Recently, we’ve shared several contract award announcements for Special Operational Equipment Tailored Logistics Support issued by Defense Logistics Agency. There has been some consternation amongst our readers regarding these awards and what they mean.
First off, the award announcements are for the 6 winners of the Special Operational Equipment Tailored Logistics Support program run by Defense Logistics Agency. Some of you guys may remember the old Prime Vendor program and this is just the latest version.
Last go around, 4 companies held the contract; ADS Inc, Darley Defense, Source One, and TSSi. This time, they’ve been joined by Quantico Tactical and Federal Resources Supply for a total of 6.
Different Prime Vendor programs exist for a variety of commodity areas including the TLS program we are most familiar with so it isn’t just for buying eye pro and sleeping bags. For example, similar arrangements exist for Class I (rations) and Class VIII (medical). They were created in order to streamline the delivery of goods by moving the onus of kitting, packaging and warehousing unto the vendor and off of the Government.
In the case of Special Operational Equipment, it was initially let many years ago to support the dive community so that it could introduce a wider variety of low demand items and keep up to date with new technology rather than having DLA stock a smaller range of dive gear that can become quickly outdated. Some of the units that used dive equipment such as Naval Special Warfare asked if the contract vehicle could be used to purchase other gear they used such as packs and boots and the program adapted itself to support the procurement of a wide range of gear.
Originally, Prime Vendor had 4 vendors and worked much differently than it does now. At the time, you contacted the vendor with a list of exactly what you wanted, even by brand name. They gave a quote and once you approved it, you transferred the funds and they bought what you wanted, shipped it to you, and you used it.
Now, one aspect of the program is still the same. Now in its fourth generation, the customer can still order specific brand name products to meet their mission requirements within the scope of the TLS contract. But how it’s done has changed. Each of those 6 companies was awarded a seat at the table. That seat is an opportunity to provide the equipment a DoD customer needs. Customers don’t go directly to the vendor anymore. Instead, they now go to DLA Troop Support and DLA uses the same procedures that are used with many service oriented IDIQs. DLA issues a task order with the list of equipment the customer wishes to purchase. Each of the 6 vendors has a short period of time to offer a bid and the Government selects the best value and awards that task order to the winning bidder. Best value is pretty important here. Oftentimes, that means best price but in the case where a customer isn’t beholden to a particular brand of product. For example, they want a day pack but are more interested in the capability than a brand. They can ask for “or equivalent” substitutions that allow the vendors to offer options. DLA will work with the customer to determine the best value based on requirements and award based on that. That’s why best value may not necessarily be best price. An item may cost more but more, yet turn out to be a better solution than other offerings.
Additionally, DLA monitors the program. DLA Troop Support audits the vendors on a regular basis competitive pricing, overall customer satisfaction and promptness of delivery. TLS, as a component of DLA, also allows customers to use Military Standard Requisitioning & Issue Procedures (MILSTRIP) requisitions, government credit cards and Military Interdepartmental Purchase Requests (MIPR).
We’ve been posting the TLS award announcements and it’s confused some folks, including vendors. The program still works the same, but now you’ll have a few more companies in the mix. These contracts are for a total of 5 years with a base period of 2 years with 3 options through March 6, 2019. This Indefinite Delivery, Indefinite Quantity contract holds a maximum total award amount of $10 billion.
To wrap this up, let’s cover the term Indefinite Delivery, Indefinite Quantity and this relatively high contract ceiling. Sure, $10 Billion sounds like a lot of money and it is, and all 6 of the awardees are telling everyone that they got a contract worth $10 Billion. Once again, what they got was a chance to earn up to that much money. Generally with IDIQs, the Government puts a fairly high ceiling on the contract so that they have plenty of room in case something comes up. It’s good business, but it doesn’t mean they will spend every Dollar of it. Usually, they don’t. In fact, the draft solicitation for TLS states that the contract will probably be worth about $4 Billion over 5 years.
I’ll follow this up with a note. If your supply section is asking for an NSN for a widget you need, they are living in the Cold War. That costly national stock system that issued NSNs to every imaginable item under the sun is a product of that bygone era. TLS is meant to lower costs and increase options. Consider using TLS to purchase low demand items. The program is managed by DLA and purchasing through TLS allows customers to use Military Standard Requisitioning & Issue Procedures (MILSTRIP) requisitions, government credit cards and Military Interdepartmental Purchase Requests (MIPR). It’s perfectly legal and encouraged. Just remember, you can’t purchase everything with TLS. The are limits, such as restrictions on non-Berry compliant gear. Be sure to make sure you are using the right procurement option for the requirement.
I hope this clears up some of the confusion and gives you a better idea of what IDIQ, contract ceilings and TLS are all about.