30 March 2001

**TSSC III**

**RESPONSE TO INDUSTRY COMMENTS ON DRAFT RFO/SIR**

1\. [Section C, C.3.1.3, Equipment and Fire/Life Safety, Page
1]{.underline}

[Section C, C.3.1.3, Environmental and Fire/Life Safety, Page
5]{.underline}

Issue: Page 1 C.3.1.3 currently reads "Equipment and Fire/Life Safety.\"
Page 4 reads "Environmental and Fire/Safety". Question: Is Environmental
and Fire/Life Safety the correct title for C.3.1.3?

> **ANSWER**: The Table of Contents heading for paragraph C.3.1.3 should
> read \"Environmental and Fire/Life Safety\". The heading in the body
> of the statement of work is correct as written.

2**.** [Section C, Section C.3.2, Program Management]{.underline}

Section C.3.2 starts with an overall statement of the requirements for
the Program Management function. However, there appears to be no page
count allotted for a global review of the overall management approach.
Is it the RFP\'s intent to allot a separate section to a global
presentation of the management approach, and if not, where should it be
addressed?

> **ANSWER**: The final RFO/SIR will provide for a 90 minute oral
> presentation of the Program Management Plan. The specific content and
> format is the Offeror\'s option, as long as the requirements of SIR
> Section L are met.

3\. [Section C, C.3.3.3, Staffing and Transition Management Plan, page
9]{.underline}

[Vugraph 22, TSSC III Bidders' Conference]{.underline}

Issue: Vugraph chart 22 indicated the TSSC III contractor must achieve
full staffing by March 2002, which is only 4 months after award.

Issue: A 4-month transition for a nationwide program as complex as TSSC
III seems short. In addition, the Vugraph 22, Contract Timing, raises
significant issues for a new contractor. Vugraph 22 shows a steady level
of effort for the TSSC II contract for approximately 5 months after
award of the TSSC III contract before it rapidly tapers off. The vugraph
shows the TSSC III contractor must staff up to a level of effort greater
than the current level of effort within 4 months. SOW paragraph
C.3.3.3.h requires that the staffing and transition management plan
include "plans for how a smooth and orderly transition process can be
orchestrated that will forestall a mass exodus of current personnel and
limit any associated disruption.\" Therefore, it seems the FAA would
desire this rampup be accomplished without hiring any personnel from the
incumbent contractor.

Discussion and Recommendation: This transition schedule and the
requirement for placing the burden of forestalling a "mass exodus of
current personnel" on the new contract would seem to be highly favorable
to the incumbent contractor. Competitors trying to comply with the
schedule and transition requirement are in a Catch-22 situation. They
cannot ramp up to the full level of effort within 4 months and, at the
same time, provide selected, highly qualified technical personnel
working on the T2 contract an opportunity for continued employment with
the new contractor. In fact, the incumbent contractor would have strong
incentives after award to delay the completion of assigned tasks so as
to make it harder for the new contractor to achieve a strong start-up.
We recommend that the FAA revisit the current workload and schedule for
the TSSC II contract to permit a smoother transition of work from one
contract to the next. That is, the total LOE between the two contracts
during the transition should not exceed the anticipated first-year LOE
of the TSSC III contract. If that is not feasible, we recommend that the
ramp-up for the TSSC III contract be moved to the right. A case could be
made that as long as the prospective contractor can demonstrate in its
proposal the appropriate plans for an efficient ramp-up within a
reasonable (6-month) time frame, the ramp down of the current contract
should be irrelevant. This especially true since the FAA has already
indicated that specific projects will not transition from one contract
to the next.

> **ANSWER:** While Vugraph 22 could be interpreted in this manner,
> paragraph L.18.2.3, Staffing and Transition Management Plan, specifies
> that Offerors should assume a linear ramp up to full staffing levels
> during the first year of the contract. Consequently, full staffing
> levels would not be reached for 12 months, not 4 months. Also, the FAA
> does not expect a new Contractor to refrain from hiring any personnel
> now employed by the incumbent. Quite the opposite will probably be the
> case. However, the FAA would prefer that this would occur gradually so
> as not to impair the incumbent\'s ability to complete in-process
> projects. In the final RFO/SIR, paragraph C.3.3.3.h will be revised to
> read: \"A description of the Contractor\'s plans for how a smooth and
> orderly transition process will be orchestrated and limit any
> associated disruption in service.\"
>
> It is important to note that the Vugraph reference at the conference
> was for illustrative purposes only and was provided for the purpose of
> showing a transition between TSSC II and TSSC III. It is not
> necessarily to scale and does not supercede the final RFO/SIR
> requirements. The TSSC III ramp up period is expected to take 12
> months, as stated in the final RFO/SIR. Furthermore, all TSSC III
> tasks (WRs) will be new and will not require hand off between the TSSC
> II and TSSC III contractor.

4\. [Section C, C.3.9.3, Interface with FAA TSSC Tracking System (T3TS),
Page 15]{.underline}

-   What is the current timetable for the implementation of the T3TS?

-   Does the incumbent contractor have access to T3TS development
    information other than the data provided in the RFO?

-   Is the incumbent contractor being given an opportunity to update its
    current tracking system on the current contract to interface with
    T3TS? At a minimum, the FAA should provide all offerors with the
    same access to T3TS development information being provided to the
    incumbent contractor.

-   If the incumbent contractor is being given an opportunity to update
    its current tracking system on the current contract to interface
    with T3TS, we would recommend that the FAA eliminate the development
    of the CCDB from its proposal evaluation. Alternatively, the
    weighting assigned to this element should be significantly reduced.

> **ANSWER:** The current timetable for T3TS is to have it fully
> developed before award of the TSSC III contract. The current
> contractor does not have access to any T3TS information other than
> that in the final RFO/SIR and is not being given an opportunity to
> update its current tracking system to interface with T3TS.

5 [Section C, C.3.3.6, Subcontract Management Plan]{.underline}

[Section L, Section L.18.2.6, Subcontract Management Plan]{.underline}

> Section L.18.2.6 refers to Section C.3.6. Upon review, we believe that
> C.3.3.6 is a more proper reference. Please clarify this.
>
> **ANSWER**: C.3.3.6 is the correct reference.

6**.** [Section C, Section C.3.3.2, Contractor-Provided Equipment, page
8]{.underline}

> [Section L, L.20.3.5, Other Direct Costs, Not Technical Work Release
> Related]{.underline}
>
> [Section L, Cost Exhibit 5, page 36]{.underline}
>
> [Section L, Cost Exhibit 5, Other Direct Costs, Not PM Work Release
> Related, page 44]{.underline}

Reference: RFO Sections C.3.3.2, Resource Management Plan, page 8 and
Section L.20.3.5, Other Direct Costs, Not Technical Work Release
Related, Cost Exhibit 5, page 36, Section L, Cost Exhibit 5, Other
Direct Costs, Not PM Work Release Related, page 44.

Issue: The Draft RFO does not specify whether the FAA will provide any
general-purpose test equipment to the successful offeror.

Discussion and Recommendation: We assume that offerors must identify and
propose any general-purpose test equipment they intend to provide and to
indicate whether such equipment will be provided as a direct or indirect
cost. To ensure all bidders use the same criteria to determine costs, we
recommend that "general purpose test equipment" be added to the list of
directly charged costs identified in paragraph L.20.3.5.

> **ANSWER:** Offerors should assume zero cost for general-purpose test
> equipment for bidding purposes. That is, Offerors should assume
> general-purpose test equipment will be provided as Government
> Furnished Equipment (GFE).

7**.** [Section H, H.3, Service Contract Act - Multiple Places of
Performance]{.underline}

[Section L, Section L.20.3.2, Cost Exhibit 2]{.underline}

Section L.20.3.2 establishes applicable Department of Labor Service
Contract Act direct labor rates for bidding purposes. Section H.3 states
that the contract will incorporate all wage determinations which have
been issued by the Department of Labor and the actual location(s) where
the work will be performed govern which wage determination(s) apply. The
RFP does not include a minimum Service Contract Act H&W benefit, to
protect Service Contract Act employees as required by the statute. The
current H&W minimum benefit required to be paid to the TSSC Service
Contract Act workforce is \$2.56 per hour. Please modify Section
L.20.3.2 to require offerors to bid at least this H&W benefit.

> **ANSWER**: The final RFO/SIR will provide that the high benefit rate
> of \$2.56 per hour should be used for proposal preparation purposes.

8\. [Section J and Section L, Job Description for Computer Systems
Analyst]{.underline}

Please note that no job description for Computer Systems Analyst was
included in the RFP. It was however included in the Section L attachment
1 \"Estimate of Staff Hours Requirements\". Please clarify whether this
is an exempt or Service Contract Act labor category, and provide the
position duties and requirements.

> **ANSWER:** A job description for Computer Systems Analyst, a
> non-exempt position, will be included in the final RFO/SIR.

9\. [Section L, L.16.2, Proposal Organization, Volume II, Section
A]{.underline}

> [Section L, L.19.3, Oral Presentations]{.underline}
>
> [Section L.18.1.1 Scenarios]{.underline}

The tables in Section L.16.2, Proposal Organization, Volume II, Section
A, and Section L.19.3, Oral Presentations both indicate the order in
which the scenarios should be presented. Scenario #1 - Add Equipment
Rack ATCT, Scenario #2 - Establish a CAT II ILS, and Scenario #3 -
Removal of Decommissioned ARSR. Section L.18.1.1 Scenarios, changes the
order in which they are to be presented. Can it be assumed that the
table in Section L.16.2 is the preferred proposal organization? Please
clarify this.

> **ANSWER**: The final RFO/SIR will not require oral presentations for
> the technical scenarios; only written responses will be required.

10\. [Section L, L.16.3.c (1), Page 10, Proposal
Preparation]{.underline}

Issue: 11x17 pages are allowed for graphics, tables, and diagrams.
Recommendation: We recommend this paragraph be modified to include the
following sentence at the end of the paragraph: "11x17 pages when used
for graphics, tables and diagrams shall count as 1 page."

> **ANSWER**: The Government intends to count 11 x 17-inch size paper as
> only one page. As specified in paragraph L.16.3, 11 x 17-inch paper
> must fold to 8 1/2 x 11-inch paper.

11\. [Section L, L.16.2, Proposal Organization, Volume III, Section
A]{.underline}

> [Section L, L.19.5.6, Oral Presentation Schedule]{.underline}

The table in Section L.16.2, Proposal Organization, Volume III, Section
A, indicates 30 minutes for presenting the Program Management Plan.
Section L.19.5.6, Oral Presentation Schedule, adds the requirement to
brief the EOSH Plan in the same time allocation. Will additional time be
allocated for the EOSH Plan brief?

**ANSWER**: The final RFO/SIR will require oral presentations of only
the Program Management Plan (90 minute time limit), the Subcontract
Management Plan (90 minutes), and the National Program Management Work
Release (30 minutes). Written submissions will be required for the other
plans. The EOSH presentation is to be included in the Program Management
Plan presentation.

12\. [Section L, L.18.3, Relevant Experience]{.underline}

[Section L, L.18.4, Past Performance]{.underline}

Issue: Some agencies, as a matter of practice, will not respond to Past
Performance questionnaires such as the questionnaire provided as
attachment L-3. For example, DoD uses a system called Contractor
Performance Assessment Reporting (CPARS) that provides current past
performance data for DoD contracts. This system is accessible to all
Federal agencies. Some agencies will only provide the requesting agency
with access to the appropriate CPARS data.

Discussion and Recommendation: We recommend that Section L be amended to
take into account the practice that some agencies may require the use of
data from CPARS or another automated system rather than responding
directly to a past performance questionnaire. Otherwise, a contractor
could be prevented from presenting its most relevant or best past
performance because of a conflict between Government agencies.

> **ANSWER:** In the final RFO/SIR, we will provide that CPARS or
> similar data may be submitted in lieu of the past performance
> questionnaire and reserve the right to consider such data regardless
> of how it is acquired.

13\. [Section L, L.18.3.1, Relevant Experience]{.underline}

> [Section L, L.18.4, Past Performance, pages 23-26]{.underline}

Issue: Prime contractors and all subcontractors are limited to citing
three contracts for Relevant Experience and Past Performance. Given the
size and wide range of services required under this contract, this
restriction seems to provide a significant advantage to the incumbent
contractor. Other companies might need to cite more than three contracts
to adequately demonstrate the breadth and depth of their relevant
experience.

Discussion and Recommendation: We understand and support the
Government's desire to minimize the number of agencies that need to be
contacted as part of the Relevant Experience and Past Performance
evaluation. However, in the interest of increasing the competitive
field, we recommend allowing each prime contractor to submit up to six
contracts for the Relevant Experience and Past Performance evaluations.
Under this scenario, subcontractors could still be limited to three
contract cites. This change could significantly increase the chances for
the FAA to achieve the level of competition it desires on this important
procurement. It is also similar to the requirement for the FAA's recent
Systems Engineering and Technical Assistance (SETA) procurement. That
procurement allowed prime contractors to submit up to 5 citations.

> **ANSWER:** In the final RFO/SIR, the limitation will be increased
> from three to five contracts for the prime contractor but remain at 3
> contracts for each subcontractor.

14\. [Section L, L.18.3.2, Relevant Experience - Preference]{.underline}

Under Section L.18.3.2, both Government and non-Government contracts are
acceptable as examples of relevant experience, provided other
requirements of relevant experience are met regarding dollar values,
contract duration, and numbers of personnel employed. The clause appears
to imply that contracts cited must satisfy specific criteria for value,
duration, and workforce size, but the draft supplies no such criteria.
Please clarify this.

> **ANSWER:** The phrase \"provided other requirements of relevant
> experience are met...\" will be deleted from the final RFO/SIR.

15\. [Section L, L.18.3.2, Relevant Experience - Preference]{.underline}

Past Performance Section L.18.3.2 reads \"The FAA strongly prefers that
contracts used to demonstrate relevant experience reflect the actual
experiences of the company entity proposed to conduct TSSC III work.
However, corporate-wide experience may be used where new entities have
been created for the purpose of conducting TSSC III work. Experience
more closely related to the entity that will perform TSSC III work will
be viewed more favorably by the FAA and evaluated accordingly.\"

Where a new corporate entity has not been created for the TSSC III bid,
will corporate-wide experience be permitted, or is experience in that
case limited to the experience of the corporate entity bidding the
contract?

> **ANSWER**: Paragraph L.18.3.2 does not prohibit the submission of
> corporate-wide experience; it only states that such experience will be
> viewed less favorably than experience of the entity that will perform
> the contract in the evaluation process. An Offeror should submit
> whatever relevant experience it has and the FAA will evaluate it.

16\. [Section L, L.18.3.3, Details]{.underline}

[Under L.18.4, Section D - Past Performance]{.underline}

In Section L.18.3.3 the final bullet requests \"information on problems
encountered on the contracts and subcontracts identified under relevant
experience and corrective actions taken to resolve those problems.
Offerors should provide general information on their performance on the
identified contracts.\"

Under L.18.4, Section D - Past Performance, the fourth paragraph
requests: \"Offerors and their subcontractor teammates may provide
information on problems encountered on previous or current contracts and
subcontracts identified under relevant experience and
corrective/innovative actions taken to resolve those problems. Offerors
may also provide a self-assessment (not to exceed one page) of their
performance on identified contracts\"

The solicitation appears to be requiring essentially identical material
(problems and corrective actions) in two separate locations (proposal
sections C and D of Volume II). Please clarify this.

> **ANSWER**: The last bullet of L.18.3.3 will be deleted from the final
> RFO/SIR.

17\. [Section L, L.18.3.4, Terminated or De-Scoped
Contracts]{.underline}

Under Section L.18.3.4, please clarify the scope of this requirement:
terminated or de-scoped contracts from the operational unit only or
division and corporation as well? Also, does this mean offeror only or
offeror and subcontractors?

> **ANSWER:** The requirement to disclose terminated or de-scoped
> contractors applies to both the prime contractor and its
> subcontractors and is intended to apply to only the entity which will
> be involved in TSSC III and two levels directly above it on a current
> organization chart. This will be clarified in the final RFO/SIR.

18\. [Section L, L.18.4, Section D- Past Performance]{.underline}

Under Section L.18.4, Section D- Past Performance, offerors are provided
the opportunity to provide a self-assessment (not to exceed one page) of
their performance on identified contacts. Please clarify if this means
one page per contract or if one page is intended to cover all contracts.

**ANSWER:** The intent is one page per contract.

19\. [Section L, L.18.4, Section D- Past Performance]{.underline}

[Attachment L3, Past Performance Questionnaire]{.underline}

Under Section D-Past Performance and Attachment L3, Past Performance
Questionnaire: Paragraph L.18.4 requires that offerors \"forward the FAA
past performance questionnaire...to those points of contact identified
above \[paragraph L.18.3.3, p. 24, second, third and fourth bullets\].
The points of contact identified are:

· Government or industry Contracting Officer

· Administrative Contracting Officer (if different from CO)

· Government or Commercial Technical Officer

· Government or Commercial Program Manager

The wording may lead one to conclude a questionnaire must be sent to all
four, if all four positions exist on the contract chosen. However, Part
V, Respondent Information of the questionnaire provides only for the
name and number of the Contracting Officer and the Technical Officer.
Please clarify this.

> **ANSWER**: It is **not** FAA\'s intent that Offerors forward multiple
> questionnaires related to the same contract. This will be clarified in
> the final RFO/SIR.

20\. [Section L, Sections L.19.1, L.19.5.2, L.19.5.3 Oral Presentations,
Pages 26 and 28]{.underline}

Issue: Paragraph L.19.1 says offer materials will consist of an original
(acetates). Paragraph L.19.5.2 says FAA will provide one overhead
projector, etc. Paragraph L.19.5.3 says each offeror must use the
overhead transparencies etc. Recommendation: We recommend allowing the
offerors the option of submitting an paper copies and a soft copy of its
presentation in Microsoft PowerPoint format and being allowed to provide
equipment for electronic projection during the oral presentations.

> **ANSWER**: The Government will allow Offerors the option of an oral
> presentation in PowerPoint or similar format, provided the Offeror
> supplies all the required electronic equipment. However, the
> requirement that the material actually presented be identical to that
> submitted with its proposal remains in effect. The final RFO/SIR will
> reflect these changes.

21\. [Section L, Attachment L3, Past Performance
Questionnaire]{.underline}

Under Attachment L3, \"Effective program management\" is identified as
an area for experience/past performance evaluation, but the
questionnaire does not include any program management-related queries.
Please clarify this.

**ANSWER:** While the FAA cannot find any place where the phrase
\"effective program management\" is used in relation to experience/past
performance, the questionnaire in its entirety is intended to present a
picture of the Offeror\'s ability to provide effective program
management.

22\. [Section L, Section L.19.5.1, Participants]{.underline}

Section L.19.5.1 states \"Offerors oral presentation must be conducted
by key personnel, or other selected senior managers of either the prime
contractor or teammates, who the Offeror will actually employ under the
TSSC III (including) other Senior Managers of the Prime and Teammates\".
Some firms may have business unit, divisional or first line corporate
management who will be substantively involved with the management of the
program and will not directly charge to the contract, but will be
directly involved in the execution of the program. Is it correct to
assume that such individuals may participate in orals?

> **ANSWER:** Yes, the Government will permit such corporate management
> officials to participate in the oral presentation provided their
> participation is limited to the area of their involvement in TSSC III.

23**.** [Section L, L.20.1.5, Yearly Increases in Direct Labor Rates,
and L.20.3.2, Cost Exhibit 2]{.underline}

Under Section L.20.1.5 and L.20.3.2, does the 3 percent escalation on
direct labor rates apply to every labor category including exempt and
nonexempt (Service Contract Act) personnel?

**ANSWER**: Yes.

24\. [Section L, Attachment L-2, List of Applicable Contract Labor
Categories, Page 47]{.underline}

Issue: The requirements for the National Program Manager and Regional
Program Manager positions do not allow for FAA Civil Service 855/801
series engineering credentials to be substituted for the degree
requirement.

Discussion and Recommendation: The FAA has traditionally accepted EIT/PE
and Civil Service Engineering Equivalency as the equivalent of a 4-year
degree and does so for the engineering positions in the final RFO/SIR.
Allowing this substitution for the National and Regional Program Manager
positions will provide the FAA with a broader pool of highly qualified
individuals who, by virtue of their Government experience, have proven
their ability. Therefore, we recommend that the requirements for both
positions be amended to include the sentence: "The FAA will accept
Engineer-in-Training (EIT) or Professional Engineer (PE) certification
in lieu of the bachelor's degree."

> **ANSWER**: There will be no change in the requirement for a
> Bachelor\'s degree for the National and Regional Program Manager
> positions. However, the FAA will include provisions that this
> requirement may be waived by the FAA on a case-by-case basis if the
> Offeror/Contractor presents adequate justification.

25\. [Section L, Cross Reference and Table of Contents]{.underline}

Would the FAA entertain including reference material in each proposed
section, including a cross-reference matrix and table of contents, which
do not count against the page limitation?

> ANSWER: A cross-reference matrix, table of contents, index, or similar
> brief \"reference materials\" will not count against the page
> limitation. However, content by reference (for example, personnel
> manuals) **will** count toward the page limit.

26\. [Section M, M.4.3, Cost Evaluation, Page 5]{.underline}

Issue: Paragraph M.4.3 states that prices will be evaluated for both
\"the full contract period (base and both option periods) and the
proposed cost for the first year of the Program Management WR....\" By
evaluating the proposed cost for the first year of the Program
Management WR separately, the Government is providing a significant
advantage to the incumbent contractor. All other offerors will have to
incur significant transition and start-up costs and bear those costs
either through direct charges to the Government or through increased
indirect rates. The incumbent, by definition, will have little or no
transition costs.

Discussion/Recommendation. Because transition costs will make up a very
small percentage of the total contract value and provide a significant
advantage to the incumbent, we recommend that the Government change this
factor as follows: \"Each Offeror\'s cost proposal will be evaluated as
to the cost/price reasonableness and cost/price realism of their
response. The total price for the full contract period (base and both
option periods) will be considered. The proposed cost for the first year
of the Program Management WR will be evaluated for cost realism, but
will not be considered as part of the overall cost evaluation. All
offerors are required to justify all prices offered and the FAA reserves
the right to adjust an Offeror\'s price, as deemed necessary and
appropriate, based on cost reasonableness, cost realism, or any other
aspect of the FAA cost/price analysis. Risks involved with each proposal
due to unrealistic or unreasonable pricing will also be evaluated.\"
Will the Government consider such a request?

> **ANSWER**: The cost of the first year NPM WR is included in the
> overall cost of the base period, so if the Government evaluates the
> total price for the full contract period, the NPM WR cost will be
> included. For all vendors, the Government wants to know what portion
> of the Offeror\'s base period cost is represented by the first year
> NPM WR. Although paragraph M.4.3, Cost Evaluation, indicates that the
> overall cost is more important than the NPM cost, it should be noted
> that cost is the least important factor in the evaluation. The cost of
> the first year NPM WR is not anticipated to be determinative to
> contract award

27\. [Section M, M.4.1, Management/Technical Evaluation, Factor 1 -
Management Capability, Page 3]{.underline}

Issue: Paragraph M.4.1 states that the evaluation "of Management
Capability will consist of an analysis of the written management plans
and oral presentations submitted in accordance with L.18.2. Each plan
will be evaluated separately. The Program Management Plan (L.18.2.1) is
more important than the Staffing and Transition Management Plan
(L.18.2.3)...\" Yet, in L.18.2.1, the description of the Program
Management Plan clearly states that the National Program Management Work
Release is a sub-element of the Program Management Plan and serves "for
the first 12 months of the Program Management services. L.18.2.3, the
Staffing and Transition Management Plan also talks to the first year of
the contract and incorporates the time period of the transition. The
incumbent, by definition, will have significant advantage in management
of a transition. By evaluating the Management Capability based upon both
of these plans separately, but including transition as a significant
element of one plan and the major element of the other plan, the
government is giving even more weight to the transition period.

Discussion/Recommendation: Transition makes up a relatively short part
of the overall contract performance period, but inherently offers a
significant advantage to the incumbent. We recognize there are major
challenges in transition for ramp-up, staffing, processing and training.
However, outside of the transition issues, the overall contract
management plan should generally be the same during the first year as
for the remainder of the contract. Therefore, we recommend that the
Government change the final SIR by adding the following sentences in
Section M.4.1, in Factor 1, after the fourth sentence and before the
current fifth sentence. "Although the National Program Management Work
Release is considered to be a sub-element of the Program Management
Plan, it relates primarily to the transition period and therefore will
be evaluated only as part of the Staffing and Transition Management
Plan. The Staffing and Transition Management Plan shall be evaluated
based upon the factors and considerations in L.18.2.3."

> **ANSWER:** We acknowledge that the NPM WR may relate to both plans
> but evaluating it as part of the Program Management Plan will not
> necessarily give it greater weight than if it were evaluated as part
> of the Staffing and Transition Management Plan. As stated in
> L.18.2.1.1, the primary purpose of obtaining this submission is to
> initiate a rapid startup of TSSC III efforts and to be able to
> negotiate elements of the NPM WR prior to award of the contract. The
> NPM WR sub-element will be appropriately weighted in the evaluation
> plan. However, it will be evaluated as part of the Program Management
> Plan, not the Staffing and Transition Management Plan.

28\. [Section M, M.4.3, Cost Evaluation, Page 5]{.underline}

Issue: Paragraph M.4.3 states that prices will be evaluated for both
"the full contract period (base and both option periods) and the
proposed cost for the first year of the Program Management WR....\" By
evaluating the proposed cost for the first year of the Program
Management WR separately, the Government is providing a significant
advantage to the incumbent contractor. All other offerors will have to
incur significant transition and start-up costs and bear those costs
either through direct charges to the Government or through increased
indirect rates. The incumbent, by definition, will have little or no
transition costs.

Discussion/Recommendation: Because transition costs will make up a very
small percentage of the total contract value and provide a significant
advantage to the incumbent, we recommend that the Government change this
factor as follows: "Each Offeror\'s cost proposal will be evaluated as
to the cost/price reasonableness and cost/price realism of their
response. The total price for the full contract period (base and both
option periods) will be considered. The proposed cost for the first year
of the Program Management WR will be evaluated for cost realism, but
will not be considered as part of the overall cost evaluation. All
offerors are required to justify all prices offered and the FAA reserves
the right to adjust an Offeror\'s price, as deemed necessary and
appropriate, based on cost reasonableness, cost realism, or any other
aspect of the FAA cost/price analysis. Risks involved with each proposal
due to unrealistic or unreasonable pricing will also be evaluated.\"
Will the Government consider such a request?

> **ANSWER:** See response to question #26.

29\. [Section M, Evaluation of Teammate Arrangements]{.underline}

In assessing technical expertise, will it make any difference in the
evaluation of technical expertise in an area is possessed by the prime
contractor rather than a teammate? In other words, all other things
being equal, will the FAA assign a higher score where technical
expertise is possessed by the prime contractor rather than a teammate?

> **ANSWER:** No, the FAA will not consider who has the technical
> expertise in evaluating the technical aspects of proposals. However,
> where the various types of technical expertise reside could be a
> factor in the evaluation of management capability and/or risk. In
> other words, the FAA **is** concerned about a seamless operation
> between the prime and all subcontractors, in that any teaming
> arrangements should be \"invisible\" to the user.

30\. [Software and Automated System Queries]{.underline}

1\) What project scheduling software is used by the FAA for project
management?

2\) Where is the data for the present TSSC II tracking system? How is
that data accessed by the users?

3\) What version of Oracle is used by the FAA for project tracking and
TSSC II tracking?

**ANSWER:**

> 1\) The FAA Resource Tracking Program (RTP) presently uses Prestige as
> its project scheduling tool. Late this summer, FAA plans to issue an
> SIR to update (replace) Prestige with a product TBD.
>
> 2\) The data for the present T2 (Unitrack) system is maintained on a
> server as part of T2 Program Management. There is no T3TS development
> or testing being performed on the T2 servers. Each regional/IC\'s
> database is maintained in the national Unitrack file server. Access to
> it is via the FAA intranet only; there is no internet access to
> Unitrack.
>
> 3\) The T3TS and RTP presently use Oracle version 8i for the database
> application. FAA maintains an Agency-wide license for Oracle;
> therefore, it is anticipated that FAA will remain current with Oracle
> product releases.

31\. [Section B, B.4.0.c (1), Determination of Award Fee Amounts, Page
4]{.underline}

Issue: The Draft RFO states that the amount of the award fee shall be
calculated on \"the number of hours invoiced during the period under
evaluation divided by the estimated total number of hours in the
base/option period of the contract. The amount of Davis-Bacon Act
subcontracting will not be considered in award fee computations, but may
be considered in the evaluation of the Contractor\'s performance.\"
There were a number of comments regarding this issue during the Bidders'
Conference in Atlanta. The FAA has now asked potential offerors to
provide their rationale for including fee on those efforts.

Discussion and Recommendation: The Prime Contractor is ultimately
responsible for the successful completion of all work release orders
placed under this contract. The Prime Contractor assumes all risk of
performance, including work performed under the Davis-Bacon Act. In
fact, the FAA's Acquisition Management System includes all costs in the
base for determining profit using the Weighted Guidelines method (FAA
Pricing Handbook Section 12.3, Use of a Structured Approach for Profit
Analysis). Because work performed under the DBA can reduce the earned
award fee by the Prime Contractor, the prime should also be entitled to
earn fee on that effort as well, and not just on its own labor dollars.
Profit is meant to be a motivator for performance, as evidenced by the
decision to use award fees for the non-DBA work.

When a potential offeror makes a bid/no bid decision, in addition to
whether he feels he is the most qualified to perform the work, he must
also make a financial decision with respect to the expected return on
sales. This return on sales must be adequate to satisfy the shareholders
and must be based on the investment of B&P dollars required to win the
job. By excluding both other direct charges (ODCs) costs and DBA
subcontracting from the award fee, Offerors will need to apply a much
higher fee percentage against the labor costs to compensate for the high
percentage of non-fee bearing elements. As the amount of Davis-Bacon Act
(DBA) work is indefinite, with a minimum/maximum range, there is no
realistic way for the Offeror to estimate this number and he may end up
over or under-estimating the amount of cost risk. Further, the ratio of
DBA to non-DBA work on the TSSC program has varied significantly during
the life of the first two TSSC contracts. If that ratio moves to more
DBA work during the life of the new contract, the prime contractor's
award fee, calculated as a percentage of the overall contract revenue,
would drop significantly. This poses an additional risk factor to
companies as they evaluate their bid decision.

The TSSC II contract, which does allow fee on DBA subcontracting, is a
fixed fee contract. We recognize that the FAA is using award fees to
provide incentives to contractors as part of its performance-based
contracting initiative. Using that same logic, it would seem that
permitting fee on DBA subcontracting work would provide additional
incentives to the TSSC III contractor.

A compromise approach the FAA could consider would be to establish a
fixed fee/award fee contract solely on Davis-Bacon work. For example,
FAA could establish a fixed fee of 3 percent (or some reasonable figure)
on DBA subcontracting while at the same time including performance on
Davis-Bacon projects in the overall award fee determination. This
approach would reduce the risk to the Prime while still providing
incentives to perform in a top-notch manner on such projects in order to
achieve high award fee marks.

At the Pre-Proposal conference last week, the FAA stated that it was not
their intention to have award fee applied to construction
subcontracting. In addition to this, it also appears that the FAA is
attempting to keep the award fee pool as low as possible by: (1) having
the prime contractor and team subcontractors share in one award fee
pool; (2) including no base fee; (3) not allowing fee pool carry over;
and (4) incentivizing a reduction in the fee pool through the forces of
competition. Lastly, the FAA has stated that it will not include a
Performance Evaluation Plan for award fee until after the contract is
negotiated. Upon review of the draft RFP provisions, we recommend the
FAA reconsider its position based on the following.

-   FAA will lose the performance incentives it is seeking through an
    award fee evaluation, if it awards to a contractor with a diminished
    fee pool. AMS pricing tool 12.4 states that fee is to be used as a
    motivator for contract performance. It also states that low fees
    will result in less competition. Similarly, other federal
    regulations state that it is in the Government\'s best interest to
    offer contractors fee opportunities to stimulate efficient contract
    performance. Deflating the award fee pools diminishes the importance
    of FAA award fee evaluations. This could result in the FAA awarding
    to a contractor who would run up costs to serve other business
    objectives, since it would not be incentivized to control costs.
    That is, on a cost type contract, the FAA will likely spend more
    money, and receive a poorer product with a low fee pool, than it
    would from a contractor incentivized by a larger fee pool.
    Furthermore, a pre-award audit alone will not be sufficient to
    mitigate the risk for this type of cost growth on a major dollar
    value 10-year program such as the T3.

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-   It can easily be argued that construction subcontracting entails
    more contractual risks than the associated level of effort work. The
    AMS policy states that contractor risk should be a fee
    consideration. Liabilities, such as accidents, subcontract claims
    and labor issues are facts of life in construction subcontracts.
    While it is recognized that the FAA does contemplate some award fee
    evaluation for construction, it would be more appropriate and
    practical to have fee directly assigned to this work. A contractor
    will be less motivated to manage low cost, quality and on-schedule
    contractors, without a direct correlation of performance to a
    specific fee pool. Furthermore, and in fairness to offerors, it
    should be recognized that the successful prime contractor will be
    carrying costs for both construction and labor-related efforts and
    fee should be recognized for both.

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-   The FAA AMS states that a contractor is entitled to a 1 to 5 percent
    fee for subcontracting. It also stipulates a 5 to 15 percent fee for
    services labor. Please note that these percentages are based on no
    contractor risk, and AMS recognizes additional risk percentage
    application for award fee contracts.

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-   By applying fee only to labor, differences in the mix of labor to
    construction are not taken into account. For instance, an offeror
    could propose a 10 percent award fee pool on labor, assuming \$50M
    in labor related costs and \$50M in construction and based on the
    RFP provided estimates, which would equate to a 5 percent fee pool
    for the prime (if there were no team subcontractors further
    depleting the pool). If construction were to actually turn out to be
    \$75M and labor related costs turned out to be \$25M (with
    proportionately less hours for fee application), the prime
    contractor\'s actual fee percentage would be considerably reduced
    (and vice versa if the proportions were opposite). This could
    trigger a request for equitable adjustment by the contractor or the
    FAA. If the FAA precludes such a request for equitable adjustment by
    modifying the RFP, this might be seen as being unfair to the
    offerors. Furthermore, even if offerors were to cover construction
    fee in the proposed labor related fee, not having a specific fee
    pool is problematic and not in the best interests of FAA.

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-   We agree with some of the comments made at the Pre-Proposal
    Conference regarding the difficulty in not having a pre-determined
    Performance Evaluation Plan. It results in confusion when entering
    into teaming arrangements and in determining what a reasonable
    expectation of fee will be. Once again, profit is a motivator and is
    a major reason to compete. We believe contractors are entitled to
    reasonable guidelines prior to submitting a proposal for a contract
    of this magnitude.

Based on the above, we would like to recommend that the FAA establish a
10 percent award fee pool on labor related costs (including fee shared
with team subcontractors) and a 5 percent award fee pool on construction
subcontracting. We have noted that it is common practice for the
Government to establish 10 percent award pools on service-type contracts
(including material and subcontracts). We suggest a lesser 5 percent fee
on construction in deference to the FAA\'s position. Both fee
percentages are in accordance with FAA profit policy guidelines. We also
believe both of these percentages are reasonable if FAA does not include
a base fee. When we have asked our customers why they have established
pre-determined pools, the answer has been \"to motivate performance\"
and that it would be counterproductive to have contractors bid low fees.
Secondly, we recommend that the FAA establish a Performance Evaluation
Plan concurrent with the formal RFP release, or allow offerors to
propose their own plan. This will make potential fee more predictable as
teaming arrangements are negotiated and for corporate bidding decisions.
With a contract of this magnitude, it is important that companies
understand the business and profit return implications of the program,
so FAA can create the competitive base it seeks.

> ANSWER: The FAA has reconsidered and will issue the final RFO/SIR to
> provide for a fixed fee of 2 percent of the dollar amount of
> competitively-awarded, firm fixed price Davis-Bacon Act subcontracts,
> to be invoiced and paid monthly. This will be separate from the award
> fee pool, although the performance evaluation plan (PEP) will probably
> incorporate one or more factors related to such subcontracting. The
> final RFO/SIR will not incorporate any information related to the
> contents of the PEP, which will be developed after contract award (see
> answer to question 32)

32\. [Award Fee Concerns]{.underline}

The contractor has several concerns regarding the lack of a proposed
Performance Evaluation Plan and the limited base for award fee
opportunity. This combination presents an extremely difficult business
case to present to justify bidding the TSSC III program. The following
questions are provided for the FAA\'s consideration on these topics:

-   Request that a proposed or draft PEP be provided for use during the
    proposal preparation process. This is especially important when
    preparing the Subcontractor Management Plan that requires a method
    for allocating award fee to the subcontractors. Preparation of this
    plan without the guidance of the PEP presents a
    challenge/unidentifiable risk for both the contractor and its
    subcontractor.

-   With regard to the basis for award fee, limiting application of
    award fee to the actual hours worked yields a possible profit
    calculation that is less than adequate to justify pursuing this
    opportunity. Will the FAA consider authorizing profit for the prime
    contractor to reward the management of its main subcontractors, the
    Davis-Bacon subcontractors, the non-Davis Bacon subcontractors, the
    travel allocation, or the other direct costs activity defined in
    L.20.3.5?

-   Schedule B does not reflect an input for the Other Direct Costs
    identified in Section L. Is this an oversight. In addition, there is
    no evaluation associated with the costs proposed for L.20.3.5-Other
    Direct Costs. Are these correct assessments?

-   The RFO/SIR refers to the Model Contract document in several
    locations. When is this document scheduled for release?

-   The contractor is concerned that there is no base fee available in
    the TSSC3 SIR. This contractor recommends you add a base fee. Will
    the FAA consider a base fee in the award fee structure?

> **ANSWER:**
>
> Regarding the a draft PEP, the FAA does not believe it is feasible to
> prepare a performance evaluation plan for inclusion in the final
> RFO/SIR and has not done so on any of its recent acquisitions which
> resulted in a cost-plus-award-fee contract with no adverse
> consequences.
>
> Regarding award fee, FAA has reconsidered and will issue the final
> RFO/SIR to provide for a fixed fee of 2 percent of the dollar amount
> of competitively-awarded, fixed price Davis-Bacon Act subcontracts, to
> be invoiced and paid monthly.
>
> Regarding the \"Schedule B\" comment, the term \"Total Estimated Cost
> for Direct Labor\" is incorrect. It will be revised to read \"Total
> Estimated Cost\" in the final RFO/SIR.
>
> Regarding the \"Model Contract\" comment, the model contract refers to
> sections A-J of the RFO.
>
> Regarding base fee, the FAA has not changed its position that there
> will be no base fee under the contract.