Items and as explained in the definitions at RFP section B-096. The Target Cost of required Catalog Items and the Target Cost of required Non-catalog Items will both fluctuate with the quantities of items actually delivered to meet the mission. (The Target Cost (less cost of Catalog and Non-Catalog Items does not fluctuate.) Therefore, both the total Target Cost and the Target Fee Pool will fluctuate until the end of the contract at which time the final Target Cost can be calculated. Despite the fluctuations based on quantities delivered, the Target Cost is independently calculable from the estimated costs initially negotiated.

Similarly, will the Government also allow Offerors to submit bilateral agreements as attachments that are not included in the page allocation?

No. All such content will count toward the page limitations.