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DLAD PART 17 – SPECIAL CONTRACTING METHODS



PART 17 – SPECIAL CONTRACTING METHODS

TABLE OF CONTENTS

SUBPART 17.1 – MULTIYEAR CONTRACTING

17.104 General.

17.105-1 Uses.

17.171 Multiyear contracts for services.

SUBPART 17.2 – OPTIONS

17.202 Use of options.

17.203 Solicitations.

17.204 Contracts.

17.206 Evaluation.

17.207 Exercise of options.

17.208 Solicitation provisions and contract clauses.

SUBPART 17.5 – INTERAGENCY ACQUISITIONS UNDER THE ECONOMY ACT

17.500 Scope of subpart.

SUBPART 17.73 – IDENTIFICATION OF SOURCES OF SUPPLY

17.7301 Policy.

17.7302 Procedures.

SUBPART 17.74 – UNDEFINITIZED CONTRACT ACTIONS

17.7403 Policy.

17.7404 Limitations.

17.7404-1 Authorization.

17.7404-2 Price ceiling.

17.7404-3 Definitization schedule.

17.7404-4 Limitations on obligations.

17.7404-6 Allowable profit.

17.7404-90 Other requirements.

SUBPART 17.75 – ACQUISITION OF COMPONENT PARTS

17.7501 Procurement of parts.

17.7502 General.

17.7505 Limitation of price increases.

SUBPART 17.76 – CONTRACTS WITH PROVISIONING REQUIREMENTS

17.7601 Provisioning.

17.7601-90 Contracting requirements for issuance of provisioned item orders (PIOs).

17.7601-91 Negotiating and executing supplemental agreements.

17.7601-92 Solicitation and contract clauses.

17.7601-93 Contracting officer's representative - Provisioning.

17.7601-94 Data pricing, evaluation, and award.

17.7601-95 Solicitation and contract clauses.

SUBPART 17.78 – CONTRACTS OR DELIVERY ORDERS ISSUED BY A NON-DOD AGENCY

17.7800 Scope of subpart.

SUBPART 17.90 – MULTISOURCE CONTRACTING

17.9000 Scope of subpart.

17.9001 Policy and authority.

17.9002 Conditions for use.

17.9003 Limitations on use.

SUBPART 17.91 – [RESERVED.]

SUBPART 17.92 – REOPENER CLAUSES

17.9201 General.

17.9202 Procedures.

17.9203 Contract requirements.

17.9204 Clause requirements.

17.9205 Contract clauses.

SUBPART 17.93 – SURGE & SUSTAINMENT (S&S)

17.9300 Scope of part.

17.9301 Definition.

17.9302 Background.

17.9303 Policy.

17.9304 Solicitation and contract clauses/provisions.

17.9305 Surge and Sustainment (S&S) pricing evaluation.

17.9306 Executing S&S.

17.9307 Surge and sustainment.

SUBPART 17.94 – CUSTOMER VALUE CONTRACTING

17.9400 Scope of subpart.

17.9401 Definitions.

17.9402 General.

17.9403 Acquisition planning.

17.9404 Ordering procedures.

SUBPART 17.95 – TAILORED LOGISTICS SUPPORT CONTRACTING

17.9500 Scope of subpart.

17.9501 Definitions.

17.9502 General.

17.9503 Acquisition planning.

17.9504 Pricing.

17.9505 Pre-award.

17.9506 Ordering procedures.

17.9507 Post award actions & management oversight.

17.9508 Solicitation provisions and contract clauses.

SUBPART 17.96 – NON-ECONOMY ACT INTERAGENCY ACQUISITIONS

17.9600 Scope of subpart.

17.9601 Justification for use.

17.9602 Ordering procedures.

17.9603 Contracting officer review.

17.9604 Fiscal matters.

17.9605 Follow-up procedures for non-Economy Act transactions.

SUBPART 17.97 – CORPORATE CONTRACTS

17.9700 Contract clauses.

SUBPART 17.1 – MULTIYEAR CONTRACTING

17.104 General.

17.105-1 Uses.

17.171 Multiyear contracts for services.

SUBPART 17.2 – OPTIONS

(Revised October 11, 2011 through PROCLTR 2012-01)

17.202 Use of options.

17.203 Solicitations.

17.204 Contracts.

17.206 Evaluation.

17.207 Exercise of options.

17.208 Solicitation provisions and contract clauses.

SUBPART 17.5 – INTERAGENCY ACQUISITIONS UNDER THE ECONOMY ACT

17.500 Scope of subpart.

SUBPART 17.73 – IDENTIFICATION OF SOURCES OF SUPPLY

17.7301 Policy.

In the interest of maintaining supply system and item integrity, and fostering the spare parts breakout programs, it is essential to know what is being purchased and from whom. It is the policy of DLA to retain the right to require identification of the manufacturing sources of the items purchased. Therefore, refusal of offerors to provide such information when specifically required is a valid basis for rejection of offers.

17.7302 Procedures.

17.7302(90) Solicitation and contract clauses for perishable dairy products.

Use 52.217-9024, Special Provisions for Bulk Milk Dispensing Equipment (Subsistence Supply Chain), in solicitation and contracts for perishable dairy products.

SUBPART 17.74 – UNDEFINITIZED CONTRACT ACTIONS

17.7403 Policy.

Follow the procedures of PGI 17.7404-3 when requesting DLA HQ review and approval of a letter contract or other undefinitized contract action (UCA), regardless of value, or an unpriced change order with an estimated value exceeding $5 million. Only the Director, DLA, has the authority to approve use of a UCA, regardless of value, or an unpriced change order with an estimated value exceeding $5 million. Definitization of any UCA or an unpriced change order valued over $5 million within the mandated time frames does not require DLA Director approval. Definitization beyond the mandated time frames does require the approval of the DLA Director.

17.7404 Limitations.

17.7404-1 Authorization.

17.7404-2 Price ceiling.

17.7404-3 Definitization schedule.

17.7404-4 Limitation on obligations.

17.7404-5 Exceptions.

17.7404-6 Allowable profit.

17.7404-90 Other requirements.

SUBPART 17.75 – ACQUISITION OF REPLENISHMENT PARTS

17.7501 Procurement of parts.

17.7502 General.

17.7502(b)(2)(70)

Use 52.217-9023, Restriction of Alternate Offers for Source Controlled Items, in solicitations when the acquisition is restricted to material manufactured by the sources listed on the source control drawing, as indicated by AMSC code B.

17.7505 Limitations on price increases.

SUBPART 17.76 – CONTRACTS WITH PROVISIONING REQUIREMENTS

(Revised December 27, 2011 through PROCLTR 2012-17)

17.7601 Provisioning.

17.7601-90 Contracting requirements for issuance of provisioned item orders (PIOs).

17.7601-91 Negotiating and executing supplemental agreements.

The file shall be documented when the price or cost analysis techniques discussed at 13.106-3 are used for the exercise of priced PIOs and definitization of UPIOs.

17.7601-92 Solicitation and contract clauses.

17.7601-93 Contracting officer's representative - provisioning.

17.7601-94 Data pricing, evaluation, and award.

The clause cited at 52.217-9000, Data Pricing, Evaluation, and Award, shall be inserted in solicitations for acquisition of data with end items. The clause shall be inserted in Section M, Evaluation Factors for Award.

17.7601-95 Solicitation and contract clause.

Use 52.217-9022, Provisioning Documentation is Waived, when any DLAD Provisioning clauses were included in the solicitation and the buyer determines at time of award that provisioning documentation will be waived.

SUBPART 17.78 – CONTRACTS OR DELIVERY ORDERS ISSUED BY A NON-DOD AGENCY

17.7800-90 Scope.

SUBPART 17.90 – MULTISOURCE CONTRACTING

17.9000 Scope.

This subpart prescribes policies and procedures for acquisitions of supplies and services from multiple sources when the coverage at FAR 16.504 for making multiple awards of indefinite-quantity task and delivery order contracts is not used.

17.9001 Policy and authority.

17.9002 Conditions for use.

17.9003 Limitations on use.

17.9004 Supply assurance through multisource contracting.

SUBPART 17.91 – [RESERVED]

SUBPART 17.92 – REOPENER CLAUSES

17.9201 General.

17.9202 Procedures.

When the contracting officer documents that use of a reopener clause is the most appropriate means of overcoming a contingency (see 31.205-7(c)(2)(90)(v)) that will significantly affect the pricing of a contract, as a minimum, the following should be accomplished:

17.9203 Contract requirements.

Incorporate the cost principles and procedures in FAR Subpart 31, for use as the basis for pricing any adjustment under the reopener clause, and the clauses at FAR 52.215-23, Price Reduction for Defective Cost or Pricing Data - Modifications, FAR 52.215-25, Subcontractor Cost or Pricing Data - Modifications, (if applicable), and FAR 52.215-2, Audit - Negotiation.

17.9204 Reopener clause requirements.

A reopener clause shall, at a minimum, incorporate the following:

17.9205 Contract clauses.

The reopener clauses listed below are available for use in negotiated contracts only after an advisory copy has been submitted and reviewed in accordance with 17.9202(h):

SUBPART 17.93 – SURGE AND SUSTAINMENT (S&S)

(Revised September 15, 2011 through PROCLTR 2011-43)

17.9300 Scope.

17.9301 The S&S enterprise procedures.

“D1-D6 schedule,” represents the surge requirements expressed in exact quantity with a 6-month sustainable accelerated delivery. D1-D6 is the surge requirement, including the Services’ go-to-war requirements. D1-D6 schedule is used when MWR cannot be applied (e.g., DLA Troop Support items that have a definitive fielding schedule such as MREs). D1-D6 Schedule is determined and obtained by using SPIDERS or IBMS, or by consulting the industrial specialist.

“Industrial capability issue (ICI),” a procurement issue created by the lack of industrial capability, capacity, or raw or semi-finished materials lead-time issues that impact the ability of the supplier to deliver at the wartime rate. The mitigation of the issue would require an investment by the Government to improve capability to deliver at the wartime rate. Normally, such investments are funded through the Warstopper program (refer to Warstopper Issuance).

“Long term contract (LTC),” are all long-term contract instrument types (e.g., indefinite quantity, corporate, prime vendor) where the ordering period of performance, to include option periods, is greater than 1 year. LTC does not include indefinite delivery purchase orders (IDPO).

“Monthly wartime rate (MWR),” expressed in units per month, represents the combined recurring requirements for all services after offsets for peacetime DLA direct (DD) supply chain surge capability and/or DLA managed war reserve material (WRM) stocks are applied. MWR is the surge requirement, including the services’ go-to-war requirements. MWR is used when items have assigned national stock numbers (NSN). MWR for an item is determined and obtained by using the industrial base management system (IBMS) or by consulting the industial specialist.

“Peacetime support issue,” occurs when DLA is unable to meet the customer’s required delivery date for a weapon system repair part that is coded not mission capable-supply (NMCS), a critical item that impacts mission capability (MICAP), or to prevent the loss of life/property, or meets the FAR criteria for an unusual and compelling requirement if routine fulfillment/replenishment procedures will not satisfy the requirement.

“Surge and sustainment (S&S),” increased quantities and/or accelerated delivery rates required to meet the Services’ requisitions across a broad spectrum of contingencies. The increased quantity and accelerated delivery rate are above and beyond the normal peacetime requirements, and are identified as MWR, D1-D6 schedule, or surge quantity option.

“Surge and sustainment coverage,” is a combination of DLA’s ability to fill contingency requisitions through MWR, D1-D6 schedule, or surge quantity option within the customer’s required delivery date (RDD) and the vendor’s ability to meet surge quantity and sustainable accelerated delivery.

“S&S events” describe the relationship between the S&S planning requirement (S&SPR), the S&S actual requirements, and S&S coverage.

“Surge and sustainment planning requirements (S&SPR),” (also referred to as “go-to-war requirements”), are the additive monthly wartime demand requirements obtained through collaboration with the customers, which include the services’ other war reserve material requirements (OWRMR), Joint Chief of Staff (JCS) project coded requisitions, and items with a weapon system essentiality code (WSEC) of 1, 5, 6 or 7. These are the Services’ go-to-war items for contingency operations, national emergencies, or other readiness needs, where speed of delivery and immediate availability of materials are the primary priority to support national security interests. DODI 3110.06, War Reserve Material Policy, and Secretary of Defense strategic planning guidance require the identification of these Go-to-War requirements to support the national security interests of the United States.

“Surge quantity option,” increased quantity above and beyond peacetime demands expressed in percent or exact number with a sustainable accelerated delivery. This is other than MWR or D1-D6 schedule, and used for items that are market ready, commercial, or non-NSN vendor part numbered items (e.g., cataloged commercial items under a prime vendor arrangement) to support increased demands during contingency operations, national emergencies, or other readiness needs. Surge quantity option is calculated using appropriate demand data through market research, or determined by consulting the industrial specialist.

“Unsupported item issue (UII),” surge requirements that cannot be met through peacetime inventory, normal peacetime contracting, alternative contract strategies, or a successful resolution using investment to an ICI. DLA is required to report these items to the services for inclusion into their war reserve planning, such as when an investment to resolve an ICI exceeds cost of a government “buy and hold” solution, or when stocking the item is counter to DoD war reserve policy.

17.9302 Background.

The primary mission of DLA is to support the warfighter in peacetime and wartime to include smaller contingencies. The ability to surge (or ramp up quickly) and to sustain replenishment of wartime consumable items at an increased pace is critical to the execution of U.S. military strategy. S&S coverage is impacted by the continuing emphasis by both DLA and suppliers to reduce inventory and by DLA’s plan to rely on industrial capability. Therefore, S&S capability must be a primary consideration in all acquisition strategies and resource investments.

17.9303 Policy.

17.9304 Solicitation and contract clauses/provisions.

The contracting officer shall insert the following provisions/clauses in solicitations when MWR, D1-D6, or surge quantity option is required. The contracting officer, in coordination with the supply chain’s industrial support, shall obtain the approval of DLA HQ J74 prior to authorizing any exceptions to the provisions/clauses. Exceptions from and/or alteration to the clauses listed below are not subject to the review and approval requirements set forth at 1.301-91. Exceptions or alterations must be submitted in writing to DLA HQ J74 for approval.

17.9305 Surge and sustainment (S&S) pricing evaluation.

17.9306 Executing S&S.

17.9307 Program control measures.

The effectiveness in obtaining surge coverage will be assessed, measured, and tracked by DLA HQ J74 in accordance with the DLA Issuance.

SUBPART 17.94 – CUSTOMER VALUE CONTRACTING

17.9400 Scope.

This subpart prescribes policies and procedures for soliciting offers, awarding contracts, and placing orders under DLA’s customer value contracting (CVC) initiative. The Administrator of General Services and DLA have agreed that DLA is responsible for developing and maintaining Federal supply schedule type contracts for assigned items in furtherance of the national supply system concept (see DoD 4140.1-R, DoD Supply Chain Materiel Management Regulation, Appendix 7). Authority for this is also found in FAR 8.401(a) and FAR 38.000.

17.9401 Definitions.

"Customer value contracting” is a multiple award schedule (MAS) method of providing logistics support that empowers the customer to select the product that best meets their mission needs. This multiple award, customer best value approach is similar to GSA Federal supply schedules. CVC is similar to the multiple award delivery order contracts covered by FAR Subpart 16.5 in that it uses either an indefinite delivery/indefinite quantity contract with a minimum ordering amount or an indefinite delivery requirements contract. It differs from the multiple award delivery order contracts covered by FAR Subpart 16.5 with regard to the solicitation and award process. In FAR Subpart 16.5 acquisitions, CICA and the FAR require a statement of definite requirements allowing direct competition in the award of contracts, but this degree of requirements definition is not required for CVC, thus allowing CVC contracts to include entire product lines and catalogs of products.

17.9402 General.

17.9403 Acquisition planning.

Based on market research an analysis should be conducted to determine and identify those items/product lines that demonstrate a reasonable probability of being requisitioned in a CVC environment. Use of CVC shall be annotated in acquisition planning documents.

17.9404 Ordering procedures.

The following requirements shall be followed regarding placement of orders against CVC contracts.

costs, etc.) to meet the Government's needs.

SUBPART 17.95 – TAILORED LOGISTICS SUPPORT CONTRACTING

(Revised September 13, 2011 through PROCLTR 2011-36)

17.9500 Scope of subpart.

This subpart prescribes policies and procedures for soliciting offers, awarding contracts, placing orders, and post award administration under DLA’s tailored logistics support contracting initiatives. Included in this category are prime vendor (PV), similar existing support arrangements known as modified prime vendor initiatives (MPV), and future initiatives that have characteristics of PV arrangements, but are not considered traditional PV. This subpart also discusses the management attention required throughout the life of a tailored logistics support contract. It includes a clause to be used when the Government is relying on the contractor’s purchasing system to verify that the contractor competed the items or services or to justify fair and reasonable pricing. Any deviation from this subpart must be requested in writing and be approved by the Senior Procurement Executive. Deviations may be requested on a program rather than an individual acquisition basis.

17.9501 Definitions.

“Catalog” is a vendor’s listing of items that have been determined to have fair and reasonable pricing by DLA and are now available for ordering by authorized users. The catalog is limited to DLA approved items and is not necessarily inclusive of the full range of items that a vendor can provide.

“Distribution and handling fee” is one component of the total item price listed in the catalog. It is the portion paid for stocking, handling, and delivering the item, as awarded under the contract. It does not include the cost of the actual item that the tailored logistics provider may have manufactured itself or procured from another supplier. It is expressed in fixed dollar amounts only, not in percentages, except for those prime vendor acquisitions found in the PGI 17.9504 (a) pricing model.

“Distribution and pricing agreement (DAPA)” is an agreement with a manufacturer or supplier that establishes both the selling price of a product and an affirmation from the DAPA-holder to allow tailored logistics support contractors to distribute its products. A DAPA allows for the delivery of selected products at specified prices.

“Market basket” is an evaluation tool that uses a representative group of line items on the proposed contract to establish fair and reasonable price determinations. Items and quantities selected for inclusion in a market basket must represent a minimum of 75 percent of the anticipated dollar value of the planned acquisition. Market basket price reasonableness determinations are made in accordance with FAR Subpart 15.4 and may consist of comparisons with historical pricing data, catalogs, market prices, various price indexes, and similar standard pricing standards.

“Modified prime vendor (MPV)” are those PV-like arrangements that provide additional capabilities beyond distribution. Some of these other support arrangements have been known in the past as integrated prime vendor and virtual prime vendor. There may or may not be a direct relationship between the prime vendor and the customer.

“National allowance pricing agreement (NAPA)” is an agreement with a manufacturer or supplier that provides discounts on a national basis. Tailored Logistics Support contractors pass on these savings to the end customer.

“Prime vendor (PV)” is a supplier of a wide variety of products within a specific industry/sector, which along with supplying those products provides additional capabilities such as distribution. The additional capabilities are evaluated as part of the best value decision making process. Examples are the medical/surgical, pharmaceutical, and garrison feeding PV contracts.

17.9502 General.

Acquisition and acquisition personnel involved in tailored logistics support arrangements, such as PV, MPV, and other similar support arrangements, both existing and future, are subject to the policies and procedures contained in this subpart.

The DLA tailored logistics support approach provides access to an extensive variety of products through indefinite delivery contracts, enabling DLA customers to obtain products quickly and efficiently while utilizing the commercial inventory and distribution infrastructures established by primary distributors. They may be part of a performance based logistics (PBL) initiative, and if so, would also be subject to the PBL acquisition process coverage in 90.15. Selecting a tailored logistics support approach requires a clear and convincing business case justification that this acquisition strategy shall provide the best support for the customer, provides competitive pricing and transparency of those prices throughout the life of the contract, and that there are sufficient resources available to adequately monitor compliance with all contract terms and conditions.

17.9503 Acquisition planning.

All acquisition strategies for all dollar value tailored logistics support contracts must be approved by DLA HQ before public notice of the procurement is published and a solicitation is issued. As described below, included in the request for approval must be an acquisition plan, a business case analysis, and a contract management plan.

17.9504 Pricing.

17.9505 Pre-award.

Contracting officers shall develop metrics to monitor critical factors in the tailored logistics support arrangement to include price and other factors. In addition to complying with the acquisition planning requirements at 17.9503, contracting personnel shall utilize the automated tailored logistics support tools to perform analyses and justifications for the contract. These tools are found in PGI 17.9505(a).

17.9506 Ordering procedures.

17.9507 Post-award actions and management oversight.

17.9508 Solicitation provisions and contract clauses.

SUBPART 17.96 – NON-ECONOMY ACT INTERAGENCY ACQUISITIONS

17.9600 Scope of subpart.

17.9601 Justification for use.

DLA may place a non-Economy Act order as an assisted acquisition, as defined in 2.101, including orders to fill DLA’s own internal needs, with a non-DoD activity if all the following conditions are met:

17.9602 Ordering procedures.

See mandatory procedures at PGI 17.9602 for the “mechanics” of, and the elements to consider with regard to, non-Economy Act ordering from another department or agency.

17.9603 Contracting officer review.

DoD policy requires DoD-warranted contracting officer review of all non-Economy Act orders over $500,000. DLA policy, at 7.104-90(a), and as stated in 7.9001(a)(90), 7.9002(a), and 7.9003(a), requires that a DLA warranted contracting officer review the assisted acquisition from a non-DoD entity of either supplies or services valued over $150,000. This review must be accomplished prior to sending the order to the funds certifier or issuing the military inter-departmental purchase request (MIPR) to the non-DoD activity. If the requesting official is different from the contracting officer, the requesting official shall also review the acquisition package to ensure compliance with FAR, DFARS, and DLAD Part 7. Requirements will not be split into smaller amounts in order to avoid contracting officer review.

17.9604 Fiscal matters.

17.9605 Follow-up procedures for non-Economy Act transactions.

See PGI 17.9605 for mandatory procedures and other considerations pertaining to oversight, fund status monitoring, payment, and close-out of non-Economy Act transactions.

SUBPART 17.97 – CORPORATE CONTRACTS

17.9700 Contract clauses.

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