Amendment_0008_attachment_2-PWS_wTrk_amend_2_3_5_AND_6.doc

The changes reflected in this document are specific to Amendment 0002,0003 and 0005 AND 0006 of the RRAD IPV solicitation. Other changes/additions made will have the specific Amendment indicated from the solicitation.

Performance Work Statement

1.0 INTRODUCTION

This Performance Work Statement (PWS) defines the effort required to implement the Industrial Product - Support Vendor (IPV) program of the Defense Logistics Agency (DLA) Land and Maritime at Red River Army Depot (RRAD). An additional (amend 0006) IPV site may be included under this contract to support operations at any Army Industrial Site where a DLA managed IPV program is in full operation at the time of the need.

1.1 Scope

The scope of this contract is for total supply chain management in direct support of bench stock items for RRAD and possibly an additional (amend 0006) site to be added after contract. In the event an additional (amend 0006) site is added, paragraphs 1–7, and 9 of this PWS will apply to that site. Bench stock items are required for maintenance support and/or overhaul of all military weapons systems or related equipment supported at the designated Army site and the criteria for IPV items is listed below. The bench stock parts will normally be stored at or near the point of use (line-side support) in performance of the maintenance, repair, and/or overhaul of military weapons systems or related equipment. Items falling under this definition, that due to size or special storage requirements are not stored in a bin but still near the point of use, are sometimes referred to as “line side stock”. Bench stock items may also be listed in the “Bill of Materials (BOM)” for applicable weapons systems or related equipment (see Exhibit 3). The magnitude of this effort and of bench stock items being supplied shall flex upward or downward depending upon the maintenance line activities at the above mentioned Army maintenance sites. The scope of this contract includes the flexibility of the Contractor to provide seamless, uninterrupted support when RRAD requirements for bench stock items change or production line configurations and building location changes.

This acquisition initiative will provide for bench stock items to the maintenance line at Red River Army Depot, which will provide the framework to improve the supply chain process and achieve improved performance levels.

The IPV Contractor will be required to use innovative methods and best commercial business practices for business management, coupled with sourcing of supplies from appropriate government and commercial sources of supply, to furnish timely, cost efficient, integrated supply chain management of bench stock items required by RRAD in their maintenance, overhaul and repair of various weapons systems and other military equipment, together with related services and information technology systems (ITS). In addition to the high use bench stock items that fit into bins, the scope also provides for support for materials that are used on the production line, however due to size and/or storage requirements may not fit into bins. The broad range of total supply chain management tasks required by this contract includes:

· supply chain and inventory management

· parts acquisition

· receiving, warehousing, and material issue

· physical inventory control

· distribution (line side presentation to the mechanic or artisan)

· bin management

· forecasting

· obsolescence management

· dedicated program customer service representatives

· kitting

· quality assurance to ensure that the parts provided meet specifications and are maintained in the bins at the required levels

· the ITS necessary to support the contract data, supply chain management functions and invoice/billing requirements specified by the contract and the Implementation Plan(s) The receiving function includes offloading of freight, including proper handling, inspection classification, reclassification (using kind, count, and condition procedures) of all incoming material, and the routing of that material to storage. The receiving function also includes checking packaging, markings, and the use of research data systems, such as Federal Logistics Information System (FLIS). The Contractor is responsible for maintaining documentation, reporting discrepancies, and identifying items requiring inspection or testing by Government Quality Assurance personnel.

The ITS provided must interface with government systems, provide real time inventory (including commercial, DLA, and any Army-owned material), supply, and billing visibility, support demand forecasts (for both the Contractor’s and Government’s supply chain), allow all material to be tracked and traced, support inventory management and process MILSTRIP requisitions. It also must track and display parts consumption while providing report capability through batch processing of data and reports.

The IPV contract is a performance-based agreement structured around this PWS. Performance-based contracting emphasizes that all aspects of an acquisition are based upon the purpose of the work to be performed as opposed to the manner in which the work is executed. The concept of performance-based logistics is designed to ensure the Contractor is given the freedom to determine how to meet the prescribed Government’s performance objectives and defined quality levels. Payment will be rendered only for services that meet or exceed these levels.

1.1.1 Red River Army Depot (RRAD), Texarkana, Texas

DLA Land and Maritime, in conjunction with Red River Army Depot, have identified multiple items that are initially within the scope of this contract; however, items could be added or removed during the term of the contract.

The RRAD Contract Line Item Number (CLIN) structure is as follows:

CLIN 0001 = Commercially Sourced Parts CLIN 0002 = Kitting Parts (labor rate for kits) CLIN 0003 = Material Management Price (amend 0006) for active NSNs CLIN 0004 = Spot Buy (cost of item and transportation) CLIN 0005 = Spot Buy Process Fee (processing) CLIN 0006 = Implementation/Transition CLIN 0007 = Material Management Price (amend 0006) for warehousing Army-owned inventory at the contractor’s warehouse

1.1.2 Additional (amend 0006) IPV Site

An additional (amend 0006) IPV site may be included under this contract to support operations at any Army Industrial Site where a DLA managed IPV program is in full operation at the time of the need. The provisions of Federal Acquisition Regulation (FAR) 6.302, Circumstances Permitting Other Than Full and Open Competition, will apply. At this time, that additional (amend 0006) IPV site will not be named or priced.

1.2 Objectives

The objectives of the IPV Program are:

a. To have bench stock items that conform to specification always available when needed by the mechanic or artisan. Materiel should be available whenever needed, including periods of deployment, mobilization, or other unanticipated demands. RRAD assumes ownership of material only when it is placed in the bin (or at a Army-designated RRAD location if due to size or special storage requirements the items not stored in a bin).

b. The reduction of inventory investment by RRAD and by DLA through the elimination of excess bench stock item inventory and by maintaining only that inventory necessary to carry out the mission of the RRAD.

c. An elimination of systems being released from the facility without all bench stock items.

d. An effective balance between sourcing from the Contractor's supply chain and Government sources to achieve maximum efficiency in supply support for RRAD commensurate with asset investment.

e. The capability to provide timely response to the RRAD’s requests for “spot buys” as set forth in this contract.

1.3 Contractor Responsibilities

The Contractor shall perform all functions of the PWS, including (amend 0006):

a. Facilitate collection, generation, and sharing of maintenance forecast data and other relevant logistics information

b. For each active NSN, forecast demand and establish an appropriate asset/stocking level and position for 10 calendar days

c. Function as a source of supply for the population of NSNs listed in the schedule of supplies

d. Coordinate and synchronize its logistics and production processes to provide a predictable and reliable supply of items to meet normal and contingency requirements

e. Purchase all assets needed to meet stocking objectives for normal and contingency requirements

f. Manage the contractual relationships of the Original Equipment Manufacturers (OEMs) and suppliers that will provide the NSNs listed in the schedule of supplies

g. Manage and provide the warehousing network

h. Manage the supplier base (maintaining sources of supply with emphasis on expanding small business participation)

i. Perform obsolescence management

j. Provide dedicated program customer service

k. Move army owned material to designated location (e.g., different bin/line, contractor warehouse, Army warehouse) should production/maintenance lines shut down and/or be re-aligned.

1.4 Site Manager

The Contractor shall designate both a primary and an alternate site manager for each site who have full authority to act for the Contractor on all matters relating to the Contractor’s operations. The site manager or alternate shall be available to meet in person with government personnel at the site within one hour during normal duty hours and within two hours outside of normal duty hours. The Contractor shall provide the names and telephone numbers (to include mobile telephone) of the primary and alternate site managers in writing at the start of implementation. In the event of the replacement of the site and/or alternate site manager, the Contractor shall notify the Contracting Officer, in writing, of such replacement and provide the name(s) and telephone number(s) at least 15 calendar days prior to a planned replacement and within 24 hours following an unplanned replacement.

1.5 Definitions

(1) Industrial Product-Support Vendor (IPV): the title given to this program, which is an integrated supplier solution for Vendor Management Inventory (VMI).

(2) Acquisition Identification Description (AID): The AID identifies those firms that have received prior source approval from the cognizant Military Service’s Engineering Support Activity (ESA). The requiring Military Service defines or specifies the technical requirements of the item being procured and maintains the accuracy of the AID.

(3) AMC: Acquisition Method Code (see Defense Federal Acquisition Regulation Supplement Procedures Guidance Information (PGI) 217.7506—SPARE PARTS BREAKOUT PROGRAM, PART 2--BREAKOUT CODING, paragraph 2-201.1 at http://www.acq.osd.mil/dpap/dars/pgi/pgi_htm/PGI217_75.htm)

(4) AMC HQ: Army Materiel Command Headquarters

(5) AMSC: Acquisition Method Suffix Code (see DFARS PGI 217.7506—SPARE PARTS BREAKOUT PROGRAM, PART 2--BREAKOUT CODING, paragraph PGI 2-201.2 at http://www.acq.osd.mil/dpap/dars/pgi/pgi_htm/PGI217_75.htm)

(6) Bench Stock Items: Includes Class II, III, IV, or IX spare parts.

(7) Bin: The individual containers placed within specified locations for the purpose of storing a quantity of a single item of supply, which may be an NSN or part number.

(8) Bin Location: A storage area at or near the point of use.

(9) BOM: Bill of Materials. A list of the raw materials, sub-assemblies, intermediate assemblies, sub-components, components, parts and the quantities of each needed to manufacture a product. The BOM contains bench stock items identified by RRAD in support of maintenance at each designated site.

(10) Business Day: A 24-hour period, not including weekends and holidays.

(11) C-Folders: A government website where a contractor may access drawings.

(12) COR: Contracting Officer Representative(s); the individual(s) designated in accordance with DFARS 201.602-2 and authorized in writing by the Contracting Officer to perform specific technical or administrative functions listed in the COR appointment letters.

(13) Contractor: The prime IPV contract holder.

(14) Contract Calendar Year: is (i) a period of 365 consecutive days (366 days in a leap year) commencing on the date of contract, or (ii) a period of 365 consecutive days (366 days in a leap year) commencing on the first day following the last day of the preceding contract calendar year. If any contract period consists of more than one contract calendar year, the Government’s estimated quantities for that contract period will be the estimated annual quantity multiplied by the number of years in the period, unless the annual estimates are adjusted pursuant to Consumption Reports delivered by the Contractor. The contract year shall expire at 11:59 P.M., Eastern Standard Time (EST) on the date described herein.

(15) CAI: Critical Application Item; An item essential to weapon system performance or operation, or the preservation of life or safety of operating personnel, as determined by the military services.

(16) CSI: Critical Safety Item; All parts whose failure would cause loss of life, permanent disability or major injury, loss of a system, or significant equipment damage.

(17) Customer: A specific Army/Military activity supported under the IPV contract.

(18) Demand: The consumption of Bench Stock Items at RRAD.

(19) DFAS: Defense Finance and Accounting Service

(20) DoD: Department of Defense

(21) Department of Defense Electronic Mall (EMALL): Online tool vendors will access to get information on DoD inventory. (Amendment 0005)

(22) DLAI: Defense Logistics Agency Instruction

(23) DLA SoS: DLA Source of Supply

(24) DSS: Distribution Standard System

(25) EDI: Electronic Data Interchange

(26) EPA: Economic Price Adjustment

(27) ESA: Engineering Support Activity; The military service organization designated as responsible for engineering support and technical decisions for a given part or component in that service.

(28) Estimated Annual Demand Quantities: At the start of the contract and when new items are added to this contract, the Government’s projected needs for each NSN are stated in terms of “estimated annual demand quantities”. The estimated annual quantities are estimates only and represent the government’s good faith estimate of the quantities the government anticipates will be required for distribution during a contract calendar year RRAD. The estimated annual quantities are for evaluation purposes only, this information is provided to assist contractors in developing their proposals, however the Government neither warrants nor guarantees that the Contractor will realize any of the estimated annual quantities provided herein during the performance of the contract.

(29) Exact Product: Items of product designated by National Stock Numbers (“NSNs”), identified in the AID by the Contractor And Government Entity (CAGE) Code, name and part number of a manufacturer or other entity, or by the CAGE Code, name, and part number of a manufacturer or other entity, as modified by additional requirements set forth in the AID, and which must be manufactured by, or under the direction of, the manufacturers or other entities whose CAGE Codes, names and part numbers are specified (i.e. approved/acceptable sources). Any product not meeting the criteria of an Exact Product is an Alternate Product, even though it might be manufactured in accordance with the drawings and/or other specifications of the manufacturer or other entity identified in the AID. See DLAD 52.217-9002.

(30) Fair Market Price: A price based on reasonable costs under normal competitive conditions and not on lowest possible cost.

(31) Federal Department of Defense Electronic Mall (Fed-mall): Online tool scheduled to replace EMALL in summer of 2016 that will allow vendors access to information on DoD inventory. (Amendment 0005)

(32) FSC: Federal Supply Class; Federal materiel classification groupings.

(33) FMR: Financial Management Regulation

(34) F.O.B.: Free On Board; without charge to the purchaser for delivery on board or into a carrier at a specified point or location.

(35) Formal Implementation Plan: The schedule of activities to implement performance at the IPV site.

(36) Get Well Plan: A plan submitted by the Contractor to the Government when a non-conforming part is received that describes how the Contractor plans to replace the part and limit the impact to the production line.

(37) GFM: Government Furnished Material

(38) Interchangeability: Includes all specified requirements for form, fit, function, interface and compatibility of the specified part. For an alternate or substitute part to be interchangeable with the specified part, it must possess the same functional and physical characteristics as to be equivalent in performance and durability of the specified part, and it must be capable of being exchanged one for the other without alteration of the part, or of adjoining parts, and without selection for fit and performance. The alternate or substitute part, in all respects, must interface, and be compatible with, any and all parts, assemblies, sub-assemblies, etc., with which the specified part interfaces.

(39) KCC:

(a) Kind: A visual inspection of at least one bare item for verification of the part number/ NSN and contract number.

(b) Count: A count of the total number of packages received and verification of the count of the contents of one package per line item received.

(c) Condition: A visual verification of the general physical appearance of all packages and visual verification of specific characteristics of the bare item when an alert notice and/or other technical data is provided in the DSS receipt files or by special inspection request by the technical offices of the procuring activity.

(36) Kit: Made up of a number of replenishment parts and industrial hardware, listed on the schedule, that are combined and provided in one package, box, container, etc.

(37) KO: Refers to Contracting Officer and may also be designated or used interchangeably with “CO” within this document.

(38) Logistics Modernization Program (LMP): RRAD Supply System. (Amendment 0005)

(39) MILSVC: Military Service

(40) MM: Material Master; A record that holds vital descriptive information about a particular item (good or service). The MM includes data across several groups within the supply chain, including basic data, technical and quality data, purchasing data, sales data, packaging data, supply management data and accounting data.

(41) MSDS: Material Safety Data Sheet; A document that contains information on the potential health effects of exposure to chemicals, or other potentially dangerous substances, and on safe working procedures users should adhere to when handling chemical products.

(42) NSN: National Stock Number; The 13-digit materiel identifier consisting of a four-digit Federal Supply Class (FSC) and a nine-digit National Item Identification Number (NIIN).

(43) New Item of Supply: Any item added by way of contract modification subsequent to the original requirements list.

(44) NRE: Non-Recurring Engineering Effort; Refers to the one-time cost of researching, designing, and testing a new product. When budgeting for a project, NRE must be considered in order to analyze if a new product will be profitable. Even though a company will pay for NRE on a project only once, NRE can be considerably high and the product will have to sell well enough to produce a return on the initial investment. NRE is unlike production costs, which must be paid continually in order to maintain production of a product.

(45) Obsolete Part: A part that is no longer in current or continuous production, and for which necessary manufacturing tooling is not available for the resumption of manufacture of the part.

(46) PIIN: Procurement Item Identification Number

(47) Production Lead Time (PLT) – the time from award to delivery of an item. This will be provided by DLA at the time the item is added to the schedule of supplies. (Amendment 0003)

(48) QPL: Qualified Product List; A list of products or families of products that have successfully completed the formal qualification process (including all specified periodic tests) that examines, tests, and verifies that a specific product design meets all the applicable specification requirements.

(49) QML: Qualified Manufacturers List; A list of manufacturer of products that have successfully completed the formal qualification process (including all specified periodic tests) that examines, tests, and verifies that a specific manufacturer meets all the applicable specification requirements.

(50) QSLM: Qualified Suppliers List of Manufacturers A list of manufacturers whose processes and materials have been successfully subjected to a defined set of qualification and periodic tests using processes, worst case designs or materials, to verify the end product’s design, performance, quality, and reliability meet all the applicable specification requirements.

(51) QSLD: Qualified Suppliers List of Distributors; A list of distributors whose processes and materials have been successfully subjected to a defined set of qualification and periodic tests using processes, worst case designs or materials, to verify the end product’s design, performance, quality, and reliability meet all the applicable specification requirements.

(52) RIC: Routing Identifier Code

(53) Root Cause Analysis: A technique used to identify the conditions that initiate the occurrence of an undesired activity or state.

(54) Safety Stock: Additional parts or material, stored at the Contractor’s expense, for RRAD in the event of a stock outage, a bin becomes empty, or when a replacement for non-conforming material is realized.

(55) SMI: Service Managed Inventory

(56) Special Procedures Coding: The SPC code permits the identification of critical items that require special processing, e.g., Aircraft Launch & Recovery Equipment (ALRE), Individual Repair Parts Ordering Data (IRPOD), Critical Safety Item (CSI), Intercontinental Ballistic Missile (ICBM).

(57) Specialized Small Business Category - based on size standard and industry, small businesses may fall into one of the following categories: Small Business Set-Aside, 8(a) Business Development, Woman Owned Small Businesses, Economically Disadvantaged Woman Owned Small Businesses, HUBZone, Service Disabled Veteran Owned Small Businesses, and other small business programs.

(58) Spot Buy: The acquisition of any bench stock items required by RRAD, not readily available in support of maintenance activities.

(59) SRM: Supplier Relationship Management

(60) Stock Out: Parts not available by type and/or quantity when required at the maintenance site/production line at the time of repair or assembly in support of the production line.

(61) Technical Data Package (TDP): A technical description of an item adequate for supporting an acquisition strategy, production, engineering and logistics support. Defines the required design configuration and procedures required to ensure adequacy of item performance. It consists of all applicable technical data such as drawings and associated list, specifications, standards, quality assurance requirements, software and package details.

2.0 MATERIAL AND MATERIAL MANAGEMENT

2.1 Items of Supply

Items of supply will be provided to RRAD.

2.2 Schedule of Supplies (SoS)

The SOS is the list of bench stock items developed by DLA/DLA Land and Maritime and RRAD as required for the support of the RRAD’s mission of maintenance overhaul and repair of its weapons systems and related equipment. The required materiel to be provided by this contract can be identified by National Stock Numbers (NSN), part-numbers and manufacturer codes, drawings, or nomenclature. DLA/DLA Land and Maritime has identified a population of items that are within the scope of this contract. However, additional items which meet the definition of bench stock items and fall within the scope of this contract may be added and other items may be removed. A listing of the items on the SOS is at RFP Attachment I.

The SOS has the following categories of items (Amendment 0003):

a. Commercially Sourced List: items that will be priced and evaluated prior to the award of the contract, and may be included in the contract as priced items on the date of contract award.

b. Supplemental List: items that are not priced at the time of contract award, but may be added to the contract as commercially-sourced priced items in accordance with a pricing schedule established by the Implementation Plan.

c. Schedule of Additional Items: items added to the contract as prescribed by the Army COR. Items added to the contract shall meet the scope outlined herein. The Government reserves the right to move items between the Commercially Sourced and Supplemental List.

These types of bench stock items are normally stored at or near the point of use where mechanics and artisans are employed in the maintenance, overhaul and repair of weapons systems and related military equipment. However, other bench stock items, the size and shape of which do not lend themselves to being easily stored in bins, may be stored elsewhere as determined by the Army COR or DLA and delivered to the point of use in a fashion consistent with the delivery point space available and the production line schedule.

High volume, recurring use items are the primary focus of the support required under this PWS. However, non-recurring demand, and low volume use items are included, as they are deemed essential to the successful accomplishment RRAD’s mission. Requirements may include items that contain a number of designated replacement or repair parts for a single assembly or sub-assembly provided in a single container, commonly referred to as a “Kit.” The Contractor shall work with the Army COR and the Contracting Officer to develop kits tailored to meet RRAD needs. The kits shall be limited to the items included in the Schedule of Supplies.

Items covered by this PWS are generally cataloged under, but are not limited to, the following Federal Supply Classes (FSCs): 1240; 1260; 1270; 1420; 1430; 1440; 2510; 2530; 2540; 2590; 2910; 2920; 2930; 2940; 2990; 3010; 3020; 3030; 3040; 3110; 3120; 4010; 4020; 4030; 4130; 4140; 4310; 4330; 4710; 4720; 4730; 4820; 5305; 5306; 5307; 5310; 5315; 5320; 5325; 5330; 5331; 5340; 5342; 5355; 5360; 5365; 5410; 5805; 5810; 5840; 5850; 5855; 5895; 5905; 5910; 5915; 5920; 5925; 5930; 5935; 5940; 5945; 5950; 5955; 5960; 5961; 5962; 5965; 5970; 5975; 5977; 5980; 5985; 5990; 5995; 5996; 5998; 5999; 6060; 6105; 6130; 6135; 6140; 6145; 6150; 6160; 6210; 6220; 6240; 6250; 6620; 6625; 6645; 6650; 6680; 6685; 9150; 9320; 9330; 9340; 9510; 9530; and, 9535. FSC descriptions may be found at http://www.dlis.dla.mil/H2/H2Home.aspx.

2.3 Additions, Deletions, or Changes to the Schedule of Supplies The scope of this PWS includes items of supply which are not on the SOS as of the date of contract, but which are subsequently determined by the installation to be essential in accomplishing its mission of maintenance, overhaul or repair of weapons systems or military equipment. At the discretion of the Army COR, such items may be acquired under the “SPOT BUY” provision of the contract. If the Army COR determines that the need for such an item is recurring, the item will be added by modification to the SOS in the contract.

2.3.1 Addition or Deletion of Items; Changes or Substitution

From time to time, items may be added to or deleted from this contract, as the maintenance/production requirements might dictate. Changes in, or substitution for, any item(s) specified may be made only in accordance with the provisions and limitations set forth in this contract. The Contractor shall furnish items added to this contract in strict accordance with the technical requirements specified in the Material Master (MM), as designated by the National Stock Numbers (NSNs) or part numbered item for the added items. The Contractor shall not make any changes to, or substitutions for, any added item, except as may be authorized or approved by the Military Service having configuration management and/or technical responsibility for the added item, (collectively referred to as the “Engineering Support Activity” or “ESA”). (However, should a replacement NSN be issued by Defense Logistics Information Service (DLIS) for an item on the contract schedule, the Contractor is authorized to obtain the replacement NSN prior to the update of the contract schedule, if the item is needed on RRAD lines.) The ESA will review proposed changes or substitutions to determine whether the proposed alternate or substitute part complies with material and design requirements of the specified item, as well as the item’s requirements for form, fit, function, interchangeability and interface. The Contractor shall, upon request, provide a complete Technical Data Package (TDP) reflecting the design, materials and performance characteristics, inspection and testing criteria, as well as fit, form, function and interchangeability/ interface features, of its proposed alternate or substitute item. Pending evaluation by the ESA, the Contractor shall furnish the item in strict accordance with the technical requirements specified for the NSN.

2.3.2 Government-Initiated Additions and Deletions

During contract performance, the Contracting Officer may add or delete items to or from the contract or designate items as active or inactive on the contract as the requirements of the industrial maintenance site(s) dictate.

Active/Inactive (Applicable Only to NSNs Listed in the SOS)

The Contracting Officer may in writing unilaterally convert an NSN from an inactive to active status or from an active to inactive status. When a commercial-sourced item is unilaterally moved by the Contracting Officer from inactive to active the Contractor has one Production Lead Time (PLT)to supply the item. When a government-sourced item is unilaterally moved by the Contracting Officer from inactive to active, the Contractor shall immediately begin supplying it to the designated bins.

When NSNs are designated as inactive, the Contractor is relieved of all IPV responsibilities (Section C of the contract) as it relates to the subject NSN. The Economic Price Adjustment shall be applied to all NSNs on the SOS, whether the item is designated as active or inactive.

Additional/Deletion to the SOS During contract performance, the Contracting Officer may in writing unilaterally add or delete government-sourced NSNs. The Contracting Officer must provide the Contractor one month advance written notice of government-sourced NSNs added to or removed from the contract. If government-sourced NSNs are added, the Contracting Officer must further provide the bin locations of the NSNs being added. By bilateral modification, commercially-sourced items can be added to the contract in support of the industrial maintenance site’s production maintenance lines.

2.3.3 Contractor-Initiated Additions and Deletions

During any period of this contract, the Contractor may propose items to be added to or deleted from the contract. Prior to proposing the addition or deletion of items to the Contracting Officer, the Contractor shall coordinate with the Army COR as to the feasibility of adding or deleting the items to the contract.

Additionally, during any period of the contract, the Contractor may propose changes to, or substitutions for, spare part(s) covered by the contract.

The Contractor shall create consumption analysis models, based on facts or circumstances peculiar to RRAD and on technical specification data, in order to make recommendations with regard to the following:

a. The deletion of obsolete items from the contract

b. Removal of non-use or low usage items from the work areas where they are not being used

c. The substitution or replacement of items as deemed necessary or appropriate. The effect of such change(s) or substitution(s) on material, design, fit, form, function, and interchangeability/interface must be determined by the ESA. Further, changes or substitutions for item(s) coded as Special Procedures Coding (SPC) and Critical Application Items (CAI) must be supported by a complete TDP for review by the ESA. This includes, but is not limited to, changes in designated part number(s), manufacturing location(s) when the item has approved manufacturing location(s), and the manufacturers’ name(s)logo(s) (even after mergers or consolidations, or the sale of product line by an approved source to another entity).

d. Realignment or reconfiguration of the distribution system or of the work areas being supported under the contract. Since some of the parts covered under this contract are used in more than one maintenance site, the realignment recommendations should consider the fact that items may no longer be needed at one maintenance site/work area but may be needed elsewhere. However, except as provided for under the spot buy and alternate and replacement items provisions, no action to distribute, use or dispose of any part, or execute any recommendations, shall be acted upon until the action has been approved by the Government’s Contracting Officer in accordance with the provisions of this contract and PWS.

The Contractor shall use this model to make recommendations with regard to the deletion of items from the contract or away from the work areas where they are not used. If appropriate, the Contractor will recommend that non-use or low usage items be transferred to a maintenance site with sufficient demands to justify holding the materiel or to a DLA depot.

Additionally, in lieu of items being deleted from the contract, they may be changed to an inactive status if the Contracting Officer determines there is a reasonable expectation the items will be needed for future maintenance lines throughout the life of the contract. In such cases, the following applies:

a. When a NSN on CLIN 0001 is designated as inactive, the Contractor is relieved of all IPV responsibilities as it relates to the subject NSN at the maintenance depot.

b. If the NSN is maintained in an inactive status during the application of an Economic Price Adjustment, the adjustment will be applied to the applicable NSN.

2.3.3.1 Obsolescence Provision

The Contractor and the Contracting Officer agree that the prices and the delivery commitments under this contract are predicated upon the assumption that the items for which they are stated are items that are in current or continuous production, and that manufacturing tooling is available for the resumption of manufacture of the item(s) that are not in current or continuous production. The parties also agree that there might be instances in which the Contractor will be required to propose that alternate Military and/or commercial specification parts (if available) be directly substituted for obsolete parts. In such instances, the proposed alternate or substitute part must comply with all of the requirements of the specified item for form, fit, function and interchangeability. If there are no known acceptable substitute parts, as determined by the Government, the Contractor will have to provide a Technical Data Package (TDP) for review/approval by the Engineering Support Activity (ESA). Further, if the obsolete item is coded as a Critical Application Item (CAI), the prior approval of the designated ESA is required for any substitute item. See the Section entitled “Addition and Deletion of Items; Changes or Substitutions,” and Section 2.13 entitled “Alternate Products for Specific Part Numbered Items” for the procedures for the submission of TDPs.

Prices set forth in this contract do not include any costs for Non-recurring Engineering Effort (NRE) that might be required to redesign the hardware for any obsolete parts that are not directly replaceable and do not include any costs for NRE that might be required to redesign manufacturing tooling or test equipment that is no longer available. If it becomes apparent after the contract date that NRE is required, the Contractor shall notify the Contracting Officer of the item(s) involved, and the NRE required.

2.3.4 Administration of Additions and Deletions under this Provision

When the number of active NSNs changes, the CLIN 0003 fixed monthly price shall be adjusted. For example:

Monthly Price per NSN

#of Active NSNs

Fixed Monthly Price

$20.00 1,000

$20,000 To further explain, here is an additional example. During the month of June, the following changes are made at RRAD:

Active Sourced NSNs made Inactive: 35 Newly added Active NSNs: 40 The total NET change in the number of NSNs under CLIN 0003 is an upward adjustment of 5. The final monthly fee for June is increased by $100.00 (5 x $20.00) for a fixed monthly price of $20,100. (amend 0006). Additionally, 30 items would be added to CLIN 0001 with a material/parts fixed unit price.

When the number of inactive Army-owned NSNs warehoused at the contractor’s warehouse changes, the CLIN 0007 fixed monthly price shall be adjusted. For example:

Monthly Price per NSN

#of Inactive NSNs (May)

Fixed Monthly Price

$20.00

$2,000 During the month of June, the following changes are made at RRAD:

Number of inactive Army-owned NSNs no longer warehoused at the contractor’s warehouse: 35

Number of inactive Army-owned NSNs newly warehoused at the contractor’s warehouse: 40

The total NET change in the number of NSNs under CLIN 0007 is an upward adjustment of 5. The final monthly fee for June is increased by $100.00 (5 x $20.00) for a fixed monthly price of $2,100. (amend 0006)

2.4 Sourcing of Covered Items of Supply

Except as otherwise directed by the contract, or by the Contracting Officer, the Contractor will employ its manufacturer/supplier/vendor network, its finances, and its supply chain management capability, to source items for support of planned and unplanned requirements under this contract. This contract allows the Contractor to obtain a portion of the items from DLA, Army and other Government sources, including, but not limited to:

a. Army-owned inventories (to include material warehoused by the Contractor or the Army, as well as material the Army COR has asked be moved from one cost center to another).

b. DLA Distribution Standard System (DLA-DSS),

c. (amend 0006)

d. (amend 0006)

e. The use of DLA Depot inventories, and

f. Existing DLA vendor-managed inventory contracts, some or all of which are tied to meeting the socio-economic mandates of Congress, DoD and DLA.

2.5 Sourcing Order of Priority

The Contractor shall use the following order of priority in exercising its bin replenishment responsibility at RRAD:

a. 1st sourcing order of priority: Use of Army-owned inventories (in order of priority):

1. Army-owned inventory within the Contractor’s warehouse

2. Army-owned inventory within the Army’s warehouse

b. 2nd sourcing order of priority: DLA (amend 0006)VMI.

c. 3rd sourcing order of priority: Contractor’s commercial supply chain for priced items in the SoS. The Contractor is encouraged to find and price as many sources of supply for items on the schedule of requirements as possible, especially for parts.

d. 4th sourcing order of priority: Spot Buy Process.

Note: Even though an item may be identified on the Commercially Sourced List, the contractor shall use the above sourcing priority. If the Army or DLA has inventory, that inventory must be exhausted prior to the contractor using its inventory.

2.5.1 Department Of Defense Activity Address Code (DoDAAC)

Since this contract permits the Contractor to obtain material from DLA sources, the Contractor will be issued a Department of Defense Activity Address Code (DoDAAC) to be used exclusively in performance of any contract for which the DoDAAC is required and subject to any applicable terms or limitations of use established by the Defense Logistics Management Standards Office. This will enable the Contractor to obtain bench stock items from Government sources to assist the Contractor in meeting its obligations of support for items that are not commercially priced. Upon issuance of a DoDAAC to the Contractor, access to the DLA Distribution Standard System (DLA-DSS) will be granted to the Contractor. Approval from the Contracting Officer is required prior to the Contractor acquiring through government systems any commercially-priced item.

a. By means of one or more DoDAAC(s), issued by the Contracting Officer, the Contractor for IPV may have access to the following Defense Logistics Agency (DLA) sources of supply to meet the performance requirements of this contract:

(i)

DLA-DSS;

(amend 0006) (amend 0006) (iv) DLA Vendor Managed Inventory Contracts (DLA-VMICs).

b. Ultimately, the goal of IPV GEN-I Program is for the Contractor to use its own supply chain to meet the performance requirements of this contract. However, there will be instances when (i) for its own reasons, the Contractor will elect to use its DoDAAC(s) to access DLA source(s) of supply (reference CLIN 0003 or (ii) the Contractor will be directed by the Contracting Officer to use its DoDAAC(s) to access DLA source(s) of supply (reference CLIN 0003).

2.6 Exceptions to Sourcing Order of Priority

In the event that adherence to the above order of priority for sourcing supplies will interfere with the Contractor’s compliance with the performance metrics set forth in the contract, the Contractor shall notify the Army COR at RRAD and the Contracting Officer, by written or electronic means, of the nature and extent of the interference, and may request authority to deviate from the order of priority.

2.7 Critical Safety Items

The Contractor shall obtain pre-award approval from the Contracting Officer for each CSI acquisition, which shall include the exact item cited in the AID, exclusively from a source cited in the AID.

2.8 Supply of Parts at RRAD

The Contractor shall supply and maintain the required items of supply in all bin and/or line side stock locations, or other RRAD-designated delivery location(s) (for bench stock inappropriate for bin storage due to size or storage requirements), at levels not to exceed the quantity of 10 days’ demand, and such that any and all bench stock items are available to the artisans or mechanics at or near the point of use, when the mechanics or artisans require such bench stock items for the maintenance, overhaul or repair of military weapons systems or other related military equipment. The Contractor shall break packages of items before placement into the bins unless otherwise coordinated with the Army COR. Prior to delivery of item to the bin, consideration should be given to unit of issue and order of unit and whether or not breaking package in advance diminishes quality of the item. If vendor notices significant changes, issues or errors with the supply levels then vendor shall notify the Army COR, the DLA COR and the DLA Program Manager. (amend 0006) Production/maintenance lines at RRAD periodically shut-down and/or re-align leaving material in bins that must be either (a) moved to active bins for the same material on different lines or (b) inventoried and warehoused. If the Army COR so directs, the Contractor shall be responsible to determine if a shut-down/re-aligned line contains active items that can be used on other lines. The Contractor is to perform a kind, count and condition review of the material. The Contractor is also responsible to move Army-owned material on a shut-down/re-aligned line to a designated location (e.g., Army or Contractor warehouse, different bin location).

For material warehoused, there is no exception to the sourcing order of priority—i.e., the Contractor is responsible to ensure adherence to the sourcing order of priority. By example, if the Contractor warehouses Army-owned inventory for an inactive item (i.e., CLIN 0007) that becomes active (i.e., moves to CLIN 0001), the Contractor shall not commercially source that item until all Army-owned material is exhausted. The BCA and Army COR are responsible for reviewing the consumption report described at 4.4.3 to validate that the CLIN 0001 unit price is not invoiced by the Contractor.

The Point of Sale occurs upon delivery of the item to a bin located at the production/maintenance line. For items that due to size or storage requirements are not appropriate for bin storage, the Point of Sale occurs upon delivery to the designated depot location. RRAD assumes ownership of IPV material when it is placed in the bin or the designated depot location.

2.8.1 Procedures for Army-Owned Inventory:

1. Initial notification of the need to invoke this process will likely come from the Army COR. However, only with documentary authorization from the BCA is the contractor to execute it.

2. Upon official authorization/notification from the BCA, contractor shall conduct the kind, count and condition inventory of the material. Weighing the hardware is acceptable when counting. Obvious errors such as a washer erroneously placed in a bolt bin will be removed and disposed of in accordance with contract language. Loose material is to be bagged or boxed as needed and properly marked to clearly identify contents as Army-owned inventory with the NSN or part number if applicable, quantity and nomenclature. Then the contractor will remove the bins and/or material from the production line and transport them to contractor’s warehouse.

3. In addition, an automated system for marking may be used by the contractor to aid them in their inventory tracking.

2.8.1.1 Moving material during production line inactivation/relocation:

1. Initial notification of the need to invoke this process will likely come from the Army COR. However, only with documentary authorization from the BCA is the contractor to execute it.

2. Upon authorization/notification from the BCA of a partial or complete line relocation, the contractor shall move items either from one bin/line-side location to another or by moving an entire bin/rack/storage unit to a different line. The Army COR shall direct the contractor where to move the material/bin/rack/storage unit.

3. Upon authorization/notification from the BCA of a partial or complete line inactivation, the contractor shall remove the items from the production line.

a. Items that can be used by other production lines shall be relocated to those lines by the contractor as long as by adding the material, the maximum of 10 calendar days of inventory is not exceeded. For any active material that cannot fit on another production line, the contractor shall move that inventory to its warehouse for management/tracking and disposition in accordance with the sourcing order of priority. The contractor shall conduct a kind, count, condition inspection of this material prior to warehousing. Weighing the hardware is acceptable when counting, if appropriate. Obvious errors such as a washer erroneously placed in a bolt bin will be removed and disposed of in accordance with the contract. Loose material is to be bagged or boxed as needed and properly marked to clearly identify the contents as Army-owned inventory with the NSN and/or part number, quantity, and nomenclature.

b. For inactive material, the contractor shall move that inventory to its warehouse for management/tracking and disposition in accordance with the contract. The contractor shall conduct a kind, count, condition inspection of this material prior to warehousing. Weighing the hardware is acceptable when counting, if appropriate. Obvious errors such as a washer erroneously placed in a bolt bin will be removed and disposed of in accordance with contract language. Loose material is to be bagged or boxed as needed and properly marked to clearly identify the contents as Army-owned inventory with the NSN and/or part number, quantity, and nomenclature.

4. The contractor will move empty bins/shelving/racks resulting from a production line change when directed by the Army COR.

5. The contractor shall use its own material handling equipment to move any material, bins, racks, or shelving moved under this section.

2.8.1.2 Requesting/Obtaining Hardware from Army-owned Warehouses:

1. The contractor will notify the Army COR of the need for Army-owned inventory from the Army-owned warehouse. This notification should come in the form of an email, fax or telephone call with material number, quantity requested, Nomenclature, Production line supported.

2. The Army COR will work with RRAD personnel to retrieve this stock from the Army-owned warehouse using the current LMP procedures.

3. The Army COR will notify the contractor within two business days when the stock is ready for pickup at buildings 321 or 1172. The Army COR will tell the contractor where the stock is available and assist in locating the stock. The Army COR will assist in setting up a receiving bin in building 321 for Army-owned and issued material.

4. The contractor will record at a minimum the material number, quantity, and Nomenclature with any identifying supplier information (CAGE Code, Supplier name, Contract delivered under) if available. The contractor will retain this record for at least three (3) years from the date of the last invoice for the applicable products. The contractor will not be held liable for quality problems or inventory inaccuracies in Army-owned inventory such as, misidentified material, wrong quantity on location, wrong quantity delivered.

5. The contractor will deliver the hardware to the bin location on the production line. Inventory that will not fit into the bin will be handled with Returning Stock from Production line to Contractor’s Warehouse procedure. (amend 0006)

4.

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2.9 Bins/Storage Units and/or Line Side Stock Locations, or Other Designated Location(s) Unless otherwise provided by the contract, as determined during contract implementation, the Contractor shall use the bins or storage units currently in use. Bins must adequately hold the material appropriate to meet the supply needs. In the event that the bin does not adequately hold the material, the Contractor shall coordinate with the Army COR to address the inadequate bin size.