NOTICE OF MARKET RESEARCH NOTICE OF MARKET RESEARCH The Defense Industrial Supply Center, Metals and Metal Products Group is the Inventory Control Point for ferrous, non-ferrous and precious metals including Federal Stock Groups 95 and 96. Our intention is to issue a Request for Proposal (RFP) for the award of one, or possibly multiple contracts to acquire bulk metal and metal products for Government installations worldwide. These installations are mainly military bases throughout the United States. Our largest customers include the Puget Sound Naval Shipyard in Bremerton, WA, the Norfolk Naval Shipyard in VA, the Anniston Army Depot in AL and Tinker Air Force Base in Oklahoma City, OK. We also serve smaller customers such as the NASA Langley Research Center in VA and McGuire Air Force Base in NJ. The contract(s) are to replace expiring Direct Vendor Delivery contracts. We are issuing this Notice of Market Research as a vehicle for industry to provide recommendations/comments on the best business practices for supplying this material to our customers. History: Prior to 1993, most metals purchased by the Defense Industrial Supply Center were bulk purchases placed into Government warehouses for distribution to our customers. After 1993, a Direct-Vendor Delivery (DVD) program was initiated to reduce inventory and total system costs. Long-term, Indefinite Quantity Contracts (IQCs) were established with vendors for specific National Stock Numbers (NSN's, which are Government part numbers). These NSN's are entered into our Paperless Ordering Procurement System (POPS) and when material was requisitioned by our customers, a delivery order is electronically issued to the contractor. The contracts are regional, based upon either East or West of the Mississippi River. Material is delivered in 7 or 23 days directly to the ordering activity. Most orders are for small quantities of material, one or two sheets or bars of metal. Our total metal sales in FY 97 was $54 million and this amount is expected to increase to $100 million by FY 2000. The type of material currently on DVD contracts are as follows: Federal Stock Class Material 9505 Non Electrical Wire 9510 Bar 9515 Carbon Steel Plate 9520 Structural Carbon Steel 9535 Aluminum Sheet and Plate 9530/9540 Aluminum Extrusions The primary concern of our customers is the quality of the metals ordered. To assure the quality of material, a Qualified Supplier List (QSL) has been established. Before receiving an award, a contractor must be approved for the Defense Industrial Supply Center QSL. For further information, please contact Elsie Dennis at 215-697-3964. We have three logistics solutions for our customers that we expect to have in place by the year 2000: Currently, we are working on a Regional Integrated Supplier initiative which will establish long term partnerships with industry to become a supply chain integrator and manager offering a broad range of metals, metal products and services to most of our customers in a specific region. An award for the Southeast Region of the United Stateshas been issued and a solicitation for the Northeast, Central and Western United States is currently in progress. We expect this to account for 50% of our total sales. The second logistics solution is our Depot Stocking program. This was our initial method of supply. This is still a viable logistics solution for some of our customers, however it has been phased down to where we expect depots to account for only 15% of our total sales. The third logistics solution, Direct Vendor Delivery Contracts is the subject of this Notice of Market Research. We expect this logistics solution to account for 35% of our total sales. Information Requested: You are welcome to provide comments and suggestions on any aspect of our procurement process. At a minimum this Notice of Market Research is being issued to improve our Direct Vendor Delivery Program in the following categories: Product Line: We would like to explore what product lines should be included. Should the contracts be for specific product lines or a broad range of material? How should types of material be grouped to best serve our customers? How could items be added or deleted to the contract during the term of the contract? Distribution: As stated above, current leadtimes are 7 days for priorities and 23 days for routine items. How can we reduce our delivery leadtime? What is the best method to distribute small quantities of material to our customers? Should these contracts be national or regional, based upon the location of our customers? Ordering: What is the best ordering method for this type of contract? Is there a more efficient Electronic Order Entry method that can be used, rather than our current Paperless Ordering Procurement System? Pricing: What is your pricing methodology? How should unit prices be adjusted to account for price fluctuations in the metals market place? How do you account for delivery charges and services such as cutting in your pricing? NOTE: Interested parties should provide only pricing methodology for determining prices; price proposals should not be submitted at this time. You are invited to furnish written comments and recommendations regarding the general approach and any specific provisions, as well as proposing alternate approaches involving different strategies and / or improved commercial practices. The Government will not pay for information received under this Notice of Market Research. After reviewing vendors' comments, the Government intends to issue a formal Request for Proposal (RFP). Proprietary information submitted in response to this Notice of Market Research will be kept confidential to the fullest extent and in accordance with all applicable laws. Please respond by 29 May 98 and submit your response to: SUBJECT: NOTICE OF MARKET RESEARCH Address mailed responses to: Defense Logistics Agency Defense Industrial Supply Center 700 Robbins Avenue Philadelphia, PA 19111 Attn: Mr. David Katz, DISC-YP E-Mail Address dkatz@disc.dla.mil Address facsimile transmissions to: 215-697-4236 All questions, pleasecall David Katz at 215-697-5000. REVIEW PROCESS For this Notice of Market Research, all submittals will be reviewed by a technical panel of professionals from the Defense Industrial Supply Center's Metals and Metal Products Group. The information and perspective gained during this review process will be used to finalize a formal Request for Proposal which is expected to be issued to the commercial marketplace. The actual RFP will contain all evaluation factors and subfactors for award. The RFP will state how these factors and subfactors will be evaluated. The evaluation of the formal RFP shall be made using Best Value Source Selection procedures. An award will be made to the offeror whose proposal is most advantageous to the Government, taking into consideration the evaluation factors as listed, where technical factors are more important that price. We encourage your participation and written comments regarding this Notice of Market Research.

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