1. Naval Surface Warfare Center Philadelphia Division (NSWCPD)
Industry Day 2017
Contracts
presented by
Albert Stracciolini/John Striano
Contracts Department
NSWC Philadelphia Division
24 March 2017

2. NSWCPD Contracts Department
Code 02
Karen Gutmaker
Administrative Officer
Code 02 Lori Cornish
Deputy
Contracts
Code 02B
Albert Stracciolini
Acquisition Policy & Oversight Division
Code 021
Doris Tung
Contracts A
Division Code 022 John Striano
Contracts B
Division Code 023
Robert Colot
P-Card Program Management
Code 0211
Timothy Pates
Contracts Branch 0221
Code 0221
John Stefano
Contracts Branch 0231
Code 0231
Kevin Hann
Policy & Self-Assessment
Code 0212
Charlotte Cerkvenik
Contracts Branch 0222
Code 0222
Cynthia Esposito
Contracts Branch 0232
Code 0232
Craig Wright
Small Acquisition Purchase (SAP)
Code 0223
Camille Bennett
Contract Oversight Branch 0233
Code 0233
VACANT
Technical Liaison Oversight
Code 0213
Guy Goss
COR Oversight
Code 0214
Barbara Walters

3. NSWCPD Contract Obligations
Source: FPDS-NG

4. What We Buy – NSWCPD OTHER ENGINEERING SERVICES, SUPPLIES
Source: FPDS-NG

5. NSWCPD Competition Performance Effective competition
A market condition that exists when more than one offer is received in response to a solicitation issued using competitive procedures
A new measure as of FY Better Buying Power Initiative for promoting competition.
Source: FPDS-NG Standard "Competition report"

6. How To Stay Competitive
Innovation in your technical approaches and solutions
Technical innovation still counts in best value contracting
Be specific and realistic about what you are proposing
Cost is important in best value procurements
Technical approaches need to take that into account
Your proposal and contract performance should reflect labor market trends
After award:
Do what you proposed
Government monitoring may link to past performance ratings
Reduce costs that drive your indirect rates

7. Top 15 NSWCPD FY16 Industry Partners- NSWCPD
Total NSWCPD FY16 Obligations - $664M

8. How We Communicate Largest Procurements ($5M+):
FedBizOpps (FBO) special announcements
Seaport-e advance notices
Draft solicitations – GOAL
Solicitations open minimum of 30 days – FAR 5.203
SeaPort award announcements not required – DFARS
Above $25K:
Synopsis in FBO
All:
Industry Day Events
Pre-Proposal Conferences – Large MACs
Deputy for Small Business and Contracting Officers
Long Range Acquisition Forecast (LRAF) for all services and supplies to be published on the NAVSEA public website
- IAW FAR Agencies shall allow at least a 30 day response time from the date of publication of a proper notice of intent to contract for services if the proposed contract action is expected to exceed the SAT. The response time may be extended past 30 days depending on the requirement and is at the PCO's discretion.
NSWCPD hosts Pre-Proposal Conference based on lead time and complexity of the procurement. We plan to conduct more in the near future for our large MACs.
Contract announcements are not required for Task Order Awards IAW DFARS Announcement of Contract Awards and the SeaPort ConOps.

9. Acquisition Environment and Trends
1984 – Competition in Contracting Act (CICA)
1994 – Federal Acquisition Streamlining Act
1995 – Federal Acquisition Reform Act
1990s – Drawdown in acquisition workforce
2000s – Building up of acquisition workforce
2009 – Weapon System Acquisition Reform Act
– DOD Better Buying Power I, II, III
(See detailed description)
2012 – Tripwires (See detailed description)
2016 – NAVSEA Services Instruction
…and the list goes on…
Where are these documented?
Federal Acquisition Regulation (FAR)
Defense Federal Acquisition Regulation Supplement (DFARS)
Navy Marine Corps Acquisition Regulation Supplement (NMCARS)
DOD and Navy instructions
NAVSEA Contracting Handbook

10. SeaPort-e All current SeaPort-e MACs will expire in April 2019
Task Orders awards will continue to occur up until MAC expiration
The Navy is in the process of collecting lessons learned via a RFI that was posted to FBO in May 2016
The feedback from the RFI is being used by HQ to develop the Acquisition Strategy
Draft RFP will be released to industry for comments in FY18
No rolling admission to add new vendors in FY17
5 year Period of Performance for new SeaPort Task Order awards
Waivers required by NAVSEA to use vehicle (MAC IDIQ) outside Seaport
- Vendors and users should know that all current SeaPort-e RFPs should be awarded by 4/4/19. HQ are working plans to have leeway if we need to extend that date based upon RFPs that are in evaluation but not yet awarded, but that will be on a case by case basis as we approach FY18. HQ plan is to have the next set of contracts awarded before 4/4/19.
 - Vendors should know that Dalghren will release a draft RFP for comment so nothing should be a surprise as we near the final RFP release dates.
-Discuss how we can now issue 5 year PoPs versus 3.
-NAVSEA says "we are permitted to issue Seaport Task Orders with a Five (5) Year Period of Performance if orders are issued on or before 31 December 2019."
Distribution Statement A: Approved for Public Release: Distribution is unlimited.

11. Pre/Post-Award Contracting Oversight:
NAVSEA Tripwires
Commander, Naval Sea Systems Command Instruction A
of 1 July 2016
Subj: PLANNING, USE, AND CONTROL OF SERVICE CONTRACTING
Selected tripwires:
Pre-Award hourly labor rates exceeding rate of $156
Subcontracts - monitor proposed addition of subcontractors beyond what was included as part of the initial award
Excessive ODCs on a services contract (>5%)
Lack of effective competition (prior one bids, and when only one offer is received, it’s going to get a closer look and require headquarters approval)
Post-Award proposed bid labor rates to actual labor rates (>10% monthly; >15% for 3 consecutive months)
Bridge Contracts – SEA 00 Approval by VADM Moore
All redacted J&As are posted including bridge J&As.
Remind them about “consent to subcontract” and how we are reviewing invoices to ensure only approved subs are being invoiced.
Distribution Statement A: Approved for Public Release: Distribution is unlimited.

12. Proper Use Of ODC Lines
Must be incidental or consumed as part of the services for the specific task order
If not incidental or consumed during contract performance must be clearly defined either as a separate CLIN (only for non-Seaport) or procured under a separate contract
Services (labor) provided by subcontractors other than for specialized services must be invoiced against the Labor CLIN (not permitted under ODCs).
New paragraph in SOW "PURCHASES" (effective Nov 2016 in all new service requirements):
"Only items directly used for this Task Order, for work within the scope of the Performance Work Statement, shall be purchased under the Other Direct Cost (ODC) line items. Individual purchases above $3,500 shall be approved by the Contracting Officer prior to purchase by the Contractor. The purchase request and supporting documentation shall submitted via to the Contracting Officer and the Contracting Officer's Representative (COR) it shall be itemized and contain the cost or price analysis performed by the Contractor to determine the reasonableness of the pricing. (Include the following language where negotiated subcontracts are expected: Provide copies of price estimates from at least 2 vendors.)"
Specialized services or “purchased labor” are treated in a contractors’ accounting treatment depending on the circumstances under which purchased labor costs are incurred. For example, some contractors classify purchased labor as direct labor costs when the work is performed in the contractor’s facilities and under their supervision and otherwise meets the FAR definition of direct costs. These contractors cost such effort using the average labor rate incurred by their own employees for comparable work. Differences between the amounts derived and purchased labor prices are treated as overhead costs and are allocated accordingly. Other contractors classify purchased labor as subcontract costs. most likely causes no fringe benefits and other employee-related costs to be incurred by the contractor. Such costs are generally paid by the entity providing personnel performing the effort.

13. Pre-Award Cost/Price Considerations Common Proposal Mistakes
Reminders on solicitation requirements:
Cost proposal shall identify all its subcontractors and the proposed subcontract type (CPFF, Labor Hours, FFP, etc.) in accordance with FAR Consent to Subcontract
IAW , offerors should not limit discussion of the total compensation plan to salaries. Also shall identify the survey data used (name source).
Offerors including subs must have an adequate accounting system determined adequate by the Government in order to be awarded a cost type contract
RFP requires that offerors list the cost elements that comprise the overhead, general and administrative expense, and other indirect pools. Cost elements are a detailed listing of the accounts (should map to Chart of Accounts) that comprise a given pool (overhead, G&A, MHX, etc.). Contractors are providing summary level proposed rates, and historical PBR & actuals, which is not sufficient to analyze the rates.
Accounting System – Under cost reimbursable contracts the accounting system must be adequate and approved by the government under FAR Subpart 16.3.
Examples of Cost Elements – Rent, Utilities, Vacation Expense, G&A Salaries, etc. If a contractor prepares an Incurred Cost Proposal, or submits Provisional Billing Rates to the Government, it is most likely summarizing and providing costs by cost element to the Government. Our preference would be for contractor’s to provide the costs by cost element in electronic media.
General Ledger Detail Report – The General Ledger Detail Report (or equivalent) details the transactions for the non-labor costs billed on the invoice & will reconcile to the invoice. This report enables the COR to see the specific non-labor direct costs that are being invoiced. The COR would be able to determine if these costs are reasonable, allowable, & allocable to the contract.
Distribution Statement A: Approved for Public Release: Distribution is unlimited.

14. Pre-Award Cost/Price Considerations
Recent L&M Revisions
A chart/spreadsheet shall be included to summarize the hours allocated by labor category and site for each subcontractor. This shall total the LOE specified in the TO.
If the level of effort specifies both hours to be performed off-site and on-site, the contractor shall propose two different indirect rates. If not, provide explanation.
Added requirement to leave formulas in excel files.
If the offeror’s latest budgeted rates (i.e. provisional billing rates) are not used in the proposal of indirect rates, an explanation needs to be provided.
If the proposed labor is discounted from the supporting documentation submitted, the offeror shall provide an explanation why the proposed discounted rate is realistic and reasonable.
Additional details regarding uncompensated Overtime. Company should indicate whether it has a company policy regarding uncompensated overtime, and explain the policy. When adjusting hourly rates to reflect hourly rates impacted by uncompensated overtime, the contractor should include the formula on the rate reduction.
Possible forthcoming changes:
identifying projected sales over the course of the PoP. Sales have a direct correlation to indirect rates.
Spreadsheet providing all direct labor hours by labor category by site (including subcontractor effort) – Without such information the government needs to review all hours by labor category by location for each submitted subcontractor proposal. Additionally, not all subcontractor proposal identify whether effort will be on-site and off-site.
Uncompensated Overtime – Proposal should provide narrative on: (1) company’s uncompensated OT policy (or state that its employees do not work uncompensated Overtime), (2) how uncompensated overtime hours are accounting for in its accounting system and in its billings), (3) Whether labor rates are adjusted for uncompensated OT and how, and (4) if proposal states “we are not proposing” UCOT, need to explain why you are not proposing; if the company has an UCOT practice.
Distribution Statement A: Approved for Public Release: Distribution is unlimited.

15. Pre-Award Cost/Price Considerations Forthcoming L&M Revisions
Possible forthcoming changes:
Identifying projected sales over the course of the period of performance for the anticipated contract. Sales have a direct correlation to indirect rates.
Indirect rates detail - Summary costs by each individual cost element for an indirect rate.
Currently NSWCPD is evaluating escalation based on the offeror’s historical actuals and/or Global Insight.
Offerors are inconsistent with the information submitted and the rates being proposed.
Primes are directing subcontractors to use an escalation rate. However with cost type contracts NSWCPD will need to evaluate based on what is “realistic”.
NSWCPD is soliciting industry feedback prior to implementing these changes.
Indirect Rates Detail – Summary cost for each Fiscal Year for each account used to calculate an indirect rate. For example, if a contractor provides FY2015 historical G&A rate. The contractor proposal would include identification of each cost element, and the summarized costs for each cost element (e.g, rent) would also be identified. This would also include the cost elements that comprise the allocation base. Preferable reporting of such costs would be in electronic media.
Distribution Statement A: Approved for Public Release: Distribution is unlimited.

16. Post Award: Invoicing and Payment
Command emphasis on contract oversight with focus on invoice reviews
Provide required documentation as required/requested by COR or Contracts personnel (1102’s to include cost/price analysts)
Submit supporting docs in WAWF for all invoices IAW HQ G , Supplemental Instructions regarding electronic invoicing (NAVSEA) in addition to CDRLs Financial & Status Monthly Reports (e.g. Incurred Cost and Burn Rate, (A001) Contracting Officer's Management Report (DI-MGMT-81864) etc.)
Provide accounting system reports or equivalent in WAWF:
Job Summary Report (or equivalent)
Labor Distribution Report (or equivalent)
General Ledger Detail Report (or equivalent)
Electronic Cost Reporting and Financial Tracking (eCRAFT)
Mandated use of this web based tool used by all warfare centers.
Job Summary Report - The Job Summary Report (or equivalent) provides the total dollar amount for each specific cost element, which reconciles to the amounts on the invoice. This report should include the cumulative amounts for each cost element as well.
Labor Distribution Report – The Labor Distribution Report (or equivalent) includes all labor that is billed on the invoice. This report details the employees’ names, job category, current & cumulative hours & dollars. This report enables the COR to track hours & direct labor rates by employee. The COR compares the billed direct labor rates to the bid direct labor rates.
General Ledger Detail Report – The General Ledger Detail Report (or equivalent) details the transactions for the non-labor costs billed on the invoice & will reconcile to the invoice. This report enables the COR to see the specific non-labor direct costs that are being invoiced. The COR, in conjunction with the SME, would be able to determine if these costs are reasonable, allowable, & allocable to the contract.
For e-CRAFT just say more is to come.
Distribution Statement A: Approved for Public Release: Distribution is unlimited.

17. CDRLs-Cost Reports
Cost Reports (Incurred Cost and Burn Rate Analysis Report) were replaced with the following CDRLs effective 01 October 2015 on all new contracts:
(A001) Contracting Officer's Management Report (DI-MGMT-81864)
(A002) Travel Report (DI-MISC-81943) - Use when Travel is a CLIN on the contract/order as a separate CLIN or under ODCs
(A003) Contractor's Personnel Roster (DI-MGMT-81834A ) - For a list of On-Site Personnel
(A004) Other Direct Costs (ODCs) Report (DI-FNCL-81866) - Use when Other Direct Costs are CLINS to the contract/order
CDRLs will be incorporated under the "Deliverables" section of the solicitation and included in clause HQ C "Items Data Requirements" of the resultant contract to reflect all applicable Reports/CDRLs.
Some contracts (not modified) still have incurred cost and burn rate reports.
Mention that we don’t have any new CDRLs forthcoming.
Evaluating impact with e-CRAFT forthcoming.
Distribution Statement A: Approved for Public Release: Distribution is unlimited.

18. Post Award: Invoicing and Payment
COR’s Review Will Focus On:
Are the ODCs allocable to the contract?
Is the labor mix appropriate based on the work performed during this period of performance?
Are the travel costs billed appropriate for the contract and for the work performed during this period of performance?
Is the contractor billing in conformance with the terms and conditions of the contract? (Ex: Within pass-through caps, fee caps, etc.)
Reminders:
Contractors shall not invoice for work not performed.
Contractors shall not perform work without funds on the contract order or technical instruction(working at risk).
Any work done by the contractor or sub must be performed within the PoP established for that priced SLIN or priced CLIN. Invoice shall reflect payment against the line items funded for that TI. Work done outside of that established PoP or funded line items is done at the contractor’s own risk.
Distribution Statement A: Approved for Public Release: Distribution is unlimited.

19. Post Award: Invoicing and Payment
Direct Labor
Compare proposed labor rates for each employee/labor category to the billed labor rates. The contractor should provide an explanation for any variances in excess of 10% (tripwire). Variations in excess will also be reflected in the cost control element of CPARS.
Indirect Rates
The indirect rates billed should reconcile to the approved provisional billing rates.
If the contractor capped an indirect rate in their proposal, they should be billing at that capped indirect rate.
Billed Fee Amount
The contractor’s prime fee on prime labor and fee on subcontractor labor should be billed at the amounts negotiated pre-award.
The contractor should withhold fee in accordance with FAR for CPFF contracts and FAR for CPIF contracts.
PCO instruction to withhold fee is found in Section G of the contract.
Pass Through Costs
Pass through costs include all adders and any prime contractor fee applied to the subcontractor labor cost plus subcontractor fee.
Contractors should be invoicing at the appropriate pass through rates that were negotiated. All SeaPort-e Multiple Award Contracts have a pass through cap of 8%, unless negotiated lower.
Distribution Statement A: Approved for Public Release: Distribution is unlimited.

20. CPFF LOE Fixed Fee Adjustment
NSWCPD will ensure compliance with SEA (DEC 2000) on CPFF Level of Effort requirements. Fee will be adjusted accordingly to the LOE expended once the contract/task order is complete.
Per SEA (DEC 2000), if the total level of effort specified is not provided by the Contractor during the period of the contract, the Contracting Officer, at its sole discretion, shall either
(i) reduce the fee on this contract as follows:
Fee Reduction = Fee x ((Required LOE minus Expended LOE)divided by Required LOE), or
(ii) subject to the provisions of the clause of this contract entitled "LIMITATION OF COST" (FAR ) or "LIMITATION OF COST (FACILITIES)" (FAR ), as applicable, require the Contractor to continue to perform the work until the total number of man hours of direct labor specified in paragraph (a) above shall have been expended, at no increase in the fee of this contract.

21. Contracting Points of Contact
Seaport (Services) -
Federal Business Opportunities (FBO) -
NSWC Philadelphia Division Chief of Contracting Office:
Karen Gutmaker
Naval Surface Warfare Center, Philadelphia Naval Business Center
5001 South Broad St.
Philadelphia, PA
NSWC Philadelphia Division Deputy Chief of Contracting Office:
Albert Stracciolini
Phone: (215)
NSWC Philadelphia Division Small Business Deputy:
Irene Katacinski
Phone: (215)