By Geoff Fein
The Navy’s request for proposals (RFP) for the FY ’10 Littoral Combat Ship (LCS) competition stresses cost and affordability but places less weight on total ownership cost, according to industry sources.
According to the RFP, the Navy seeks proposals that “demonstrate the greatest technical merit at a reasonable cost. Awards will be made to the technically acceptable offeror whose proposal is determined to represent the ‘best value’ to the government for the supplies and services to be provided under this solicitation.”
The 397-page document (http://www.neco.navy.mil/biz_ops/840-v5static.aspx?hkey=90961076) notes that for the technical management category, the number one factor in evaluating which variant of LCS the Navy will ultimately select is affordability and production approach.
Additionally, in a move to protect against unrealistically low bids, the Navy warned both General Dynamics [GD] and Lockheed Martin [LMT] that if the government determines a price proposal is unrealistically low, that company’s bid may be rejected, regardless of its technical merit and/or evaluated price.
The Navy will conduct a detailed review of each offeror’s pricing proposal to assess and evaluate the realism of the bid’s target price, the RFP said.
An estimated total evaluated price to the government will be determined by adding together the estimated final price, projected costs, the cost of government furnished equipment and costs associated with the bidders’ proposed use of government facilities, according to the RFP.
According to sources, the Navy has said that cost will carry a weight of 50 percent in the evaluation scoring. Life-cycle cost reduction initiative only counts for three percent of the evaluation.
The industry source noted that the low ranking given the life-cycle cost reduction initiative seems counter to the Navy’s focus on total ownership cost.
One significant issue in the RFP, according to industry sources, is the requirement that each LCS Flight 0+ ship to be delivered must achieve performance that is equal to or greater than the demonstrated capability.
“With respect to all such changes to the Technical Baseline, the Contractor understands and agrees that each LCS Flight 0+ ship to be delivered hereunder must achieve performance that is equal to or greater than the demonstrated capability of the FY ’09 Flight 0+ Ship as validated and approved by the Government in acceptance testing,” according to the RFP.
That means each industry team will have to provide the same ship as they did in Flight 0, an industry source noted. That means the teams cannot make any cuts in systems or technologies to make cost projections.
“In the event any ship constructed under this contract does not meet the described performance capabilities as a result of the incorporation of any change the contractor agrees to correct such deficiencies at no cost to the government,” the RFP added.
The RFP also requires the contractor to describe its approach to reducing energy usage.
The competing teams must also develop and implement a Life Cycle Cost Reduction Plan that documents the plan and initiatives identified to ensure that cost of ownership is minimized from development through disposal, according to the RFP.
The contractor will also describe its approach to the development of a total ship training program during ship systems integration and construction that achieves life cycle cost reductions, the RFP added. “The contractor shall identify potential reductions in the Navy training pipeline and the percentage of associated cost savings. The contractor shall identify and describe the development and establishment of special training facilities and discuss plans for in-service use and operations and support associated cost savings.”
The shipbuilder must also provide an approach to integrating reliability and maintainability considerations early in the ship systems integration, construction, testing, logistics and life cycle process, according to the RFP. “The contractor shall determine the percentage of life-cycle cost benefits of alternative designs and equipment selections.”
Additionally, the contractor will provide information on the development of a life-cycle support strategy for LCS that addresses ship operation cycle, maintenance and modernization planning, port engineering, logistics support and configuration management, the RFP said.
The winning bidder will also maintain and implement a Technology Refresh and Open Systems Architecture Plan that will contain a plan to upgrade the capabilities of the LCS over its lifecycle, according to the RFP.
“The contractor shall demonstrate maximum use of open systems architecture throughout the ship design to facilitate affordability, mission system change-out, system maintenance, technology refresh, interoperability, interoperability, integration, and technology insertion as defined at the Open Systems Joint Task Force,” the RFP said.
As part of the contract, the contractor is required to define, document, and follow an open systems approach for using modular design, standards-based interfaces, and widely- supported consensus-based standards, the RFP added.
“The contractor shall develop, maintain, and use an open system management plan to support this approach and shall be required to demonstrate compliance with that plan during all design reviews,” according to the RFP. “As part of an open system management plan, the contractor shall be required to identify to the government all Commercial-Off-the- Shelf/Non-Development Item (COTS/NDI) components, their functionality and proposed use in the system, and provide copies of license agreements related to the use of these components for government approval prior to use.”
The contractor will also update and provide information assurance for all data created, managed and stored for the configuration baseline, as pertains to the construction of the Basic Seaframe, including: unclassified information; sensitive information including data not releasable to foreign nationals; and business sensitive information.
LCS will also be built in accordance with the May 2004 American Bureau of Shipping (ABS) Guide for Building and Classing Naval Vessels (Naval Vessel Rules or NVR) and other referenced ABS Rules and Guides as necessary to comply with the designated Classification notations, according to the RFP.
“In addition, there are a number of areas that must be addressed by criteria not in ABS Rules. These include requirements of a statutory nature and criteria of such a militarily unique nature that they do not appear in ABS Rules,” the RFP said.
Last year, the Navy began a new LCS acquisition strategy that will award a single contract for up to 10 ships to one of the two competitors.
The LCS RFP was released to industry on Wednesday.