a. References. The following are existing statutory, regulatory, policy, and other provisions for surge and sustainment coverage:
(1) DOD Strategic Planning Guidance (SPG)
(2) Defense Production Act of 1950
(3) Defense Priorities and Allocations System, 15
CFR 700
(4) DOD 4400.1-M, Department of Defense Priorities and
Allocations Manual
(5) DOD Instructions 3110.06, War Reserve Materiel
Policy
(6) Various provisions of Title 10, United States Code
(7) DFARS 217.208-70(b);
(8) DFARS PGI 217.202(2);
(9) Executive Order 12919, National Defense Industrial
Readiness Preparedness
(10) FAR Subpart 6.302.3 Other Than Full and Open
Competition
b. It is the Agency’s goal to have all Surge and Sustainment Planning Requirements (S&SPR) and the Services’ go-to-war requirements on a long-term contract to ensure coverage for wartime critical materials, in accordance with the regulations, policy, and provisions above. Acquisition planning efforts shall ensure DLA leverages its long-term contract (LTC) acquisitions to obtain S&S coverage that addresses surge events I - VI specified above.
c. Contracting Officers (CO) shall obtain coverage for items identified as go-to-war items during the acquisition process of all long-term contracts, except indefinite delivery purchase orders (IDPO); or modifications to add items to the contract; or when exercising the term option. Refer to the PGI 17.9301 for procedures when processing surge requirements.
(1) PRESOLICITATION PHASE
(A) CO conducts market research (e.g., historical surge plan and performance, collaboration with industrial specialist) to determine the appropriate strategy to obtain S&S coverage.
(i) If market research clearly shows that surge quantities and delivery schedule can be met through the LTC contract maximum and required delivery, and can satisfy both peacetime and wartime requirements, CO shall consult the IS to determine if surge-specific provisions can be excluded, in part or as a whole, from the solicitation.
(ii) CO shall only exclude surge-specific provisions after receiving approval from the Industrial Base (IB) Chief through the waiver process in PGI 17.9301, and will clearly document the market research result, surge coverage decision, and approval in the acquisition plan.
(B) CO verifies and validates LTC population for surge requirements using the appropriate IB tool or by consulting the Industrial Specialist (IS) to determine surge requirements. Methods for incorporating surge requirements into the LTC:
(i) Include surge requirements using MWR or D1-D6 in the solicitation/contract under a separate CLIN; or
(ii) Include surge quantity option (percent or exact number) with a sustainable delivery for items that are market ready, commercial, or non-NSN vendor part numbered (e.g., cataloged commercial items under prime vendor arrangement). The exact quantity or percent for the surge quantity option shall be calculated based on historical consumption data or other appropriate demand data.
(C) CO shall collaborate with the IS when developing the evaluation criteria for S&S requirements.
(D) The CO shall obtain IS approval of the S&S coverage strategy and clearly document in the acquisition plan.
(2) SOLICITATION PHASE
(A) When surge requirements apply, CO shall include MWR, D1-D6, or surge quantity option CLINS, insert appropriate clauses/provisions and evaluation criteria in the solicitation.
(B) CO shall notify the IS immediately upon issuing the solicitation and when it becomes available in the electronic contract file (ECF) to update the corresponding IB tool.
(C) CO shall collaborate with the IS prior to making changes to surge requirements and coverage in the solicitation to assess the impact of the proposed change to the Services go-to-war items.
(D) CO shall notify the IS when an amendment is issued affecting surge coverage, close dates, and/or LTC population.
(3) EVALUATION PHASE
(A) CO shall submit the capability assessment plan (CAP), and Warstopper or Government investment request (if applicable), to the IS for review and recommendation. Refer to PGI 17.9301 Section 4 for CAP evaluation procedures.
(B) See 17.9305 for surge price evaluation. CO shall document surge price objectives in the pre-negotiation briefing memorandum.
(C) CO shall ensure that the CAP includes an exit strategy and that the proposed exit strategy is in the government’s best interest. Refer to PGI 17.9301 Section 5(d) and (e) for exit strategy alternatives.
(4) NEGOTIATIONS/DISCUSSIONS PHASE
(A) CO shall conduct negotiations/discussions to make every attempt to obtain surge coverage and collaborate with the IS or IB Chief for assistance for alternate surge strategy, if necessary. Refer to PGI 17.9301 Section 5(n) for alternate strategies to support go-to-war items.
(B) CO shall consult the IS for Warstopper or Government investment determination and recommendation when an ICI is identified by the supplier and/or if supplier is requesting Government investment.
(C) CO shall ensure that approved Warstopper or Government investment is offered to all suppliers competing in the acquisition.
(D) CO shall negotiate an exit strategy that is in the Government’s best interest. Refer to PGI 17.9301 Section 5(d) and (e) for exit strategy considerations.
(E) CO shall document negotiation/discussion results to include surge prices, delivery, ramp-up time if applicable, and exit strategy in the price negotiation memorandum.
(F) When surge coverage is unobtainable and/or negotiations/discussions are unsuccessful, or when the CO, in collaboration with the IS, determines that it is in the Government’s best interest to exclude surge in part or as a whole, the CO shall submit a waiver request to the IB Chief for approval prior to excluding the surge item(s) and/or requirements from the solicitation. Refer to PGI 17.9301 Section 4(m) for surge waiver process.
(i) CO shall only exclude surge-specific provisions, in part or as a whole, from the solicitation/contract upon receiving approval from IB Chief and shall document the waiver approval in the contract file.
(ii) Upon receiving the IB Chief’s approval to remove surge-specific provisions in part or as whole, CO shall factor surge quantities in the contract maximum calculation and obtain accelerated delivery schedule that will satisfy both peacetime and wartime requirements.
(iii) CO shall notify the IS and SMSG/IST Lead via email of the surge provision exclusion to determine the alternate support strategy for the Services’ go-to-war items or that an unsupported item issue (UII) exists. Refer to PGI 17.9301 Section IV (n) for alternative strategies.
(v) CO shall document unsuccessful attempts to obtain surge coverage in the contract file.
(5) AWARD PHASE
(A) CO shall incorporate the approved CAP, exit strategy, and CLIN 9965 for the approved Government investment amount (if applicable).
(B) CO shall notify the IS when the contract is available in the ECF to update the appropriate IB tool.
(C) CO shall establish the appropriate surge CLINS (i.e., MWR, D1-D6, surge quantity option, 9900) in the SAP Outline Agreement (OA) to ensure proper sourcing of surge line items or orders in the Enterprise Business System (EBS). Refer to the S&S Procurement Job Aid in EBS Online Help for instructions when loading surge information.
(6) POST AWARD PHASE
(A) CO shall coordinate with the IS before making any changes to the surge coverage after contract award and shall document the contract file for any changes made to the surge coverage. Refer to PGI 17.9301 Section 7 & 9 when there are changes in surge coverage.
(B) CO shall assess and validate the existing surge coverage when conducting market research prior to exercising the term option and consult the IS for changes in industry capability (e.g., natural disaster, bankruptcy, debarment or excluded party list). Refer to PGI 17.9301 Section 7(d) when exercising the term option with surge.
(C) CO shall conduct surge check when pricing additions to LTC items in accordance with the Add/Delete Clause; obtain a CAP and surge pricing for MWR or D1-D6. Refer to PGI 17.9301 Section 7(b) when pricing additions to LTC items in accordance with the Add/Delete Clause.
(7) SURGE EXECUTION
(A) CO shall invoke and execute surge in accordance with 17.9306. Refer to PGI 17.9301 Section 8 when invoking and executing surge.
(B) CO shall invoke and execute surge for peacetime support issue on a case-by-case basis and only when authorized by HQ DLA J7.
(8) SUPPLIER’S CHANGE IN S&S CAPABILITY
(A) CO shall consult the IS for assessment and recommended courses of action when supplier(s) requests change to surge capability or can no longer meet surge coverage obligation in the contract. Refer to Section 9 for procedures when there are changes to the supplier’s capability.
(B) If surge coverage includes Warstopper or Government investments, CO shall make adjustments to the investment as necessary when changes are made to the CAP. If supplier(s) can no longer support surge coverage, CO shall exercise the exit strategy and recoup Warstopper or Government investment (i.e., funds, raw material, finished goods) to the maximum extent possible.
(C) CO shall document surge coverage change and results of exit strategy in the contract file.
(9) CONTRACT EXPIRATION/TERMINATION
(A) CO shall exercise the exit strategy specified in the contract prior to termination or expiration to recoup Warstopper or Government investment or to ramp-down the supplier’s surge inventory, if applicable. Refer to PGI 17.9301 Section 10 for contract termination or expiration involving surge.
(B) CO shall consult the IS for assistance if necessary prior to exercising the exit strategy for contract termination/expiration and document the contract file of the exit strategy result.
