> Executive Summary for the Landing Gear Prime Vendor Contract (LGPVC) Synopsis of Executive Summary The LGPVC is a Small Business Set-aside, multiple award, ID/IQ, 10-year contract, with an approximate ceiling of $1.5B for landing gear parts.  The contract will be fixed price with Economic Price Adjustment, with a fixed price for the first year of the basic period and ceiling prices for subsequent periods up to a total contract length of 10 years.  Ceiling prices will be definitized prior to award of terms beyond the basic period (Economic Price Adjustments will be allowed yearly, in accordance with the stipulations outlined in the contract which are summarized herein).    Competition will be maintained throughout all periods of performance by providing each offeror the opportunity to voluntarily reduce price and delivery time for each delivery/task order.  In order to earn additional terms (time) beyond the basic term of the contract, prime contractors will be required to achieve continuous improvements in production lead time, cost, and quality relative to the other awardees as specified in the award term plan. Background  

The purpose of the LGPVC is to provide a flexible vehicle for procuring spares in support of the Landing Gear Commodity Council00 740 MSD Spares, and 342 items assigned to other Commodity Councils.  The total requirement includes Air Force spares, and DLA landing gear parts.

Structure of Basic Contract  

The contract contemplated by the commodity council is an ID/IQ, multiple award contract with a maximum length of 10 years.  The contract will use award terms to increase the period of performance from the basic period (three years) to the maximum period of 10 years.  This acquisition is a total small business set-aside.  Prime contractors will be responsible for managing subcontractor performance throughout each term in order to achieve savings in production lead time, cost, and quality, thereby earning additional terms.

Award Term  

Prime awardees will receive additional terms based on their performance in accordance with the evaluation criteria specified in the Award Term Plan.   Evaluation criteria incentivize improvement in the following areas: 

Price Delivery On-time delivery Reduced production lead-time Quality Business relations/Customer Support  

Competition will be fostered by evaluating contractor results in those areas through an integrated assessment of these factors in comparison with the best results achieved during the previous term.

IDIQ Conditions  

Reference FAR 16.501-2 (b)(3).  Under the terms of the ID/IQ contract the government00 obligation to place orders is limited to the fulfillment of any minimum order amounts set forth in the contract.  Accordingly, after satisfying any required minimums, the government may discontinue the placement of orders if continuing to do so is determined not to be in the government00 best interests.  Such action does not exclude the awarding of a new contract for the same or similar requirements.

Pricing of Supply Items  

There are a total of 714 Air Force items covered by this contract and 373 Defense Logistic Administration parts.  Items shall be firm fixed priced (FFP) for the first year of the basic period.  All subsequent years shall include ceiling prices.  IAW RFP Clause 9952.703-H703, (Economic Price Adjustment Provision), contractors may adjust prices to accommodate for extreme fluctuations in material costs only.  Prior to awarding additional terms, ceiling prices will be definitized IAW this clause.  Any possible add-on items shall be awarded in accordance with FAR Guidelines.

Economic Price Adjustment Special Contract Provision  

Approximately 3-6 months before each new contract year commences, each contract awardee will provide four 00irm00unit prices for each item on the contract that correspond to the quantity ranges it submitted at the outset of the contract for the basic year. None of the unit prices for an item may exceed the pre-established 00eiling00unit price for that item and year unless the following conditions apply: 

The government will monitor the cost of materials generally used in the production of landing gear parts by tracking an index that is reflective of the overall changes in the cost of landing gear materials. In the event that there have been unusually high increases in the cost of these materials, a contractor will be allowed to establish firm range unit prices for an item that exceed its pre-established ceiling unit price for that item. This 00conomic Price Adjustment00(EPA) ceiling will be calculated using the Producer Price Index for Other Aircraft Parts and Auxiliary Equipment Manufacturing.  This index will be supplied by the government just prior to the contractor providing firm prices for an approaching period.  The Government reserves the right to select an alternative index, or combination of indexes, in the event the stated index (PPI for Other Aircraft Parts and Auxiliary Equipment Manufacturing) is not available or does not adequately reflect market conditions for the landing gear components on this contract. The contractor may propose unit prices for the approaching period which do not exceed the higher of the pre-established ceiling price, or the economic ceiling price calculated by applying the Producer Price Index provided by the government. 

The Producer Price Index (PPI) measures average changes in selling prices received by domestic producers for their output.  The PPI considers premiums, discounts, rebates and allowances.  Since the PPI is a measure of selling prices, it includes elements of labor, subcontract, and other costs that are part of the price for a given commodity, industry, etc. The North American Industry Classification System (NAICS) defines Other Aircraft Parts and Auxiliary Equipment Manufacturing (PPI 336413) as including effort by establishments which are primarily engaged in manufacturing aircraft parts or auxiliary equipment. 

Delivery Order (DO) Process  

Orders during the first year of performance will be placed based on proposed price and delivery.  All primes will be notified of a pending DO and be given the opportunity to adjust initially proposed price and delivery.  The length of the basic term will be three years (long enough to establish a sufficient performance history that can be used to evaluate for awarding of additional terms).  Subsequent term ordering shall also include the evaluation of proposed prices, delivery, as well as other factors, such as past performance, quality, and delivery record.   Ordering will be decentralized, allowing DLA to issue orders against the contract only for those items which it manages. 
 

Adding New Parts to the Contract 

It is possible that during the life of LGPVC, the addition of new weapon systems, development of improved parts, or the addition of other service00 landing gear items may make it advantageous to the Government to add parts to the LGPVC.  Potential examples would include the F/A-22, F-117, additional DLA landing gear parts, and Navy weapon systems.  The Competition in Contracting Act (CICA) requires full and open competition in order to add parts.  The commodity council is investigating the possibility of conducting Full and Open competitions for new items resulting in addition by modification to these contracts or the addition of new contracts/contractors to the program.   Items may be only added non-competitively if they are supported by a proper Justification and Approval.

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