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SUBCONTRACTOR PROPOSAL COMPLIANCE CHECKLIST (SPCC)PREPARATION GUIDELINES

FAR 15.403-4 sets forth those circumstances in which subcontractors are required to submit certified cost or pricing data. The responsibility for providing well-prepared and fully supportable cost proposals for sole source acquisitions that exceed the TINA threshold lies solely with the subcontractor. The basis and rationale for all proposed costs shall be provided as part of the proposal so that the Buyer may rely on the information as sufficiently current to permit negotiation of a fair and reasonable price.

The attached SPCC must be completed and submitted as part of your proposal if certified cost or pricing data are required to be submitted; and may be requested by the RFP instructions under other circumstances. Items within the SPCC that do not contain specific FAR references are needed for Buyer review and negotiation, as applicable. Contact the LM Aero Buyer as soon as possible prior to proposal submittal if there is uncertainty as to whether a checklist item is a requirement, how to correctly respond to, or adequately comply with, any of the specific items on this SPCC. Non-compliances with the enclosed checklist will require immediate correction in order to proceed with proposal evaluation and negotiation, however, completion of the checklist does not relieve you from your responsibility to comply with regulations and any special requirements of the solicitation.

In addition, it is highly recommended that you flow this (or a similar) checklist to your sub-tier suppliers/affiliates where certified cost and pricing data is required and that you use the elements of the SPCC (or elements of a similar checklist) to evaluate the adequacy of a sub-tier supplier’s/affiliate’s proposal.

You are advised that the contracting officer/buyer may determine costs associated with revising/reworking inadequate cost proposals as unreasonable, and must consider the nature and extent of any proposal inadequacies when assessing/negotiating profit.

SPECIAL NOTE TO SUBCONTRACTOR: To indicate that you have complied with an Item, unless otherwise indicated, you must provide the specific location in the proposal where compliancy can be verified in the “PROPOSAL LOCATION” column. For example “Cost Volume; Section B; pages 19-21”. In order to preclude delays in negotiations and contract award, you must discuss the basis for all “negative” responses (i.e., no entry provided in the “PROPOSAL LOCATION” column) in the “PROVIDE EXPLANATION” column.

NOTE TO BUYER: Once returned in the Subcontractor’s proposal, the Buyer is to complete the left side of the SPCC, to determine if the responses are compliant/responsive to identify any responses that need to be revised/corrected. In completing the LM Aero section, for those items in the FAR Compliance Section, they should be assessed as either “C” for Compliant or “NC” for Non-Compliant. In the RFP Response Section the items should be assessed as either “R” for Responsive or “NR” for Non-Responsive.

Latest Revision Date: 09/05/2013

Subcontractor Proposal Compliance Checklist

Subcontractor: Program:Proposal No.: Effort:Date: Subcontractor Reviewer:

Note 1: There is a clear distinction between submitting cost or pricing data and merely making available books, records, and other documentation without identification. The requirement for submission of cost or pricing data is met when all accurate cost or pricing data reasonably available to the offeror have been submitted, either actually or by specific identification to Lockheed Martin. As later information comes into your possession, it should be submitted promptly to Lockheed Martin in a manner that clearly shows how the information relates to the offeror’s price proposal. The requirement for submission of cost or pricing data continues up to the time of agreement on price, or an earlier date agreed upon between the parties if applicable.

Note 2: By submitting your proposal, you grant the contracting officer (CO) or an authorized representative (Lockheed Martin) the right to examine records that formed the basis for the pricing proposal. That examination can take place at any time before award. It may include those books, records, documents, and other types of factual information (regardless of form or whether the information is specifically referenced in the proposal as the basis for pricing) that will permit an adequate evaluation of the proposed price.

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ITEM # ITEM DESCRIPTION REFERENCE

PROPOSAL LOCATION (must be specific)

PROVIDE EXPLANATION IF Not Provided (use continuation page if

necessary)

I. F A R C O M P L I A N C E S E C T I O N

GENERAL INSTRUCTIONS


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necessary)

1 Is there a properly completed first page of the proposal in accordance with all requirements of Table 15-2, Section I, Paragraph A and/or as specified by the Buyer in the solicitation?

(A positive response indicates compliance with all 11 items specified in the FAR reference)

FAR 15.408, Table 15-2, Section I,

Paragraph A. (1) – (11)

2 Is an Index, appropriately referenced, of all certified cost or pricing data and information accompanying or identified in the proposal, provided and appropriately referenced?


Paragraph B.

Note You must annotate any future additions and/or revisions, up to the date of agreement on price, or an earlier date agreed upon by the parties, on a supplemental index. As required by the RFP, this index and all supplements must be included as an attachment to your Certificate of Current Cost or Pricing Data to be provided at the conclusion of negotiations.


Paragraph B.

RFP

3 As part of the specific information required, have you submitted, with your proposal, certified cost or pricing data as defined in FAR 2.101, and have you clearly identified on your cover sheet that certified cost or pricing data are included as part of the proposal?


Paragraph C.(1)


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necessary)

Note In addition, you must submit with your proposal any information reasonably required to explain your estimating process.


Paragraph C.(2)

4 Does the proposal disclose the judgmental factors applied and the mathematical or other methods used in the estimate, including those used in projecting from known data?


Paragraph C.(2)(i)

5 Does the proposal disclose the nature and amount of any contingencies included in the proposed price?


Paragraph C.(2)(ii)

6 Are there any exceptions to submission of certified cost or pricing data pursuant to FAR 15.403-1(b)? If so, is supporting documentation included in the proposal?

FAR 15.403-1(b)

Note If the total price of the proposal meets or exceeds the threshold for certified cost or pricing data, this SPCC is required even if a portion of that total value qualifies as an exception. Address exception(s) with the Buyer prior to submittal of your proposal.


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necessary)

7 Is there a summary of total cost by element of cost and are the elements of cost cross-referenced to the supporting cost or pricing data? (Breakdowns for each cost element must be consistent with your cost accounting system including breakdown by year and identified if by CY or GFY.)


Paragraph D.

8 If more than one proposal line item, Contract Line Item Number (CLIN) or sub Contract Line Item Number (Sub-CLIN) is proposed as required by the RFP, are there summary total amounts by year (specify if CY or GFY) covering all line items for each element of cost and is it cross-referenced to the supporting cost or pricing data?


Paragraphs D and E

9 Are recurring and non-recurring costs segregated at both the CLIN/Sub-CLIN and total cost levels?


Paragraphs E.

10 Does the proposal identify actual hours, and cost incurred as well as hours/cost to complete and the time phasing associated with these hours/costs? This information/data is to be provided consistent with cost element summaries.

FAR 15.408, Table 15-2, Section I.,

Paragraph F., and Section III

MATERIALS and SERVICES


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necessary)

Note The BOM should include estimated raw materials, parts, components, assemblies, subcontracts and services to be produced or performed by others, not included elsewhere in your proposal.

11 Is a consolidated priced summary of individual material quantities and services, referred to as a Consolidated Bill of Material (CBOM), included in your proposal and have you provided as a minimum the basis of the pricing (vendor quotes, invoice prices, etc.), item, source, quantity, and price?

FAR 15.408, Table 15-2, Section II,

Paragraph A.

Note Consolidated Bill of Material (CBOM). A CBOM is a consolidated priced summary of individual material quantities and subcontract items included in the various tasks, orders, or contract line items being proposed and the basis for pricing (negotiated/invoice prices, vendor quotes, average unit pricing, prior purchase history, long term agreements, etc.) The offeror’s CBOM shall include estimated raw materials, parts, components, assemblies, subcontracts and services to be produced or performed by others.

Note Depending on your system, inter-organizational transfers may be included as part of a total CBOM or be a separate CBOM.


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necessary)

Note The CBOMs must be in an electronic format that is able to be sorted.

Note Additional CBOMs may be required or desired for separate CLIN end item deliverables (e.g., Alternate Mission Equipment, Special Test Equipment, Spares, etc.).

SUBCONTRACTS (Purchased materials or services)

12 If the subcontract or purchase order exceeds the threshold for certified cost or pricing data and none of the exceptions to TINA apply, does the proposal include the subcontractor’s Price/Cost Analysis establishing the reasonableness of each subcontract price?

FAR 15.403-4, FAR 15.408, Table 15-2, Section II.,

Paragraph A.

13 If your subcontractor Price/Cost Analyses are not provided with the proposal, does your proposal include a matrix identifying dates for receipt of your subcontractor’s proposal, completion of fact finding for purposes of Price/Cost Analysis, and submission of the Price/Cost Analyses?

FAR 15.403-4, FAR 15.408, Table 15-2, Section II.,

Paragraph A.

Note As later information/data comes into your possession, it should be submitted promptly to the Buyer in a manner that clearly shows


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necessary)

how the information/data relates to the offeror’s price proposal. The requirement for submission of certified cost or pricing data continues up to the time of agreement on price, or an earlier date agreed upon between the parties if applicable.

Note Analyses not provided with the proposal may result in a delay to audit, fact-finding and negotiations. Analyses not included with the proposal shall be provided as soon as possible after the proposal submission date and shall be accomplished in sufficient time to support the definitization/contract award schedule.

14 Does the proposal identify those actions where assist audits have been requested, or may need to be requested by the subcontractor or sub-tier subcontractor(s) and identify the request date and scheduled receipt date?

DFARS 215.404-3

Note The need for assist audits resulting from proprietary data rights assertions at any tier must be identified to the Buyer as soon as possible in the proposal build cycle. Notwithstanding assist audits performed by the government, subcontractors must still perform and provide Price/Cost Analysis.

15 In accordance with the thresholds of FAR 15.404-3(b)3 and (c), Subcontract Pricing Considerations, does the proposal include

FAR 15.404-


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necessary)

the applicable sub-tier subcontractor’s certified cost or pricing data?

3(b)3 and (c)

INTERORGANIZATIONAL TRANSFERS

16 For inter-organizational transfers proposed at cost, does the proposal include a separate breakdown of cost elements?


Paragraph A(2)

Note Inter-organizational work is considered to be part of the certified cost or pricing data submission of the subcontractor. The performing company’s certified cost or pricing data must be included in the Performing Company’s submittal. As such, the subcontractor’s responsibility for conducting Cost/Price Analysis does not apply to its inter-organizational transfers. However, prior to the submission, the Performing Company shall (a) ensure that all statement of work tasks are addressed without duplication and are consistent with the overall program performance schedule and, (b) ensure ground rules and assumptions are consistent with the Performing Company’s submittal.

17 For inter-organizational transfers proposed at price in accordance with FAR 31.205-26(e), does the proposal provide an analysis by

FAR 31.205-26(e)(2); FAR


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necessary)

the subcontractor that supports the exception from certified cost or pricing data in accordance with FAR 15.403-1(b)

15.403-1(b)

ADEQUATE PRICE COMPETITION

18 Does the proposal support the degree of competition and the basis for establishing the source and reasonableness of price for each subcontract or purchase order priced on a competitive basis exceeding the threshold for certified cost or pricing data?


Paragraph A(1)

COMMERCIAL ITEM DETERMINATIONS

19 Are you proposing commercial items either at your level or other sub-tier subcontractor level for which you are claiming an exemption from certified cost or pricing data requirements in accordance with provision 52.215-20?

FAR 2.101,

FAR 15.403-1 (b)(3) or (b)(5),

FAR 52.215-20

Note If you are modifying a commercial item or are providing a modified commercial item, there may be circumstances that require the submission of certified cost or pricing data (see Note to checklist item 22 below).


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necessary)

20 Has the sub-tier supplier provided support for subcontractor assertions of commerciality and any sub-tier subcontractor Commercial Item Determinations (CIDs)

Note A sub-tier supplier CID includes the following information/data in addition to the subcontractor’s independent price analysis and conclusion of the sub-tier supplier’s commerciality assertion. (see checklist item 24.D.)

21 Has the sub-tier supplier specifically identified the type of commercial item claim (FAR 2.101 commercial item sub-definitions (1) through (8)), and the basis on which the item meets the definition?

FAR 2.101

22 For modified commercial items (commercial item sub definition) (3); did the sub-tier subcontractor classify the modification(s) as either:

A. Of a type customarily available in the commercial marketplace(FAR 2.101 commercial item sub-definition (3)(i)) or

A minor modification (FAR 2.101 commercial item sub-definition (3)(ii)) of a type not customarily available in the commercial marketplace made to meet Federal Government requirements not exceeding the thresholds in FAR 15.403-1(c)(3)(iii)(B)? (see note below)

FAR 2.101

FAR 15.403-1


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necessary)

Note Modifications that do not qualify as “minor” under FAR 2.101 sub-definition (3) or modifications that qualify as “minor” where the total price of all such modifications exceeds the greater of the threshold for certified cost or pricing data (FAR 15.403-4) or 5% of the total price of the contract at the time of contract award are NOT exempt from the submission of certified cost or pricing data. Where the sub-tier supplier is proposing a modified commercial item, the Buyer should, in every case, be consulted as soon as possible before the proposal is submitted.

23 B. Technical Assessment: For proposed commercial items “of a type”, or “evolved” or modified (FAR 2.101 commercial item sub-definitions (1) through (3)), did the sub-tier supplier provide a technical description of the differences between the proposed item and the comparison item(s)?

FAR 2.101

24 Price Reasonableness: Has the sub-tier supplier provided, or made available, data other than certified cost or pricing data to establish price reasonableness of the proposed commercial item (to include any modifications not subject to certified cost or pricing data (ref. Note under checklist item 33 above) by supplying:

A. Information/data related to competition (refer to item 15 above)

B. Information/data related to prices (sales data, market price assessments, etc.)

C. Cost information/data (cost elemental breakdown and supporting documentation not subject to certification in accordance with FAR 15.406-2), and

FAR 15.402 (a)(2),

FAR 15.403-1(c)(3)(ii),

FAR 15.403-3(c),

FAR 15.404-3(b)

FAR 15.404-3(c)

FAR 15.406-2


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necessary)

D. For sub-tier supplier assertions, the subcontractor’s price analysis/price reasonableness determination?

Note The preferred method to establish the price reasonableness of commercial items is to obtain commercial sales data. It is recognized that other methods, such as market price assessments data or cost data not subject to certification, are also acceptable when prior sales data cannot be obtained. Sales data must (1) demonstrate sales to the general public, (2) be current and where possible, (3) in like quantities. Items sold to state, local or foreign governments or items sold with applications only to state, local, foreign government or the US government end items, are not considered to be sales to the general public unless the proposed commercial item meets the commercial item definition FAR 2.101 commercial item sub-definition (8).

DIRECT LABOR

25 Does the proposal include a time-phased (e.g., monthly, quarterly, yearly, etc.) breakdown of labor hours, rates, and cost by appropriate category or skill level, with bases of estimates (BOEs) provided?


Paragraph B.

26 If covered by the Service Contract Labor Standards statute (41 U.S.C. chapter 67), are the rates in the proposal in compliance with the minimum rates specified in the statute?

FAR 22.10


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necessary)

INDIRECT COSTS

27 Does the proposal indicate how you computed and applied your indirect costs, including cost breakdowns and did you provide trend and budgetary data which forms the basis of the reasonableness of the proposed rates?


Paragraph C.

28 Does the proposal include all rates and factors by year that are utilized in the development of the proposed price as well as the basis of the proposed rates and factors?

FAR 15.408, Table 15-2, Section II.,

Paragraphs B and C

29 If you currently have a Forward Pricing Rate Agreement (FPRA) with the Government and it forms the basis of the Indirect Rates and Factors utilized in this proposal, have you identified such agreement, provided a copy, and described its nature?

FAR 15.408, Table 15-2, Section I.,

Paragraph G

OTHER COSTS

30 Does the proposal include other direct costs and the basis for pricing? If travel is discretely estimated does the proposal include number of trips, number of people, number of days per trip, locations, and rates (e.g. airfare, per diem, hotel, car rental, etc.)?

FAR 15.408, Table 15-2 Section II,

Paragraph D.


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necessary)

ROYALTIES

31 If Royalties exceed $1,500, does the proposal provide the information/data identified in FAR 15.408, Table 15-2, Section II; Paragraph E.?

FAR 15.408, Table 15-2 Section II

Paragraph E.

FACILITIES CAPITAL COST OF MONEY

32 If Facilities Capital Cost of Money (FCCM) is proposed, does the proposal include submission of Form CASB-CMF and show the calculation of the proposed amount?

FAR 31.205-10 FAR 15-408, Table 15-2 Section II

Paragraph F.

FORMATS FOR SUBMISSION OF LINE ITEM SUMMARIES

33 Are all cost element breakdowns provided using the applicable format(s) prescribed in FAR 15.408, Table 15-2; Section III? (or alternative format if specified in the RFP)


Paragraph D.


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necessary)

34 If the proposal is for a modification or change order, have cost of work deleted (credits) and cost of work added (debits) been provided in the format described in FAR 15.408, Table 15-2, Section III, Paragraph B?

FAR 15.408, Table 15-2, Section III,

Paragraph B.

35 For price revisions/redeterminations, does the proposal follow the format in FAR 15.408, Table 15-2, Section III; Paragraph C?

FAR 15.408, Table 15-2, Section III,

Paragraph C.

OTHER

36 Does the proposal identify the location and point of contact for any certified cost or pricing data submitted by specific identification (i.e., which is referenced, but not included, in the proposal)?

FAR 15.408, Table 15-2, Note

1

37 Have you disclosed any known activity that could materially impact the costs such as existing excess material, changes in production methods, make/buy decisions, company re-organizations, new business or new technology, etc.? These types of items are considered to be cost or pricing data.


Paragraph C(1)

FAR 2.101


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necessary)

38 If an incentive type contract, does the proposal include offeror proposed target cost, target profit or fee, share ratio, and when applicable, minimum/maximum fee, ceiling price?

FAR 16.4

39 Is proposed profit or fee in accordance with the statutory guidance included in FAR 15.404-4(c)(4)(i)?

FAR 15.404-4(c)(4)(i)

40 If Economic Price Adjustments are being proposed, does the proposal show the rationale and application for the economic price adjustment, including the proposed indices?

FAR 16.203-4(a)(1)

41 If the offeror is proposing Performance Based Payments, has the subcontractor complied with FAR 52.232-28 and FAR 32.1000 (e.g., provided an expenditure profile, proposed events and their projected dates, proposed values for each event, completion criteria, and identification of which events are severable or cumulative to)? This profile total must not exceed 90% of the total proposed price.

FAR 52.232-28,

FAR 32.1000

42 Excessive Pass-through Charges – Identification of Subcontract Effort, if the offeror intends to subcontract more than 70% of the total cost of work to be performed, does the proposal identify: (i) the amount of the offeror’s indirect costs and profit applicable to the work to be performed by the sub-tier supplier(s); and (ii) a

FAR 15.408(n)

FAR 52.215-22

FAR 52-215-23


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necessary)

description of the added value provided by the offeror as related to the work to be performed by the sub-tier supplier(s)?

43 Does the proposal explain the basis of all cost estimating relationships (CERs) (e.g., labor hours or material proposed on other than a discrete basis)?

FAR 15.408, Table15-2, Section II,

Paragraph D.

Note Calculations/formulas/logic made to generate “CER” costs must be presented with proposal along with 3 years of history.

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PROVIDE EXPLANATION IF Not Provided (use

continuation page if necessary)

II. R F P R E S P O N S E S E C T I O N

1 Is a cost elemental breakdown for each proposal line item, such RFP


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as recurring part number or CLIN included in the proposal?

2 Does the proposal reflect all specific requirements established by the Buyer in the RFP, Pricing Instructions, or other controlling documents?

RFP Yes of No If “No”, please explain

3 Is the proposal compliant with all requirements of the Supplier Statement of Work (SSOW)?

RFP Yes or No If “No”, please explain

4 If requested in the RFP, have you provided a completed SSOW Compliance Matrix?

RFP

5 If applicable, are all program specific pricing templates provided with the RFP completed and submitted with your proposal?

RFP

6 Has a Bill of Material (BOM) for each Line Replaceable Component, Tooling Item, etc. been provided which shows part number (both Lockheed and supplier), Description, Unit of Measure, Quantity per Ship-set, Total Quantity, Unit Price, and Extended Price, as well as the Basis of Pricing (i.e., quote, PO history, Long Term Agreement, estimate, etc.)

RFP


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7 Have you provided BOM support for at least the top 80% of the consolidated BOM? This support should include purchase orders, quotes, pricing agreements, and other forms of support as may be appropriate, as well as three years of price history for each item in the sample.

RFP

Note The BOM should include estimated raw materials, parts, components, assemblies, subcontracts and services to be produced or performed by others, not included elsewhere in your proposal.

8 In addition to the FAR requirements in item 25 above, do the Direct Labor BOEs show task descriptions, Statement of Work (SOW) reference, applicable CLIN, Work Breakdown Structure (WBS), proposal rationale, and applicable history?

RFP

9 Have you provided a Termination Liability Forecast completed in accordance with the RFP Instructions? This forecast total must match the total proposed price.

RFP

10 Should the proposal identify the need for government furnished material/tooling/test equipment, did you include the lending contract number and contracting officer contact information if

RFP


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known.

11 Have you submitted your proposal in usable, non-password protected versions of Microsoft Office Suite such as Excel and Word?

RFP Yes or No If “No”, please explain

SUBCONTRACTOR LOCKHEED MARTIN

Reviewed and Approved by: Reviewed and Approved by:

_____________________________________(signature) ______________________________________(signature)

(Printed Name) (Printed Name)

(Title) (Title)

(Phone Number) (Phone Number)

(Email address) (Email address)


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