éLIMINATION PAR DéMILITARISATION

Trade Agreement: Agreement on Internal Trade (AIT)
Tendering Procedures: All interested suppliers may submit a bid
Attachment: YES (MERX) Electronic
Competitive Procurement Strategy: Best Overall Proposal
Comprehensive Land Claim Agreement: No
Nature of Requirements:
DISPOSAL BY DEMILITARIZATION

W8486-14YC03/A
Derby, Sandra
Telephone No. - (819) 956-0257
Fax No. - (819) 956-5650

Director Ammunition and Explosives Management and Engineering
(DAEME)
Letter of Interest (LOI)

PURPOSE:

The Department of National Defence/Canadian Forces (DND/CF)
maintains a stockpile of ammunition. Within this inventory
reside select natures of Ammunition and Explosives (A&E),
Munitions Scrap (MS), Aids to Production (A to P) and Ammunition
Salvage which are surplus to requirements or are obsolete. The
DND/CF, therefore, has a requirement for a contracted Disposal
by Demilitarization service capability.

BACKGROUND:

A&E and A to P inventory is held to support a multitude of
tasks, missions and training. Part of this inventory has reached
the end of its life by being declared life expired, surplus or
obsolete to requirements. In addition, accumulation of MS is
expected to increase as a result of future Range
Clearances/Unexploded Ordnance (UXO) activities and requires
Disposal by Demilitarization before it may be safely released
for public sale or final disposal.

Throughout the life cycle of A&E, items may become deteriorated,
obsolete, or be declared surplus to requirement; resulting in
A&E and A to P that require safe disposal. When disposal through
sale is not possible or appropriate, the DND/CF is required to
find approved acceptable methods to demilitarize A&E and A to P
that are compliant with established explosive safety policies
and standards and that are in line with International Traffic in
Arms Regulations (ITAR), Controlled Goods Regulations (CGR),
Explosive Safety, Intellectual Property (IP) and End User
Certificates (EUC) while also complying with environmental laws
and regulations. Historically, the disposal of this material has
been achieved through sale, functioning, or destruction by open
burning/open detonation (OB/OD) and the use of static small arms
ammunition (SAA) type furnaces.

Due to a lack of Disposal by Demilitarization technologies and
equipment capabilities available, the DND/CF continues to
accumulate A&E, MS, A to P and salvage that requires it to
undergo a safe Disposal by Demilitarization process that is
environmentally acceptable prior to final disposal.

The disposal, Demilitarization and recycling of A&E, its
subcomponents, MS, A to P and ammunition salvage is labour
intensive and at times complex as there is no one particular
procedure, process and/or equipment that is capable of solely
meeting or exceeding all regulations and requirements.

OBJECTIVE:

The objectives of this LOI are:

1. To give an opportunity for Industry to provide input to aid
DND/PWGSC in further developing the Statement of Work (SOW)
documentation and Bid Evaluation methodology. Interested firms
are encouraged to review the attached documentation and provide
comments or questions including but not limited to the following:

i. The achievability of the requirements as outlined in the
attached documentation;
ii. Identification of any areas of the requirement which could
be deemed to be medium or higher risk to achieve and why;
iii. Any suggested changes to the SOW in order to improve
clarity, feasibility and/or completeness;
iv. Any suggested changes to the Request for Proposal (RFP)
framework in order to improve clarity, feasibility and/or
completeness;
v. Any suggest changes to the Bid Evaluation in order to improve
clarity, feasibility and/or completeness.

2. To give an opportunity for Industry to provide input to aid
DND/PWGSC in further developing the Basis of Payment (BoP) and
the Financial Terms and Conditions in the RFP Documentation.
Interested firms are encouraged to review the attached
documentation and provide responses to the following:

i. A 10-year, firm fixed-price contract with options for 2,
3-year additional extension periods is being considered. The
DND/PWGSC requests that Industry indicate if this is viable and
achievable.
ii. Due to the varying locations of the stockpile of A&E, MS, A
to P and Ammunition Salvage to be Demilitarized across the
country and the varying locations of potential bidders and to
ensure an equitable and transparent Bid Evaluation process is
followed, the DND/PWGSC intends to request two financial
proposals from Industry - one for the Processing of A&E, MS, A
to P and Ammunition Salvage and one for Transportation. The
Crown requests Industry to indicate if this is a viable and
achievable pricing methodology.
iii. The financial response expected from Industry for
Processing will request all-inclusive (full-up) pricing
(excluding the associated Transportation costs) for "Each",
"Kit", "Kg", "Ft", "Metre" and "Box" units of measure for all
natures within each of the 26 categories appearing in the
Inventory List located at Appendix B4 and in the Draft BoP
financial response sheet. Given that certain natures require a
higher level of handling and unpacking - in many cases resulting
in a secondary stream of packaging and Aids to Production waste
to be processed - the DND/PWGSC requests that Industry indicate
if this a viable and achievable pricing methodology.
iv. The financial response expected from Industry for
Transportation will request Full Truck-load (TL) and Less than
Truck-load (LTL) costs from any of the various locations across
Canada where A&E, MS, A to P and Ammunition Salvage are
currently stockpiled to the Bidder's location. Although the
DND/PWGSC cannot at this time provide the exact total quantity
of truck-loads in each of these locations, the intent is to
apply a point-rated scoring methodology to the Transportation
Financial response during the Financial Bid Evaluation. The
DND/PWGSC requests that Industry indicate if this a viable and
achievable pricing methodology.
v. The DND/PWGSC is strongly recommending that Transportation
costs be based on road shipments only due to the fact that none
of the locations where A&E, MS, A to P and Ammunition Salvage is
currently stockpiled and awaiting demilitarization have a
rail-siding or rail capability and the distance from these
locations to the nearest Rail facility varies. Additionally, all
railcars - regardless of their size and capacity - must be
pre-certified for Dangerous Goods movement in accordance with
Provincial, Territorial and Federal law in advance of loading as
these locations do not have the requisite lifting capacity to
perform the certification on-site at the time of loading. This
represents a significant increase in the level of effort to ship
by Intermodal rail and will undoubtedly result in increased
costs which may equal or exceed that of shipping by road. A Rail
Transportation cost model, however, would be acceptable
providing Industry can fully substantiate their proposal. The
DND/PWGSC requests that Industry comment on this methodology.
vi. The DND/PWGSC intends to request first year costing by
nature within each of the 26 categories appearing in the
Inventory List located at Appendix B4 and in the Draft BoP
financial response sheet. Canada's overall rate of inflation
will then be applied to the first year costing for each
additional year of the contract to determine the costing
structure for out years and subsequently, the full contract
value. Pricing will become effective at contract award
regardless of the duration of the equipment commissioning
period. The DND/PWGSC requests that Industry indicate if this a
viable and achievable pricing methodology.
vii. The DND/PWGSC intends to provide a Minimum Yearly Work
Guarantee clause in the resulting contract. Canada's minimum
obligation under the Contract will be to request Work up to the
amount of the Minimum Yearly Work Guarantee value which will
form Canada's minimum yearly financial obligation to the winning
Bidder. In consideration of such an obligation, the Contractor
agrees to stand in readiness throughout the Contract period to
perform the Work described in the Contract. In the event that
Canada does not request work up to value of the Minimum Yearly
Work Guarantee during the period of the Contract, Canada will
pay the Contractor the difference between the Minimum Yearly
Work Guarantee value and the total cost of the Work requested.
The Minimum Yearly Work Guarantee value clause will only become
effective once the Contractor's facility is at Full Operating
Capacity (FOC) or Initial Operating Capacity (IOC) such that the
DND/PWGSC can begin tasking the Contractor to perform a portion
of the work detailed in the Contract up to or exceeding this
stated value. The DND/PWGSC requests that Industry indicate what
the value of the Minimum Yearly Work Guarantee should be and if
this a viable and achievable methodology?
viii. The Financial Bid Evaluation will be based on a
combination of Processing cost, Transportation cost and a
Minimum Yearly Work Guarantee value. Industry is asked to
comment on this methodology.
ix. Industry is requested to provide Rough order of Magnitude
costing for their proposed capability by completing the Draft
BoP financial response sheets for both Processing and
Transportation.

3. To advise Industry of a proposed Canadian Forces Ammunition
Depot (CFAD) Dundurn, Saskatchewan site visit and allow Industry
to register for the event which is planned for the 14th and 15th
of May, 2014. Interested firms are to contact the DND
Procurement Lead, Mr. Sean Burke DLP 3-1
(S••••••••@••••••.••.CA, 819-994-0125) no later than 25 April
2014 with their intention to attend.

4. To allow Industry the opportunity to engage Crown
representatives from both DND and Public Works and Government
Services Canada (PWGSC) in bilateral discussions which will be
held in Gatineau, QC during June 2014 (exact dates and times
TBA). A formal schedule of these meetings will be compiled at a
later date and provided to respondents. Interested firms are to
contact the DLP Procurement Lead, Mr. Sean Burke DLP 3-1
(S••••••••@••••••.••.CA, 819-994-0125) no later than 19 May
2014 with their request for a bilateral discussion.

DND will accept inquiries regarding the referenced documents
throughout the LOI posting period. DND requests that a formal
response to this LOI be submitted to the Procurement Lead, Mr.
Sean Burke DLP 3-1 (S••••••••@••••••.••.CA, 819-994-0125) no
later than 20 May 2014.

PROCUREMENT SCHEDULE:

Based on the information contained in the responses to this LOI,
the outcome of the upcoming CFAD Dundurn, Saskatchewan site
visit and the feedback received from Industry, the SOW, RFP and
other aspects of this requirement may be altered which may
affect the schedule. It is anticipated that a RFP for this
requirement may be released by PWGSC late in 2014.

NOTE TO INTERESTED FIRMS:

This is not a bid solicitation and a contract will not result
from this LOI.

Requirements are subject to change which may be as a result of
information provided in response to this LOI. Potential
respondents are advised that any information submitted to Canada
in response to this LOI may or may not be used by Canada in the
development of a subsequent competitive RFP.

The issuance of this LOI does not create an obligation for
Canada to issue a subsequent RFP and does not bind Canada -
legally or otherwise - to enter into any agreement or to accept
or reject any suggestions from responding organizations. Canada
reserves the right to accept or reject any or all comments
received.

Respondents to this LOI should clearly identify any information
submitted that is to be considered as either commercial in
confidence or proprietary.

PWGSC and DND reserve the right to have further discussions with
any individual firms at any time to further discuss issues of
mutual concern and/or to clarify elements of a firm's response
to this LOI. A point of contact should be clearly identified to
facilitate this.

INQUIRIES:

Other than already specified herein, inquiries and communication
related to this LOI must be directed to the PWGSC Contracting
Authority. The PWGSC Contracting Authority is Sandra Derby:

S••••••••@••••••••.••.ca
819-956-0257

Delivery Date: Above-mentioned

The Crown retains the right to negotiate with suppliers on any
procurement.

Documents may be submitted in either official language of Canada.