Zimmer Complete Solicitation SPE2DE-19-R-0007.pdf

CONTINUATION SHEET REFERENCE NO. OF DOCUMENT BEING CONTINUED:

SPE2DE-19-R-0007 Page 2 of 91

Table of Contents Page Continuation of Blocks from the Standard Form 1449 3 Block 8, Offer Due Date/Local Time 3 Block 9, Issued By 3 Block 17a, Contractor/Offeror 3 Block 17b, Remittance Address 4 Block 19-22, Item No., Schedule of Supplies/Services, Quantity, Unit 4

Caution Notices

Contractor Code of Business Ethics 5-7 Requirements for Information Other Than Certified Cost and Pricing Data 7-8 Trade Agreements- Basic 8 Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment

Contract Clauses 52.212-4 Contract Terms and Conditions—Commercial Items (by reference, see SF 1449, Block 27a)

52.212-5 Contract Terms and Conditions Required to Implement Statutes or Executive Orders—Commercial Items

Addendum Containing Supplementary Clauses in Full Text and by Reference 28 52.211-16 Variation in Quantity 28 52.252-2 Clauses Incorporated by Reference 30 252.204-7012 Safeguarding Covered Defense Information and Cyber Incident Reporting 31 252.209-7004 Subcontracting With Firms That Are Owned or Controlled by the Government of a Country that is a State Sponsor of Terrorism

52.232-17 Interest 31 52.242-13 Bankruptcy 31 52.242-15 Stop Work Order 31 Statement of Work 31-58

Solicitation Provisions 52.212-1 Instructions to Offerors—Commercial Items 59-62 Addendum to 52.212-1 62-64 52.212-2 Evaluation—Commercial Items 64 52.212-3 Offeror Representations and Certifications—Commercial Items, Alternate I 64-82 Addendum Containing Supplementary Provisions in Full Text and by Reference 82-84 52.216-1 Type of Contract 84 52.233-9001 Disputes: Agreement to Use Alternative Dispute Resolution (ADR) 84 52.252-1 Solicitation Provisions Incorporated by Reference 85 252.204-7008 Compliance with Safeguarding Covered Defense Information Controls 85 52.225-25 Prohibition on Contracting With Entities Engaging in Certain Activities or Transactions Relating to Iran - Representation and Certification

Procurement Notes L06 Agency Protests 85 Additional Clauses as Applicable 86-91

SPE2DE-19-R-0007 Page 3 of 91

Continuation of Blocks from SF 1449

1. Block 8 Offer Due Date/Local Time: July 7, 2020 3:00 P.M. EST

2. Block 9

› Address and Submit “mailed” offers to:

Defense Logistics Agency Troop Support Post Office Box 56667 Philadelphia, PA 19111-6667 Solicitation Number: SPE2DE-19-R-0007 Opening/Closing Date and Time: : June 4, 2020/July 7, 2020 3:00 P.M. EST › Address and Deliver “hand carried” offers, including delivery by commercial carrier, to:

DLA Troop Support Business Opportunities Office Bldg. 45, Wing C, 1st Floor, Room C1047 700 Robbins Avenue Philadelphia, PA 19111-5092 Solicitation Number: SPE2DE-20-R-0005 Opening/Closing Date and Time: June 4, 2020/July 7, 2020 3:00 P.M. EST

Notes: 1. All hand carried offers are to be delivered to the Business Opportunities Office between 8:00 a.m. and 5:00 p.m., Monday through Friday, except for legal federal holidays as set forth in 5 USC 6103. Offerors using a commercial carrier service must ensure that the carrier service “hand carries” the package to the Business Opportunities Office specified above for hand carried offers prior to the scheduled opening/closing time. Package must be plainly marked ON THE OUTSIDE OF THE COMMERCIAL CARRIER’S ENVELOPE with the solicitation number, date, and time set forth for receipt of offers as indicated in Block 8 of the Standard Form 1449.

2. Examples of “hand carried” offers include: In-person delivery by contractor, Fed Ex, Airborne, UPS, DHL, Emery, other commercial carrier, USPS Express Mail, and USPS Certified Mail.

› Transmit “facsimile” offers (if authorized; see “Addendum” to 52.212-1(b)) or offer modifications/withdrawals to: (215) 737-9300, 9301, 9302, 9216 or 8558.

Offers submitted to any other facsimile number shall not be considered for award.

3. Block 17a › Offeror’s assigned Unique Entity Identifier Number: _______________

(If you do not have a Unique Entity Identifier number, contact the individual identified in Block 7a of the SF 1449 or see 52.212-1, Instructions to Offerors—Commercial Items (paragraph j) for information on establishing a unique entity identifier.)

› Offeror’s assigned Contractor and Government Entity (CAGE) Code:__________________

SPE2DE-19-R-0007 Page 4 of 91

4. Block 17b Remittance Address: (if different from Contractor/Offeror address in block 17a of the SF 1449.)

5. Blocks 19-22 Item No., Schedule of Supplies/Services, Quantity, Unit:

The goal of the Manufacturer Direct Program is to establish an alternative to manual open market purchase activity and re-engineer the business process with automated e-commerce business solution. The objective of this solicitation is to establish a Fixed Price (with Economic Price Adjustment) Indefinite Delivery/Indefinite Quantity (IDIQ) contract for Zimmer Biomet (Zimmer) Orthopedic “Procedural Packages” . The “procedural package” includes the implants, instrumentation sets and ancillary accessories that are necessary for the physician to perform the surgical procedure. The contract terms will be a (1) one year base ordering period and (4) four one-year option ordering periods.

Depending on the complexity of the surgical procedure, the contractor will have a qualified sales representative on site at the Medical Treatment Facility (MTF), if required by the surgeon.

The representative provides technical and product information to the physician before, during and after implantation. However, the contractor provides products and related support twenty-four (24) hours a day, seven (7) days a week despite the delivery method utilized to deliver the products.

The contractor will have their product line loaded in the DLA Troop Support Electronic Catalog (ECAT). All Orders, Order Confirmation and Invoice transactions are required to be electronic. Items will be delivered to various Department of Defense (DoD) research centers, hospitals, clinics and any federal customer participating in this program.

Realistic Estimated Dollar Value of the Procurement

Guaranteed Minimum and Contract Maximum

The guaranteed minimum is $133,048.00 for the life of the contract. The maximum dollar value for this procurement is $134,789,120.00.

Contract Period Base $13,304,822.00 Option Ordering Period One $13,391,303.00 Option Ordering Period Two $13,478,346.00 Option Ordering Period Three $13,565,955.00 Option Ordering Period Four $13,654,134.00 Estimated 5 Year Total $67,394,560.00

SPE2DE-19-R-0007 Page 5 of 91

Questions/Requests For Clarification

Any technical questions, requests for clarification, or requests for data in connection with this solicitation must be in writing and submitted via electronic mail to charles.reimer@dla.mil.

CAUTION NOTICE

1. CAUTION - CONTRACTOR CODE OF BUSINESS ETHICS (OCT 2015)

FAR Part 3.1002(a) requires all government contractors to conduct themselves with the highest degree of integrity and honesty. Contractors should have a written code of business ethics and conduct within thirty days of award. To promote compliance with such code of business ethics and conduct, contractors should have an employee business ethics and compliance training program that facilitates timely discovery and disclosure of improper conduct in connection with government contracts and ensures corrective measures are promptly instituted and carried out. A contractor may be suspended and/or debarred for knowing failure by a principal to timely disclose to the government, in connection with the award, performance, or closeout of a government contract performed by the contractor or a subcontract awarded there under, credible evidence of a violation of federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in title 18 of the United States Code or a violation of the False Claims Act. (31 U.S.C. 3729-3733)

If this solicitation or contract includes FAR clause 52.203-13 - CONTRACTOR CODE OF BUSINESS ETHICS AND CONDUCT; the contractor shall comply with the terms of the clause and have a written code of business ethics and conduct; exercise due diligence to prevent and detect criminal conduct; promote ethical conduct and a commitment to compliance with the law within their organization; and timely report any violations of federal criminal law involving fraud, conflict of interest, bribery or gratuity violations found in title 18 of the United States Code or any violations of the False Claims Act. (31 U.S.C. 3729-3733). When FAR 52.203-13 is included in the contract, contractors must provide a copy of its written code of business ethics and conduct to the contracting officer upon request by the contracting officer.

b. The Department of Defense (DoD) and the Defense Logistics Agency (DLA) Troop Support have developed an e-business solution for Manufacturer Direct Products through the DLA Troop Support Electronic Catalog (ECAT). The goal of the Manufacturer Direct Program is to establish an alternative to manual open market purchase activity and re-engineer the business process with automated e-commerce business solution. The object of this solicitation is to establish a Fixed Price (with Economic Price Adjustment) Indefinite Delivery/Indefinite Quantity (IDIQ) contract with an offeror(s) who can provide for Zimmer Orthopedic “Procedural Packages” .

c. The Medical Directorate at DLA Troop Support is the inventory control point responsible for purchasing pharmaceuticals, medical, surgical, dental, optical and laboratory supplies and related equipment for U.S. soldiers, sailors, airmen and marines-around the world and around the clock.

Our primary focus is to support the war-fighter in time of war, in peace, during relief efforts in times of national emergency or in support of our humanitarian operations.

d. This contract will be used to support DLA Troop Support customers as well as DLA Troop Support acting as a customer. The Army, Navy, Air Force and VA MTF’s are the customers that mailto:charles.reimer@dla.mil

SPE2DE-19-R-0007 Page 6 of 91 will be ordering under this contract. However, other DoD and non-DoD customers may be added at a later date.

e. DLA Troop Support is a single order entry point under this contract, as the ECAT ordering application program resides at DLA Troop Support. During the term of the contract, to include any additional option periods exercised, DLA Troop Support reserves the right to add or delete customers through the modification of “User Code” profiles, which resides in the ECAT Application.

f. This solicitation applies to Government facilities worldwide. The Continental United States (CONUS) catalog includes facilities located in the 48 contiguous states and the District of Columbia as well as Alaska and Hawaii and will be implemented first. The Outside Continental United States (OCONUS) catalog will include facilities located outside the Continental United States as defined above. Due to transportation costs, Food and Drug Administration (FDA) restrictions and/or limitations, separately priced OCONUS catalogs may be required in the future under this solicitation.

g. This solicitation proposes to establish a Fixed Price (with Economic Price Adjustment) Indefinite Delivery/Indefinite Quantity (IDIQ) contract for Zimmer Orthopedic “Procedural Packages” that are necessary for the physician to perform orthopedic surgery. This solicitation is issued in accordance with FAR Part 12 Acquisition of Commercial Items. The term of the contract will be

(1) one-year Base Ordering Period with four (4) one-year unilateral Option Ordering Periods.

h. Price adjustments, under this procurement will be in accordance with the Economic Price Adjustment (EPA) provisions “Economic Price Adjustment-Established Catalog Price One Upward Adjustment Per Option Year-E-CAT” and “Economic Price Adjustment-Other Federal Agency Contracts-E-CAT” included in this solicitation. The offeror’s proposal will dictate which Economic Price Adjustment provisions(s) will apply.

i. DLA Troop Support shall operate and manage the DLA Electronic Commercial Catalog System (ECAT). The DLA Troop Support Electronic Catalog (ECAT) will be the sole means by which orders will be placed, confirmed and invoiced under this contract. The contractor agrees to use the ECAT system to display the associated items and agrees to let authorized users of the system view assigned catalogs displayed in the system (“Authorized Users” are defined as customers of DLA Troop Support in the Army, Navy, Air Force and VA.).

j. The contractor is responsible for providing their own computer hardware and software necessary to transmit and receive e-procurement transaction sets. There are two communication strategies available for ECAT; Web Supplier Interface and the American Standard Institute (ANSI) X 12 EDI) standard for direct EDI. Web Supplier Interface will be used for products delivery “Just-In-Time” for the surgery and under consignment agreement. The contractor has the option to use either of the two strategies or a combination of the two communication options for products delivered through “Direct Vendor Delivery”.

k. All applicable products offered in response to this solicitation must be Food and Drug Administration (FDA) approved.

SPE2DE-19-R-0007 Page 7 of 91

l. The offeror is required to provide a catalog(s) for the orthopedic product lines that make up the “procedural package” for each of the applicable delivery methods. This catalog shall encompass the orthopedic products that fall into the product categories the MTFs will order under this contract.

2. CAUTION- REQUIREMENTS FOR INFORMATION OTHER THAN CERTIFIED COST

AND PRICING DATA (OCT 2010)

Offerors are required to submit other than cost and pricing data in accordance with clause 52.215-20 Requirements For Information Other Than Certified Cost and Pricing Data (Oct 2010), found on pages 82-84 of this solicitation. This information will be used for price evaluation. In accordance with the aforementioned clause, offerors shall submit the following data and supporting rationale:

1. Other Federal Agency (OFA) price: The OFA price is defined as the lowest price offered a Federal Agency other than DLA Troop Support. The OFA price shall be provided for each item in the spreadsheet column designated for COMPARISON_PRICE_1 (OTHER FEDERAL AGENCY) in accordance with the catalog loader template that can be found at https://www.medical.dla.mil/Portal/ECAT/EcatHome.aspx on the left under Info for Suppliers. Additionally, the offeror shall include in its proposal a narrative describing the specific arrangements and circumstances that warrant this price (sales commitments, market share, etc.) as well as general contract information including but not limited to:

OFA name, contract award date, contract length, contract dollar value, and contract maximum dollar value.

2. Most Favored Customer (MFC) price: MFC price is defined as the best price provided to a commercial customer. The MFC price shall be provided for each item in the spreadsheet column designated for COMPARISON_PRICE_2 (COMMERCIAL MOST FAVORED CUSTOMER) in accordance with the catalog loader template that can be found at the link provided in paragraph 6(a) above. Additionally, the offeror shall include in its proposal a narrative describing the specific arrangements and circumstances that warrant this price (sales commitments, market share, etc.) as well as general contract information including but not limited to: MFC name, contract award date, contract length, contract dollar value, and contract maximum dollar value. If the offeror is unwilling or unable to provide the MFC price to the Government, supporting rationale shall be provided in this narrative as well. The offeror, to the best of its ability, shall provide one (1) MFC that will encompass the entire catalog offering. If the offeror cannot provide one MFC, a narrative as described above must be provided for all MFC customers provided for comparison.

3. Most Similar Customer (MSC) price: MSC price is defined as the price provided a commercial customer under terms and conditions that are most comparable to those solicited by the Government. The MSC price shall be provided for each item in the spreadsheet column designated for COMPARISON_PRICE_3 (MOST SIMILAR CUSTOMER) in accordance with the catalog loader template that can be found at the link provided in paragraph 6(a) above. Additionally, the offeror shall include in its proposal a narrative describing the specific arrangements and circumstances that warrant https://www.medical.dla.mil/Portal/ECAT/EcatHome.aspx

SPE2DE-19-R-0007 Page 8 of 91 this price (sales commitments, market share, etc.) as well as general contract information including but not limited to: MSC name, contract award date, contract length, contract dollar value, and contract maximum dollar value. If the offeror is unwilling or unable to provide the MSC price to the Government, rationale supporting a higher price shall be provided in this narrative as well. The offeror, to the best of its ability, shall provide one

(1) MSC that will encompass the entire catalog offering. If the offeror cannot provide one MSC, a narrative as described above must be provided for all MSC customers provided for comparison.

3. CAUTION- TRADE AGREEMENTS- BASIC (SEP 2019)

The Trade Agreements Act is applicable to all Government Procurement Agencies. In exercising its authority under FAR Part 25, Foreign Acquisition, purchases by Ordering Activities are restricted to either U.S.-made or designated country end products. A U.S.-made product can be either 1) an article that is mined, produced, or manufactured in the United States, or 2) an article that is substantially transformed in the United States into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed. It is the offeror’s responsibility to verify that all offered products are U.S. made or designated country end products as defined in clause FAR 52.225-5. When an item consists of components from various countries and the components are assembled in a designated country, the test to determine country of origin is substantial transformation (see FAR 25.001(c)(2)). Offerors requiring a determination on substantial transformation can go to the US Customs and Border Protection (CBP) Office of Regulations and Rulings. For services, origin is determined by the country in which the firm providing the service is established, not the location at which the services are performed.

4. CAUTION- PROHIBITION ON CONTRACTING FOR CERTAIN TELECOMMUNICATIONS

AND VIDEO SURVEILLANCE SERVICES OR EQUIPMENT (AUG 2019)

Recent statutory changes require DLA to add FAR 52.204-25, Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment, to all awards issued on or after August 13, 2019. The contractor may address any concerns regarding the addition of these requirements or meeting these requirements to the contract administrator. Failure to perform in accordance with these requirements may result in a termination for Government convenience. Continued performance in accordance with the revised terms and conditions of this contract constitutes acceptance of the new requirements

Contract Clauses

SPE2DE-19-R-0007 Page 9 of 91

Note: 52.212-4, Contract Terms and Conditions—Commercial Items (OCT 2018) is incorporated in this solicitation by reference. Its full text may be accessed electronically at https://www.acquisition.gov/far/index.html. Text is available for viewing in Subpart 52.2 Text of Provisions and Clauses, through either the HTML or PDF Format links.

Addendum to 52.212-4:

The following paragraphs of 52.212-4 are amended as indicated below:

1. Paragraph (m), Termination for Cause.

Delete paragraph (m) in its entirety and substitute the following:

(m) Termination for Cause. The Government may terminate this contract, or any part hereof, for cause in the event of any default by the Contractor, or if the Contractor fails to comply with any contract terms and conditions, or fails to provide the Government upon request, with adequate assurances of future performance. In the event of termination for cause, the Government shall not be liable to the Contractor for any amount for supplies or services not accepted, and the Contractor shall be liable to the Government for any and all rights and remedies provided by law. If this contract is terminated in whole or in part for cause, and the supplies or services covered by the contract so terminated are repurchased by the Government, the Government will incur administrative costs in such repurchases. The Contractor and the Government expressly agree that, in addition to any excess costs of repurchase, or any other damages resulting from such default, the Contractor shall pay, and the Government shall accept, the sum of $1,350.00 as payment in full for the administrative costs of such repurchase. This assessment of damages for administrative costs shall apply for any termination for cause following which the Government repurchases the terminated supplies or services together with any incidental or consequential damages incurred because of the termination. If it is determined that the Government improperly terminated this contract for default, such termination shall be deemed a termination for convenience.

2. Paragraph (t), System for Award Management.

Add the following paragraph:

(a) Definitions.

“System for Award Management (SAM) database” means the primary Government repository for contractor information required for the conduct of business with the Government.

“Commercial and Government Entity (CAGE) Code” means—

(1) A code assigned by the Defense Logistics Information Service (DLIS) to identify a commercial or Government entity; or

(2) A code assigned by a member of the North Atlantic Treaty Organization that DLIS records and maintains in the CAGE master file. This type of code is known as an “NCAGE code”.

“Data Universal Number System (DUNS) Number” means the 9-digit number assigned by Dun and Bradstreet, Inc. (D&B) to identify unique business entities.

“Data Universal Numbering System +4 (DUNS+4) Number” means the DUNS number assigned by D&B plus a 4-character suffix that may be assigned by a business concern.

(D&B has no affiliation with this 4-character suffix.) This 4-character suffix may be assigned at the discretion of the business concern to establish additional SAM records for identifying alternative Electronic Funds Transfer (EFT) accounts (see Subpart 32.11 of the Federal Acquisition Regulation) for the same parent concern.

“Registered in the System for Award Management database” means that— https://www.acquisition.gov/far/index.html

SPE2DE-19-R-0007 Page 10 of 91

(1) The Contractor has entered all mandatory information, including the DUNS number or the DUNS+4 number, and Contractor and Government Entity (CAGE) code into the SAM database;

(2) The contractor has completed the Core Data, Assertions, Representations and Certifications, and Points of Contact sections of the registration in the SAM database;

(3) The Government has validated all mandatory data fields to include validation of the Taxpayer Identification Number (TIN) with the Internal Revenue Service. The Contractor will be required to provide consent for TIN validation to the Government as part of the SAM registration process; and

(4) The Government has marked the record “Active”.

ECONOMIC PRICE ADJUSTMENT – OTHER FEDERAL AGENCY CONTRACTS -

E-CAT

(a) This clause applies to any items under this contract where the offeror has proposed the same (or discounted) prices as are included in any current contract(s) the Contractor may have with other Federal Agencies (OFA) and the Contracting Officer agrees to use this pricing methodology. OFA contracts include GSA Schedule, Federal Supply Schedule, and Department of Veterans Affairs (DVA) National Acquisition Contracts. During the life of this contract, the Contracting Officer and the Contractor may agree in writing to also apply this clause to any other items that previously were not, but subsequently become, available under both this contract and any concurrent OFA contract(s).

(b) Definitions:

(1) Other Federal Agency (OFA) Price: “OFA Prices” or “OFA Unit Prices” refer to the unit prices for specific commercial items the Contractor and another Federal Agency have agreed to and are included in one or more current contracts.

(2) Discount: The percentage reduction off the OFA unit price proposed by the Contractor, accepted by the Government, and maintained in the contract file (not the E-CAT System) by the Government.

These percentages may vary per item and quantity ordered. They shall be agreed to at time of award and may not be reduced for the life of the contract. (Contractors may offer larger discounts and/or reduced contract unit prices at any time.)

(3) Contract unit price: The price per unit of issue comprised of the OFA Unit Price and the applicable “Discount”. The contract unit price is determined by reducing the OFA Unit Price by the appropriate Discount. Proposed revised prices are loaded by the Contractor into an E-CAT file and are forwarded electronically to the Government. The Contactor shall also separately submit (in Excel Spreadsheet or ACCESS Database format) the additional information as required in paragraphs (e) and (f) below in order for the Government to review and evaluate these proposed price changes. Upon the Government’s determination that the offered prices are acceptable/fair and reasonable, the Government shall release them into the contract electronic catalog residing in the E- CAT System. (contract unit prices, OFA Unit Prices and Discounts under this contract are not visible in the E-CAT System to the Contractor or any customer. The prices visible in the E-CAT System to the Contractor or any customer are the delivered unit prices, which are the contract unit

SPE2DE-19-R-0007 Page 11 of 91 prices plus the DLA Troop Support administrative fee percentage (in effect at that time) charged customers ordering under this contract.)

(4) Voluntary price reduction (VPR): See paragraph (k).

(c) The offeror/Contractor warrants that (1) the OFA unit prices and the subsequent revisions thereto are the OFA unit prices in effect at time of award or adjustment for like quantities of the same items and (2) any contract unit prices determined using these OFA unit prices do not include allowances for any portion of the contingency covered by this clause.

(d) Prior to award, the Contractor must furnish a copy of their current OFA Contract, OFA contract unit prices and the OFA contract expiration date for each item. The Contractor shall also furnish its offered Discounts and proposed contract unit prices. At the option of the Contracting Officer, the Contractor shall also furnish the documentation set forth in paragraphs (f)(1)(i)(I) and (f)(1)(ii) below. Upon acceptance by the Government, the Award Unit Prices shall be established at the OFA Unit Prices minus the offered Discounts.

(e) Downward Adjustments.

(1) Downward adjustments to contract unit prices are mandated whenever there are decreases in OFA Unit Prices. The Contractor shall promptly notify the Contracting Officer in writing of the amount and effective date of each decrease in OFA Unit Price. The Contractor shall propose a lower Contract Unit Price taking into consideration the benchmark in paragraph (e)(2) below. The Contractor must furnish a copy of the revised OFA Contract and OFA Unit Prices as soon as they are available. Also, the Contractor must provide a copy of the “E-CAT file” at least 30 days prior to the date when the reduced OFA Unit Price takes effect. Finally, the Contractor shall also furnish, within the timeframe above, a separate Excel spreadsheet or ACCESS database (in both hard copy and disc) that displays for each item with an offered decrease in Contract Unit Price the following information:

(i) The item number; e.g., 0003.

(ii) The Supplier; e.g., ABC Dental, Inc.

(iii) The Product Name/Nomenclature; e.g., High Speed Handpiece.

(iv) The Part Number; e.g., HPH2000.

(v) The applicable contract discount used as a basis for determining the current Contract Unit Price.

(vi) The OFA Unit Price upon which the current Contract Unit Price is based.

(vii) The Contract Unit Price currently in effect.

(viii) The applicable Contract Discount or larger Contract Discount now offered.

(ix) The reduced OFA Unit Price.

(x) The reduced Contract Unit Price now offered.

(xi) The percentage decrease in OFA Unit Price from the OFA Unit Price that determined the Current Contract Unit Price to the new, lower OFA Unit Price.

(xii) The percentage decrease in Contract Unit Price from the current Contract Unit Price to the new lower Contract Unit Price now offered.

SPE2DE-19-R-0007 Page 12 of 91

(2) Benchmark For OFA Price Reductions. The appropriate Contract Discount or larger Discount now offered will be applied to each reduced OFA Unit Price to determine the adjusted Contract Unit Price provided the adjusted Contract Unit Price does not exceed the following benchmark:

The offered reduction in Contract Unit Price on a percentage basis must be at least equal to the percentage reduction from the OFA Unit Price that determined the current Contract Unit Price to the new lower OFA Unit Price, i.e., the current Contract Unit Price must, as a minimum, be reduced by the percentage decrease in the OFA Unit Price.

(3) If the proposed Contract Unit Price exceeds the benchmark above, the Contracting Officer shall determine the proposed price reductions unreasonable. The Contracting Officer and Contractor shall negotiate a reduction in the proposed Contract Unit Price to an amount that does not exceed the benchmark above. (All negotiated price reductions shall be confirmed in writing and will include the agreed-to price(s) and the OFA prices and discount(s) which make up these prices.) If an agreement cannot be reached, the Contracting Officer has the option of removing these items from the E-CAT system or taking the action in the last sentence below.

If the proposed Contract Unit Price does not exceed the benchmark above, it will be determined fair and reasonable. Upon acceptance of any proposed price decreases, the Government shall modify the contract electronic catalog residing in the E-CAT system to include the reduced prices. These reduced contract unit prices shall apply to those items ordered on or after the date when these lower prices appear in the contract electronic catalog residing in the E-CAT system (Revisions will not be added to the electronic catalog prior to date they take effect).

If the Contractor fails to notify the Contracting Officer of any OFA Unit Price decreases within the timeframe and in the manner stated above or agreement on any reduction cannot be reached, the Contracting Officer may determine the applicable adjustment and authorize a unilateral price adjustment retroactively applied to all items ordered on or after the date the new OFA unit price takes effect.

(f) Upward adjustments.

(1) Upward adjustments may be requested at any time. The requested upward price adjustments must be based upon increases in the Contractor’s OFA Unit Prices. The request shall include a copy of the revised OFA unit prices, the “E-CAT file”, and the following for each item with a proposed increase in contract unit price:

(i) A separate Excel spreadsheet or ACCESS database, in both hard copy and disc, that displays for each item with a proposed price increase the following information:

(A) The item number; e.g., 0003.

(B) The supplier; e.g., ABC Dental, Inc.

(C) The product name/nomenclature; e.g., high speed hand-piece.

(D) The part number, e.g., HPH2000.

SPE2DE-19-R-0007 Page 13 of 91

(E) For the initial year, the OFA unit price that determined the award unit price, the applicable contract discount, and the award unit price. For all subsequent contract years, the OFA unit price that determined the highest contract unit price that was in effect at any time during the preceding contract year, the applicable discount, and the highest contract unit price that was in effect during the preceding contract year.

(F) The increased OFA Unit Price, the applicable Contract Discount or larger Contract Discount now offered, and the proposed higher Contract Unit Price.

(G) For the initial year, the percentage change from the OFA Unit Price that determined the award unit price to the new higher OFA Unit Price. For all subsequent contract years, the percentage change from the OFA Unit Price that determined the highest Contract Unit Price that was in effect at any time during the preceding Contract Year to the new higher OFA Unit Price.

(H) For the initial year, the percentage change from the award unit price to the new higher proposed contract unit price. For all subsequent contract years, the percentage change from the highest contract unit price that was in effect at any time during the preceding contract year to the new higher proposed contract unit price.

(I) For any items offered to the Department of Veterans Affairs and the General Services Administration at other than OFA contract prices, the non-OFA prices/discounts (if different than the reported OFA unit prices/discounts) offered to those agencies.

(ii) Any other applicable supporting data requested by the Contracting Officer.

(2) Benchmarks for OFA price increases: If any OFA unit price increases, and the increase is authorized under this clause, the contract unit prices for any corresponding items shall be determined using the increased OFA unit price(s) and either the applicable discount(s) originally awarded or any larger discount(s) now offered. These increased contract unit prices shall apply to all orders issued on or after the date these revised unit prices appear in the electronic catalog residing in the E-CAT system. Proposed increases will be considered fair and reasonable if they do not exceed whichever is the lower of the following two benchmarks:

(i) For the initial year of the contract, any proposed increase in contract unit price on a percentage basis cannot exceed the percentage increase from the OFA unit price that determined the award unit price to the new higher OFA unit price. For all subsequent contract years, any proposed increase in contract unit price on a percentage basis cannot exceed the percentage increase from the OFA unit price that determined the highest contract unit price that was in effect at any time during the preceding contract year to the new higher OFA unit price.

(ii) Any proposed higher contract unit prices are subject to the following limitations:

(A) For the initial contract year, contract unit price increases shall be limited to the following annual ceiling(s) applied to the award unit price for the same item (i.e., any proposed higher contract unit price cannot exceed the award unit price plus the annual ceiling).

SPE2DE-19-R-0007 Page 14 of 91

(B) For all subsequent Contract Years, Contract Unit Price increases shall be limited to the following annual ceiling(s) applied to the highest Contract Unit Price in effect during the preceding Contract Year for the same item (i.e., any proposed higher Contract Unit Price cannot exceed the highest Contract Unit Price in effect during the preceding Contract Year plus the annual ceiling.)

Annual Ceiling, All Items: 10%

There is no percentage limit on downward adjustments under this clause.

(3) Upon approval of the proposed price increases, the Government shall modify the contract electronic catalog residing in the E-CAT System to include the increased contract unit prices.

Upward price adjustments shall be effective once they appear in the contract electronic catalog residing in the E-CAT system. These updates will take place within 60 days after receipt of the Contractor’s request for upward price adjustment (or at the same time the increased OFA Price takes effect, whichever is later) unless the Contracting Officer is unable to determine during that period that a price increase on any item or items is fair and reasonable (i.e., the proposed Contract Unit Price exceeds the lower of the two benchmarks above).

In this case, no price increases will be authorized for those items until the Contracting Officer is able to determine the price increases for those items to be fair and reasonable.

If necessary, the Contracting Officer shall conduct discussions with the Contractor to reduce the proposed Contract Unit Price to an amount which does not exceed the lower of the two benchmarks and reach an agreement on fair and reasonable prices. When discussions have concluded, the Contractor shall confirm the agreed-to price(s) in writing and forward an E-CAT file which includes the agreed-to price(s). (The agreement shall also identify the OFA price and discount which makes up each agreed-to price.)

Once the written agreement is received, the Government shall modify the contract electronic catalog residing in the E-CAT System to include the increased contract unit prices. If the Contracting Officer and the Contractor are unable to agree upon the price for any items, the Contracting Officer will delete these items from the catalog in the E-CAT System. (This procedure applies to only those items whose prices the Contracting Officer is unable to determine fair and reasonable within the 60-day period the Government has to evaluate prices and update the E-CAT System.

The remainder of the items whose price increases are determined fair and reasonable, shall be entered into the E-CAT system within the prescribed period.)

In addition, the Contracting Officer may also, at any time, remove any item from the catalog in the E-CAT System that the Contracting Officer believes is no longer reasonably priced (if the Contracting Officer and the Contractor are unable to agree upon a reduced price) and notify customers accordingly.

(4) Isolated incidents may occur for an item or group of items when proposed increases could exceed the annual ceiling benchmark in paragraph (f)(2)(ii). In such cases the Contractor can submit an adequately justified written request for Contracting Officer approval of an increase in Contract

SPE2DE-19-R-0007 Page 15 of 91

Unit Price that exceeds the ceiling. The Contracting Officer may approve the request on a one-time basis, increase the ceiling for the item or group of items if appropriate, negotiate a lower Contract Unit Price, or delete the item from the contract electronic catalog residing in the E-CAT system. In no case may the increase in Contract Unit Price exceed the ceiling without written authorization from the Contracting Officer. Also, no increase will be authorized that results in a contract unit price that exceeds the other benchmark.

(5) Any increased OFA unit prices shall not be used to compute contract unit prices for Delivery Orders issued before the date the adjusted contract unit prices take effect under the Contract (i.e., the date they appear in the contract electronic catalog residing in the E-CAT system).

(g) If the Contracting Officer removes items from the E-CAT system for price unreasonableness (see (e)(3), (f)(3) and (4) above), all outstanding orders issued prior to the date the items are removed shall be delivered in accordance with the contract delivery schedule and the Government shall pay for such items at the Contract Unit Price in effect at the time of the order.

(h) If the Contracting Officer at any time has any reason to believe that the OFA Unit Price has been discontinued (e.g., the current OFA contract expires and the Contractor does not receive a subsequent contract), the Contractor shall furnish relevant information as required by the Contracting Officer. If the Contracting Officer determines that the OFA unit price has been discontinued, the parties shall promptly agree upon an appropriate substitute for determining adjustments pursuant to this or some other appropriate EPA clause. The contract shall be modified to incorporate the substitute and its effective date.

(i) Pricing actions pursuant to paragraph (c) entitled “Changes” of Federal Acquisition Regulation (FAR) clause 52.212-4 (including any revisions by addendum thereto) or any other provision of this Contract will be priced as though there were no provisions for Economic Price Adjustment.

(j) Pending approval of any proposed price changes and revision of the contract unit prices in the contract electronic catalog residing in the E-CAT System, payment shall be made at the contract unit prices in effect at the time of order.

(k) Voluntary price reductions (VPR): A “special or discount” offered by the Contractor which results in a voluntary price reduction for an item or group of items for a given period of time. The Contractor may offer a VPR at any time. The price reductions resulting from these VPRs will be in addition to any price reductions mandated by this provision. The Contractor shall notify the Contracting Officer when the VPR takes effect, the applicable items included, and the length of time the VPR will remain in effect. Once the “special or discount” period expires, prices will revert to the contract unit prices in effect at that time.

If an OFA unit price decreases when a VPR is in effect, the VPR will remain in effect until it expires if it is lower than the proposed unit price decrease. If the Contractor requests a contract unit price increase based upon an increased OFA unit price when a VPR is in effect, the VPR shall remain in effect until it expires. Upon expiration of the VPR, prices will revert to the adjusted contract unit prices, as calculated in accordance with this clause if no VPR had been in effect.

SPE2DE-19-R-0007 Page 16 of 91

ECONOMIC PRICE ADJUSTMENT – ESTABLISHED CATALOG PRICE ONE UPWARD

ADJUSTMENT PER OPTION YEAR E-CAT

(a) All price adjustments authorized or mandated by this clause are based upon changes in the Contractor’s list prices and certain Other Federal Agency (OFA) contract unit prices. The clause also provides for voluntary price reductions (VPR) in the form of “specials” or “discounts”.

(b) Definitions:

(1) Contract Unit Price: The price per unit of issue comprised of the “List Price” and the applicable “Discount”. The Contract Unit Price is determined by reducing the applicable list price by the appropriate discount. Contract unit prices and any revisions thereto are loaded by the Contractor into an E-CAT File and are forwarded electronically to the Government. For proposed price changes, the Contractor shall also separately submit (in Excel Spreadsheet or ACCESS Database format) the additional information as required in paragraphs (g) and (h) below in order for the Government to review and evaluate these proposed price changes. Upon the Government’s determination that the offered unit prices are acceptable/fair and reasonable, the Government shall release them into the contract electronic catalog residing in the E-CAT System. (Contract unit prices, list prices, and discounts under this contract are not visible in the E-CAT System to the Contractor or any customer. The prices visible in the E-CAT System to the Contractor or any customer are the delivered unit prices which are the contract unit prices plus the DLA Troop Support administrative fee percentage (in effect at that time) charged customers ordering under this contract.)

(2) Discount: The percentage reduction off the list price proposed by the Contractor, accepted by the Government, and maintained in the contract file (not the E-CAT System) by the Government.

These percentages may vary per item and quantity ordered. They shall be agreed to at time of award and may not be reduced for the life of the contract. These discounts are in addition to any standard trade discounts in the Contractor’s established commercial Catalog/Price List. (Contractors may offer larger discounts and/or reduced List Prices at any time.)

(3) List Price: The established Catalog Unit Prices of the items. In order for a “List Price” to meet the criteria as an established Catalog Price, it must meet the definition in (c)(1) below.

(4) Voluntary Price Reduction (VPR): See paragraph (l).

(c)(1) The term "established Catalog Unit Price", as used in this clause, means a Unit Price that

(i) is a Catalog Price for a commercial item sold in substantial quantities to the general public and

(ii) is the net price after applying any standard trade discounts offered by the Contractor.

(2) Unless otherwise specified, all reference to the terms “OFA Unit Price”(s) or “ OFA Price(s)” as used in this clause, shall be the prices appearing in the Contractor’s current contract it may have with another Federal Agency for the same items under this contract.

SPE2DE-19-R-0007 Page 17 of 91

(d) The offeror/Contractor warrants that (1) the List Prices and the subsequent revisions thereto are the established Catalog Unit Prices in effect at time of Award or adjustment for like quantities of the same items and (2) any contract unit prices determined using these List Prices do not include allowances for any portion of the contingency covered by this clause. The offeror/Contractor also warrants that any contract unit prices determined using OFA Unit Prices do not include allowances for any portion of the contingency covered by this clause.

(e) Prior to award the Contractor must furnish:

(1) Their current established Catalog/Price List, offered Discounts, proposed contract unit prices;

and

(2) If applicable, a copy of their current OFA Contract(s), OFA Unit Prices, and the OFA contract expiration dates applicable to items offered as well as any other information required by the Contracting Officer.

(f) Upon acceptance by the Government, the Award Unit Prices will be established at the List Prices minus the offered Discounts provided the resulting contract unit prices do not exceed the current OFA Unit Price (if applicable) for the same item. Accordingly, offers are cautioned to propose discounts which, when applied to the list prices, will not exceed OFA Unit Prices (if applicable).

(g) Downward Adjustments.

(1) Downward adjustments to contract unit prices are mandated whenever there are decreases in either 1) List Prices or 2) OFA Unit Prices when the reduction results in a revised OFA Price which is now lower than the current Contract Unit Price. The Contractor shall promptly notify the Contracting Officer in writing of the amount and effective date of each decrease in list price and any OFA Unit Price reduction which results in an OFA Unit Price which is now lower than the current Contract Unit Price. If the offered price decrease is based upon a reduction in list price or OFA Price, the Contractor shall propose a lower Contract Unit Price taking into consideration the benchmarks in paragraphs (g)(2) and (3) below. The Contractor must furnish a copy of the revised Catalog/Price List or OFA Unit Price as soon as it is available. Also, the Contractor must provide a copy of the “E-CAT file” at least 30 days prior to the date when the reduced List Price(s) or OFA Price(s) take effect. In addition to the “E-CAT file” and any other information required by the Contracting Officer, the Contractor shall also separately furnish, within the timeframe above, an Excel spreadsheet or ACCESS database (in both hard copy and disc) that displays for each item with an offered decrease in Contract Unit Price the appropriate information below:

(i) For List or OFA Price changes: The item number; e.g., 0001AA.

(ii) For List or OFA Price changes: The Supplier (Catalog); e.g., ABC Imaging, Inc.

(iii) For List or OFA Price changes: The Product Name/Nomenclature; e.g., High Speed Handpiece.

(iv) For List or OFA Price changes: Part Number; HIH 2000

SPE2DE-19-R-0007 Page 18 of 91

(v) For List or OFA Price changes: The list price upon which the current Contract Unit Price is based.

(vi) For List or OFA Price changes: The applicable Contract Discount used as a basis for determining the current Contract Unit Price.

(vii) For List or OFA Price changes: The Contract Unit Price currently in effect.

(viii) For list price changes: The reduced List Price.

(ix) For List or OFA Price changes: The applicable Contract Discount or larger Contract Discount now offered.

(x) For List or OFA Price changes: The reduced Contract Unit Price now offered.

(xi) For list price changes: The percentage decrease in list price from the list price which determined the current contract unit price to the new, lower list price.

(xii) For list price changes: The percentage change in contract unit price from the current contract unit price to the new lower contract unit price now offered.

(xiii) For OFA Price changes: The current OFA unit price which is about to expire and the new reduced OFA unit price which will replace it and triggered this contract Unit Price reduction.

(xiv) For list price changes: For any items offered to Federal Agencies under an OFA Contract, the current OFA Unit Price(s) for the same item.

(2) Reductions in list price(s). if the offered price decrease is based upon a reduction in the list price, the appropriate discount or larger discount now offered will be applied to each reduced list price to determine the adjusted contract unit price provided the proposed lower contract unit Price does not exceed the lower of the following two benchmarks:

(i) The offered reduction in Contract Unit Price on a percentage basis must be at least equal to the percentage reduction from the list price currently in effect under the contract to the new lower List Price; i.e., the current Contract Unit Price must, as a minimum, be reduced by the percentage decrease in List Price.

(ii) The new proposed lower Contract Unit Price shall not exceed the current OFA Unit Price for the same item.

(3) OFA price reductions. If the offered price decrease is based upon a reduction in the OFA price, the proposed lower contract unit price shall not exceed the following…