Mr' Dennis Dudek Deputy Director C

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Mr. Dennis DudekDeputy Director CTDefense
Supply Center Philadelphia
Contract Management Issues
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OVERVIEW

• BACKGROUND
• TELECONFERENCE
• SURVEY and DOMESTIC SOURCING CONFERENCE
• SURVEY RESULTS
• INITIATIVES
• FOLLOW-UP

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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

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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

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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

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SURVEY SUMMARIES

• 15 Survey Questions
• Can Be Split Into 5 Major Elements
• Contract Length
• Solicitation Improvements
• Min / Max
• Information Sharing
• Technology Issues

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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

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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 1st Del
• Will Monitor Award Postings to FedBizOps

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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

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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

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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

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BOTTOM LINE

• DSCP Will Strive To Make Improvements As Noted
• However, we are bound by regulatory limitations

• Need the Help / Understanding of AAFA

• Working Together to Improve the System