# DLAD PGI PART 17 – SPECIAL CONTRACTING METHODS

- DLAD PGI PART 17 – SPECIAL CONTRACTING METHODS

- PGI SUBPART 17.74 – LIMITATIONS.

- PGI 17.7400 Scope.

- PGI 17.7404-3 Definitization schedule.

- PGI SUBPART 17.93 – SURGE AND SUSTAINMENT (S&S) [F25]

- PGI 17.9300.
- PGI 17.9301 S&S Implementation Procedures, Guidance, and Instructions for Contracting Officers.

- PGI SUBPART 17.95 – TAILORED LOGISTICS SUPPORT CONTRACTING

- PGI 17.9502 Tailored Logistics Support Contracting Program of Instruction. [CH26]
- PGI 17.9503(e) [CH27]
- PGI 17.9504 Pricing. [CH28]
- PGI 17.9505(a) Pre-award tools include, but are not limited to those found at PV Tools.
- PGI 17.9507(c)(ii) Price Review Tools include but are not limited to those found at PV Tools
- PGI 17.9507(c)(v) Management tools for oversight include, but are not limited to those found at page 3 of PV Tools .

- PGI SUBPART 17.96 – NON-ECONOMY ACT INTERAGENCY ACQUISITIONS

- PGI 17.9602 Ordering procedures. [CH29]
- PGI 17.9605 Follow-up procedures for non-Economy Act transactions. [CH30]

DLAD PGI PART 17 – SPECIAL CONTRACTING METHODS

PGI SUBPART 17.74 – LIMITATIONS.

(Revised September 15, 2011 through PROCLTR 2011-41)

PGI 17.7400 Scope.

PGI 17.7404-3 Definitization schedule.

(a)(2) To ensure timely approval, submit all proposed undefinitized contract actions (UCAs), regardless of value, or unpriced change orders with an estimated value exceeding $5 million to J72 a minimum of two weeks prior to proposed issuance date in order to permit J7 and General Counsel review and DLA Director approval. Requests for HQ DLA review and approval of a letter contract or other UCA, regardless of value, or unpriced change order with an estimated value exceeding $5 million shall be prepared in accordance with DFARS Subpart 217.74 and DLAD 17.74. The proposed action must be as complete and definite as practicable under the particular circumstances, including all Supply Chain and/or contracting activity review, coordination, and approval. HCAs for activities with an assigned HCA shall review requests for UCAs or unpriced change orders and may disapprove requests or forward them to J72 for further processing.

(b) At a minimum, requests for approval shall include:

(1) An Acquisition Plan

(2) Any required Justification and Approvals or Determination and Findings

(3) A written Statement of Urgency supporting the requirement for a UCA or unpriced change order, including:

(i) The quantities, dates and priorities of existing and projected requirements to be filled by the buy;

(ii) The date that the requirement was first known to exist;

(iii) Why the interests of national defense demand that a contractor be given a binding commitment so that work can begin immediately , including the adverse impact on agency requirements resulting from delays in beginning performance;

(iv) Why negotiation of a definitive contract or priced order did not and cannot occur in sufficient time to meet the acquisition need; and

(v) The determination required by FAR 16.603-3 (letter contracts only);

(4) The contracting officer's responsibility determination concerning the prospective contractor (FAR 9.103);

(5) A price negotiation memorandum that includes the not-to-exceed ceiling total price and ceiling unit price(s) to be included.

(6) A funding document that includes the offeror’s proposed obligation amount by period prior to definitization, interim billing price, and the predefinitization limits of the Government's liability under the UCA or change order;

(7) A discussion of any requirement for progress payments, provisional payments, and options for increased quantity or performance period;

(8) The proposed definitization schedule including dates for--

(i) Proposed obligation rate against the not-to-exceed ceiling price;

(ii) Receipt of the contractor's proposal;

(iii) Beginning of negotiations;

(iv) Completion of negotiations;

(v) Target date for definitization; and

(9) The following additional milestone dates (unless another contract management activity will definitize):

(i) Receipt of field pricing report;

(ii) Receipt of the local price or cost/price analysis; and

(iii) Submission of the proposed definitive contract/change order and supporting file for HQ DLA review and approval, pursuant to 1.690-6(c)(6).

(10) The delivery schedule.

(c) A copy of a signed letter contract shall be forwarded to HQ DLA, ATTN: J73, within 1 week of execution.

PGI SUBPART 17.93 – SURGE AND SUSTAINMENT (S&S) [F25]

PGI 17.9300.

This DLAD PGI subpart prescribes the mandatory procedures, guidance, and instructions for obtaining Surge and Sustainment (S&S) coverage through acquisition planning and long-term contracting. Refer to the Industrial Capabilities Surge and Sustainment One Book for a more detailed process, if necessary.

PGI 17.9301 S&S Implementation Procedures, Guidance, and Instructions for Contracting Officers.

The procedures, guidance, and instructions help Contracting Officers implement S&S in the acquisition process. The supporting Industrial Specialist (IS) shall assist the Contracting Officer with implementation to ensure appropriate S&S coverage is obtained.

Steps | Tasks | Sources
PRE-SOLICITATION
1 | (a) CO conducts market research (e.g., historical surge plan and performance, collaboration with industrial specialist) to determine the appropriate strategy to obtain S&S coverage. (i) If market research clearly shows that surge quantities and delivery schedule can be met through the LTC contract maximum and required delivery, and can satisfy both peacetime and wartime requirements, CO shall consult the IS to determine if surge-specific provisions can be excluded, in part or as a whole, from the solicitation. (ii) CO shall only exclude surge-specific provisions after receiving approval from the Industrial Base (IB) Chief through the waiver process below, and will clearly document the market research result, surge coverage decision, and approval in the acquisition plan. (b) Except as stated below, Contracting officer (CO)/Buyer conducts surge check using the Industrial Base Management System (IBMS): (i) Go to https://www.dla.mil/wicap. Refer to Exhibit 1 for IBMS Surge Check procedures. (ii) Copy and paste NSN or NIIN (LTC population) in IBMS. (iii) IBMS provides surge requirements expressed as monthly wartime rate (MWR) to include estimated PLT. (iv) Export surge results from IBMS to Excel. (v) Save Excel sheet to preferred drive or desktop. Use RFP number and Project Name to title surge requirements in IBMS. (vi) Edit Excel sheet to meet required CLIN format - add columns for 9900 CLINS (9961, 9962, 9963, & 9964), UI, and for pricing MWR. Estimated PLT is provided to buyer as information only and should not be included in the solicitation. Refer to Exhibit 2A for the CLIN sample and 4.7103-2(a)(90). (c) For Medical, Buyers consults the DSCP Medical Contingency Contracting Office to validate surge requirements on LTC item candidates and surge coverage recommendation. DSCP Medical uses Readiness Management Application (RMA) as the Industrial Base (IB) tool to identify S&S requirements. (d) For Subsistence and C&T, Buyers consult IB Chief to validate surge requirements on LTC item candidates and surge coverage recommendation. DSCP Subsistence and C&T use SPIDERS or IBMS to identify S&S requirements. (i) For Subsistence, Buyers include surge quantity option in percent or exact number to identify surge requirements. Surge quantity option is calculated using historical demand data or other appropriate data. (ii) Buyers identify surge quantity option using a regular CLIN and include 9900 CLINS (9961, 9962, 9963, & 9964). Refer to Exhibit 2C for the surge quantity option CLIN sample and 4.7103-1(a)(90). (iii) For C&T, Buyers include D1-D6 schedule to identify surge requirements. Surge requirements are obtained from SPIDERS or IBMS. (iv) Buyers identify D1-D6 schedule using regular CLINS and include 9900 CLINS (9961, 9962, 9963, & 9964). Refer to Exhibit 2B for D1-D6 CLIN sample and 4.7103-1(a)(90). (e) Contracting Officers shall obtain surge coverage for items identified as the Services “go-to-war” items during the acquisition process for all long-term contracts, except IDPO, in accordance with DLAD 17.9303(c). (f) The CO documents S&S coverage strategy in the acquisition plan. | 17.9303(c)(1) Exhibit 1 Exhibit 2A Exhibit 2C Exhibit 2B
SOLICITATION
2 | (a) When surge requirements apply, CO includes the following in the solicitation: (i) S&S clauses IAW DLAD 17.9304; and (ii) S&S CLINS 9960, 9961, 9962, & 9963, IAW 4.7103-(a)(90); and (iii) Include MWR or D1-D6 using regular CLINS (i.e., 0001, 0002, etc.) to identify surge requirements. Refer to Exhibit 2A or 2B for CLIN structure sample. (b) For Prime Vendor arrangements for commercial, market ready items, non-NSN, or part numbered items, CO includes the following in the solicitation: (i) S&S Alternate Clauses IAW DLAD 17.9304; (ii) S&S CLINS 9960, 9961, 9962, & 9963. Refer to Exhibit 2C for CLIN structure sample. (iii) Include surge quantity option expressed as a percent or an exact number using a regular CLIN. Refer to Exhibit 2C for CLIN structure example. (c) CO determines and identifies the appropriate technical evaluation criteria in the solicitation: (i) For best value/source selection, Buyer in collaboration with the IS determine the appropriate S&S evaluation criteria in the solicitation; or (ii) For LPTA and/or ABVS, Buyer in collaboration with the IS determine appropriate or additional evaluation criteria if necessary to evaluate the CAP for technical acceptability (go or no go). (d) CO notifies the IS immediately via email when the solicitation is issued and/or available in the ECF. (e) IS will obtain copy of solicitation from ECF to update the appropriate IB tool. | 17.9303(c)(2) Exhibit 2A Exhibit 2C
3 | (a) Solicitation Amendment, Changes, Closing: (i) CO collaborates with IS before making changes to surge coverage in the RFP after issuance (i.e., increase, decrease, or deletion). (ii) IS assesses the impact of the proposed change to surge requirements and will advise the CO. (iii) CO proceeds with the amendment or change after receiving IS feedback. (iv) Buyer notifies the IS when the amendment is posted in the ECF. (v) IS obtains a copy of the amendment and updates the appropriate IB tool. |
| (b) Supplier is required to submit the following with the proposal upon solicitation closing: (i) Prices for MWR or D1-D6, either in $ or %; (ii) When surge pricing exceeds peacetime prices, vendor provides sufficient explanation by submitting information other than cost or pricing, or, if applicable, certified cost or pricing data to determine price reasonableness or cost realism IAW Clause 52.217-9009; (iii) Submits capability assessment plan (CAP) using applicable IB Tool (i.e, WICAP/eCAP or SPIDERS) as specified in Clause 52.217-9007 or the Alternate Clause; (iv) Submits hard copy of the CAP or questionnaire with the proposal. |
EVALUATION
4 | (a) Buyer submits the Capability Assessment Plan (CAP) or Questionnaire to IS for evaluation and recommendation: (i) Buyer submits an electronic copy of the CAP or questionnaire to the IS via email; (ii) IS reviews and advises the Buyer; (iii) IS determines the application of Warstopper (WS) or Government investment; (iv) If Warstopper or Government investment applies, Buyer notifies all vendors competing in the acquisition during negotiations or issues a modification to include the investment; and IS assists the Buyer with processing the investment; (v) Buyer documents the IS recommendation and negotiation plan in the PBM. (b) When evaluating MWR or D1-D6 prices, (i) Buyer evaluates the surge prices to determine price reasonableness and cost realism IAW FAR 15.404-1, 15.403, 2.101, and DFARS 217.7505(b)(2); (ii) Total surge price is not added in the overall comparative price evaluation to determine awardee due to varying factors affecting surge pricing; (iii) Buyer documents surge price objectives in the PBM. | 17.9303(c)(3)
NEGOTIATION/DISCUSSION
5 | (a) CO negotiates if necessary to obtain surge coverage. Delivery for S&S items will be 30 days or less. (b) CO makes every attempt to obtain surge coverage to include the following: (i) Negotiate surge prices if necessary; (ii) Use the exit strategy (e.g., surge asset buy-back for high demand items, surge asset ramp down) as leverage or negotiating tool to obtain surge coverage; (iii) Consider alternate packaging or guaranteed minimum for surge items if appropriate and/or applicable; (iv) Engage the IS and/or IB Chief during negotiations to determine alternate surge strategy to obtain coverage; (v) Collaborate with IB Chief to determine if Government investment can be applied to obtain surge coverage. NOTE: When negotiating/discussing surge, make every attempt to obtain surge coverage and consider vendor’s proposed alternatives to support the Services’ go-to-war items IAW DLAD 17.9303(a). (c) If vendor’s CAP excludes the exit strategy, obtain one during negotiation/discussion. Vendor is required to include an exit strategy IAW Clause 52.217-9006. CO ensures that the proposed exit strategy is in the Government’s best interest. (d) Consider the following exit strategies when WS or Government investment does not apply: (i) Surge asset ramp-down before contract expiration date (i.e., 6-12 months); (ii) Asset buy-back for highly demanded or backordered items based on historical stock position, or to have inventory on- hand until follow-on contract can be established; (iii) Apply asset buy-back guaranteed minimum in percent, dollar amount, or quantity based on historical demand patterns and/or items with long lead times; (iv) Shift assets to other contracts if applicable. (e) Consider the following exit strategies or other alternate strategy that is in the Government’s best interest when Warstopper investment applies: (i) Transfer investment to the next contract; (ii) Put investments into production to produce finished goods and offset price for Government furnished property, material, or equipment; (iii) Salvage investment to be used for other government projects; or (iv) Return funds to US Treasury through the WS Program Manager at HQ DLA J-74. (f) For other Government investment application: (i) Supplier may request for Government investment during negotiation/discussion; (ii) CO consults the IS to determine if Government investment can be applied and IS advises the CO; (iii) CO exercises prudence and limit or conserve use of Government investment when obtaining S&S coverage. Only authorize or allow Government investment to overcome S&S shortfall and/or to obtain coverage. Refer to 52.217-9006(c)(3) to (7) for shortfall conditions; (iv) CO and IS approve request for Government investment only when it is absolutely in the Government’s best interest to do so; (v) CO ensures an exit strategy is included when Government investment applies. Refer to exit strategy alternatives under (e) above. (g) For Warstopper (WS) investment application: (i) WS application is determined and approved by the DLA HQ J-7 WS Program Manager(PM). (ii) When WS investment applies, CO notifies the vendor(s) of Government investment during negotiations or discussions. Refer to 52.217-9010 for Limitation on Use of S&S Government Investment. (iii) CO exercises great prudence when negotiating surge coverage with WS investment and only include when approved by DLA HQ J-7 WS PM. (h) When DLA HQ J-7 WS PM approves use of WS investment, the CO consults the IS to process the investment: (i) IS processes the request and advises the CO of WS funding approval; (ii) Upon receiving funding approval, the CO: (A) Includes the WS CLIN 9965 and not-to-exceed amount in the contract; (B) Incorporate appropriate exit strategy as listed under (e) above; (i) If WS or Government funding is approved before contract award, CO notifies all vendors competing in the acquisition of the approved investment amount and includes explicit written language describing use and limitation of Government investment. (j) If WS or Government funding approval occurred after contract award, CO notifies and advises the supplier of approval by issuing a contract modification with the approved dollar amount using CLIN 9965 and includes explicit written language describing use and limitation of Government investment. (k) For a successful negotiation, (i) Proceed with awarding surge coverage; (ii) Include appropriate surge CLINS, MWR/D1-D6 prices, exit strategy, WS investment (if applicable) in the contract; (iii) Include explicit language in the contract on use and limitation of WS or Government investment; (iv) Document the PNM of surge negotiation results. (l) When negotiation is unsuccessful, (i) After making every attempt to obtain surge coverage, and vendor refuses to support surge, and/or negotiation becomes extended, and/or surge prices are unreasonable, Buyer elevates to the CO for a waiver request decision and describe attempts made to obtain surge coverage; (ii) CO consults IB Chief for alternate solutions or recommends to exclude surge requirement, in part or as whole, via a waiver request; (iii) IB Chief recommends alternate solution if any or approve waiver request; (m) Surge Waiver Process (i) CO sends a waiver request to the IB Chief via email that includes the following information: (A) Describe every attempts made to obtain surge coverage; (B) Inform IB Chief whether the contract maximum (quantity or dollar value) can sustain potential increase in demands in the event of future contingency or emergency; (C) Incorporate CO’s decision/concurrence to exclude surge, in part or as a whole, in the email; (D) Attach surge coverage or item(s) being excluded from LTC; (ii) IB Chief may recommend other alternatives if any or approves the waiver request via email and forwards a copy to HQ DLA J-74; (iii) Buyer excludes surge coverage or item(s) as a requirement after receiving approval from the IB Chief; (iv) CO ensures the contract maximum (quantity or dollar value) can cover potential surge in demands in the event of future contingencies to prevent untimely contract expiration; (v) Buyer documents the PNM and includes the waiver approval in the contract file; (vi) IS coordinates with SMSG or IST Lead for alternate surge support strategy for the excluded surge coverage or item(s). (n) IS in collaboration with the SMSG or IST Lead considers the following alternatives: (i) Corporate Exigency Contracts (CEC); (ii) Minimum Sustaining Rate (MSR) contracts (this type of contract may generate protected inventory that can be used to meet contingency demands as free issue); (iii) Industrial Base Maintenance Contracts (IBMC); (iv) Vendor Managed Inventory; and/or (v) Agreements common in some industries (e.g. subsistence), such as memorandum of understanding/agreement or blanket purchase agreement. (o) If using alternate support strategies listed under (n) above, DLAD 17.93 does not apply. Terms, conditions, and provisions for these alternatives will be developed and established by the Contracting Officer and IS based upon specific contingency support needs of the customer(s). (p) When the alternative methods to obtain S&S coverage also fail, the IS notifies the IB Chief and HQ DLA J-74 that Unsupported Item Issue (UII) exists. IS takes the appropriate action to notify the Service(s) and document UII in the appropriate IB tool (i.e., IBMS, SPIDERS, RMA). IS relays the information to the SMSG/IST Lead for future acquisition planning and strategy. (q) CO documents the contract file of the UII for future use. | 17.9303(c)(4)
AWARD
6 | (a) CO incorporates approved CAP in the contract. (b) If WS or Government investment applies, CO incorporates CLIN 9965, approved dollar amount, and explicit written language in the contract regarding limited use of investment. (c) Provides final surge items awarded and notifies the IS when the contract is available in ECF. (d) IS obtains a copy of the contract from ECF to update the appropriate IB tool (i.e., IBMS, SPIDERS). (e) CO uploads surge CLINS in SAP Outline Agreement (OA). Refer to Job Aid “Establishing a Surge Outline Agreement” in EBS Online Help for instructions. | 17.9393(c)(5) Job Aid – EBS OLH
POST AWARD
7 | (a) Deleting Surge Items (i.e., Obsolete items, item no longer needed, etc.) – IAW Add/Delete Clause (i) CO notifies the IS via email before deleting surge coverage or item(s) from the LTC; (ii) CO follows the surge waiver process under Section 5(m) above when excluding or deleting surge coverage or item(s) from the LTC; (iii) IS assesses and determines impact to surge support and WS investment (if applicable, and advises the CO; (iv) CO proceeds with deleting surge coverage or item (s) from the LTC via a modification after receiving approval from the IB Chief. Modification (mod) will include disposition and instructions for WS or Government investment, if applicable); (v) CO documents the contract file by including waiver request, IB Chief approval and a copy of the mod; (vi) CO updates the OA in SAP by removing the surge coverage or item(s) from LTC; (vii) CO notifies the IS via email when mod becomes available in the ECF; (viii) IS obtains a copy of the mod from ECF and updates the appropriate IB tool; (ix) IS advises the Services. (b) Adding Items (Phased Pricing) IAW Add/Delete Clause (i) CO conducts surge check using the appropriate IB tool or by consulting IS. Refer to Section 1 for the surge check procedure. If surge requirement applies, CO obtains surge pricing and CAP from the vendor: (ii) CO evaluates surge Pricing, and IS reviews the CAP and advises the CO. Refer to Section 4 above for procedures on CAP and surge price evaluation; (iii) CO negotiates if necessary to obtain surge coverage for the added items. Refer to Section 5 above for negotiation or discussion procedures; (iv) CO incorporates surge coverage via a mod. Follow the procedure under Section 6 when adding surge coverage or item(s) on LTC; (v) CO notifies the IS when mod is available in the ECF and provides the awarded surge items; (vi) IS obtains a copy of the mod from the ECF and updates the appropriate IB tool. | 17.9303(c)(6)
| (c) Decreasing or Increasing MWR (i) If CO intends to decrease/increase the surge coverage, notify the IS before making any changes; (ii) IS reviews and determines the impact to the customer, surge support, and WS investment (if applicable); (iii) IS collaborates with the Services if necessary and advises the CO via email; (iv) CO proceeds with decreasing or increasing surge coverage after receiving IS recommendation; (A) If increasing MWR or D1-D6, negotiate with vendor if necessary to lower surge prices and update the CAP; (B) CO issues the mod reflecting the change and include instruction for WS investment adjustment (if applicable); (v) CO documents the contract file by incorporating all related email transactions in the ECF; (vi) CO updates the surge coverage in SAP OA when changes are made and notifies the IS when mod is available in ECF; (vii) IS updates the appropriate IB tool. |
| (d) Exercising Option Periods (i) CO notifies the IS before making any changes to the surge coverage i.e., add/delete items or increase/decrease); (ii) Follows the procedures under (a), (b), (c) above when adding, deleting, increasing, or decreasing surge coverage; (iii) Remember to update the OA and document the contract file when changes are made to surge coverage; (iv) CO notifies the IS when the option mod is available in the ECF to update appropriate IB tool. |
S&S EXECUTION
8 | (a) CO invokes/executes surge IAW 17.9306, when: (i) Supporting project coded requisition(s) for: (A) Wartime or contingency operations; (B) Reconstitution of contingency resources following wartime or major exercise; (C) NMCS, MICAP, unusual and compelling requirements; or (ii) Directed by senior leaders to support anticipated increase demands in preparation for national emergency; or (iii) Supporting peacetime issue to resolve backorder situation affecting customer readiness (Requires J7 approval); or (iv) To support testing, validation, or maintenance of S&S capability. (b) Prior to invoking/executing surge, the CO considers the following: (i) Buyer validates the item(s) for surge coverage in the LTC, verify MWR, D1-D6 or surge quantity option, and ramp-up time requirement; and (ii) Determine if requirement meets criteria under (a) above; and (iii) Determine if it’s in Government’s best interest to invoke/execute surge in lieu of other support that may be more cost effective (e.g., expedited delivery, spot buys, diversion, redistribution orders, etc.), and consider delivery, customer readiness, and vendor performance record. (c) Surge trigger or input to invoke/execute may come from the following: (i) Internal input (A) Manual – CO, Buyer, Supply Planner (SP), Customer Account Specialist (CAS), Industrial Specialist, Seniors Leaders, HQ DLA J-74; (B)Automated – Industrial Base Management System, SAP. (ii) External input – Customers or Services. (d) Invoking/executing surge for DLA Direct: (i) Supply Planner (A) Validates backorder, due-in, stock-out situation, and criteria listed under 8(a) above prior to generating a Surge PR for manual sourcing; (B) Identifies the PR as a “Surge PR”. (C) Notifies the CO of the Surge PR via email for immediate processing. Refer to the Job Aid “Creating a Surge Purchase Requisition” in EBS Online Help for instructions; (ii) Contracting Officer (A) Retrieves Surge PR sent by the SP; (B) Validates the Surge PR against the email sent by the SP; (C) Prior to invoking or executing surge, CO follow steps under (b) above and ensures that it’s in the Government best interest to invoke or execute surge to support the requirement in lieu of other support; (D) Sources surge PR against the appropriate Surge CLIN(S) in the OA and includes a remark stating “This is a Surge Order”; (E) CO notifies the vendor and IS immediately by emailing a PDF copy of the order with subject title “Surge Order – Read Immediately”; Includes the PIIN, Order Number, and other information deemed necessary to bring immediate attention to the order for processing. (iii) IS tracks and reports surge execution. (e) Invoking/executing surge for Customer Direct: (i) Customer Account Specialist (A) Uses Surge CLIN(S) to source CD requisitions that meet the criteria under 8(a) above; (B) Project coded requisition can be sourced automatically in SAP by loading the appropriate Surge CLIN(S) in the OA and inclusions and/or exclusions. (C) CAS consults the CO to validate surge coverage in LTC and to load the surge CLINS in SAP OA (if not already loaded). (D) CO notifies the vendor and IS immediately by emailing a PDF copy of the order with subject title “Surge Order – Read Immediately”; Includes the PIIN, Order Number, and other information deemed necessary to bring immediate attention to the order for processing. (E) IS tracks and reports surge execution. (ii) CO is responsible for loading surge CLIN(S) in SAP OA. | 17.9303(c)(7) Job Aid – EBS OLH
SUPPLIER CHANGE IN S&S CAPABILITY
9 | (a) In the event of supplier change request to the CAP due to unexpected supply chain interruption (i.e., extreme market conditions, natural disaster, labor dispute, etc.), the following applies: (i) CO instructs the supplier to update the CAP using the appropriate IB tool. CO notifies and consults the IS; (ii) IS reviews and assesses the impact to the customer and WS investment (if applicable), and advises the CO with the next step; (iii) CO takes action based upon the IS recommendation; negotiates if necessary to keep the surge coverage if possible; documents the contract file; and updates the surge coverage in the OA; (iv) Refer to Section 7 above if making changes to surge coverage (i.e., decreasing, increasing, deleting). (b) If vendor can no longer support surge coverage (e.g., bankruptcy, etc.) and contract is being terminated untimely or before contract maturity: (i) CO notifies the IS as soon as possible; (ii) IS assists the CO with recouping the WS investment (if applicable); (iii) CO will exercise exit strategy to recoup/recover WS investment and issues a mod with instructions on investment disposition; (iv) CO notifies IS when mod becomes available in ECF and document contract file; (v) IS retrieves mod from ECF and updates the appropriate IB tool; (vi) IS works with SMSG or IST Lead to determine alternate or follow-on surge support strategy. | 17.9303(c)(8)
CONTRACT EXPIRATION/TERMINATION
10 | (a) Exercise the appropriate exit strategy before contract termination or expiration: (i) If contract includes WS investment (A) CO consults the IS for assistance if needed when exercising the exit strategy involving WS investment; (B) CO ensures all investments (i.e., funds, raw materials, finished good, etc.) are recouped and recovered to the maximum extent possible; (C) CO exercises S&S exit strategy as stated in the contract and recoup/recover all Government investment. If Government investment cannot be recouped or recovered due to unforeseen circumstance (e.g., bankruptcy) and the existing exit strategy cannot be applied, CO can exercise an alternate exit strategy that is in the best interest of the Government. Consults IS for assistance and elevates to HQ DLA J-74 if necessary for alternatives. (ii) If contract does not include Government investment, (A) CO exercises the exit strategy IAW the contract; (B) CO considers Government’s stock position and the lead time for establishing follow-on contract when exercising the exit strategy. Consider backorder, stock-out, customer support gap, and acquisition timeline when determining disposition of surge coverage. (b)If terminating the contract, CO notifies the IS immediately to determine alternate surge support strategy. (c) CO documents the result of the exit strategy in the contract file for future use as lessons learned. | 17.9303(c)(9)

PGI SUBPART 17.95 – TAILORED LOGISTICS SUPPORT CONTRACTING

PGI 17.9502 Tailored Logistics Support Contracting Program of Instruction. [CH26]

The following courses are suggested as part of a core curriculum. Supply chains should tailor the suggested curriculum with training pertinent to the acquisition at hand, such as units of instruction reflective of the commodities or industries involved, standard operating procedures to be followed within a program, and specific examples of fraud schemes encountered within the supply chain.

Core Curriculum Suggestions:

Price Reasonableness and Negotiation Skills Practicum

Commercial Item Determination –On-line Course (CLC 020)

Commercial Item Pricing (CLC 131)

Procurement Fraud Indicators (CLM 049)

Contract Pricing Refresher

Pricing Catalogs for Prime Vendor Programs

Contract Administration (including closeout, CORs and COTRs)

Domestic Content Update and Refresher (see also the DAU Course “Berry Amendment” (CLC 125)

Wide Area Work Flow

CQMPs and the Acquisition Review Board Process

Contract Documentation Requirements

PGI 17.9503(e) [CH27]

Examples of contract management plans can be found on the DLA Troop Support Procurement Process Support, Compliance Division website at the following location:

https://dscpweb.dscp.dla.mil/contracting/CMP/CMP.htm

PGI 17.9504 Pricing. [CH28]

(a) A PV Contract must be able to comply fully with one of the following established PV Pricing Models:

Pricing Model | Initial Price Reasonableness Determination | Post-Award Price Reasonableness Determination | Audits
Fixed Price utilizing Distribution and Pricing Agreement (DAPA) and Federal Supply Schedule (FSS) pricing* *e.g. Medical/Surgical and Pharmaceutical Variation: Medical/Surgical items not covered by DAPA e.g. ACPOP | Competitively awarded using best value. All prices are determined fair and reasonable by Contracting Officer before time of award. Contracts are awarded, but items are unpriced until becoming a part of the 1,000 item Core List. | The Contracting Officer makes 100% fair and reasonable determinations for new items and price changes. The Contracting Officer identifies the historical items constituting 75% of the total dollar value, determines them fair and reasonable, and creates a 1,000 item Core List. Items in the 1,000 Core List change monthly based on usage frequency from prior months. All items in the 1,000 item Core List must be determined fair and reasonable before being ordered. For items not in the 1,000 Core List, with an extended value less than “ the micropurchase threshold “, a representative statistical sampling of lines sufficient to provide a 90% confidence level shall be reviewed for fair and reasonable pricing on a post-award basis no later than 60 days after award. | Monthly Pricing Reviews,, Quarterly Contract Audits, Annually Audit Monthly Pricing Reviews, Quarterly Contract Audits, Annually Audit
Fixed Price Utilizing Market Basket* * e.g. Garrison Feeding | Competitively awarded using best value. Market basket items must represent at least 75% of the anticipated dollar value of the planned acquisition. The prices of all market basket items are determined fair and reasonable by Contracting Officer before time of award. NAPA and Central Contract pricing may apply. | The Contracting Officer makes 100% fair and reasonable determinations for new items and price changes. | Monthly Pricing Reviews, Quarterly Contract Audits, Annually Audit

(b) A Modified PV Contract or other Tailored Logistics Support contract must be able to comply fully with one of the following pricing models:

Pricing Model | Initial Price Reasonableness Determination | Post-Award Price Reasonableness Determination | Audits
Fixed Price Utilizing Market Basket* * e.g. MRO Supplies Variation: Fixed Price Utilizing Market Basket, >“ the micropurchase threshold “ e.g. Metals | Competitively awarded using best value. Market basket items must represent at least 75% of the anticipated dollar value of the planned acquisition. The prices of all market basket items are determined fair and reasonable by Contracting Officer before time of award. Competitively awarded using best value. Market basket items must represent at least 75% of the anticipated dollar value of the planned acquisition. The extended value of all market basket items over “ the micropurchase threshold “ are determined fair and reasonable by Contracting Officer before time of award. | If the Tailored Logistics Support Purchasing Review clause is applicable, and the contractor complies with the clause, the Contracting Officer makes fair and reasonable determinations as follows for new items, price changes, and those items not included in the market basket: - For line items with an extended value of less than “ $2,500 “, a representative statistical sampling of lines sufficient to provide a 90% confidence level shall be reviewed on post-award basis no later than 60 days after award. - For line items with an extended value of “ $2,500 “ to $24,999, 100% of the items with a percentage of determinations performed pre-order and the remainder post-order. The minimum percentage for pre-order is 30%, with the remainder done no later than 60 days after award. - For line items with an extended value greater than $25,000, 100% of the items shall be determined fair and reasonable prior to any order being processed. If the Tailored Logistics Support Purchasing Review clause is not applicable, the Contracting Officer makes 100% fair and reasonable determinations for new items and price changes. The Contracting Officer reviews 100% of incidental services and negotiates proper scope, pricing, and rates of labor categories prior to commencement of services. If the Tailored Logistics Support Purchasing Review clause is applicable, and the contractor complies with the clause, the Contracting Officer makes fair and reasonable determinations as follows for new items, price changes, and those items not included in the market basket: -For line items with an extended value of less than “ the micropurchase threshold “, a representative statistical sampling of lines sufficient to provide a 90% confidence level shall be reviewed on post-award basis no later than 60 days after award. -For line items with an extended value of “ the micropurchase threshold “ or greater, the contracting officer makes 100% fair and reasonable determinations of items. If the Tailored Logistics Support Purchasing Review clause is not applicable, the Contracting Officer makes 100% fair and reasonable determinations for new items and price changes. The Contracting Officer reviews 100% of incidental services and negotiates proper scope, pricing, and rates of labor categories prior to commencement of services. | Monthly Pricing Reviews, Quarterly Contract Audits, Annually Audit Monthly Pricing Reviews, Quarterly Contract Audits, Annually Audit
Fixed Price Utilizing Market Basket and competition of each order* * e.g. Special Ops, MRO Centcom, Fire Fighting and Emergency Services, Lumber | Competitively awarded using best value. Market basket items must represent at least 75% of the anticipated dollar value of the planned acquisition. The prices of all market basket items are determined fair and reasonable by Contracting Officer before time of award. | The Contracting Officer competes each order among prime vendors. [For Special Ops, fair opportunity is provided to all contractors for all orders “ the micropurchase threshold “ or greater.] The Contracting Officer makes 100% fair and reasonable determinations for new items, price changes, and those items not included in the market basket. The Contracting Officer reviews 100% of incidental services and negotiates proper scope, pricing, and rates of labor categories prior to commencement of services. | Monthly Pricing Reviews, Quarterly Contract Audits, Annually Audit
Fixed Price Utilizing Pre-Priced Core List e.g. Integrated Prime Vendor (IPV) | Competitively awarded Core List using best value . Core List is a percentage of the total item requirements. Initial Core List items are determined fair and reasonable by Contracting Officer before time of award. Only items on the Core List may then be ordered. Unpriced items representing the balance of total requirements are placed on a Schedule of Unpriced items, which are not available until priced. | The Contracting Officer makes 100% fair and reasonable determinations for price changes or adding an item to the Core List from the Schedule of Unpriced Items. Over time, eventually all requirements identified are expected to be included in the Core List. Only items on the Core List may be ordered. The Contracting Officer also reviews 100% of incidental services and negotiates proper scope, pricing, and rates of labor categories prior to commencement of services. | Monthly Pricing Reviews, Quarterly Contract Audits, Annually Audit
Tailored Logistics Support Service Contract with competition of each order* * e.g. MRO Services | Competitively awarded using best value. Vendors evaluated on price using sample tasks. | The Contracting Officer competes each order among vendors. | Monthly Pricing Reviews, Quarterly Contract Audits, Annually Audit

PGI 17.9505(a) Pre-award tools include, but are not limited to those found at PV Tools.

PGI 17.9507(c)(ii) Price Review Tools include but are not limited to those found at PV Tools

PGI 17.9507(c)(v) Management tools for oversight include, but are not limited to those found at page 3 of PV Tools .

PGI SUBPART 17.96 – NON-ECONOMY ACT INTERAGENCY ACQUISITIONS

PGI 17.9602 Ordering procedures. [CH29]

(a) Non-Economy Act assisted acquisition orders for work and services outside the Department of Defense should ordinarily be executed by issuance to the non-DOD agency of a DD Form 448, “Military Interdepartmental Purchase Request (MIPR).” In those instances where an alternative document such as a DD 1348-1 or -6 is used, it must provide information consistent with the MIPR, to include the purchase request number and the Activity Address Code (DoDAAC). A non-Economy Act order placed by DLA for its own use or in support of a military customer shall comply with the documentation standards in Volume 11A, Chapter 1 of the DOD Financial Management Regulations (FMR).

(b) Non-Economy Act orders using either assisted or direct acquisition methods must be supported with the following, which are the responsibility of the requesting official in a DLA or other Defense activity, with assistance from the DLA contracting activity:

(1) Conduct market research;

(2) Perform acquisition planning;

(3) Prepare the Independent Government Cost Estimate (IGCE);

(4) Prepare the statement of work (SOW);

(5) Establish the basis for award, including evaluation criteria;

(6) Ensure the receipt and compliance of MIPR (or other execution document) acceptance by the supporting non-DOD activity;

(7) Assist in the technical evaluation;

(8) Establish the quality assurance plan, which addresses the following:

(A) COR/COTR responsibilities for receiving reports/invoices and inspection and acceptance duties;

(B) Contract Data Requirements List (CDRL) procedures, required reports, deliverables, and contract performance reports;

(C) Property/Equipment management;

(D) Contract oversight. (The requesting official will not only include this in the QAP, but will also retain some share of responsibility for oversight of contract performance. See DLA PGI 17.9605(a), below.)

(9) Perform funds management/record-keeping duties, to include:

(A) Draw-down of funds;

(B) Contract reconciliation;

(C) Initiation of action to deobligate unused funds;

(D) Oversight of billing/reporting.

(10) Update all POCs as necessary throughout the acquisition.

(c) Assisted- or direct-acquisition non-Economy Act orders from a customer to DLA must include the following, as must assisted acquisition orders from DLA to a non-DOD agency:

(1) A firm, clear, specific, and complete description of the goods or services ordered. The use of generic descriptions is not acceptable. If the description is contained in more than one document, such as an item listing on one page and a price list on another, the documents should refer to one another, and the obligation document (e.g., MIPR or manual requisition) should be signed by a responsible official from the requesting activity.

(2) Specific delivery or performance requirements.

(3) A proper fund citation.

(4) Payment terms and conditions (e.g., direct cite or reimbursement; provisions of advanced payments).

(5) Department of Defense Activity Address Code (DoDAAC).

(6) In the case of assisted acquisition orders, the DLA order to the non-DOD agency must also include specific non-Economy Act statutory authority, such as the Acquisition Services Fund, through which purchases are authorized to be made from the General Services Administration (GSA) (see 41 U.S.C. 251 et seq. and 40 U.S.C. 501); or Franchise Fund authority (first established by P.L. 103-356, Title IV, section 403; see 31 U.S.C. 501 note), by which other Federal agencies may enlist the support of the Departments of the Treasury or Interior, among others.

(d) For non-Economy Act orders valued greater than the simplified acquisition threshold, the requesting official must provide, for both assisted and direct acquisitions:

(1) Market research and acquisition planning. The DLA contracting officer or other contracting official must either receive the market research and acquisition planning from the requiring activity, or accomplish them him- or herself, and prepare or provide documentation thereof for inclusion in the contract file.

(2) A statement of work that is specific, definite, and certain in terms of both the work encompassed by the order and the terms of the order itself.

(3) Terms, conditions, and requirements to comply with applicable DOD-unique statutes, regulations, directives and other requirements.

PGI 17.9605 Follow-up procedures for non-Economy Act transactions. [CH30]

(a) Oversight. The DLA contracting officer shall ensure, in both assisted and direct acquisitions, that the requesting official has established a satisfactory quality surveillance plan for non-Economy Act orders in excess of $100,000 to facilitate the oversight of the goods provided or services performed by the performing agency. If DLA is making a direct or assisted acquisition on behalf of a customer activity, the DLA contracting officer must ensure that the requestor produces this plan. The plan should include:

(1) Contract administration oversight in accordance with the surveillance plan;

(2) A process for receipt and review of receiving reports and invoices from the performing agency/contractor;

(3) Reconciliation of receiving reports and invoices; and

(4) Requirements for documenting acceptance of the goods received or services performed.

(b) Fund status monitoring. The requesting official (i.e. the customer or program manager, with the assistance of the DLA contracting officer or post-award contracting official, as appropriate) must monitor fund status to:

(1) Monitor balances with the performing agency;

(2) Conduct tri-annual reviews of non-Economy Act orders in accordance with the Financial Management Regulation, Volume 3, Chapter 8, Section 0804, “Tri-Annual Review of Commitments and Obligations,” in conjunction with the Financial Management/J-8 organization;

(3) Confirm open balances with the performing agency;

(4) Coordinate the return of funds from the non-DOD performing agency in accordance with 17.9604(e); and

(5) Coordinate with the accounting office to ensure timely deobligation of funds.

(c) Payment. In assisted acquisitions, payment shall be made promptly upon the written request or billing of the performing agency/contractor. In assisted acquisitions and under specific conditions, payment to the performing agency may be made in advance or upon delivery of the supplies or services ordered, and shall be for any part of the estimated or actual cost, as determined by the performing agency.

(1) The requesting official and supporting DLA contracting or program office must be cognizant of the performing agency’s payment method. Should the performing agency elect to receive advances or conduct advance billing prior to providing goods or services, the requesting official and/or DLA contracting or program office, as appropriate, must comply with the requirements pertaining to advances of public money outlined in Volume 4, Chapter 5 of the “DOD Financial Management Regulation,” which implements the general prohibition against advance payments contained in 31 U.S.C. 3324 and 10 U.S.C. 2307. When the conditions under which the advance was made are satisfied, the specific appropriation or law authorizing the advance must be cited on the order, and any unused amounts of the advance shall be collected from the performing agency immediately and returned to the fund from which originally made.

(2) Payments made for services rendered or supplies furnished may be credited to the appropriation or fund of the agency performing the reimbursable work.

(d) Order close-out. All non-Economy Act orders shall be reviewed by the requesting official to determine if they are complete. Completed orders shall be fiscally closed out. The requesting official (or DLA contracting or program office, as appropriate) shall reconcile funds and coordinate the return of excess or expired funds held by the performing agency. This review shall include:

(1) Determination and identification, if applicable, of any outstanding invoices;

(2) Determination and identification of existence of excess or expired funds;

(3) Coordination of return of funds from the non-DOD performing agency, IAW 17.9604(e); and

(4) Coordination with the accounting office to ensure the deobligation of funds.