RR_F402_SOW_17Apr2013.docx

STATEMENT OF WORK

ROLLS ROYCE F402 ENGINE SUPPORT

SECTION 1: GENERAL INFORMATION

1.1 Purpose and Objectives: This acquisition will encompass all F402 engine components that are determined to be sole source to Rolls Royce PLC (also referred to in this document as “the contractor”). Consumable items and depot level reparables (DLRs) managed by either Defense Logistics Agency (DLA) or the military services may be included. The goal of this acquisition is to reduce Production Lead Times (PLT) and increase On-Time Delivery (OTD) in order to improve the overall availability of the items covered under the contract.

1.2 Scope: The National Stock Numbers (NSNs) listed in Attachment 1 constitute the items to be included in the contract. The contractor shall manage and provide these products to the Government on demand, and in accordance with the terms of the contract. As the Government’s source for the items, the contractor will be responsible to the Government for the cost, quality and delivery of all items.

1.2.1 NSNs may be added to the contract, by bilateral modification, as follows:

1.2.1.1 Items that are newly developed by Rolls Royce PLC, and therefore sole source, may be added to this contract.

1.2.1.2 Items that become sole source to Rolls Royce PLC after award, even though alternate sources existed prior to award, may be added to this contract.

1.2.1.3 Replacements for obsolete items already on contract may be added to this contract if Rolls Royce is the sole source of the replacement items.

1.2.1.4 Rolls Royce PLC manufacturing facilities that were not identified in the initial contract award may be added to this contract.

1.2.2 NSNs may be deleted from the contract as follows:

1.2.2.1 Obsolete items may be deleted from the contract by unilateral modification. Rolls Royce PLC will identify obsolete items as well as their replacement items. The replacement items may be added to the contract IAW paragraph 1.2.1.3 above.

1.2.2.2 Competitive items, which can be obtained from sources other than Rolls Royce PLC, even though no alternate sources may have existed at the time of award, shall be deleted by the Government by unilateral modification.

1.2.2.3 The contractor shall continue to accept orders for any deleted items until issuance of the modification that deletes them, or for any duration specified by that modification. Deletion of items under this provision is not subject to the Termination for Convenience provision of this contract and will not otherwise result in any liability by the Government to Rolls Royce PLC.

1.3 Contract: A multiple-year, Fixed Price (with Prospective Price Redetermination) Requirements contract will be established. There will be a five-year basic period of performance with a possible five year option period, for a total potential period of performance of ten years. The place of performance shall be at Rolls Royce PLC’s facilities or as approved in writing by the Contracting Officer.

1.4 Ordering: Any Defense Logistics Agency (DLA) Supply Chain or Military Service activity listed below may issue delivery orders to Rolls Royce PLC for the items listed in Schedule B of the contract. The DLA Aviation Supply Chain will administer the basic contract, but each activity will issue and administer its own delivery orders. For purposes of identifying authorized ordering activities, this section of the SOW is considered ‘the schedule’ as referenced in Defense Federal Acquisition Regulation (DFARS 252.216-7006). The ordering activities are:

DLA Aviation Supply Chain, to include any detachments DLA Land Supply Chain, to include any detachments DLA Maritime Supply Chain, to include any detachments Navy Ordering Activities

1.4.1 Ordering authority for any additional DLA or Military Service activity may be added by bilateral modification to this contract.

SECTION 2: REQUIREMENTS

2.1 Delivery Orders (DOs): The Government shall pass requirements to the contractor in the form of a delivery order. DOs will be issued using Electronic Data Interchange (EDI) or DD Form 1155 Contract/Award Document. The contractor shall then provide the items to the Government in accordance with the terms of the contract. Delivery orders will be issued electronically or manually.

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

2.1.2 Written inquiries for delivery order cancellations will be sent to the contractor electronically via the Internet, e.g. electronic mail. Within two (2) working days after receipt of a request for cancellation, the contractor shall inform the Government if there will be any cancellation cost on the order. If the order can be cancelled at no cost, a no cost-termination for convenience procedure will apply. If cancellation costs apply, the contractor shall provide the Government with the estimated cancellation cost for the order within seven (7) working days of the initial request for cancellation. The Government will respond to the contractor within five (5) working days advising of the Government’s intent to cancel the order.

2.1.3 The contractor shall deliver the items to the location(s) specified in each delivery order. Consistent with contractual delivery schedules the contractor shall consolidate shipments from the same source to the same destination whenever practicable. Priority shipments will not be held for consolidation but shall be shipped immediately.

2.1.3.1 Shipments of consumable and DLR items will be FOB origin.

2.1.4 The contractor is authorized to deliver partial quantity shipments and/or early shipments provided there is no additional cost to the Government. However, unless the contractor is specifically directed otherwise, the partial shipments must be shipped against the delivery order with the earliest delivery date. This statement does not apply to Government requested expedites where an additional fee may apply.

2.2 Obsolescence: The contractor shall notify the Government in writing when an item is no longer procurable due to obsolescence. This notification shall state if a suitable replacement for the discontinued item is recommended.

2.2.1 When specifically requested by the Government, an Obsolescence Management Plan (in contractor format) covering specific items identified by the Government shall be developed by the contractor and provided to the Government within 30 days. The plan shall provide detailed information at the item level. The purpose of the plan is to show that Rolls Royce PLC is aware of and has a plan to mitigate those causes of obsolescence that are within its control (i.e. sole source suppliers, at risk suppliers, at risk material, etc.).

2.2 Quality: The contractor shall maintain a quality system that ensures conformance to all contractual requirements and addresses the requirements of the current revision of ANSI/ISO/ASQC Q9001-2000. The quality systems for procedures, planning, and all other documentation, media and data which comprise the quality system shall be made available to the Government for its review and use upon request. The Government reserves the right to disapprove the quality system or portions thereof when it fails to meet its intended objective. (Reference FAR 52.246-2 and 52.246-11).

2.2.1 The acceptance of non-conforming supplies is a prerogative of, and shall be as prescribed by, the Government.

2.2.2 Items shall be manufactured in accordance with Rolls Royce PLC technical data. The contractor is responsible for notifying the Government if its part number, technical data or nomenclature is different from the information cited in the delivery order.

2.3 Packaging Requirements: The contractor shall package items in accordance with Military Standard 129 packaging unless otherwise specified on the individual delivery order. The packaging clauses are included in the solicitation (Part I - The Schedule, Section D Packaging and Marking).

2.3.1 Unique Item Identifier (UID) marking in accordance with DFARS 252.211-7003, Item Identification and Valuation, is required for items with a unit price of $5,000 or more, or specific items less than $5,000 as identified in the basic contract and/or delivery order.

2.3.2 Radio Frequency Identification (RFID) in accordance with DFARS 252.211-7006, Radio Frequency Identification, is required for items shipped to the locations specified in the clause.

2.4 Inspection and Acceptance:

2.4.1 All consumable items require origin inspection and acceptance.

2.4.2 All DLR items require origin inspection and acceptance.

2.4.3 The contractor shall contact the Defense Contract Management Agency (DCMA) to schedule in-plant inspections in accordance with FAR 52.246-2.

2.5 Buy-Back: The Government will not be responsible for buy-back of actual or committed inventory purchased by Rolls Royce in anticipation of satisfying future delivery orders under this contract.

2.6 Surge and Sustainment: Surge and sustainment items and quantities are identified and provided in Attachment 2. The attachment identifies the monthly wartime rate for each item. The Government is not obligated to order any of the surge quantities and the contractor should not ship such quantities without receipt of an order clearly designated for surge quantities. In accordance with Defense Logistics Agency Directive (DLAD Clause) 52.217-9007 “Surge and Sustainment (S&S) Instructions to Offerors” (Jun 2009), an S&S plan is required unless a waiver is obtained. Surge and sustainment is applicable to consumable items only.

2.7. Collaborative Forecasting: The contractor and the Government shall participate in collaborative forecasting meetings. The objective of these meetings will be to increase the flow of information between all parties and improve the accuracy of the demand projections for the F402 engine program.

2.7.1 At a minimum, the collaborative forecasting meetings will be held on a quarterly basis. The meetings may be held face-to-face at a mutually agreed upon location, by video teleconferencing (VTC), or by phone conference.

2.7.2 Collaborative forecasting is for planning purposes only. The Government is not obligated to purchase any items or materials purchased by the contractor as a result of the collaborative forecasting process.

2.8 Production Lead Time (PLT) Reductions: PLT reductions (in the form of shortened contractual delivery requirements) will be required by the contract. Specific changes to PLT, at the NIIN level, will occur over the life of the contract as described below.

2.8.1 PLT for all items in Attachment 1 listed as Acquisition Advice Code (AAC) “D” will eventually be reduced to 30 days or less. Not later than two years following contract award, no less than 50% of the AAC “D” items will have PLTs of 30 days or less. Not later than three years following contract award, 75% of the AAC “D” items will have PLTs of 30 days or less. Not later than four years following contract award, 100% of the AAC “D” items will have PLTs of 30 days or less.

2.8.2 PLT for all items in Attachment 1 listed as Acquisition Advice Code (AAC) “Z” will eventually be reduced to 120 days or less. Not later than two years following contract award, no less than 50% of the AAC “Z” items will have PLTs of 120 days or less. Not later than three years following contract award, 75% of the AAC “Z” items will have PLTs of 120 days or less. Not later than four years following contract award, 100% of the AAC “Z” items will have PLTs of 120 days or less.

2.8.3 Specific PLT reductions will occur at the NIIN level and in accordance with the transition schedules outlined in paragraphs 2.8.1 and 2.8.2. A bilateral contract modification will be issued to amend the contractual delivery requirements as required.

2.9 On-Time Delivery (OTD): Using the formula below, OTD will be measured at the end of each twelve month period following contract award.

OTD % = (TOS/TOR)*100

Where:

OTD% = On-Time Delivery Rate (rounded to the nearest tenth) TOS = Total orders shipped IAW the contract delivery schedule TOR = Total orders required to ship IAW the contract delivery schedule

2.9.1 The contractor shall meet a minimum OTD rate throughout the life of the contract. The minimum OTD rate the contractor shall meet increases over the first three years of the contract as outlined below:

2.9.2 Monthly OTD will also be computed to assess contractor performance and identify problems as they occur. The Government will share monthly OTD reports with the contractor. The contractor may notify the Contracting Officer of any discrepancies they find between their OTD data and the Government’s OTD data. This notification should occur within 15 days after receipt of the monthly Government OTD reports.

For any order wherein the contractor fails to meet the established delivery schedule, the unit price of the delinquent item(s) will be reduced by .5% per day (not to exceed 10%) until delivery. Metrics will be re-evaluated and possibly revised annually. During contract performance, additional metrics may be identified or added.

2.10 Program Management Reviews (PMR): On a semi-annual basis, the Government and the contractor shall conduct a PMR. The primary purpose of these meetings will be to 1) promote an open and ongoing dialogue between the parties, 2) assess performance under the contract, 3) identify any problems associated with execution of the contract, 4) jointly develop solutions to specific problems, and 5) develop mutually beneficial process improvements related to the execution of the contract.

SECTION 3 – GOVERNMENT PROPERTY/CPARS REPORTING

3.1 Government Furnished Property (GFP): No GFP will be provided.

3.2 Contractor Performance Assessment Rating System (CPARS): This contract will require CPARS reporting. Performance information will be collected and reported in accordance with established procedures and the information will be available for Government use and collection for the purpose of past performance evaluation of the contractor’s performance.

SECTION 4 – APPENDICIES

Attachment 1 – Applicable NSNs Attachment 2 – Surge Requirements