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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 S&S definitions.

17.9302 Policy.

17.9303 Procedures.

17.9304 Solicitation provisions and contract clauses.

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.

17.7404-3-90 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 July 2, 2012 through PROCLTR 2012-41)

17.9300 Scope.

(a) This subpart prescribes policy for obtaining S&S coverage through the acquisition planning and long-term contracting process.

(b) This subpart does not apply to DLA Energy. For DLA Energy contracting, S&S coverage will be specified in the currently approved DLA Energy annual surge capability plan (ASCP). Updates to the DLA Energy ASCP will be submitted for review to DLA HQ J74 and approval by J7 no later than October 31 each year or more frequently as significant changes occur.

(c) This policy defines DLA actions for requirements in DFARS 217.208-70(b) and DFARS PGI 217.202(2). Although the goals remain the same, the procedures in this policy do not apply when establishing corporate exigency, minimum sustaining rate, or industrial base maintenance contracts, vendor managed inventory, prime vendor war reserve material (WRM), and/or stock rotation as the alternate strategy to support the Services' go-to-war requirements.

17.9301 S&S definitions.

“D1-D6 schedule” represents the surge requirements expressed in exact quantities with a 6-month sustainable accelerated delivery. D1-D6 is the surge requirement, including the Services’ go-to-war requirements. The D1-D6 schedule is used when the monthly wartime rate (MWR) cannot be applied, such as DLA Troop Support items that have a definitive fielding schedule for meals ready to eat (MREs). The D1-D6 schedule is determined and obtained by using the support planning integrated data enterprise readiness system (SPIDERS) or industrial base management system (IBMS ), or by consulting the industrial specialist.

“Industrial capability issue (ICI)” is a procurement issue created by the lack of industrial capability, capacity, and/or raw or semi-finished materials with 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. These investments are funded through the warstopper program (refer to DLA Instruction 1212 Industrial Capabilities Program – Manage the Warstopper Program).

“Industrial specialist” represents the Government personnel performing certain technical functions in different organizational activities within the supply chains. This term applies to the Government personnel within the industrial preparedness branch for DLA Aviation, the industrial support office for DLA Land and Maritime, the industrial base planning office in DLA Troop Support Clothing and Textiles (C&T), the industrial preparedness branch in DLA Troop Support Construction and Equipment (C&E), the strategic material sourcing group (SMSG) readiness division for DLA Troop Support Medical, and the industrial base planning branch for DLA Troop Support Subsistence.

“Long term contracts (LTCs)” are all long-term contract instrument types to include indefinite quantity, corporate, and prime vendor contracts, where the ordering period of performance with option periods is greater than 1 year. LTCs do not include indefinite delivery purchase orders (IDPOs).

“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 (NSNs). MWR for an item is determined and obtained by using the industrial base management system (IBMS) or by consulting the industrial specialist.

“Peacetime support issue” occurs when DLA is unable to meet the customer’s required delivery date for a weapon system repair part that 1) is coded not mission capable-supply (NMCS), 2) is a critical item that impacts mission capability (MICAP) or to prevent the loss of life/property, or 3) 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)” represents 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 a surge quantity option.

“Surge and sustainment coverage” is a combination of DLA’s ability to fill contingency requisitions through the 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. “S&S events” describe the relationship between the S&S planning requirement (S&SPR), the S&S actual requirements, and S&S coverage.

Details on events, numbered I through VII, and how they are used, are covered in DLA Instruction 1214, Industrial Capability Program – Surge and Sustainment (S&S), Enclosure 4. An event may have known surge planning requirements, may be covered for surge, and may be needed in surge quantities during an actual contingency.

“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 , Joint Chiefs of Staff (JCS) project coded requisitions, and items with a weapon system essentiality code (WSEC) of 1, 5, 6 or 7. These requirements 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” is an increased quantity above and beyond peacetime demands expressed in percent or exact number with a sustainable accelerated delivery. This quantity is other than the MWR or D1-D6 schedule, and used for items that are market ready, commercial, or non-national stock number (NSN ) vendor part numbered items such as 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)” are surge requirements that cannot be met through peacetime inventory, normal peacetime contracting, alternative contract strategies, or a successful resolution using investment to an industrial capability issue (ICI). DLA is required to report a UII 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 Policy.

(b) References. The following statutes, regulation, and policy include coverage for surge and sustainment:

(2) FAR Subpart 6.302.3 Other Than Full and Open Competition, Industrial Mobilization; Engineering, Developmental, or Research Capability; or Expert Services.

(3) Defense Production Act of 1950, as amended;

(4) Defense Priorities and Allocations System Program;

(5) DoD 4400.1-M, Department of Defense Priorities and Allocations Manual; and

(6) DoD Instruction 3110.06, War Reserve Materiel Policy.

(c) The agency’s goal is to have all surge and sustainment planning requirements (S&SPR) and the Services’ go-to-war requirements on an LTC to ensure coverage for wartime critical materials, in accordance with the regulations and policy listed in paragraph (b) of this section. Acquisition planning efforts by the contracting activity shall ensure DLA leverages its LTC acquisitions to obtain S&S coverage that addresses all surge events.

(d) Contracting officers shall obtain coverage for items identified as go-to-war items during the acquisition process of all LTCs, except IDPOs, modifications to add items to a contract, or when exercising an option period. Contracts/orders with mandatory sources under FAR 8.002(a), including General Services Administration Federal Supply Schedules and AbilityOne, are not exempt from compliance with this policy in solicitations and resulting contracts.

17.9303 Procedures.

Refer to PGI 17.9303 for procedures when processing surge requirements from the pre-solicitation through post-award phases.

17.9304 Solicitation provisions and contract clauses.

The contracting officer shall insert the following provisions/clauses in solicitations when MWR, D1-D6, or the surge quantity option is required. The contracting officer, in coordination with the supply chain’s industrial specialist, shall obtain the approval of DLA HQ J7 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 by J7.

(a) Use clause 52.217-9006, Surge and Sustainment (S&S) Requirements, only when including MWR or D1-D6 in the solicitation and resulting contract. Insert 52.217-9006 Alternate I only when including a surge quantity option in the solicitation and resulting contract.

(b) Use clause 52.217-9007, Surge and Sustainment (S&S) Instructions to Offerors, only when including MWR or D1-D6 in the solicitation and resulting contract. Insert 52.217-9007 Alternate I only when including a surge quantity option in the solicitation and resulting contract.

(c) Use clause 52.217-9008, Surge and Sustainment (S&S) Evaluation, only when including MWR or D1-D6 in the solicitation and resulting contract. Insert 52.217-9008 Alternate I only when including a surge quantity option in the solicitation and resulting contract.

(d) Use clause 52.217-9009, Surge and Sustainment (S&S) Pricing, when including MWR or D1-D6 in the solicitation and resulting contract.

(e) Use clause 52.217-9010, Limitations on Surge and Sustainment (S&S) Investments, when including MWR, D1-D6, or surge quantity option in the solicitation and resulting contract.

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 July 18, 2012 through PROCLTR 2012-35)

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 or 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 or surgical, pharmaceutical, and garrison feeding PV contracts.

17.9502 General.

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 procedures 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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