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DOD FINANCING AND PRICING STUDY Elements to be studied by Educational Institutions This is a request for information (RFI) from Air Force District of Washington (AFDW), SAF Enterprise Support (PKS), w... DOD FINANCING AND PRICING STUDY Elements to be studied by Educational Institutions This is a request for information (RFI) from Air Force District of Washington (AFDW), SAF Enterprise Support (PKS), which serves as a notice to industry concerning procurement of Financial and Pricing Studies for the Under Secretary of Defense for Acquisition and Sustainment Defense Pricing and Contracting. This notices serves as a Sources Sought and is not a solicitation for work or a request for proposal. AFDW/PKS is providing this Request for Information (RFI) for review of the example area of studies and to identify any interested educational institution. The objective is to research and provide findings on multiple areas of study related to financing and pricing. If your educational institution is interested then please provide your capability statement. Capability statements should contain all of the minimum requirements stated below. Formal communications related to this acquisition shall be submitted by email to the point of contact listed below. Minimum Requirements: Regionally or nationally accredited college or university, capable of performing the entire Area of Study itself (i.e., without subcontractors). Identify the proposed Principle Investigator and any individual(s) who does not have a college/university affiliation. Capability Statements should include, at a minimum: The approach to investigating each area of study for which the institution is interested in bidding Rough-Order-of-Magnitude pricing with each area of study (to include labor categories, rates, and hours). Each study area is anticipated to have a period of performance of approximately 6 Recent, relevant experience performing analysis in the example Area(s) of Study (if available). If available, please provide an executive summary of the analysis and links to academic papers Identify any potential organizational and/or consultant conflicts of interest Any other capabilities, experiences, or resources that the educational institution believes will be value added to demonstrate their capabilities Point of Contact: The Contracting Officer, Robert G. Warren, is the sole point of contact for this effort. All submissions and/or questions should be submitted to robert.warren.13@us.af.mil by 1500 EDT on 26 October 2020. Example Area of Study - Examine financial health of the defense industry Research, compare and contrast the financial health of DOD companies and comparable commercial companies; determine if there are significant differences in the health of these sectors and why; and perform a trend analysis of each segment to determine if the financial health has improved, declined, or remained the same from 2000 – 2019 Address how major mergers and acquisitions (M&A) may have impacted firms’ financial statements and address the degree of M&A in the aerospace/defense sector versus other sectors selected for comparison Identify and analyze several diversified corporations that participate significantly in the aerospace/defense and commercial sectors. Propose and conduct additional financial comparisons Summarize comparable measures, and if possible, construct and deliver a repeatable model Example Area of Study - Examine Free Cash Flow (FCF) in the Defense Sector Using publicly available financial data (e.g., corporate 10-K reports submitted to the SEC), perform an analysis of FCF for defense industry firms. Recommend, for government approval, the firms selected for research and analysis For each firm and the industry as a whole as represented by the firms selected the study will address the following questions: Has FCF, as a percent of annual revenue, increased or decreased over time? For what purposes is FCF being used and has that changed over time? What is the linkage, if any, between FCF and IR&D spending for defense firms, considering the allowability of IR&D expenses on defense contracts? Example Area of Study - Examine Impact of Cash Flow by Contract Type and Financing Validate or recommend changes to the Defense Pricing and Contracting (DPC) Cash Flow Model to calculate financial returns by contract-type and financing methods As financial measures, compare Net Present Value and Internal Rates of Return Review Industry executive compensation packages for Named Executive Officers per proxy statements filed with the Securities and Exchange Commission, to gain insight into important financial measures from the company perspective, including those related to cash flow Example Area of Study - Examine Financing and its impact on Small Businesses What are the obstacles for small businesses to obtain financing in the private sector as well as when doing business with the Department of Defense? A Government unique accounting system is required for progress payments and cost type contracts. What resources are available to small businesses to meet the accounting system requirement? Based on a survey of small businesses, what types of payment/financing terms are prevalent between prime contractors and the small businesses who perform as subcontractors? The survey and the analysis of responses should distinguish between financing and invoice payments and also address frequency of payments and any discounts for prompt payment. If a small business subcontractor supports both defense and commercial prime contractors, address whether and how the terms differ when the prime is a defense contractor vs. a commercial company. Example Area of Study – Examine the government accounting system requirements as a barrier to the commercial sector’s willingness to do business with the government The requirement for a Government unique accounting system is perceived as a “barrier to entry” to doing business with the Government for small businesses and nontraditional defense contractors. In the commercial sector, how do companies accumulate and track costs? Do they use job order accounting systems and in what context? What are considerations for how they determine at what level they track costs for both recurring and non-recurring effort? Do the answers to these questions vary from small to large businesses? Do the answers these questions vary depending on the length of contracts? Is the cost of implementing a Government unique accounting system significant and how does the cost/system compare to what is used by commercial companies? Once implemented, what is the recurring cost? Compare the results with commercial companies. Example Area of Study - Examine costs and benefits of the Truth in Negotiations Act (TINA) What are the costs to comply with the law? Do companies doing business with the Department of Defense have to collect cost data in order to comply with the law that would otherwise not be needed to comply with Generally Accepted Accounting Principles? What are the true drivers of these costs: the TINA statute (Pub. L. 87-653), proposal compliance with Federal Acquisition Regulation (FAR) Table 15-2, Cost Accounting Standards, accounting system requirements, estimating system requirements, etc.? What are the financial benefits to the government of compliance with TINA? What happens in the absence of TINA applicability? As a minimum, study should consider GAO and DoD-IG audit reports that address TINA exceptions. Example Area of Study - Examine how commercial companies determine what they are willing to pay for items To what extent do commercial companies rely on competition to determine the price they will pay? Are there circumstances where they obtain any cost data and if so what does that data look like in contrast to certified cost or pricing data? In sole source situations, how do companies determine what they are willing to pay? How do market structures drive a company’s ability to obtain data? For the purpose of this study a commercial company generates less than 10% of its revenue from Federal and Department of Defense contracts.