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DLAD PART 16 – TYPES OF CONTRACTS



PART 16 – TYPES OF CONTRACTS

(Revised June 16, 2015 through PROCLTR 2015-09)

TABLE OF CONTENTS

SUBPART 16.1 – SELECTING CONTRACT TYPES

16.105 Solicitation provision.

16.105-91 Alternate offer conditional award.

16.190 Long-term contracting.

16.191 Bridge contracts.

SUBPART 16.2 – FIXED PRICE CONTRACTS

16.203 Fixed-price contracts with economic price adjustment.

16.203 Definitions.

16.203-1 Description.

16.203-2 Application.

16.203-3 Limitations.

16.203-4 Contract clauses.

16.205-4 Contract clauses

SUBPART 16.5 – INDEFINITE-DELIVERY CONTRACTS

16.501-2 General.

16.503 Requirements contracts.

16.504 Indefinite-quantity contracts.

16.505 Ordering.

16.506 Solicitation provisions and contract clauses.

SUBPART 16.6 – TIME-AND-MATERIALS, LABOR-HOUR, AND LETTER CONTRACTS

16.601 Time and materials contracts.

16.603 Letter contracts.

16.603-3 Limitations.

16.603-90 Procedures.

SUBPART 16.1 – SELECTING CONTRACT TYPES

(Revised August 28, 2015 through PROCLTR 2015-11)

16.190 Long-term contracting.

(a) Scope of section. This section prescribes policy and procedures applicable to contracting offices for establishing and processing long-term contracts (LTC) at all dollar values for supplies and services in support of DLA customers. Additional LTC policy is contained elsewhere in the DLAD (see parts 4, 7, 9-11, 13, 15-17, 46, and 47).

(b) The Large Acquisition Milestone Management System (LAMMS) shall be used to track large and long term acquisitions pending transition to the EProcurement milestone tracking system.

(c) Policy. Contracting officers shall establish and process long-term contracts in accordance with this section.

(1) LTCs should be used for stock replenishment consumable items that have frequent, consistent, and predictable demands, as well as non-replenishment items having at least 12 demands per year. Items currently on LTCs will be renewed provided they have had at least 4 demands in the previous year. Terminal or obsolete items are generally excluded from LTCs. Items will be excluded if they have 2 years DLA stock on-hand, unless the PLT is 18 months or greater or there is no planned buy within 2 years. DLR candidates for LTCs will be determined in conjunction with the Military Service managing those items.

(2) Contract management plans. The contract management plan (CMP) policy at 7.105(b)(19)(S-90) is applicable to all long-term contracts (LTCs) that contain provisions for repricing as described in 15.403-4(a)(1)(i)(S-91)(D) during the contract term.

(d) Standards and metrics.

The following milestones shall be tracked in LAMMS:

Milestone

Description

Project Create Date

Create project, includes preliminary market research and may include, Statement of Work (SOW)/Statement of Objective (SOO), performance criteria. This is typically the customer’s requirements generation time.

Purchase request (PR) Create

Date

Contracting officer reviews market research and obtains clarification on requirements. Contracting officer completes all documents to include solicitation.

Solicitation Issue Date

 

Solicitation Close Date

Pre Negotiation Memorandum Approval Date

Competitive: Items for negotiation are identified, documented, and all clarifications, communications, and, as applicable, discussions with offerors are completed. All items have been addressed and documented and approval is granted to request final proposal revisions or award on initial proposals.

Noncompetitive: All negotiation objectives are identified, documented and approval is provided to enter into negotiations.

Close Negotiations (Discussions) Date

Competitive: Discussions are closed and final proposal revisions are received (FPR). IF award will be made on initial proposals it is the same date as above

Noncompetitive: Negotiations are completed

Price Negotiation Memorandum

(PNM)/SSDD Approval Date

Competitive: Date PNM and Source Selection Decision Document (SSDD) are approved.

Noncompetitive: Date of PNM

Award Date

Competitive: For multiple award acquisition, the date of first award is entered.

Noncompetitive: Date of award

(2) DLA has established an objective of making large and long term contract awards (supplies

and services) in no more than an established number of days between the receipt of a PR to award based on the type and dollar value of the subject procurement. The established objectives are shown below.

.

Sole Source

 

$150K-$700K

$700K-$10M

$10M-$100M

$100M-$500M

>$500M

Days from PR to Award

110

140

180

210

270

 

Competitive

 

$150K-$700K

$700K-$10M

$10M-$100M

$100M-$1B

>$1B

Days from PR to Award

110

135

180

215

270

16.191 Bridge Contracts.

(a) The use of bridge contracts (see definition in 2.101) is an impediment to competition. Bridge contracts may also extend the use of acquisition or pricing strategies that are no longer appropriate for the current environment. For purposes of this coverage, the terms “contract” and “contracts” only include contract actions with a total estimated value above the simplified acquisition threshold (SAT), and include task or delivery orders and orders against GSA Schedule contracts.

(b) A bridge contract shall be used only when it is not possible to award the planned follow-on contract in sufficient time to meet the Government’s requirements. A bridge contract may be appropriate in the following circumstances:

(1) The competitive follow-on contract/solicitation has been protested;

(2) The approved acquisition strategy requires a necessary change and is endorsed by the HCA;

(3) A statutory or regulatory change necessitates a change prior to award; or

(4) Other circumstances, demonstrated to not be due to lack of advance planning or inadequate procurement execution, result in delay of a solicitation and/or award.

(c)(1) The contracting officer and the program office, when applicable, shall prepare a Justification & Approval (J&A) in accordance with FAR Part 6 or other applicable FAR Part (e.g., FAR 8.405-6 or FAR 16.505(b)(2)(ii)(B)) to support solicitation and award of a bridge contract, and a request to the Head of the Contracting Activity (HCA) for approval to solicit and award the bridge contract (see sample format at PGI 16.191). The J&A need not be prepared in conjunction with the request if FAR 6.302-2 or other provision of FAR Subpart 6.3 not requiring preparation of a written J&A is applicable.

(2) This J&A (or the request for approval, if a J&A is not required to proceed pursuant to FAR 6.302-2 or other provision of FAR Subpart 6.3 not requiring preparation of a written J&A) shall include a detailed rationale for use of a bridge contract; an explanation why the need for a bridge contract is not due to lack of advance planning or inadequate procurement execution; a justification for the length of the bridge; and a discussion of actions to be taken to avoid this bridge request and additional bridge contracts. The J&A shall be processed for approval at the required level based on the total estimated value of the contract action.

(3) The request to issue a bridge contract, with supporting J&A, shall be presented to the HCA for approval of the request (the HCA is not required to sign the J&A if the J&A approval authority is at a lower level) before a bridge contract may be solicited, negotiated, and awarded. The HCA’s approval authority may be delegated to the CCO for bridge contracts valued between the SAT and $1M. The request with HCA/CCO approval shall be included in the contract file.

(4) A bridge contract issued to the incumbent on a sole source basis shall be issued as a separate contract, not as an extension/modification to the existing contract. Such contracts shall be properly coded in FPDS-NG as sole source.

(5) Numbers/status for bridge contracts on Hi Viz contracts (as identified in DLAD 1.690-4(b)) shall be reported monthly to the DLA Acquisition Operations Division in a format prescribed by the DLA Acquisition Operations Division.

(6) Numbers/status for bridge contracts on other than Hi Viz contracts exceeding the simplified acquisition threshold (SAT) shall be reported on a quarterly basis (due Dec 31, Mar 31, June 30 and Sep 30) in a format prescribed by the DLA Acquisitio Operations Division.

SUBPART 16.2 – FIXED PRICE CONTRACTS

(Revised June 15, 2015 through PROCLTR 2015-09)

16.203 Fixed-price contracts with economic price adjustment.

16.203-90 Definitions. As used in this section—

“Established catalog price” means prices (including discounted prices) recorded in a catalog, price list, schedule, or other record that are regularly maintained by the manufacturer or vendor and are published or otherwise available for customer inspection.

“Established market price” means a price that is established in the course of ordinary and usual trade between buyers and sellers free to bargain and that can be substantiated by data from sources independent of the offeror.

“Existing EPA clause” means a clause prescribed in FAR 16.203-4 or DFARS 216.203-4-70, or this subpart that has been reviewed and approved in accordance with agency procedures in 1.301-91.

16.203-1-90 Description.

(a) Adjustment based on established prices. Established prices may reflect industry-wide and/or geographically based market price fluctuations for commodity groups, specific supplies or services, or contract end items. (Refer to DAR Tracking Number 95-D0003, FARS DEV 96-10).

(c) Adjustments based on cost indexes of labor or material. These price adjustments may also be based on increases or decreases in indexes for commodity groups, specific supplies or services, or contract end items. (Refer to DAR Tracking Number 95-D0003, FARS DEV 96-10.)

16.203-2-90 Application.

(a) Established prices and cost indexes need not reflect changes in the costs or established prices of a specific contractor. The established price or cost index may be derived from sales prices in the marketplace, quotes, or assessments as reported or made available in a consistent manner in a publication, electronic database, or other form, by an independent trade association, Government body, or other third party independent of the contractor. More than one established price or cost index may be combined in a formula for economic price adjustment purposes in the absence of an appropriate single price or cost index. (Refer to DAR tracking number 95-D0003, FARS Deviation 96-10.)

(b) Although a specific item or element of cost may require EPA coverage, the contracting officer should also determine whether an EPA clause should cover the entire end item to take advantage of competitive market forces to moderate price fluctuations. The decision should be based on risk and price analyses of the alternatives, and may be an appropriate element of tradeoff in negotiations.

(c) All EPA clauses shall contain, and the contracting officer shall ensure compliance with, the contractor’s warranty that the contract prices do not include allowance for any contingency to cover increased costs also considered by the EPA clause. (When a contract option is also planned, see 17.203(d).)

(d) If it becomes apparent that an EPA clause is clearly justified in a solicitation that did not include one, a FAR, DFARS, or DLAD EPA clause may be included by amendment to the solicitation and in any resulting contracts if all EPA contingencies covered by the EPA clause are removed from any formerly offered price(s).

16.203-4 Contract clauses.

(a) Adjustments based on established prices–standard supplies.

(1)(S-90) The clause at 52.216-9000 (or substantially the same clause) may be used with FAR clause 52.216-2.

(S-91) Fresh fruits and vegetables under the DLA Troop Support subsistence supply chain is authorized to use a FAR Deviation for long term contracts. The deviation is provided at 52.216-9039.

(S-92) The clause at 52.216-9085 may be used in any DLA Multiple Award Schedule solicitation or contract instead of FAR 52.216-2, which is hereby determined inappropriate in accordance with FAR 16.203-4(a).

(S-90) When the contracting officer determines that no existing EPA clause (including a FAR clause used in conjunction with the corresponding FAR EPA “Implementation” DLAD clause) is appropriate, the contracting officer may develop an alternate to an existing EPA clause, or a new clause, in accordance with 16.203-1(a) or (c) or as otherwise authorized in the FAR, and will submit it for approval in accordance with 1.301-91. Established prices and cost indexes need not reflect changes in the costs or established prices of a specific contractor. The established price or cost index may be derived from sales prices in the marketplace, quotes, or assessments as reported or made available in a consistent manner in a publication, electronic database, or other form, by an independent trade association, Governmental body, or other third party independent of the contractor. More than one established price or cost index may be combined in a formula for economic price adjustment purposes in the absence of an appropriate single price or cost index. (Refer to DAR tracking number 95-D0003, FARS Deviation 96-10.)

(S-91) Adjustments based on established market prices or indexes.

(1) The contracting officer shall determine the most appropriate international, national, regional, or local area market. The EPA clause included in the solicitation shall identify the index or established market price, the document containing such index or price, and its effective date or period.

(2) If the contracting officer is unable to identify an established market price or index that satisfactorily reflects economic fluctuations, then the EPA provision included in the solicitation may provide for offeror fill-in to recommend the most appropriate established market price or index (if none, the most appropriate established catalog price), along with the document containing the established price or index and the effective date/period of the established price or index (and, for established catalog price EPA clauses, the identification and amount of any applicable extras, discounts, or rebates used in calculating the contract price). The contracting officer shall select the most appropriate established market price or index identified (if none, the most appropriate established catalog price). The contracting officer may amend the request for proposal (RFP) to include this selection.

(3) In addition, when preparing a new, locally developed EPA clause or a revision to an existing clause involving using an established or published market price clause, include the provision, after substituting the phrase “market price” indicator for the occurrences of the word “index.”

(4) The clause at 52.216-9003 may be included in solicitations and resulting contracts for items containing specialty metals, when there is potential for unpredictable increases or decreases in the cost of the specialty metal, and the changes can be tracked by a published market price indicator (e.g. London metals exchange, Platts). Cost or price indices that are subject to recalculation after initial publication (to take into account late survey reports and corrections by respondents, e.g., PPI) shall not be used with this clause. Clause requires contractor submission of information adequate to support derivation of the dollar value of specialty metal(s) in the unit price.

(S-92) Adjustments based on established catalog prices. An established catalog price-type EPA clause (FAR 52.216-2 or –3, DFARS 252.216-7000 or –7001) may be included in solicitations and resulting contracts for an item previously bought without such EPA clause only after the contracting officer determines that neither an index-type or an established market priced EPA is suitable (i.e., the requirements of FAR 16.203-4(d) and DFARS 216.203-4(d) are not met or there is no suitable index or established market price describing the supplies with specificity) and documents in the acquisition plan the results of actions taken in reaching this determination.

(S-93) Approvals.

(1) Prior to issuance of a solicitation containing a new EPA clause, the contracting officer shall submit the clause for review and approval in accordance with 1.301-91.

(2) The CCO or designee (not lower than one level above the contracting officer) shall approve any adjustment ceiling exceeding ten (10) percent. Such approval may cover more than one contract and extend over a stated definite period of time not to exceed two years, at which time the adjustment ceiling will be reviewed again.

16.203-4(a)(2)(90) EPA – Established catalog price. Two upward adjustments per year open season E-CAT solicitation.

(i) Use 52.216-9040, Economic Price Adjustment – Established Catalog Price Two Upward Adjustments Per Year Open Season E-CAT Solicitation, in medical FAR Part 12 solicitations and contracts for the equipment ECAT/CVC Program where offered prices are based upon established catalog/list prices, the contracting officer determines an EPA is appropriate, the adjustment scenario below is suitable for the instant acquisition, and the resulting contract will be placed on the medical electronic catalog (ECAT) web based ordering system. Upward adjustments are based on increases in list prices and may be requested by the contractor twice each contract year. Downward adjustments are mandated whenever the contractor’s list prices decrease and/or whenever the contractor has a Federal supply schedule (FSS) for the same item and that price is reduced to one that is lower than the current unit price on the medical contract.

(ii) For dental, optical and laboratory integrated delivery system (LIDS) buys, use clause 52.216-9047, Economic Price Adjustment – Established Catalog Price One Upward Adjustment per Option Year E-Cat Solicitation. This clause may be appropriate for other medical ECAT acquisitions. Consult with the pricing and strategy division, DLA Troop Support, prior to use.

16.203-4(a)(2)(91) EPA, FSS prices, open season E-CAT solicitation, medical FAR Part 12 solicitations and contracts.

(i) Use 52.216-9041, Economic Price Adjustment – Federal Supply Schedule Prices – Open Season E-CAT Solicitation, in medical FAR Part 12 solicitations and contracts for the equipment ECAT/CVC program, where adjustments will be based upon price changes in the contractor’s Federal supply schedule (FSS) contract for the same items, the contracting officer determines an EPA is appropriate, the adjustment scenario below is suitable for the instant acquisition, and the resulting contract will be placed on the medical electronic catalog (ECAT) web based ordering system. Upward adjustments may be requested by the contractor whenever the FSS price for an item increases. Decreases are mandated whenever FSS prices decrease.

(ii) For dental, optical, and laboratory integrated delivery system (LIDS) buys use 52.216-9047, Economic Price Adjustment – Established Catalog Price One Upward Adjustment Per Option Year E-Cat Solicitation. This clause may be appropriate for other medical ECAT acquisitions. Consult with the pricing and strategy division, DLA Troop Support, prior to use.

16.203-4(a)(2)(92) Economic price adjustment – Federal supply schedule prices, in medical FAR Part 12 solicitations and contracts. Use 52.216-9043, Economic Price Adjustment – Federal Supply Schedule Prices, in medical FAR Part 12 solicitations and contracts where adjustments will be based upon price changes in the contractor’s Federal Supply Schedule (FSS) contract for the same items, the contracting officer determines an EPA is appropriate, the adjustment scenario below is suitable for the instant contract, the resulting contract will not be placed on the medical electronic catalog (ECAT) web based ordering system, and the concurrence of the Pricing and Strategy Division DLA Troop Support, is received prior to using the clause. Upward adjustments may be requested by the contractor whenever the FSS price for an item increases. Decreases are mandated whenever Federal Supply Schedule (FSS) prices decrease.

16.203-4(a)(2)(93) Medical FAR Part 12 solicitations and contracts. Use 52.216-9044, Economic Price Adjustment – Established Catalog Price – Multiple Adjustments Authorized per Clause Terms – non-ECAT, in medical FAR Part 12 solicitations and contracts where offered prices are based upon established catalog/list prices, the contracting officer determines an EPA is appropriate, the adjustment scenario below is suitable for the instant acquisition, the resulting contract will not be placed on the medical electronic catalog (ECAT) web based ordering system, and the concurrence of the pricing and strategy division, DLA Troop Support, is received prior to using the clause. Upward adjustments may be requested by the contractor whenever the list price for an item increases. Downward adjustments are mandated whenever the contractor’s list prices decrease and/or whenever the contractor has a Federal Supply Schedule (FSS) for the same item and that price is reduced to one that is lower than the current unit price on the DLA Troop Support Medical’s contract.

16.203-4(a)(2)(94) EPA, other federal agency contracts, E-CAT, medical FAR part 12 solicitations and contracts for the dental, optical, and laboratory integrated delivery system ECAT/CVC program.

(i) Use 52.216-9045, Economic Price Adjustment – Other Federal Agency Contracts – E-CAT– One Upward Adjustment Per Option Period, in medical FAR Part 12 solicitations and contracts for the dental, optical, and laboratory integrated delivery system (LIDS) ECAT/CVC program, where adjustments will be based upon price changes occurring on the contractor’s other Federal agency’s (OFA) contract for the same items, the contracting officer determines an EPA is appropriate, the adjustment scenario below is suitable for the instant acquisition, and the resulting contract will be placed on the medical electronic catalog (ECAT) web-based ordering system. Other Federal agency contracts include Federal supply schedules, Department of Veterans Affairs national acquisition contracts, and GSA schedule contracts. Upward adjustments are based on OFA price increases and may be requested by the contractor once annually to cover each option year. No increases are authorized in the base year. Downward adjustments are mandated whenever OFA prices decrease. Prior to award, the contracting officer and the offeror shall reach agreement on the OFA contract to be used as the benchmark for adjusting the DLA Troop Support contract.

(ii) For equipment ECAT Program buys use 52.216-9041, Economic Price Adjustment – Federal Supply Schedule Prices – Open Season E-Cat Solicitation. This clause may be appropriate for other medical ECAT acquisitions. Consult with the pricing and strategy division, DLA Troop Support, prior to use.

16.203-4(a)(2)(95) EPA, other federal agency contracts, E-CAT, in medical FAR Part 12 solicitations and contracts.

(i) Use 52.216-9046, Economic Price Adjustment – Other Federal Agency Contracts – E-CAT, in Medical FAR Part 12 solicitations and contracts (including CVC type buys) where adjustments will be based upon price changes occurring on the contractor’s other federal agency’s (OFA) contract for the same items, the contracting officer determines an EPA is appropriate, the adjustment scenario below is suitable for the instant acquisition, the resulting contract is to be placed on the medical electronic catalog (ECAT) web based ordering system, and the concurrence of the pricing and strategy division, DLA Troop Support, is received prior to using the clause. Other Federal agency contracts include Federal supply schedules (FSS), Department of Veterans Affairs national acquisition contracts, and GSA schedule contracts. Upward adjustments may be requested by the contractor whenever the OFA price increases. Downward adjustments are mandated whenever OFA prices decrease. Prior to award, the contracting officer and the offeror shall reach agreement on the OFA contract to be used as the benchmark for adjusting the DLA Troop Support contract.

(ii) For dental, optical, and laboratory integrated delivery system (LIDS) buys use 52.216-9046, Economic Price Adjustment – Other Federal Agency Contracts – E-CAT.

(iii) For equipment ECAT Program buys use 52.216-9041, Economic Price Adjustment – Federal Supply Schedule Prices – open season e-cat solicitation.

16.203-4(a)(2)(96) EPA, established catalog price one upward adjustment per option year e-cat solicitation, in medical FAR Part 12 solicitations and contracts for the dental, optical, and laboratory integrated delivery system ECAT/CVC program.

(i) Use 52.216-9047, Economic Price Adjustment – Established Catalog Price One Upward Adjustment Per Option Year E-Cat Solicitation, in medical FAR Part 12 solicitations and contracts for the dental, optical, and laboratory integrated delivery system (LIDS) ECAT/CVC program where offered prices are based upon established catalog/list prices, the contracting officer determines an EPA is appropriate, the adjustment scenario below is suitable for the instant acquisition, and the resulting contract will be placed on the medical electronic catalog (ECAT) web based ordering system. Upward adjustments are based on increases in list prices and may be requested by the contractor once annually to cover each option year. No increases are authorized for the base year. Downward adjustments are mandated whenever the contractor’s list prices decrease and/or whenever the contractor has a contract with some other federal agency (OFA) for the same item and that price is reduced to one that is lower than the current unit price on Medical’s contract. OFA contracts include federal supply schedules, Department of Veterans Affairs national contracts, and GSA schedule contracts.

(ii) For equipment ECAT Program buys use 52.216-9040, Economic Price Adjustment – Established Catalog Price Two Upward Adjustments Per Year Open Season E-Cat Solicitation. This clause may be appropriate for other medical E-CAT acquisitions. Consult with the pricing and strategy division, DLA Troop Support, prior to use.

16.203-4(a)(2)(97) EPA, established catalog price, multiple adjustments authorized per clause terms – E-CAT solicitation, in medical FAR Part 12 solicitations and contracts.

(i) Use 52.216-9048, Economic Price Adjustment –Established Catalog Price – Multiple Adjustments Authorized per Clause Terms – E-CAT Solicitation, in medical FAR Part 12 solicitations and contracts where offered prices are based upon established catalog/list prices, the contracting officer determines an EPA is appropriate, the adjustment scenario below is suitable for the instant acquisition, the resulting contract will be placed on the medical electronic catalog (E-CAT) web based ordering system, and the concurrence of the pricing and strategy division, DLA Troop Support, is received prior to using the clause. Upward adjustments may be requested by the contractor whenever the list price for an item increases. Downward adjustments are mandated whenever the contractor’s list prices decrease and/or whenever the contractor has a federal supply schedule (FSS) for the same item and that price is reduced to one that is lower than the current unit price on Medical’s contract.

(ii) For dental, optical and laboratory integrated delivery system (LIDS) buys use 52.216-9047, Economic Price Adjustment – Established Catalog Price One Upward Adjustment Per Option Year E-Cat Solicitation.

(iii) For equipment E-CAT program buys use 52.216-9040, Economic Price Adjustment – Established Catalog Price Two Upward Adjustments Per Year Open Season E-CAT Solicitation.

16.203-4(a)(2)(98) EPA, published market price, domestic bulk in domestic bulk fuel.

(i) For DLA Energy only: Insert the clause 52.216-9069 Economic Price Adjustment – Published Market Price – Domestic Bulk In Domestic Bulk Fuel in solicitations/contracts when a price adjustment is based on an independent published price listing.

(A) The clause requires contracting officer fill-in of the applicable ceiling at subparagraph (c)(5), as well as completion of the paragraph (g) with a description of the specific market prices to be used, along with any explanatory notes (notes 2 and 3).

(B) The contracting officer shall coordinate with the market research section before completion of fill in the blank information sections of the clause such as base market, and publication dates, to ensure the accuracy of the information and the correct selection of the market price.

16.203-4(a)(2)(99) EPA, published market price, electricity, heat rate.

(i) Insert the clause 52.216-9068 Economic price Adjustment – Published Market Price – Electricity – Heat Rate in DLA Energy solicitation/contracts for electricity solicitations/contracts when soliciting under the heat rate block and index method.

(A) This clause may be used in markets where natural gas represents a substantial power generation fuel source and the customer requests that DLA Energy purchase electricity using heat rate pricing. Requires contracting officer fill-ins at paragraph (b), subparagraphs (i) and (ii), and paragraphs (c) and (f).

(B) The index to be used must be a natural gas futures price from the New York Mercantile Exchange (NYMEX). If any other index is to be used, the contracting officer shall coordinate with the market research section, DLA Energy, before completion of fill in the blank information sections of the clause such as base reference price, and publication dates, to ensure the accuracy of the information and the correct selection of the market reference price.

16.203-4(a)(2)(100) EPA, market price, posts, camps, and stations, Korea, Guam, Japan.

(i) Insert the clause 52.216-9071 Economic Price Adjustment – Market Price – Posts, Camps, and Stations - Korea/Guam/Japan in DLA Energy solicitations/contracts for posts, camps, and stations (PC&S) for Korea, Guam or Japan.

(A) The contracting officer is required to insert a header in paragraph (c) for Korea and Guam. When using this clause for Japan, the contracting officer is required to insert a header as well as other language covering delivery and notification (see note 1 to the clause).

(B) The contracting officer shall coordinate with the market research section, DLA Energy, before completion of fill in the blank information sections of the clause such as base market, and publication dates, to ensure the accuracy of the information and the correct selection of the market price. Refer to note 3 of the clause in reference to coordination with the market research section.

16.203-4(a)(2)(101) EPA, petroleum product price, post camp and station.

(i) Insert the clause at 52.216-9072 Economic Price Adjustment (EPA) – Petroleum Product Price, Post Camp and Station (PC&S) in all domestic PC&S solicitations and resulting contracts.

(A) The contracting officer shall insert applicable date for each publication in paragraph (f). For OPIS, the Monday date of the publication shall be used. The clause requires fill-in information (see paragraphs (b), (c), and (f).

(B) The contracting officer shall coordinate with the market research section, DLA Energy, before completion of fill in the blank information sections of the clause such as base reference price, upward ceiling, and publication dates, to ensure the accuracy of the information.

16.203-4(a)(2)(102) EPA, petroleum product market price, post camp and station Belgium. Insert the clause at 52.216-9073 Economic Price Adjustment (EPA) – Petroleum Product Market Price, Post Campus and Station (PC&S) Belgium in all PC&S solicitations and resulting contracts for Belgium. equires contracting officer fill-in of paragraph (c)(5). The contracting officer shall coordinate with the market research section, DLA Energy, before completion of fill in the blank information sections of the clause to ensure the accuracy of the information.

16.203-4(a)(2)(103) EPA, daily market price indicators, ships’ bunkers. Insert the clause 52.216-9070 Economic Price Adjustment – Daily Market Price Indicators (Ships’ Bunkers) in DLA Energy solicitations and resulting contracts when a daily economic price adjustment escalator is used. Requires contracting officer fill-ins at paragraphs (c) and (f). The contracting officer shall coordinate with the market research section, DLA Energy, before completion of fill in the blank information sections of the clause such as base reference price, and publication dates to ensure the accuracy of information and the correct selection of the market reference price.

16.203-4(a)(2)(104) EPA, market price and actual transportation cost, natural gas. Insert the clause 52.216-9074 Economic Price Adjustment – Market Price And Actual Transportation Cost – Natural Gas – Alaska in DLA Energy solicitations and contracts for direct supply natural gas in Alaska. Requires contracting officer fill-ins at paragraphs (c) and (f). The contracting officer shall coordinate with the market research section, DLA Energy, before completion of fill in the blank information sections of the clause such as base reference price, and publication dates to ensure the accuracy of information and the correct selection of the market reference price.

16.203-4(a)(2)(105) EPA, market price indicators, ships’ bunkers, weekly. Insert the clause 52.216-9075 Economic Price Adjustment – Market Price Indicators – Ships’ Bunkers in DLA Energy solicitations and contracts for ships’ bunkers solicitations/contracts when market publications will be used for price escalation on a weekly basis. The contracting officer shall coordinate with the market research section, DLA Energy, before completion of fill in the blank information sections of the clause such as base market, and publication dates, to ensure the accuracy of the information and the correct selection of the market price.

16.203-4(a)(2)(106) EPA, National Contracts – Subsistence. The clause at 52.216-9084 may be included in DLA Troop Support Subsistence solicitations and contracts forNational Contract items. The contracting officer shall complete the fill-ins shown in paragraphs (b), (e), and (k) of the clause. Prior to incorporating the clause into a solicitation or contract or adding additional items to a previously-approved clause, the contracting officer shall submit the clause to the Pricing & Strategy Division for review and approval.

16.203-4(b) Adjustments based on established prices – semistandard supplies.

(1)(S-90) The clause at 52.216-9001 or substantially the same clause may be used with FAR clause 52.216-3.

16.203-4(c) Adjustments based on actual cost of labor or material.

(S-93) An actual cost type EPA clause (FAR 52.216-4 or a locally-developed clause) may be included in solicitations and resulting contracts for an item previously bought without such an EPA clause only after the contracting officer determines that no other type of EPA clause is appropriate and documents in the acquisition plan the results of actions taken in reaching this determination. A provision shall also be included in the solicitation and any resulting contracts that–

(i) Identifies the specific direct cost factor and dollar amount needed to establish the baseline from which adjustments will be made, regardless of whether cost or pricing data was submitted;

(ii) Incorporates by reference, the cost principles and procedures in FAR Subpart 31.2 for use as the basis for pricing the baseline and any adjustment under the EPA clause;

(iii) Identifies any appropriate markup factors/amounts; and

(iv) Provides the methodology for price adjustment calculations.

(1)(90) The clause at 52.216-9002 or substantially the same clause may be used with FAR clause 52.216-4.

(2) The clause at 52.216-9012 may be included in solicitations and resulting contracts for unitized group rations – A (UGR-A) when the requirements of FAR 16.203-2 are met and the determination required by FAR 16.203-3 is made. The clause is based on cost of materials (total components price defined below). There is no adjustment for the distribution price (defined below) for these rations. If the contractor’s applicable total components price of a ration component(s) changes (i.e. increase or decrease) after the contract date, the corresponding unit price may be increased, or shall be decreased, by the same amount, subject to upward ceiling discussed in the following paragraph. Clause requires contractor submission of supporting data adequate to support any requested price change.

(3)(S-90) When the FAR “Implementation” DLAD clause is also used with the note specified at 15.204-2(b), the contracting officer shall include the required information in such clause vice the contract schedule.

(4)(iii)(S-90) When the FAR “Implementation” DLAD clause is also used along with the note specified at 15.204-2(b), the contracting officer shall include the required information in such clause vice the contract schedule.

16.203-4(d)(2) Clauses – consumer price index and economic price adjustment.

(S-90) Adjustments based on cost indexes of labor or material. An index clause may be included in solicitations and resulting contracts only if the contracting officer documents in the acquisition plan, rationale indicating that the acquisition satisfies the requirements of FAR 16.203-4(d) and DFARS 216.203-4(d). The contracting officer shall select the most appropriate index published by the Bureau of Labor Statistics (BLS). Another index may be used provided the contracting officer determines that no BLS index is suitable and documents in the acquisition plan the specific BLS indexes considered, why they were unsuitable, and rationale demonstrating the suitability of the index selected.

(iv) In the event any applicable index is discontinued or its method of derivation is altered substantially; or the contracting officer determines that the index consistently and substantially fails to reflect market conditions, the parties shall agree upon an appropriate substitute index for determining price adjustments hereunder. The contract shall be modified to reflect such substitute index, effective on the date the index specified in the contract is no longer published or began to consistently and substantially fail to reflect market conditions.”

(v) When planning to use an index-type clause which provides for price adjustment, whenever the actual index for a period differs from the projected index for that period sufficiently to trigger a price adjustment, the contracting officer shall ensure that the projected index for each period to be included in the clause at least equals the projected indexes used in pricing the same cost element under the contract.

16.203-4(d)(2)(90) Medical FAR Part 12 solicitations and contracts under the DoD/VA shared procurement program. Use 52.216-9042, Economic Price Adjustment (EPA) – Department of Labor Bureau of Labor Statistics – consumer price index, in medical FAR Part 12 solicitations and contracts under the DoD/VA shared procurement program when the contracting officer determines that an EPA is appropriate, the adjustment scenario below, which is based on changes in the Consumer Price Index (CPI), is suitable for the instant acquisition and the concurrence of the C&P Medical Support Team is received prior to using the clause. Adjustments are based upon changes in the CPI for the expenditure category “prescription drugs and medical supplies” or “nonprescription drugs and medical supplies.” Upward adjustments may be requested by the contractor once annually to cover each option year. Downward adjustments during the option years are mandated whenever the CPI goes down. An additional downward adjustment is mandated whenever the contractor has a federal supply schedule (FSS) for the same item and that price is reduced to one that is lower than the current unit price on Medical’s contract.

16.203-4(d)(2)(91) Medical solicitations for readiness items. Use 52.216-9049, Economic Price Adjustment (EPA) of the annual management fee(s) and annual management cost(s) for the option years, in medical solicitations for readiness items which result in corporate exigency contracts or vendor managed inventory contracts. Adjustments are based upon changes in the producer price index for general warehousing and storage. One adjustment is authorized annually to determine the annual management fee(s) and management cost(s) for the upcoming option year. Upward adjustments may be requested by the contractor. Downward adjustments are mandated by the clause. No adjustment is authorized for the base year.

16.203-4(d)(2)(92) Medical solicitations for readiness items. Use 52.216-9050, Economic Price Adjustment (EPA) of the Annual Inventory Holding Fee and Annual Inventory Holding Cost for the Option Year, in medical solicitations for readiness items which result in corporate exigency contracts or vendor managed inventory contracts. Adjustments are based upon changes in the prime rate. One adjustment is authorized annually to determine the annual inventory holding fee and inventory holding cost for the upcoming option year. Upward adjustments may be requested by the contractor. Downward adjustments are mandated by the clause. No adjustment is authorized for the base year.

16.203-4(d)(2)(93) Economic Price Adjustment when offeror does not agree to 52.216-9052.

(i) Use 52.216-9051, Economic Price Adjustment – One Adjustment Per Year – Base Year Only Federal Ceiling Price (FCP) Percentage Adjustment when the offeror will not agree to use 52.216-9052, Economic Price Adjustment – One Adjustment Per Year – Base/Option Year Only FCP Percentage Adjustment and the concurrence of the C&P medical support team is received prior to using the clause.

(A) Upward adjustments may be requested by the contractor and are limited to one per year based upon the change in the FCP. Downward adjustments are mandated whenever the FCP decreases and whenever the contractor has a federal supply schedule (FSS) for the same item and that price is reduced to one that is lower than the current unit price on medical’s contract.

(B) FCP adjustments for the base year only are based upon the percentage change in the FCP. Adjustments for the Option Years cannot exceed the Federal Ceiling Price. Accordingly, use this clause if the offeror will not agree to use 52.216-9052, Economic Price Adjustment – One Adjustment Per Year – Base/Option Year Only FCP Percentage Adjustment. FCP adjustments for the base and option years are based upon the percentage change in the FCP.

16.203-4(d)(2)(94) Medical FAR Part 12 solicitations and contracts.

(i) Use 52.216-9052, Economic Price Adjustment – One Adjustment Per Year – Base/Option Year Only Federal Ceiling Price (FCP) Percentage Adjustment, in Medical FAR Part 12 solicitations and contracts for yellow fever vaccine and other appropriate pharmaceutical items which have an annual FCP as required by the Veterans Healthcare Act, the contracting officer determines that an EPA is appropriate, adjustments based upon changes in the FCP, and in some instances decreases in the contractor’s Federal Supply Schedule (FSS) price for the same item, are suitable for the instant acquisition, and the concurrence of the C&P medical support team is received prior to using the clause.

(A) Upward adjustments may be requested by the contractor and are limited to one per year based upon the change in the FCP. Downward adjustments are mandated whenever the FCP decreases and whenever the contractor has a FSS for the same item and that price is reduced to one that is lower than the current unit price on medical’s contract.

(B) FCP adjustments for the Base and Option Years are based upon the percentage change in the FCP. If the offeror does not agree to base option year adjustments on the percentage change in the FCP, consider using clause 52.216-9051, Economic Price Adjustment – One Adjustment Per Year – Base Year Only FCP Percentage Adjustment.

16.203-4(d)(2)(S-95) Economic Price Adjustment (EPA) – Actual Material Costs for Subsistence Delivered Price Business Model – DLA Troop Support Subsistence Prime Vendor (SPV) Contiguous United States (CONUS).

(i) Insert the clause at 52.216-9064, Economic Price Adjustment (EPA) – Actual Material Costs for Subsistence Delivered Price Business Model – DLA Troop Support Subsistence Prime Vendor (SPV) Contiguous United States (CONUS), in the solicitation and resultant contract for subsistence acquisitions that utilize the delivered price business model to protect the contractor and the Government against unpredictable increases and decreases in actual material costs charged by the contractor’s suppliers.

(A) This EPA clause is applicable to CONUS subsistence prime vendor (SPV) procurements.

(B) The contracting officer will fill-in required information in paragraphs (c) and (d). The contracting officer shall coordinate with the DLA Troop Support pricing office before completion of fill-in-the-blank information sections of the clause to ensure the accuracy of the information filled in. The price/cost analyst at DLA Troop Support will also review pricing information included in the statement of work for adequacy/accuracy.

(c) Additionally, for acquisitions that require review and approval by the DLA HQ integrated acquisition review board (IARB), these fill-in paragraphs and statement of work sections will be reviewed for adequacy and accuracy by the DLA HQ price/cost analyst in coordination with General Counsel.

16.203-4(d)(2)(S-96) EPA – actual material costs for subsistence product price business model.

(i) Insert the clause at 52.216-9065, Economic Price Adjustment (EPA) Actual Material Costs For Subsistence Product Price Business Model, in the solicitation and resultant contract for subsistence acquisitions that utilize “the product price business model” to protect the contractor and the Government against unpredictable increases and decreases in actual material costs charged by the contractor’s suppliers. This EPA clause is applicable to outside contiguous United States (OCONUS) subsistence prime vendor (SPV) procurements.

(ii) Contracting officer fill-ins are required in paragraphs (b) through (d). The contracting officer shall coordinate with the DLA Troop Support pricing office before completion of fill-in information sections of the clause to ensure the accuracy of the information. The cost/price analyst at DLA Troop Support will also review information on normal and premium distribution price that is included in the Statement of Work for adequacy/accuracy. Additionally, for acquisitions that require review and approval by the DLA Integrated Acquisition Review Board (IARB), these fill-in paragraphs and Statement of Work sections related to normal and premium pricing definitions will be reviewed for adequacy/accuracy by the DLA Acquisition Pricing & CQRs Division cost/price analyst in coordination with DLA General Counsel.

16.203-4-90 Additional clauses – requirements of FAR 16.203-2 and DLAD 16.203.

These clauses can be used only when the requirements of FAR 16.203-2 and DLAD 16.203 are met and the determination required by FAR 16.203-3 is made, and the contracting officer determines that none of the standard FAR EPA clauses are appropriate for use in the acquisition.

(a) Price adjustment for specialty metals. The clause at 52.216-9003 may be included in solicitations and resulting contracts for items containing specialty metals, when the circumstances in FAR 16.203-4(d)(1) exist, unpredictable increases or decreases in the cost of the specialty metal are expected, and the changes can be tracked by a published market price indicator (e.g. London Metals Exchange, Platts). Cost or price indices that are subject to recalculation after initial publication (to take into account late survey reports and corrections by respondents, e.g., the producers price index (PPI)) shall not be used with this clause. Clause requires contractor submission of information adequate to support derivation of the dollar value of specialty metal(s) in the unit price.

(b) Price adjustment for unitized group rations – A. The clause at 52.216-9012 may be included in solicitations and resulting contracts for unitized group rations – A (UGR-A). The clause is based on cost of materials (total components price defined in the clause). There is no adjustment for the distribution price (defined in the clause) for these rations. If the contractor’s applicable total components price of a ration component(s) changes (i.e. increase or decrease) after the contract date, the corresponding unit price may be increased, or shall be decreased, by the same amount (subject to upward ceiling stated in the clause). Clause requires contractor submission of supporting data adequate to support any requested price change.

(c) Price adjustment for lead, battery consignment program. The clause at 52.216-9029 Economic Price Adjustment (EPA) Lead, Battery Consignment Program, may be included in solicitations and the resulting contracts for batteries acquired under the battery consignment program, when the circumstances in FAR 16.203-4(d)(1) exist, unpredictable increases or decreases in the cost of the lead are expected, and the changes can be tracked by the London Metals Exchange standard lead pricing. When setting the “adjustment band”, the contracting officer shall determine the percentage that allows the clause to be adequately responsive to fluctuations in the lead market while also minimizing the administrative burden of processing adjustments for minimal prices changes.

(d) Price adjustment for Department of Labor Index.

(1) The clause at 52.216-9030, Economic Price Adjustment – Department Of Labor Index, may be included in negotiated solicitations and resulting contracts when:

(i) Soliciting an item when unpredictable increases or decreases in the cost of producing the items are expected or pricing uncertainties exist for a component or components of the end item, and the change in cost of production or component prices can be tracked via the Producers Price Index (PPI) published by the Bureau of Labor Statistics (BLS); or soliciting an item when unpredictable increases or decreases in the cost of producing the items are expected or pricing uncertainties exist for labor, and the change in cost of production can be tracked via the Employment Cost Index (ECI) published by the BLS.

(ii) The circumstances in FAR 16.203-4(d)(1) exist;

(iii) The contracting officer considers the use of this clause appropriate; and

(iv) The requirements of FAR 16.203-3 and DLAD 16.203 are met.

(2) The contracting officer shall coordinate with the applicable procuring organization pricing office before selecting the index, and the number of price adjustments in paragraphs (b)(1) and (c)1, respectively, of 52.216-9030. For procuring organizations for which there is no pricing office, the fill-in sections shall be coordinated with J72.

(f) Economic Price Adjustment (EPA) – Established Market Price – Milk. The clause at 52.216-9032 Economic Price Adjustment (EPA) – Established Market Price Economic Price Adjustment (EPA) – Established Market Price – Milk may be included in solicitations and resulting contracts for extended shelf life (ESL) milk items when the following conditions apply:

(1) The contracting officer has made the determination specified in FAR 16.203-3 that a fixed price contract with an economic price adjustment (EPA) is appropriate,

(2) Items have an established market price,

(3) When the entire or major quantity of milk will be processed outside the state of California, and

(4) Price adjustments will not be made by contract modification.

(i) Clause 52.216-9032 Economic Price Adjustment (EPA) – Established Market Price – Milk Alternate I. Use 52.216-9032 Alternate I in solicitations and contracts for Extended Shelf Life (ESL) milk when items 1, 2 and 4 apply and the entire or major quantity of milk will be processed in the state of California.

(ii) Clause 52.216-9032 Economic Price Adjustment (EPA) – Established Market Price – Milk Alternate II. Use 52.216-9032 Alternate II in solicitations and contracts for Ultra High Temperature (UHT) milk when items 1, 2 and 3 apply and price adjustments will be made by contract modification.

(iii) Clause 52.216-9032 Economic Price Adjustment (EPA) – Established Market Price-Milk Alternate III. Use 52.216-9032 Alternate III in solicitations and contracts for Ultra High Temperature (UHT) milk items when items 1 and 2 apply, the entire or major quantity of milk will be processed in the state of California, and price adjustments will be made by contract modification.

(g) Clause 52.216-9033 Economic Price Adjustment – Established Prices. This clause may be used in acquisitions when it is known that the items being acquired are commercial items for which manufacturers or suppliers have established, published prices meeting the definition of “market price” or “catalog price” in 16.203(90). Complete paragraph (c)(1) of the clause by inserting the maximum percentage of increase authorized.

(h) Clause 52.216-9034 Economic Price Adjustment – Published Market Price – Silver. The clause at 52.216-9034 may be included in solicitations and resulting contracts for items containing silver, when unpredictable increases or decreases in the cost of silver are expected, the circumstances in FAR 16.203-4(d)(1) exist, and the changes can be tracked by the published market price indicator in the clause.

(i) Clause 52.216-9035 Economic price adjustment – published market price – lead. The clause at 52.216-9035 may be included in solicitations and resulting contracts for items containing lead, when unpredictable increases or decreases in the cost of lead are expected, the circumstances in FAR 16.203-4(d)(1) exist, and the changes can be tracked by the published market price indicator in the clause.

(j) The following evaluation clauses will be used in solicitations when an economic price adjustment clause will be used.

(i) When using negotiation procedures that include an economic price adjustment, use 52.216-9036 Evaluation of offers – Economic Price Adjustment to advise offerors how their prices will be evaluated in regard to the EPA provision.

(ii) When using sealed bidding that includes an economic price adjustment clause, use 52.216-9037 Evaluation Of Bids – Economic Price Adjustment to advise offerors how their prices will be evaluated in regard to the EPA provision.

(k) Clause 52.216-9028 Economic Price Adjustment Labor And Material. The clause at 52.216-9028 may be used when the contractor will propose a material index for use in the economic price adjustment clause.

(l)(1) Clause 52.216-9058 Economic Price Adjustment (EPA) Established Market Price – Wool Cloth. Use the clause at 52.216-9058 in solicitations and contracts for wool cloth or items containing wool cloth. Paragraphs (b)(1), (b)(2) and (d) require the Government to fill-in the specific grade of Australian wool that the EPA applies to and in paragraph (b) fill-in pounds of wool per yard. The pounds of wool per yard will be calculated by DLA Troop Support’s pricing element based on prior audits and provided to the contracting officer as necessary. The specific grade will normally be 22 micron (U.S. grade 64’S). However, as market research or other circumstance dictates, contracting officer may complete with the appropriate number ranging from 54’S-70’S or micron equivalent. In all cases, the contracting officer will document the file with the basis for the grade chosen.

(2) The clause at 52.216-9061 may be used in solicitations and resulting contracts for table spreads. The contracting officer may add additional components based upon customer requirements within paragraph (b) of the clause. Prior to incorporation of any additional component(s) into a solicitation or contract, the contracting officer shall provide the requested new components along with supporting documentation to the cost/price office for review and approval. DLA Troop Support will keep track of any items added and/or those that should be deleted from the clause and report to DLA HQ, attention: J73 every two years for review and updating of the clause as necessary.

(3) The clause at 52.216-9062 may be included in solicitations and the resulting contracts for unitized group rations. The contracting officer may add additional components based upon customer requirements within paragraph (b) of the clause. Prior to incorporation of any additional component(s) into a solicitation or contract, the contracting officer shall provide the requested new components along with supporting documentation to the cost/price office for review and approval. DLA Troop Support will keep track of any items added and/or those that should be deleted from the clause and report to DLA HQ, attention: J73 every two years for review and updating of the clause as necessary.

(4) The clause at 52.216-9059 may be used in solicitations and resulting contracts for meal cold weather/long range patrol (MCW/LRP). The contracting officer may add additional components based upon customer requirements within paragraph (b) of the clause. Prior to incorporation of any additional component(s) into a solicitation or contract, the contracting officer shall provide the requested new components along with supporting documentation to the cost/price office for review and approval. DLA Troop Support will keep track of any items added and/or those that should be deleted from the clause and report to DLA HQ J73 every two years for review and updating of the clause as necessary.

(5) The clause at 52.216-9063 may be used in solicitations and resulting contracts for tailored operational training meal (TOTM). The contracting officer may add additional components based upon customer requirements within paragraph (b) of the clause. Prior to incorporation of any additional component(s) into a solicitation or contract, the contracting officer shall provide the requested new components along with supporting documentation to the cost/price office for review and approval. DLA Troop Support will keep track of any items added and/or those that should be deleted from the clause and report to DLA HQ J73 every two years for review and updating of the clause as necessary.

(6) The clause at 52.216-9060 may be included in solicitations and resulting contracts for meal ready to eat (MRE) assembly. The contracting officer may add additional components based upon customer requirements within paragraph (b) of the clause. Prior to incorporation of any additional component(s) into a solicitation or contract, the contracting officer shall provide the requested new components along with supporting documentation to the cost/price office for review and approval. DLA Troop Support will keep track of any items added and/or those that should be deleted from the clause and report to DLA HQ J73 every two years for review and updating of the clause as necessary.

(7) The clause at 52.216-9066 may be included in solicitations and resulting contracts for fiberboard boxes, liners and /or other items identified therein, when: 1) unpredictable increases or decreases in the cost of the items are expected; 2) the changes can be tracked by published market prices to be used for price adjustment purposes; 3) the contracting officer considers the use of this clause appropriate; and 4) the requirements of FAR 16.203-2, -3, and -4 are met.

(8) The clause at 52.216-9067, Economic Price Adjustment – Liquid Propane Gas – DLA Distribution, shall be used in contracts for procurement of liquid propane gas (LPG) by DLA Distribution. The clause requires the contracting officer to fill in the appropriate base market price date in paragraph (b)(3). This date should be no later than the date of final proposal revisions. The contracting officer must also fill in the percentage applicable in (c)(4), as determined in accordance with 16.203-3-90 and local procedures. This clause is approved for use by DLA Distribution only.

16.205-4-90 Solicitation provisions and contract clauses.

(a) Contracting officers may use clause 52.216-9038, Price Redetermination- Prospective (DEVIATION - PERMANENT), in contracts, including those subject to FAR Part 12, that meet the criteria in FAR 16.205 for fixed price prospective price redetermination, are determined not suitable for economic price adjustment, and have pricing based on the date supplies are ordered rather than on date of delivery. Reference FARS DEV 13-07.

SUBPART 16.5 – INDEFINITE-DELIVERY CONTRACTS

(Revised June 15, 2015 through PROCLTR 2015-09)

16.501-2-90 General.

(a) Indefinite delivery contracts (IDCs) that enable decentralized ordering shall contain provisions for a designated contracting officer’s ordering representative, with the options of (i) placing orders to be paid using their Government-wide purchase card and (ii) ordering against their purchase card, for individual orders not to exceed the simplified acquisition threshold. See 1.603-3-90(a) for policy and procedures regarding contracting officer’s ordering representatives.

(1) An exception is authorized only to the extent the prospective contractor refuses to accept the purchase card for ordering and payment which shall be reviewed, approved, and documented in accordance with DFARS 213.270 (b)(1).

(2) The designated contracting officer’s ordering representatives using the Government-wide purchase card against IDCs issued by contracting offices of DLAs are bound by DLAI 2106, Government Purchase Card.

(c) The requirements of DFARS Subpart 217.74 and DLAD 17.74 shall be met for indefinite-delivery contracts providing for issuance of undefinitized delivery orders (UDOs).

(d) Indefinite-delivery contracts may provide for any appropriate cost or pricing arrangements under Part 16, including firm fixed price, fixed price with economic price adjustment, fixed price with prospective redetermination, or price based on catalog or market prices. When prices are based on catalog or market prices, the price to be paid may be determined by establishing an adjustment factor and applying it to the price in industry-wide pricing guides or manufacturers’ price catalogs. Normally, the adjustment factor will be a fixed percentage discount to be applied to the price in effect on the date of each order.

16.503 Requirements contracts.

(d) The determination that award of multiple contracts is not practicable shall be contained in the acquisition plan or otherwise documented in writing prior to issuance of the solicitation.

16.504 Indefinite-quantity contracts.

16.504-90 Solicitations resulting in Indefinite Delivery Contracts (IDCs).

The clause at 52.216-9027, Evaluation of Quantity Sensitive and Indefinite Delivery Contracts (IDCs), shall be used in solicitations which will result in IDCs when it is anticipated that the contractor will offer a price break for high quantity delivery orders. Coordinate with the demand planner manager for establishment of the quantity most likely to be procured for each delivery order. The highest weight should then be assigned to this quantity. The standard form (SF) 36 shall be manually typed in the buying section to show the range of order quantities and to reflect the evaluation weight which will be placed upon the specific quantity range. The contracting officer shall also provide the contractor with an estimate of the annual requirements.

(a) The Government’s quantity limitations may be stated in different ways; for example, as a number of items or a dollar value worth of items. Stating the Government’s minimum/maximum liability for the entire contract is appropriate for multiple line item contracts when, due to the unique nature of the requirement, it is difficult or impossible to predict, prior to solicitation, the number of individual items needed. The contracting officer must balance the risks inherent in providing more specific limitations with the increased risk to the contractor, and possible increased cost to the Government, of providing less specific limitations.

(b) The determination not to make multiple awards shall be contained in the acquisition plan or otherwise documented in writing in the contract file.

(1)(ii)(D)(S-90) Single award of a task or delivery order contract.

(a) “Awarded to a single source” means the award of any task or delivery order contract where task or delivery orders will not be competed between contract holders. “Task or delivery order contract” does not include orders against task or delivery order contracts.

(b) Award of task or delivery order contracts between $10 million and the threshold at FAR 16.504(c)(1)(ii)(D)(1) to a single source requires HCA approval (unless delegated to the CCO)), or CCO approval for those DLA organizations for which the, DLA Acquisition Deputy Director is the HCA. DLA Energy’s energy program contracts, AbilityOne, and FPI contracts when it is determined to be a mandatory source in accordance with FAR 8.602(a)(3), are not subject to this requirement; however, DLA Energy non-energy task and delivery order contracts are subject to this requirement.

(c) Single awards over the threshold at FAR 16.504(c)(1)(ii)(D)(1)

(1) Preferably within the early stages of the acquisition process, but no less than 21 days before contract award, the contracting activity responsible for the acquisition shall submit a Determination and Findings (D&F) document to the DLA Acquisition Operations Division substantially the same as the template(s) provided in PROCLTR 2009-14, for a single award D&F – Fixed Price Orders and Single Award DF – Sole Source. Note that a D&F can specify the solicitation number, so that any single award contract over the threshold at FAR 16.504(c)(1)(ii)(D)(1) that results will be covered. The D&F shall include sufficient detail to fully support the application of one or more of the exceptions at FAR 16.504(c)(1)(ii)(D)(1) to the procurement.

(2) It is anticipated that many D&Fs in DLA will utilize the FAR 16.504(c)(1)(ii)(D)(1)(ii) exception for contracts providing only firm fixed price task or delivery orders. Fixed price contracts utilizing an economic price adjustment or price redetermination clause qualify for this exception if the individual delivery or task orders under the contracts are firm-fixed priced using prices established in the contracts.

(d) The required written D&F to make a single award of a task or delivery order contract over the threshold at FAR 16.504(c)(1)(ii)(D)(1) shall be signed by the Director, DLA Acquisition (J7), to whom the DLA Director has delegated Head of Agency authority.

(e) Copy of the determination. The DLA Acquisition Policy Division will provide a copy of determinations signed by the DLA Acquisition Director to the Defense Procurement Deputy Director (Contract Policy and International Contracting).

16.505 Ordering.

(a)(S-90) A delivery order must be issued for any quantity ordered, including a quantity ordered concurrent with award of a basic contract.

(a)(5) DLA Form 1224, Shipping Instruction, may be used to issue automated orders under indefinite-delivery contracts not exceeding the simplified acquisition threshold.

(b) Orders under multiple-award contracts–

(1) Fair opportunity. Solicitations shall advise offerors that (i) the competition requirements of FAR Part 6 do not apply to placement of individual task and delivery orders; (ii) individual orders shall be placed in accordance with the selection criteria specified in the solicitation/contract; and (iii) complaints about the placement of individual orders shall be reviewed by the activity competition advocate.

(2) Exceptions to the fair opportunity process. The determination not to provide all awardees a fair opportunity to be considered for a particular order in excess of $3,000 should be documented in the order file.

(8) Task-order and delivery-order ombudsman. The competition advocate at each contracting activity/office (as defined in 2.101) shall act as the activity task and delivery order contract ombudsman pursuant to FAR 16.505(b)(8). The ombudsman shall attempt to resolve contractor complaints relative to placement of individual task and delivery orders at the local level. Complaints which cannot be so resolved shall be forwarded to the HQ through the DLA Acquisition Operations Division for resolution by the DLA competition advocate. Each activity is responsible for developing procedures for executing the duties and responsibilities of its local ombudsman. The competition advocate at each contracting activity/office (as defined in 2.101) shall act as the activity task and delivery order contract ombudsman pursuant to FAR 16.505(b)(8).

(b)(S-90) Use 52.216-9022, Placement of Task/Delivery Orders Against Multiple Indefinite Delivery Contracts as needed to indicate delivery order procedures in multiple award indefinite delivery contracts pursuant to FAR 16.504. Indicate in the clause whether price for the task or delivery order is significantly more, less, or approximately equal in importance to all other factors combined.

16.506 Solicitation provisions and contract clauses.

16.506(90) Additions or deletions.

The clause at 52.216-9006 may be used in solicitations when a mechanism is needed for making additions or deletions to items covered by the contract, e.g. corporate contracts, long term contracts (LTCs) incorporating a manufacturer’s price list, comprehensive weapon system spare parts support or a specific range of items.

(1) Competition requirements must be addressed before new items may be added to a contract.

(2) A scope of contract statement is necessary in both solicitation and contract to clearly establish the Government’s intentions and rights under the contract. The contract scope statement should communicate a comprehensive objective for the acquisition, i.e. whether it is based on a specific stock class, weapon system, product line, manufacturer, or distributor. The scope statement must not include information that conflicts with Section B or other terms of the solicitation. Contracting officers have flexibility in defining contract scope but must be careful to avoid ambiguities.

16.506(91) Contract and/or delivery order limitations.

(a) The contracting officer may use the clause at 52.216-9007, Contract and Delivery Order Limitations, in conjunction with FAR 52.216-19 to establish contract and/or delivery order limitations.

(b) The clause at 52.216-9008, Offeror’s Quantity Limitations, may be used when the contracting officer anticipates the receipt of offers containing quantity limitations.

(c)(2) The contracting officer may use the clause at 52.216-9010, Contract Quantity Limitations, in solicitations for indefinite quantity contracts using information furnished by the Item manager.

(d) The contracting officer may use the clause at 52.216-9010, Contract Quantity Limitations, in conjunction with FAR 52.216-27 to establish quantity limitations for single, split, or multiple awards of indefinite-quantity contracts.

(f) The contracting officer may use the provision at 52.216-9024, Adjustment to Ordering Period, in conjunction with FAR 52.216-18, Ordering, in solicitations for definite-quantity, indefinite quantity, or a requirements contract, when the Government may need to adjust the ordering period at time of award. Fill in the assumed award date.

16.506-92(a) Evaluation of Offers for Indefinite Delivery Type Solicitations.

(1) The contracting officer may use the provision at 52.216-9013, Evaluation of Offers for Indefinite Delivery Type Solicitations, to indicate to offerors how prices for quantity increments will be evaluated in solicitations for indefinite delivery contracts. If (c)(5) is selected, use when transportation costs will be evaluated and do not use FAR 52.247-50, No Evaluation of Transportation Costs.

(2) Use alternate I when not using the specified weights, but rather assigning the greatest weight to the quantity increment most likely to be procured for each delivery order.

16.506-93 Area requirements.

(a) Use 52.216-9014, Area Requirements – Tentative Destinations, in solicitations permitting f.o.b. origin offers when it is desired to list one or more tentative destinations, each designating an area consisting of certain specified states or geographic areas.

(b) Use 52.216-9015, Area Requirements- Contiguous U.S., in solicitations and contracts for IDCs and IDPOs when the industry practice is to offer one price for delivery anywhere within the contiguous United States (48 contiguous states and the District of Columbia).

16.506-94 Construction and equipment solicitations for IDCs/IQCs.

(a) Insert the provision at 52.216-9019, Area Requirements – East and West of Mississippi, in construction and equipment solicitations for IDCs/IQCs specifying f.o.b. destination only, covering items of supply or national stock numbers (NSNs) which are divided into requirements for delivery east and west of the Mississippi River, within the continental United States, excluding Alaska, and the procurement is not partially set aside.

(b) The clause requires the use of odd numbered items (i.e., 0001, 0003, 0005, etc.) for requirements scheduled for delivery east of the Mississippi River and even numbered items (i.e., 0002, 0004, 0006, etc.) for requirements scheduled for delivery west of the Mississippi River.

16.506-95 Medical prime vendor requirements.

Use a clause substantially the same as 52.216-9020, Prime Vendor Requirements, in medical pharmaceutical prime vendor solicitations and contracts when an indefinite delivery modified requirements contract is contemplated. 52.216-9020 is to be used only for acquisitions in the medical supply chain.

16.506(96) Invoices for delivery orders against federal supply schedules.

Use 52.216-9025, Invoices for Delivery Orders, in delivery orders against federal supply schedules assigned to DLA Aviation for administration.

16.506(96)(b) Pricing of delivery orders with quantity increments.

Use 52.216-9026, Pricing of Delivery Orders with Quantity Increments, in solicitations and awards for long term contracts which provide for shipment to more than one location and include quantity range pricing. Use when transportation costs will be relatively small compared to the cost of the item or when the contract price will be f.o.b. origin.

16.506-97 Restitution.

(a) Insert the clause at 52.216-9083, Restitution, in indefinite delivery solicitations and contracts for items where restitution applies and the vendor is in the European Union, with required text filled in by the contracting officer.

SUBPART 16.6 – TIME AND MATERIALS, LABOR-HOUR, AND LETTER CONTRACTS

16.601 Time and materials contracts.

16.601-90 Monitoring and reporting.

(a) Supply chains shall annually monitor their percentage of acquisition dollars being spent on time and material (T&M)/ labor hour (LH) contracts and orders. At the earliest opportunity, particularly when a service contracting requirement becomes repetitive and more predictable in nature, contracting officers should migrate T&M/LH vehicles to other contract types, preferably a fixed price arrangement, if possible. Of particular focus should be the use of T&M/LH contracts and orders for professional, administrative, management support, information technology, and communication services.

(b) HCAs and, for activities for which the DLA Acquisition Deputy Director is the HCA, CCOs shall report to the J7 CAE at the close of the calendar year any percentages of T&M/LH contract action dollars for the preceding fiscal year exceeding 8 percent of service dollars, including a discussion of the supply chain’s strategy to decrease the use of T&M/LH contract type and the risk mitigation measures being used in administering these contract types.

(c) Limitations. Not to exceed” price ceilings shall be included in each option and delivery order.

16.603 Letter contracts.

16.603-3 Limitations.

(a) See DFARS 217.74 and subpart 17.74 for additional requirements for the use of letter contracts.

(b) The determination required by FAR 16.603-3 shall be included with the DFARS 217.7404-1 authorization request.

16.603-90 Policy.

The policy and procedures of DFARS 217.74 and PGI 217.74 are applicable to letter contracts. See also DLAD 17.7403-90.

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