RFP for LCS: Cost main factor in winning bid - Navy News | News from Afghanistan & Iraq - Navy Times

RFP for LCS: Cost main factor in winning bid

The Request for Proposal issued Tuesday by the Navy for the next round of bids for Littoral Combat Ships details factors that will guide the choice later this year of a design basis for Flight 0+.

Navy officials have indicated that cost will be the foremost determining factor in their choice between a Lockheed Martin design and one from rival General Dynamics. But the RFP makes it clear a number of other criteria will be considered — chiefly technical and management factors.

Unclassified portions of the RFP were made public Thursday, posted on the Navy Electronic Commerce Online Web site.

The RFP lists three primary bid items for the contract: a basic seaframe, or ship; selected ship systems equipment, consisting of weapons, sensors, computers and the ship’s combat system; and the systems to handle the integration and testing of the ship’s systems and equipment.

At stake is an award this year for 10 ships, including selected ship systems — two ships per year through 2014. A follow-on competition is scheduled for 2012, when a second shipyard will be chosen to build five ships over three years. A second source also will be chosen in 2012 to supply select ship systems.

Technical and management factors listed by the RFP are, in order of preference: affordability and production approach; management; technical data package adequacy, and rights in technical data and computer software; design change impact; past performance; and life-cycle cost reduction initiatives.

The guidelines also caution bidders to provide realistic price data.

“Experience in Navy programs indicates that a contract awarded to a contractor submitting an unrealistic price proposal … may cause problems for the Navy as well as the contractor during contract performance,” the RFP reads in part.

The LCS program became a poster child for cost growth in Navy shipbuilding after the $220 million ships contracted for by the Navy in 2004 more than tripled in cost. The inability of either contractor to meet a congressional cost cap of $480 million for each of the new ships led the service in September to drop plans to buy both variants. Instead, the Navy took up a new plan to buy only one design, hoping to find economies in standardization and quantity orders.

The RFP lists technical management as “approximately equal in importance” to price and cost as the chief factors in determining a winner. However, it cautioned, “the importance of overall evaluated price/cost as an evaluation factor will increase with the degree of equality in technical/management between competing proposals.”