SOW.pdf

SECTION C - DESCRIPTION / SPECIFICATIONS / STATEMENT OF WORK

C1-STATEMENT OF WORK FOR PHASE I, PERFORMANCE BASED

LOGISTICS SUPPORT

C1-1.0 INTRODUCTION AND SCOPE

C1-2.0 PROGRAM MANAGEMENT

C1-3.0 INVENTORY

MANAGEMENT

C1-4.0 TRANSITION PERIOD

C1-5.0 INVENTORY RECONCILIATION FOR TRANSITION

ITEMS

C2 – STATEMENT OF WORK FOR PHASE II, FULL PBL

IMPLEMENTATION

C2 – 1.0 DEMAND BANDS

C2 – 2.0 REQUISITIONING

C2 – 3.0 PERFORMANCE METRICS

C2 – 4.0 CONTRACTOR RETURN OF WHOLESALE

INVENTORY

C2 – 5.0 FOREIGN MILITARY SALES SUPPORT

C2 – 6.0 REPAIR, REPLACE AND OVERHAUL

C2 – 7.0 OBSOLESCENCE MANAGEMENT

C2 – 8.0 GOVERNMENT INDUSTRY DATA EXCHANGE

PROGRAM

C2 – 9.0 CONFIGURATION MANAGEMENT AND

CONTROLS

C2 – 10.0 DATA AND REPORTING REQUIREMENTS

C2 – 11.0 QUALITY ASSURANCE

C3 – STATEMENT OF WORK FOR PHASE III –

CONTRACT TRANSITION OR OTHER CONTINUATION

OF SUPPORT

C3 – 1.0 EXIT PHASE

C3 – 2.0 EXIT TRANSITION IPT

C3 – 3.0 GOVERNMENT FURNISHED

MATERIAL/GOVERNMENT FURNISHED EQUIPMENT

C3 – 4.0 EXIT PHASE MRIL

C3 – 5.0 TECHNICAL DATA

SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C1-1.0 INTRODUCTION AND SCOPE

This Statement of Work (SOW) describes the Performance Based Logistics (PBL) support of the F/A-18 aircraft and several Common items to be performed by the Contractor (which includes divisions, affiliates, subcontractors, and successors) under this contract. This PBL applies to the covered articles listed in Attachment A – NSN LISTING. This program also includes support of Navy Foreign Military Customers (FMS) of Australia, Kuwait, and Malaysia. The PBL support requires the Contractor to manage availability, and obsolescence in support of the F/A-18 A-F,E/A-18G, and AV8-B Heads Up Displays (HUD), Head-Down Displays (HDD) and Digital Display Indicators (DDI) as well as the Tactical Air Navigation System (TACAN) common to the EA-6, KC-130, S-3B, MH-60, SH-60 and the V-22 and the Control Display Unit (CDU7000), supporting the C-2A, E-2C, TE-2C, P-3C and the EP-3E aircraft.

The contract assigns the Contractor comprehensive authority to independently meet system demands through repair or replacement, maintain or improve availability, maintain reliability, manage technical and configuration changes, manage inventory, and manage obsolescence within the limits set forth in the SOW. Additionally, notwithstanding any previous inspection and/or acceptance by the Government, the Contractor warrants all items covered by this contract shall, for the duration of the contract, be maintained by the Contractor so as to be free from defects in accordance with their Program Description Documents (PDD). Any item failing to operate correctly shall be returned to the Contractor for repair or replacement. The decision whether to repair, overhaul/modify or replace any item shall be the Contractor's.

C1-1.1 GENERAL

This SOW describes the PBL scope of effort that shall comprise total life cycle supply support for the F/A-18 HUD Display components as well as the Common items. Future configurations of these items shall also be supported by this PBL contract in accordance with FAR 52.243-1.

The following requirements apply to this PBL effort:

(1) The current maintenance concept (O-I-D) shall remain in effect.

(2) The source of all flight hour data shall be the official Budget Analysis Report (BAR).

(3) The Contractor shall enter into Public Private Partnership (PPP) for the F/A-18 HUD system with Fleet Readiness Center Southeast (FRCSE) in Jacksonville, Florida and Fleet Readiness Center Southwest (FRCSW) in San Diego, California as required, via a Commercial Service Agreement (CSA) pursuant to 10 United States Code (U.S.C.) § 2474 or other appropriate authority. Since the capabilities are already established at the organic depot/Government facility, the Contractor shall transition workload to, and/or maintain workload at, that organic depot/Government facility in accordance with 10 United States Code (U.S.C.) § 2474. The Contractor shall maintain commercial support as required to meet contract requirements.

Annual Labor Rate Adjustments for Program Years 01 through 05: In the event of a fluctuation in FRC's burdened hourly rates by plus or minus 5% from the burdened hourly labor rates included in the contactor's price proposal (the FRC’s burdened hourly rate and the burdened hourly labor rate included in the contractor’s proposal is the same rate and is referenced in Table 1 below), either party will be entitled to a price adjustment.

Such price adjustment will include only the difference between the burdened hourly labor rates included in the contractor's proposal and the new burdened hourly rate as may be adjusted annually by the FRC. The extent of any price adjustment will be limited to the negotiated number of total hours for FRC labor, as identified within Table 1 below. This clause is to compensate for Fleet Readiness Center hourly burdened labor rate fluctuations only and does not provide for adjustment for the number of hours of FRC labor in performing repair activities.

Any such price adjustment shall be calculated on an annual basis, and shall be negotiated and implemented at the conclusion of eachPeriod of Performance (PoP).

Annual Labor Rate Adjustments for Program Years 01 through 05 In the event that the actual Fleet Readiness Center (FRC) burdened hourly labor rate varies by more than ±2.0 percent from the negotiated burdened hourly labor rate included in the Contractor’s proposal (as identified in Table 1), either party shall be entitled to a price adjustment. The determination of whether an adjustment is warranted shall be based solely on the percentage variance between the negotiated burdened hourly labor rate and the actual burdened hourly labor rate.

If the variance exceeds ±2.0 percent, the Contractor and the Government shall reconcile the difference between the negotiated burdened hourly labor rate and the actual burdened hourly labor rate, applied to the negotiated number of FRC labor hours for the applicable period. The adjustment shall be calculated as follows:

Labor Adjustment = (Negotiated Labor Rate - Actual Labor Rate) × Negotiated Labor Hours

A positive adjustment will result in an upward contract modification, and a negative adjustment will result in a downward contract modification or Government credit. No adjustment of any kind shall be made if the variance in the burdened hourly labor rate is within ±2.0 percent of the negotiated rate.

Any applicable adjustment shall be calculated annually and negotiated and implemented no later than 28 February of the current year for the previous Period of Performance. This clause applies solely to labor rate fluctuations and does not provide for adjustments to labor hours or any other cost categories.

Adjustments will be calculated seperately for both FRCSE and FRCSW per the formula below if either’s burdened hourly labor rate flucuates by (+/-) 5%:

(FRCSE or FRCSW FY Labor Hours Per Table 1) x (Delta between the actual FRSCE or FRCSW labor rate for FY being reconciled and lower or upper labor rate band) = Price Adjustment (+/-)

FRC Labor Rate Adjustment Example:

FY’29 Negotiated FRCSE Labor Rate (Table 1): $120.00 Labor Rate Band (5%) (Table 1): $114.00-$126.00 Labor Hours (Table 1): 1000 FY’29 actual FRSCE Labor Rate: $128.50

(FRCSE Labor hours: 1000) X (FY’29 actual rate: $128.50 – upper band labor rate: $126.00) = Contract Price Increase: $2,500.00

FY’29 Negotiated FRCSW Labor Rate (Table 1): $120.00 Labor Rate Band (5%) (Table 1): $114.00-$126.00 Labor Hours (Table 1): 1000 FY’29 actual FRSCE Labor Rate: $124.50

Adjustment not applicable. The labor rate increase falls within the labor rate band.

Any pricing adjustments are subject to the availability of funding. All reconciliations will be applied to the delivery order impacted via a bilateral modification to the contract. The contractor may invoice the current delivery order(s) in full and if a downward adjustment shall apply, the contractor shall provide the credit via a wire transfer to the government as instructed in a modification to the applicable PoP delivery order(s). If an upward adjustment shall apply, the adjustment amount will be applied to the last month in the PoP and the contractor can submit an invoice for the adjusted amount.

Negotiated FRC Rates for this contract are as follows:

TABLE 1

FRCSE Labor Rate

Labor Rate Band

FRCSE Labor Hours

FRCSW Labor Rate

Labor Rate Band

FRCSW Labor Hours

FY28 TBN TBN TBN

FY29 TBN TBN TBN

FY30 TBN TBN TBN

FY31 TBN TBN TBN

FY32 TBN TBN TBN

*The Labor Hours and Rates included in the chart above are s incorporated in the contract price.

(4) The contractor is required to maintain a Depot Work Split (W/S) as necessary to satisfy the requirements of 10 U.S.C. §§ 2464 and 2466. In the event either FRC exercises its right (as set forth in its CSA with the Contractor) to suspend or terminate performance of orders issued to it pursuant to the W/S, the Contractor shall immediately notify the Procuring Contracting Officer (PCO) and the Contracting Officer Representative (COR) in writing, and propose temporary revisions to the W/S in order to avoid and eliminate any potential failures to meet contract performance requirements. The PCO and COR shall review the Contractor’s proposed revisions to the W/S within 45 days of receipt, and the PCO may adjust the performance schedule in order to allow the Contractor to recover from any related disruption in performance of orders caused by either FRC’s suspension or termination of performance of orders.

(5) The Contractor shall repair items identified in Attachment A to the OEM specifications and drawings for each respective item. The Contractor is authorized to repair to the same or appropriate family member level in accordance with the applicable depot manual, and/or all applicable Overhaul Repair Instructions (ORI’s), Overhaul Repair Engineering Instructions (OREI’s) or Local Engineering Specifications (LES’s).

(6) Any historical information provided to or available to the Contractor other than the projected flight hours, inventory quantities on Attachment C- WHOLESALE INVENTORY QUANTITIES, and demand rates on Attachment D-DEMAND BAND (BUCKETS) is provided or made available to the contractor for informational purposes only. Such historical data and/or Contractor reliance on that data in preparation of proposal shall not be the basis for any equitable adjustment under this contract.

(7) The Contractor shall provide the Government with a summary of dollars expended (CDRL A001) for both repairs performed commercially and repairs performed at Government repair depots upon request.

C1-1.2 PRICING AND PAYMENT

Pricing and Payment shall be in accordance with Section B.

C1-2.0 PROGRAM MANAGEMENT

The Contractor shall designate a Program Manager who shall serve as a point of contact for this PBL, to ensure timely resolution of business and technical problems and implementation of corrective action. The PCO is the only agent authorized to make contractual changes on behalf of the Government. The Program Manager shall co-chair the periodic Program Management Review (PMRs) with the NAVSUP WSS F/A-18 Logistics Manager.

C1-2.1 PROGRAM MANAGEMENT REVIEWS (PMRs)

Upon Contract Award, the Contractor and Government shall conduct joint semi-annual Metrics/Status Reviews to include an annual PMR. The site of the annual review shall be at NAVSUP Weapons System Support in Philadelphia, PA either in person or virtually, unless otherwise agreed. Semi-annual Metrics/Status reviews may be conducted at various sites based upon Government direction. The F/A-18 Program Office shall attend, and will provide technical program support to the PCO and COR as required. Semi-annual Metric/Status reviews shall provide the Government with the Contractor’s progress and performance according to the performance metrics included in Section C2-3.2 of this SOW.

As part of the annual PMR requirement, the Contractor shall submit a meeting brief in the Contractor’s format one week prior to the PMR, per CDRL A002 and CDRL A003. During the PMR the Contractor shall provide status on the following elements:

1. Program overview

2. Supply Response Time (SRT) Performance

3. Reliability Issues

4. Configuration Management (CM)

5. Engineering Change Order Submissions

6. Quality Assurance Issues

7. Repair Issues

8. Contract Metrics

9. Supplier Issues

10. Depot Issues

11. Engineering Issues

12. Previous PMR Open Issues

13. Obsolescence/Diminishing Manufacturing Resources and Material Shortages (DMSMS) Issues

14. Exclusions/Other Contractual Concerns

15. Adhoc Reviews (as necessary)

16. Carcass Returns (responsibility of Government Team to provide)

17. Carcass return delays – Contractor Reported

C1-2.2 Technical Support Personnel

The Contractor may, at its option, place Technical Representatives (Tech Reps) at any Navy Air Station responsible for removal of Equipment as long as the Government mission is not impacted and appropriate clearance/authorization is obtained. Inability to place Tech Reps at any Government site shall not be the basis for any adjustment to the contract, including the performance requirements of this contract.

The Contractor may make logistics support recommendations to Intermediate Maintenance Activities (IMA) and take associated action, if required, in order to improve F/A-18 performance and the PBL effort. All actions related to the IMA will be coordinated through and approved by PMA265.

Contractor personnel working on Government installations in support of this PBL will observe and comply with all rules, regulations, directives, and requirements pertaining to the conduct of personnel as prescribed or issued by the resident military installation Commanding Officer during the contract performance period. The Contractor will obtain and maintain any necessary clearances imposed by installation Commanding Officers and ensure that Contractor personnel are properly badged.

The Contractor will comply with the individual Government facilities security requirements. Contractor personnel will be capable of handling and processing information at the appropriate security level. Section C05 SUPTXT204-9400(4-22) provides additional details.

C1 – 2.3 Cost and Software Data Reporting (CSDR)

In accordance with the DoD Manual 5000.04, “Cost and Software Date Reporting1,” the contractor shall systematically collect and report actual contract costs and technical information based on the Office of the Secretary of Defense (OSD) Deputy Director Cost Assessment (DDCA)-approved CSDR plan (Attachment XX). Cost and Software Data Reports (CSDRs) shall be prepared in accordance with the instructions contained in the most recently approved versions of the Data Item Descriptions (DIDs), Cost and Hour Report (FlexFile) DI-FNCL- 82162, Quantity Data Report DI-MGMT-82164.

The Contractor shall submit electronically the Cost and Hour Report (FlexFile) Format IAW File Format Specification (FFS) and Data Exchange Instructions (DEI) (CDRL A004) and Quantity Data Report Format IAW FFS and DEI (CDRL A005), using the CADE CSDR Submit-Review System. The required form and file type for each CSDR is specified in its Data Item DID.

Contractors must register through the CADE website located at https://cade.osd.mil/ and possess a DoD-approved External Certification Authorities (ECA) digital certificate or DoD-issued Common Access Card (CAC) to obtain a CADE Portal account and be authorized to upload CSDR content. Users can obtain access to CADE by submitting user information about themselves and their organizations to the CADE Portal and requesting a “CSDR-SR Submitter” user role.

Prime contractors are responsible for flowing down CSDR requirements contained in their prime contracts to all subcontractors who meet the reporting thresholds specified in DoD Instruction (DoDI) 5000.732, “Cost Analysis Guidance and Procedures.” Subcontractors, regardless of tier, with a subcontract that exceeds $50 million, or with subcontracts valued between $20 million and $49 million that are designated by the Government as high interest.

In accordance with Statute 10 USC 3227, DoDI 5000.73, and DoDM 5000.04:

1. This solicitation/award includes:

a. The approved CSDR Plan for the contract, DD Form 2794, “Cost and Software Data Reporting Plan”

2. In the performance of this contract, the Contractor shall:

a. Implement and document a standard CSDR process that satisfies the guidelines contained in the

DoDM 5000.04;

b. Manage procedures that produce timely and reliable information for the CSDR data items required by this contract;

c. Utilize the approved CSDR Plan, DD Form 2794, for this contract as the basis for reporting according to the required CSDR DIDs;

d. Notify the Government if a subcontract exceeds $50 million, changes subcontractors or executes new subcontract awards, as may require a subcontractor CSDR plan and electronic reporting directly to the CADE Portal using the CSDR Submit-Review System.

3. CSDR Readiness Review:

a. A CSDR Readiness Review Meeting will be held NLT 60 days after contract award to review the

CSDR process that satisfies the guidelines contained in the DoDM 5000.04 and the requirements in the approved CSDR Plan.

4. The contractor will provide required reports in the form of CDRLs listed below:

• CDRL AXXX FlexFile Format outlined in File Format Specification (FFS)

• CDRL AXXX Quantity Data Report Format outlined in File Format Specification (FFS)

5. The CSDR requirements are outlined per Attachment XX, “Cost and Software Data Reporting Plan” (DD Form 2794).

C1- 3.0 INVENTORY MANAGEMENT

The Contractor shall stock, warehouse, manage, and deliver Ready For Issue (RFI) assets in response to fleet requisitions in accordance with the Commercial Asset Visibility (CAV) Repairables Portal (RP) SOW (located at: https://www.navsup.navy.mil/NAVSUP-Enterprise/NAVSUP-Weapon-Systems-Support/Provisions- Instructions-and-Contract/)within the Supply Response Time (SRT) identified in the performance metrics, C2-

3.1 of this document and section F03 - Time of delivery. “Should there be a change to the CAV RP SOW on the aforementioned website (from the date of contract award), that creates an increase or decrease in labor, the Contractor may submit a change proposal for an equitable adjustment to the Government for review.” See clause NAVSUPWSSFA24 for supplemental information regarding CAV RP.

The Government will retain ownership of all GFE wholesale inventory (RFI and non-RFI), and the Contractor will treat the GFE wholesale inventory as Government owned, but contractor managed. Warehousing and proper storage of GFE wholesale inventory will be the responsibility of the Contractor and shall be in accordance with all requirements as applicable to the item's classification. All equipment shall be located in a U.S. Government (USG) approved, contractor managed property storage area. The Contractor shall ensure the inventory is adequately protected from potential damage, theft, and deterioration.

The Contractor shall augment the wholesale quantities including Depot washout/scrap and system carcass loss, to the extent necessary to meet the delivery and performance requirements specified in section C2-3.1 and section F04 - Place of delivery. Any spares wholesale inventory obtained or used by the Contractor to augment the inventory during this contract will become USG property once the asset is: (1) used to fill a requisition during the contract period; (2) entered into the Commercial Asset Visibility (CAV) RP system; or (3) turned over to the Government at the end of the contract period pursuant to Section C3. The contractor shall provide the part number, NIIN, and serial numbers of all equipment augmenting the inventory. This information shall be provided to the PCO and COR when the inventory enters the PBL wholesale inventory pool or is issued in response to a requisition. Piece parts required for repair shall be supplied and tracked as Contractor Furnished Material (CFM). At the end of the contract, the Contractor shall retain title to all Contractor furnished consumable piece parts stocked for repair.

The Contractor shall ensure material support and PBL component repairs are tracked throughout the supply chain to on-site coordination activity at NAVSUP-WSS as required.

If the Government modifies, expands, or otherwise increases the requirements associated with the Commercial Asset Visibility (CAV) Repairables Portal Statement of Work (including any updates posted on Government websites that are identified and incorporated by the Procuring Contracting Officer (PCO) as applicable to this contract), and such changes result in an increase in the Contractor’s required level of effort, inventory management responsibilities, warehousing capacity, augmentation of wholesale inventory, or material support activities, the Contractor shall provide written notification to the PCO within ten (10) business days of becoming aware of the change.

Following such notification, the parties shall negotiate in good faith an equitable adjustment to the contract price, schedule, and/or other impacted terms in accordance with the applicable Changes clause. The Contractor shall continue performance as directed by the PCO. Any additional work performed as a result of a Government-directed change shall be subject to equitable adjustment in accordance with FAR 52.243-1 or other applicable changes clause.

C1-3.1 INITIAL OUTFITTINGS REQUISITION PROCEDURES

C1-3.1.1 Planned Initial Outfitting Requisitions

A total quantity of NAVSUP WSS’s planned initial outfitting requisitions (i.e. QZ fund code requisitions) for the NIINs covered by this PBL contract are listed in Attachment F – Planned Initial Outfitting Requisitions QZ’s. The Contractor shall deliver RFI assets in response to planned QZ requisitions in the same manner as other requisitions, in accordance with the contract’s delivery schedule (i.e., customer response time) and such requisition responses will be subject to the SRT metric (i.e., the Contractor shall deliver such requisitions under the PBL support CLIN).

C1-3.1.2 Unplanned Initial Outfitting Requisitions

The Government anticipates there may be additional initial retail outfitting requirements during the course of the contract period. These are referred to as Unplanned Retail Requirements. The Government may provide additional GFP spares to the Contractor to fill the new initial retail outfitting requirements. Specific contract numbers and delivery order numbers will be provided as they become available.

C1 – 3.1.3 If, during the course of this contract, the contractor receives a QZ requisition in excess of what was included in Attachment F, the Contractor shall provide an Exception Request to the PCO and COR if the requisition can be filled. The Exception Request shall include (at a minimum) requisition number, NIIN, quantity, requisition receipt date, impact to metrics and identify one of the following fulfillment methods:

1. Requisition can be filled from Contractor identified excess RFI PBL material

2. Requisition can be filled from RFI material but pipeline will replenish through an unplanned repair

3. Requisition can be filled from RFI material but pipeline will replenish through an unplanned replacement (spare)

The Contractor’s proposed fulfillment method (excess RFI, unplanned repair, or unplanned replacement) shall be supported by the current stock posture. The PCO and COR may require information supporting the contractor’s claim that there are no excess carcasses available to repair in order to deliver a RFI asset in response to the requisition. Approval to fill unplanned initial retail requirement will be provided by an e-mail from the PCO or verbally and followed up by an e-mail. The contractor shall deliver a RFI asset in response to the requisition in the same manner as any other requisition in accordance with the contract’s delivery schedule (i.e., customer response time) and such requisition responses will be subject to the SRT metric, i.e., the Contractor shall deliver RFI assets in response to such requisitions under the PBL support CLIN.

The Government and the Contractor will reconcile unplanned retail requisitions (in excess of what is identified on Attachment F) that are filled with an unplanned repair or replacement (spare) during the annual reconciliation, subject to the availability of funds. Unit prices for the respective fiscal year, as indicated on Attachment D- Demand Bands (Buckets) as the Average Variable Price per Demand or Bucket will be utilized to determine the value of the price adjustment and reconcile unplanned initial retail requisitions filled by the Contractor. The Contractor will report the status of all such unplanned requisition approvals obtained for the performance period at PMRs.

C1-3.1.4 In the event the Contractor receives a QZ requisition in excess of what is identified on Attachment F and there is no excess carcass that can be inducted for repair or spare to deliver in response to the QZ requisition, the Contractor shall notify NAVSUP WSS’s PCO and/or COR who will provide direction to the Contractor regarding the requisition.

C1-3.2 DEFENSE LOGISTICS AGENCY (DLA) AS A SOURCE OF SUPPLY

Pursuant to 10 U.S.C. § 2208(h), the Contractor is authorized to use Defense Logistics Agency (DLA) as a Government Source of Supply if determined, by the contractor, to be the best value to the Government in terms of price and/or delivery. The Contractor may need to review the DoD FedMall web site to determine stock levels and availability. The Contractor and its subcontractors who currently have MILSTRIP authority may continue to use the Military Standard Requisitioning and Issue Procedure (MILSTRIP) Department of Defense Activity Address Code (DODAAC) to requisition supplies from DLA. Any acquisition from DLA will be a direct transaction between the contractor and DLA. The contractor shall arrange for direct payment to DLA for all parts requisitioned from DLA.

The contractor shall not use the NAVSUP “HM” fund code for parts ordered from DLA. The contractor is solely responsible for dealing directly with DLA to ensure timely delivery of the parts ordered. This clause does not authorize the contractor to procure Critical Safety Items from sources of supply not qualified or approved by the contractor's quality system. Parts procured from DLA are exempt from the counterfeit parts provisions in Paragraph C2-11.4. Parts acquired from DLA are considered contractor furnished property rather than Government furnished property for all purposes under this contract, including performance metrics.

Using DLA as a source will not relieve the contractor of meeting contract performance metrics. If the Contractor uses DLA as a source of supply, DLA's failure to perform shall not entitle the Contractor to an equitable adjustment under this contract. The Contractor is solely responsible for dealing directly with DLA to ensure quality and timely delivery of the parts ordered. Delays in delivery or failure to meet quality requirements shall not be deemed Government-caused and, except as otherwise provided in 252.246-7008(d), shall not relieve the Contractor from meeting all contractual requirements.

C1- 3.2.1 DRAWDOWN OF EXISTING DEPOT UNIQUE GOVERNMENT REPAIR PARTS INVENTORY

The Contractor shall procure necessary remaining depot unique consumables from existing Government inventory held by DLA as specified in Attachment G – DLA INVENTORY DRAWDOWN. Parts acquired from Government sources are considered Contractor Acquired Property (CAP). The Contractor must effect a drawdown of necessary existing available depot unique parts that meet contractor quality standards. Delays in delivery or failure to meet quality requirements shall not be deemed Government caused and shall not relieve the Contractor from meeting all contractual requirements and will not form the basis of metric relief.

C1 – 4.0 TRANSITION PERIOD

The Transition Period shall apply only to those items identified on Attachment A– NSN LISTING as “Transition Items”. The requirements of Full PBL Implementation (C2) shall apply to all other items from the effective date of award.

The Transition Period shall begin on the first day of the contract and be completed in accordance with Table 2 below. At the conclusion of the each designated period, the requirements of Full PBL Implementation (C2) shall apply to all NIINs contained in Attachment A as Transition Items. Issue Priority Group (IPG) 1 requisitions received during the Transition Period will be fulfilled.

TABLE 2

NIIN Nomenclature Part Number Transition

During this phase, the Contractor and the Government shall exercise the precautions necessary to ensure fleet readiness is not negatively impacted, as defined in the responsibilities listed below.

The joint Integrated Process Team (IPT) shall work together to resolve problems potentially arising during the Transition Period and to complete the following milestones:

Government Responsibilities Include:

• Transfer custody of on-hand RFI and Non-RFI wholesale inventory assets for the items on

Attachment A – NSN LISTING as Transition Items to the contractor within 45 days of the contract effective date. The Government shall retain ownership of these assets. The Government shall retain sufficient RFI inventory assets to meet demand requirements during the custody transfer period.

• Ensure any wholesale spares quantities on order are re-consigned to the contractor.

• Fill Fleet requisitions as needed during the custody transfer period.

• Change the Master Repairable Items List (MRIL) to reflect the Contractor’s destination(s) for retrograde shipments.

Contractor Responsibilities Include:

• Confirm receipt of each assets transferred to contractor as discussed above in accordance with procedures established in the CAV RP STATEMENT OF WORK (SOW) per C1 - 3.0.

• Reconcile the wholesale inventory quantities provided with the inventory quantities indicated on

Attachment C – WHOLESALE INVENTORY QUANTITIES. The Contractor shall annotate Attachment C with inventory quantities actually received during Phase I. For each item/family group, the RFI quantity actually received plus the quantity of requisitions filled by the Government during transition shall at a minimum be equal to the RFI quantity specified in Attachment C. (CDRL A006)

• Comply with data requirements in accordance with Attachment B – CAV RP STATEMENT OF WORK

(SOW) per C1 – 3.0

• Participate in program reviews in accordance with Clause C1-2.1

• Maintain a Public-Private Partnership with Fleet Readiness Center-Southeast (FRC-SE) and Fleet

Readiness Center- Southwest (FRC-SW) in accordance with Section C1-1.1(3)

C1 - 5.0 INVENTORY RECONCILIATION FOR TRANSITION ITEMS

Attachment C- Wholesale Inventory Quantities contains the projected inventory position and the repairs/spares projected by the Contractor included in the proposed contract price, for the items identified on Attachment “A” – NSN Listing as “Transition Items”. At the end of performance period 1, the “Transition Items” will be reviewed to determine if all wholesale inventory assets (both on hand and on order) have been received by the Contractor. For those items where all assets have been received, the Contractor will replace the projected inventory quantities (both RFI and non-RFI) on Attachment C with the actual quantities received, together with requisitions filled by the Government during transition. This financial adjustment for inventory reconciliation will be executed via contract modification at the conclusion of each performance period, until all “Transition” items have been reconciled.

C2 – STATEMENT OF WORK FOR FULL PBL IMPLEMENTATION

C2 -1.0 DEMAND BANDS

Demands are defined as requisitions received within the performance period being reconciled.

Demand pattern changes may impact PBL coverage. Forecasted demands are set forth in Attachment D – DEMAND BAND (BUCKETS). Attachment D provides forecasted annual demand, as well as the upper (+5% of forecasted demand) and lower (-5% of forecasted demand) demand bands.

PBL components may be assessed individually, or in a "bucket" with one or more other PBL components as documented in Attachment D. At the conclusion of each performance period, projected demands shall be compared to actual demands. All demands within the upper and lower bands are covered by this contract;

equitable adjustments may apply to demands falling outside of the demand bands. For further insight into the final end of performance period reconciliation procedures please refer to Section C2-3.0, Performance Metrics.

EXAMPLE ASSUMPTION

Projected Demand: 50 Demand Band: +/- 5% Upper Limit: 55 Lower Limit: 45 Average Variable Price per Demand or Bucket: $1,000

When the number of actual received requisitions (demands) for the period is GREATER THAN OR EQUAL TO the Demand Band Lower Limit AND LESS THAN OR EQUAL TO the Demand Band Upper Limit, no adjustment to the total Delivery Order amount for the POP associated with a Demand Band Reconciliation is required for that given bucket or item if assessed individually. In the example above, if the number of requisitions received during the performance period measured is 50-55, the government is entitled to fulfillment of those demands at no additional cost. Additionally, if the number of requisitions received during the performance period measured is 45-49, the contractor is eligible to retain the total contract value associated with those PBL components being assessed. In both cases those demands fall within the agreed upon Demand Band and no adjustment contract price for the POP associated with Demand Band Reconciliation of the bucket is required.

If the number of requisitions received during the performance period measured exceeds 55, the Contractor may be eligible for a variable price adjustment (contract funding increase) for that PBL component. If applicable, the adjustment will be calculated by multiplying the number of requisitions greater than the upper limit by the Average Variable Price per Demand or Bucket as documented in Attachment D.

Given the Example Assumption above, if the number of requisitions received during the POP measures 60, then the contractor is eligible for a variable price adjustment (contract funding increase) for that bucket of PBL components by multiplying the Average Variable Price Per Demand, by five (5). For this example: (60-55) * $1,000 = $5,000. Total Delivery Order amount for this PoP would increase by $5,000 for this Demand Band Reconciliation

If the number of requisitions received during the performance period measured is lower than 45, the Government is eligible for a variable price adjustment (contract funding decrease) for that PBL component by multiplying the number of requisitions less than the lower limit by the Average Variable Price per Demand or Bucket as documented in Attachment D.

Given the Example Assumption above, if the number of requisitions received during the POP measures 40, then the government is eligible for a variable price adjustment (contract funding decrease) for that bucket of PBL components by multiplying the Average Variable Price Per Demand, by five (5). For this example: (40-

45) * $1,000 = -$5,000. Total Delivery Order amount for this PoP is decreased by $5,000 for this Demand Band Reconciliation.

C2 - 1.1 DEMAND BAND RECONCILIATION

For each performance period, projected demands as identified on Attachment D shall be compared to actual demands. Demands are defined as requisitions received within the performance period being reconciled (for the purposes of Demand Band Reconciliation this does not include the Planned Initial Outfittings – QZ’s identified in Attachment F). The Average Variable Price per Demand or Bucket, as identified on Attachment D- Demand Band (Buckets), will be utilized in the reconciling of the demands. See section C2- 1.0 for additional details.

Pricing Adjustments are subject to the availability of funding. All reconciliations will be applied to the delivery order impacted via a bilateral modification to the contract. The contractor may invoice the current delivery order(s) in full and if a downward adjustment shall apply, the contractor shall provide the credit via a wire transfer to the government as instructed in a modification to the applicable PoP delivery order(s). Should there be a significant downward adjustment anticipated for any of the PoPs, the Contractor at their discretion may decide to withhold submission of invoices for that PoP to offset what the Contractor may have to credit back to the Government as a result of the annual reconciliation to occur after the end of the POP

C2 - 1.2 TRANSACTIONAL COMPONENTS

Transactional components are defined as zero demand items. For those items with a baseline of zero (0), any demand received by the Contractor above 0 is subject to validation by the NAVSUP WSS PCO and COR. The Contractor shall notify the NAVSUP WSS PCO and COR of receipt and request validation. If the Contractor receives confirmation to fill, the demand shall be counted during the annual reconciliation and will be reconciled utilizing negotiated pricing on a case by case basis. Any confirmed demands received for a component with a baseline of 0 is not subject to SRT metrics.

C2-2.0 REQUISITIONING

Fleet requisitions shall flow, via NAVSUP WSS, to the Contractor via Military Standard Requisitioning and Issue Procedures (MILSTRIP). The Contractor shall deliver in accordance with the performance metrics in C2-

3.0. The Contractor shall satisfy all requisitions, (including all backorders created during contract performance), in the order of the highest priority, then earliest Julian date of order, as required by the Uniform Material Movement and Issue Priority System (UMMIPS) Office of the Chief of Naval Operations (OPNAV) Instruction

OPNAVINST4614.1 (latest revision). If requisitions are to be delivered in a different order, written instructions must be supplied to the Contractor with PCO authorization.

C2-2.2 RETROGRADE/CARCASS RETURN REQUIREMENTS

The Government shall transport all retrograde equipment to the Contractor’s facility at Government expense. The Government shall turn-in retrograde equipment to the Contractor within an average of 40 calendar days from the requisition date. The average number of days will be calculated based on time of Beyond Capable Maintenance (BCM)- Request of Material- and contractor’s acknowledgement of receipt. The Contractor shall monitor returns considering the initial net asset position, all carcass returns including assets Beyond Economical Repair (BER) and non-repair decisions. The Contractor shall report on demand and carcass returns at each PMR. The Contractor shall notify the Government within 60 days of when the level of assets is expected to fall to a level that jeopardizes the Contractor’s ability to meet performance metrics. If the Contractor demonstrates that retrograde/carcass returns have been insufficient to support the program, temporary relief to the SRT performance metric for the NSN may be granted.

The Government shall retain ownership of all GFE wholesale inventory (RFI and non-RFI) and the Contractor will treat the GFE wholesale inventory as Government owned, but Contractor managed.

C2-3.0 - PERFORMANCE METRICS

This contract shall be a Firm Fixed Price (FFP) contract. The contractor will be measured by its ability to meet the Supply Response Time outlined in Section C2-3.1.

C2-3.1 AVAILABILITY PERFORMANCE REQUIREMENT- SUPPLY RESPONSE TIME

The availability requirement of this contract will be measured by Supply Response Time (SRT). The SRT will be calculated by taking the number of requisitions fulfilled within the supply response time defined in the Supply Response Time Metric table below, and dividing that figure by the total number of requisitions received by the Contractor. The Supply Response time will be expressed as a percent. Response Time will be defined as the length of time, in business days, from Contractor receipt of requisition until contractor notification of ATAC in CAV RP that requisitioned material is available for pick-up (meeting the criteria of “delivered” in the formula found in 3.1.3 below).

The contractor shall maintain SRT for each measurement period, in accordance with the Fill Days set forth in the Table 3 below for the life of the contract. The SRT metric shall be monitored by the Government and the Contractor throughout the term of the contract and shall be reported at a minimum by the Contractor at the semi-annual Metric/Status review as well as PMRs.

The Contractor shall review performance informally on a monthly basis, and report performance at both semi-annual Metric/Status reviews and PMRs (CDRL 0007). The Contractor shall provide the following seven (7) days before scheduled reviews:

1) a statement of SRT percentage achieved,

2) unfilled requisitions by IPG and age, and

3) summary of the data used in assessing performance for that period.

The Contractor shall deliver RFI assets in response to requisitions within the time frames specified in Table 3. If multiple requisitions for the same part number, or NIIN, are received by the Contractor, UMMIPS shall determine the release sequence, unless otherwise directed by the PCO.

The SRT metric is solely for the purpose of determining price adjustments and does not constitute a waiver of any legal rights or remedies. The contractor is required to deliver in accordance with the SRT metric specified in

Table 3 below. The Government retains all rights and remedies including termination for default if the contractor fails to deliver conforming items in accordance with the SRT metric specified in Table 3 below.

Requisitions delayed because the Government did not return a carcass—whether due to non-return, loss, or late turn-in—will be excluded from SRT performance calculations when the Contractor shows the delay was Government-caused. Such exclusions require Contracting Officer approval and will not negatively impact performance assessments.

TABLE 3: SUPPLY RESPONSE TIME METRIC

Issue Priority Group (IPG) Requisition Priority Percent of Requisitions Filled Fill Days

1 through 3

91% SRT-1: 2 business days 100% SRT-2: 20 business days

2 and 3

4 through 15

91% SRT-1: 5 business days 100% SRT-2: 30 business days

3.1.1 - All IPG 1 requisitions: For the performance period:

91% of all priority 1 through 3 requisitions shall be made available for delivery within two (2) business days.

The remaining nine 9% shall be available for delivery in 20 business days.

3.1.2 - All IPG 2 and 3 requisitions: For the performance period:

91% percent of all priority 4 through 15 requisitions shall be delivered within five (5) business days. The remaining nine 9% shall be delivered in 30 days.

Any requisition unfilled and past the SRT-1 day, but before the SRT-2 day shall be considered “open”. The status of any requisition unfilled and past SRT-2 day shall be presented at PMRs as well as upon request of the Government.

3.1.3 – Supply Response Time Assessment

SRT performance will be formally assessed for each performance period as specified in Section B of this contract.

In addition, SRT will be informally assessed each month.

The percentage of requisitions delivered on time for their respective IPG category are calculated as follows (expressed as a percent; normal rounding rules to the nearest one tenth of a perecentage point apply with round-up at .5 and above and round-down below .5):

The Number of Requisitions delivered by SRT-1 Due Date Total Number of Requisitions Due in the Performance Period for the IPG Category Measured

The Number of Requisitions delivered by SRT-2 Due Date Total Number of Requisitions Due in the Performance Period for the IPG Category

Measured For IPG 1:

Unfilled requisitions up to two (2) days old at the end of a performance period will not count in calculations for the performance period in which they we were received. Those requisitions will be carried over to the next performance period, counted, and the SRT metric applied to those requisitions during the next performance period.

Unfilled requisitions greater than two (2) days old, but less than 20 days old for the SRT-1 measurement at the end of a performance period will count as received during the current performance period for the SRT-1. These requisitions will not count as received for the current performance period for SRT-2. The requisitions will be carried over the next performance period, counted, and the SRT-2 metric applied to those requisitions during the next performance period.

Unfilled requisitions greater than 20 days old for the SRT-1 measurement period will count as received during the current performance period and be used in calculating SRT-1 and SRT-2 metrics. The requisition will also be counted as received (due) and unfilled in every applicable SRT calculation for every performance period it is open.

Each requisition not filled in accordance with SRT time frames and still unfilled as of the beginning of a new performance period will be counted again as another requisition as if it were received on the first day of that subsequent performance period until it is filled. Therefore, a requisition may be counted as undelivered more than once, depending on how long it remains unfilled. See below for examples:

1. Performance period 26 September 2027- 25 September

2028, Requisition is received on 30 March 2028 and filled 26 September 2028

Requisition counts as received during the 26 September 2027- 25 September 2028 period of performance and a “miss” is assigned to the SRT-1 and SRT-2 metric.

The requisition is also counted as received during the next performance, 26 September 2028- 25 September 2029.

The requisition is counted as a “fill” for the 26 September 2028- 25 September 2029 performance period and applied to the SRT-1 metric as it was filled before the second day SRT-1 metric expired

2. Performance period 26 September 2027- 25 September 2028

Requisition received 26 September 2027 and filled 15 October 2028

Requisition counts as received during the 26 September 2027- 25 September 2028 period of performance and a miss is assigned to the SRT-1 and SRT-2 metric

The requisition is also counted as a received during the next performance 26 September 2028 - 25 September 2029

The requisition is counted as a “fill” for the 26 September 2028- 25 September 2029 and be applied to the total percentage of requisitions filled for this period for the SRT-2 metric

3. Performance period 26 September 2027- 25 September 2028

Requisition is received 1 August 2028 and filled 1 January 2030

Requisition counts as received during the 26 September 2027- 25 September 2028 period of performance and a “miss” is assigned to the SRT-1 and SRT-2 metric

Requisition is counted as received again in the 26 September 2028-25 September 2029 period of performance and a “miss” is assigned to the SRT-1 and SRT-2 metric

Requisition is counted as received again in the 26 September 2029- 25 September 2030 period of performance and will count as a “fill” for this period for the SRT-1 metric

4. The first Performance period 26 September 2027- 25 September 2028 The second Performance period is 26 September 2028- 25 September 2029

Requisition is received 22 September 2028 (a business day).

Requisition is filled (on-time) 26 September 2028.

Requisition counts as received during the 26 September 2028- 25 September 2029 (second Performance period) and is considered a “fill” for this period for SRT-1 metric (the PoP in which the requisition was due).

5. The first Performance period 26 September 2027- 25 September 2028 The second Performance period is 26 September 2028- 25 September 2029.

Requisition is received 22 September 2028 (a business day).

Requisition is filled 15 November 2028.

Requisition counts as “miss” for SRT-1 Metric in the 26 September 2027-25 September 2028 performance period and a “miss” for SRT-2 Metric in the 26 September 2028- 25 September 2029 (the PoP in which the requisition was due)

For IPG 2 & 3:

Unfilled requisitions up to five (5) days old at the end of a performance period will not count in calculations for the performance period in which they we were received. Those requisitions will be carried over to the next performance period, counted, and SRT-1 metric applied to those requisitions during the next performance period.

Unfilled requisitions greater than five (5) days old, but less than 31 days old for the SRT-1 measurement at the end of a performance period will count as received during the current performance period for the SRT-1. These requisitions will not count as received for the current performance period for SRT-2. The requisitions will be carried over the next performance period, counted, and the SRT metric applied to those requisitions during the next performance period.

Unfilled requisitions greater than 30 days old for the SRT-1 measurement period will count as received (due) during the current performance period and be used in calculating SRT-1 and SRT-2 metrics. The requisition will also be counted as received (due) and unfilled in every applicable SRT calculation for every performance period it is open.

Each requisition not filled in accordance with SRT time frames and still unfilled as of the beginning of a new performance period will be counted again as another requisition as if it were received on the first day of that subsequent performance period until it is filled. Therefore, a requisition may be counted as undelivered more than once, depending on how long it remains unfilled.

SRT Exclusions:

For any annual formal performance period, the Contractor may make a written request, with supporting documentation, to have requisitions excluded from the base requisition count for purposes of performance assessment. If the PCO determines exclusion is warranted, those requisitions shall be excluded from the base count. Such requests must be made within 15 days of the time exclusion is known. An exclusion for performance assessment purposes does not relieve the Contractor from the obligation to fill the requisition.

3.1.4…