1. Mr. Dennis Dudek Deputy Director C&T Defense Supply Center Philadelphia

2. OVERVIEW BACKGROUND TELECONFERENCE SURVEY and DOMESTIC SOURCING CONFERENCE SURVEY RESULTS INITIATIVES FOLLOW-UP

3. BACKGROUND Issues with Current System Length of Initial Procurements Delivery Order Period Too Short Length of Contract Hard to Price Economic Price Adjustments Min/Max Quantities Unknown Future Orders

4. TELECONFERENCE Teleconference Held on 15 Feb 05 to Address the Issues AAFA Govt Contracts Committee Sponsored Good participation by Members (over 20) Good Discussions on Topics –Teleconference lasted over 1 ½ hours –Many issues were debated Results: Conduct a Member Survey

5. SURVEY and CONFERENCE Survey Issued Mar 05 and closed Apr 05 49 AAFA GCC Members Participated (28 Mfgs / 20 Suppliers) Good Cross Section of Industry Segments 14 Page Report Issued to DSCP Report Evaluated for Potential Actions Domestic Sourcing Conference Held 4 May 05 Reiterated a lot of the survey comments

6. SURVEY SUMMARIES 15 Survey Questions – Can Be Split Into 5 Major Elements: Contract Length Solicitation Improvements Min / Max Information Sharing Technology Issues

7. CONTRACT LENGTH AAFA GCC Issue: –3 or 5 Year Contracts (1 Year Plus Option Years) Is the Norm Pros: 30% Beneficial to Health of Value Chain Not a Problem If Price Adjustments Allowed Allows Recovery of Start-up / Training Cons: 70% Unanticipated Cost Increases (renegotiate options?) Material Cost Increases Cannot be Passed Through Go to 3 Year Contracts DSCP Response: Evaluating possibility of EPA Where independent index is available 3 Year Contracts ?? Renegotiate Option Years cannot be done

8. SOLICITATION IMPROVEMENTS AAFA GCC Issue: – Takes Too Long For DSCP To Come To Initial Award – Extension requests need to be more realistic Solicitations Should Expire After a Set Time (21 – 3 Months / 18 – 6 Months / 9 – 12 Months) No standard Industry conclusion Not realistic to implement Posting Of Awards Not Timely (67%) DSCP Response: Will Work to Achieve Time Schedule Solicitation (6 months to award) + PLT 1 st Del Will Monitor Award Postings to FedBizOps

9. MIN / MAX AAFA GCC Issue: –Too Wide a Variation Between the Two Half the Respondents Were Requested to Voluntarily Reduce Minimums A Uniform Percentage Range? Evenly Divided Between 4 Categories If Range Were Narrowed, Most Respondents Agreed It Would Be OK If DSCP Bought Exigency DSCP Response: Min/Max must be developed to best utilize funding stream It will be determined at the level of first order (25%) It is only a flexibility tool Will Post Past 12 Months Demand Usage on Solicitation More accurate depiction of forecast

10. INFORMATION SHARING AAFA GCC Issue: – Hard To Predict Orders and Quantities 87% Indicated That They Would Like to See More Info Sharing How? 63% - Web / 36% - Individual Contact DSCP Response: Web Site for Item Demand History and Semi-Annual Forecast of Item by Contract Planned execution of delivery orders and options

11. TECHNOLOGY ISSUES AAFA GCC Issue: – Changes Are Happening Now In Specs / RFID / VIM – ASAP Specs: Pros / Cons of Spec VS Performance All Agreed Industry Segment Groups Would Help (71%) RFID: 78% Not Prepared; Rqmts Not Set VIM – ASAP: 19 Using It Now (Of 28 Mfgs) Most Like It and Have No Problems Some Start Up Issues DSCP Response: Will Support Technical Groups Will Work With Firms on RFID We encourage the use of VIM - ASAP

12. BOTTOM LINE DSCP Will Strive To Make Improvements As Noted – However, we are bound by regulatory limitations Working Together to Improve the System Need the Help / Understanding of AAFA