SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
Amendment 2
(Mark One)
X ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 {Fee Required}
For the fiscal year ended September 30, 1996
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 {No Fee Required}
For the transition period from to
Commission file number 0-18603
Integral Systems, Inc.
(Name of small business issuer in its charter)
Maryland 52-1267968
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation of organization)
5000 Philadelphia Way, Suite A, Lanham, MD 20706
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (301) 731-4233
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
Securities registered under Section 12(g) of the Exchange Act:
Common
(Title of class)
(Title of class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant to file such reports),
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
As of November 30, 1996, the aggregate market value of the Common
Stock of the Registrant (based upon the average bid and ask prices
of the Common Stock as reported by the market makers) held by non-
affiliates of the Registrant was $19,588,322.
As of November 30, 1996, 952,533 shares of the Common Stock of the
Registrant were outstanding.
For the year ended September 30, 1996, the Registrant's revenues
were $11,217,148.
<PAGE>
PART 1
Item 1. Business
General
Integral Systems, Inc. (hereinafter referred to as "ISI" or the
"Company") is a leading provider of satellite ground systems:
computer systems for satellite command and control, data
processing, simulation, and flight software validation.
The Company believes it is the only provider that offers
"commercial-off-the-shelf" ("COTS") software for satellites
that is actually used in satellite operations. The Company's
proprietary COTS products, the EPOCH 2000 system and the OASYS
system, offer satellite operators a low-cost, highly-adaptable
system that can be used for any currently operating satellite
with minimal modification.
Customers for these systems include US Government organizations
such as National Aeronautics and Space Administration (NASA), the
National Oceanic and Atmospheric Administration (NOAA), and the US
Air Force, as well as commercial satellite operators, both domestic
and foreign. Integral Systems supports satellite missions for
scientific research, remote sensing, meteorology, and
communications applications. In addition, the Company offers
ground system products explicitly for real-time environmental
monitoring via satellite.
The Company has one active wholly owned subsidiary, Integral
Marketing, Inc. (IMI). IMI specializes in the sale and marketing
of electronic equipment primarily for the telemetry, data
acquisition and test communities.
Satellite Ground Systems
The Company offers off-the-shelf products as well as custom
development services for satellite ground systems. The customers
for the Company's products include government and commercial
satellite operators, spacecraft manufacturers, and systems
integrators. Typical sales involve a combination of off-the-shelf
software and hardware products together with development services
for mission specific requirements and system integration.
The Company's flagship commercial product is the EPOCH 2000
software which includes real-time command and control functions as
well as off-line orbit analysis and mission planning functions.
This product has gained international recognition and is currently
used as a solution on a number of Government and commercial
satellite programs. EPOCH 2000 components and turnkey systems
(software and hardware) have been sold to a number of customers,
including ChinaSat in the Peoples Republic of China, the National
Space Program Office in Taiwan (ROCSAT), EOSAT, Earthwatch, Johns
Hopkins University Applied Physics Laboratory, AT&T, GE Americom,
APT Satellite Company, Loral, TRW, Orbital Sciences Corporation,
the US Air Force, and the US Navy.
Integral Systems has ongoing systems engineering work under
contract to NASA at the Goddard Space Flight Center. This work is
in support of NASA's science satellites and includes development
projects for telemetry and command systems and simulation as well
as software verification and validation. The Company developed the
first workstation-based satellite command and control system for
NASA Goddard and has supported over a dozen different NASA space
missions.
For NOAA, Integral Systems builds command and control systems as
well as payload and image data processing systems for
meteorological satellites. The Company has had extensive
involvement in the both the TIROS and GOES satellite programs.
Recently, the company was awarded a large contract by NOAA to
provide the command and control system for the Air Force's DMSP
(Defense Meteorological) satellite fleet. Integral Systems has
also built several generations of the DMSP hardware-in-the-loop
simulator and provided the satellite manufacturer with a
workstation-based flight software test facility. The Company
provides the Air Force with ongoing services for independent
verification and validation of the DMSP flight software using this
simulator.
Integral Systems also provides a product, called the DOMSAT Receive
Station (DRS), which facilitates the collection, storage, and
analysis of environmental data. The DRS is a PC-based system which
includes an antenna, receiver, and processing software which allows
customers to take advantage of the complete NOAA GOES Data
Collection System. The Company has sold over 60 DRS systems to
customers including the Army Corps of Engineers, the US Geological
Survey, and a variety of state and local governments. The
applications include meteorology, water control, and pollution
monitoring, as well as research in geomagnetism and hydrology.
Integral Marketing, Inc.
Through it's wholly-owned subsidiary, Integral Marketing, Inc.
(IMI), the Company acts as a manufacturer's representative, selling
electronic test instrumentation and equipment to customers in
Maryland, D.C., and Virginia. IMI currently represents 14
manufacturers.
Contract Revenue
Integral Systems'commercial revenue as a percentage of total
revenue increased from 42% to 49% between fiscal year 1995 and
fiscal year 1996. The Company is continuing to focus its marketing
efforts on commercial opportunities. The Company's revenue for
fiscal years 1996 and 1995 was generated from the following
sources:
Fiscal Year
Customer 1996 1995
Commercial 49% 42%
NOAA 22% 30%
Air Force 17% 12%
NASA 12% 16%
ISI's services are principally performed under cost-plus-
fixed-fee contracts, fixed price, and time-and-material contracts
and subcontracts. Under cost-plus-fixed-fee contracts, the Company
is reimbursed for allowable costs within the contractual terms and
conditions and is paid a negotiated fee. Under fixed-price
contracts, ISI is paid a stipulated price for services or products
and bears the risk of increased or unexpected costs. Under time-
and-materials contracts, the Company receives fixed hourly rates
intended to cover salary costs attributable to work performed on
the contract and related overhead expenses, reimbursement for other
direct costs, and a stipulated profit. All contracts include
specified objectives and performance periods ranging from a few
weeks to several years, with most of the contracts providing for
terms of 4 years or less.
The percentage of revenues derived by the Company under these
different types of contracts for the fiscal years ended September
30, 1996 and 1995 is as follows:
Fiscal Year
Contract Type 1996 1995
Cost Plus 39% 43%
Fixed Price 56% 53%
Time and Materials 5% 4%
Government Contracts
Company revenues from US Government contracts are derived from
a combination of contracts with the US Government and subcontracts
with other companies that have prime contracts with the US
Government. The percentage of revenues received by the Company
from prime contracts and subcontracts with the Government for
fiscal years 1996 and 1995 are as follows:
Fiscal Year
Contract Source 1996 1995
Prime Contract 59% 46%
Subcontract 41% 54%
US Government contracting procedures may be categorized by
formal advertising or procurement by negotiation. Negotiated
procurements may, but do not necessarily, involve the solicitation
of competitive proposals. If competitive proposals are solicited,
the US Government selects the proposal most advantageous to it and
then conducts negotiations with the selected bidder. Most contracts
awarded to the Company or to other prime contractors for whom the
Company served as a subcontractor were awarded on the basis of
competitive procurements.
Many of the programs in which ISI participates as a contractor
or subcontractor extend for several years, but are funded only on
an annual basis. Accordingly, the Company's contracts and
subcontracts are subject to termination, reduction or modification
in the event of changes in the Government's requirements or
budgetary constraints. Additionally, when ISI participates in a
project as a subcontractor, it is subject to the risk that the
prime contractor may fail or be unable to perform the prime
contract.
All of the Company's US Government contracts and subcontracts
are also subject to termination for "convenience". Should a
contract be so terminated, the Company would be reimbursed for
allowable costs to the date of termination and would be paid a
proportionate amount of the stipulated profits or fees attributable
to the work actually performed. To date, no ISI contract has been
terminated for convenience.
The Company expects that 53% of revenue for the current fiscal
year (fiscal year 1997) will be derived from five major US
Government contracts and subcontracts. It is estimated that the
largest single contract will represent approximately 27% of the
Company's revenue and the smallest approximately 3%. The loss or
termination of any one of these contracts due to funding cuts or
contract termination could significantly affect the Company's
performance. Similarly, the expiration of any major contract could
significantly affect the Company's performance if not renewed or
replaced by contracts of similar value. In addition, since a
significant portion of revenue for the current fiscal year is
derived from subcontracts, loss of those subcontracts due to
termination of the subcontract or of the direct prime contract
could also affect the Company's performance. During fiscal year
1996, approximately 56% of ISI's revenue was performed under fixed-
price contracts and subcontracts. Under those contracts, an
unanticipated increase in the Company's cost or expenses may reduce
or eliminate the profitability of those contracts, thereby
adversely affecting the Company's financial performance.
ISI's books and records are subject to audit by the Defense
Contract Audit Agency. Such audits can result in adjustments to
contract costs and fees. No audits are currently in process.
Although the Company thus far has not been required to make any
material audit adjustments, the possibility that such adjustments
will be required always exists. Management is of the opinion that
any such audit adjustments would not have a material effect on the
financial position or results of operations of the Company.
Employees
As of December 19, 1996, the Company employed 92 full time
employees, 79 of whom are considered professionals in engineering
related disciplines. Of the engineering professionals, 97% have
undergraduate degrees in a scientific discipline, and 34% of those
have advanced degrees in a scientific discipline. Approximately
84% of the engineering staff have at least seven years experience,
and 13% have three to eight years experience. Approximately 18% of
the engineering staff specialize in digital hardware development,
although many of these individuals have analytic and software
development expertise as well. The remaining 82% of the
engineering staff are analysts and software developers.
Employees are not represented by any union or collective
bargaining group, and employee relations are considered good.
Since inception, ISI has experienced minimal turnover in
engineering staff.
Marketing
The Company relies upon senior corporate management, project
managers and senior technical staff to carry out its marketing
program. These individuals collect information concerning
requirements of current and potential customers in the course of
contract performance, formal and informal briefings, from published
literature, and through participation in professional and industry
organizations. Senior management evaluates this information,
identifies potential business opportunities and coordinates
proposal efforts. As sources of business within existing markets
are exhausted, new markets are explored. The Company seeks
business believed to be of long term benefit based on
considerations such as technical sophistication required, favorable
market positioning and potential product spin-offs.
Backlog
The Company's estimated backlog as of September 30, 1996 and
September 30, 1995 is as follows:
<TABLE>
September 30, 1996 September 30,1995
<S> <C> <C>
Outstanding Commitments $18,162,147 $9,596,273
General Commitments $9,489,563 $14,784,770
Total $27,651,710 $24,381,043
</TABLE>
Under outstanding commitments, the Company agrees to provide
specific services, frequently over an extended period of time, with
continued performance of those services contingent upon the
customer's year-to-year decision to fund the contract. General
commitments consist of contract options and sole source business
that management believes likely to be exercised or awarded in
connection with existing contracts. Contract options are the
Company's contractual agreement to perform specifically defined
services only in the event the customer thereafter requests the
Company to do so. Sole source business refers to contract work
which the Company reasonable expects to be awarded based on its
unique expertise in a specific area or because it has previously
done all such work in that area for the customer or prime
contractor who will award the contract. The Company estimates that
54% of backlog as of September 30, 1996 will be completed during
fiscal year 1997. Estimated backlog includes contract options
through September 30, 2002, including general commitments.
Competition
The Company principally obtains contracts and subcontracts
through competitive procurements offered by the US Government or
commercial enterprises. ISI competes with numerous companies
having similar capabilities, some of which are larger and have
considerably greater financial resources. In addition, many
smaller companies have specialized capabilities in similar areas.
Because of its size, ISI often joins with a larger company in
pursuing major procurements. It is not unusual for ISI to compete
with a company for a contract while simultaneously joining with the
same company in pursuit of another contract. The Company has
entered into such joint bidding relations with Martin Marietta,
Space Systems/Loral Corporation; Computer Sciences Corporation, and
AlliedSignal Aerospace/Bendix Field Engineering Corporation.
It is not possible to predict how ISI's competitive position
may be affected by changing economic or competitive conditions,
customer requirements or technological developments. The principal
competitive factors for the Company's business are reputation and
relationship with customers and competitors, quality of services
and products, pricing, responsiveness, and a demonstrable record of
delivering work on time and within budget.
Software Products
In the second quarter of 1991, ISI undertook several internal
software development efforts, which have resulted in products which
the Company is offering commercially. The DOMSAT Receive Station
(DRS) product is a hardware/software system that allows users to
gather environmental telemetry data via a commercial communications
satellite. In fiscal year 1996, Integral Systems recognized
approximately $229,000 in revenue on the DRS product.
The EPOCH 2000 product is a hardware/software system that
allows users to command and control satellites. The product was
formally announced in the second quarter of 1992. EPOCH related
revenue (license fees and associated services) amounted to $4.2
million in fiscal year 1996.
The Company has also developed other software intensive
products. OASYS, a spacecraft orbit determination product, can be
sold as a stand-alone package or as a subsystem under the EPOCH
2000 product. OASYS related revenue for fiscal year 1996 was
$384,000.
Research and Development
The Company is continually engaged in research and development
activities both to improve its existing EPOCH and OASYS software
products as well as probe additional product areas for the future
growth and development of the Company. Currently, the Company is
focusing its research and development efforts primarily on
developing a new version of its EPOCH 2000 command and control
software for satellites and on improving the user interface systems
for its COTS software products. In fiscal 1996, total capitalized
software development costs were $431,773.
Environment
No material effects on the Company's expenditures, earnings,
or competitive position are anticipated as a result of compliance
with federal, state, and local provisions which have been enacted
or adopted regulating the discharge of material into the
environment, or otherwise related to the protection of the
environment.
Financing
On July 28, 1988, ISI sold 110,000 of its common shares (par
value $.01) in its initial public offering for $5.00 per share.
ISI also has a line of credit agreement with NationsBank for
$1,200,000. Borrowings under the line of credit bear interest at
the bank's prime rate plus one-quarter (1/4) percentage point per
annum. Any accrued interest is payable monthly. At September 30,
1996 the Company had no amounts outstanding under the line of
credit.
Financial Information in Industry Segments
During the year ended September 30, 1996, the Company's
operations included two reportable segments: Satellite ground
systems and electronic test instrumentation and equipment
marketing.
The Company provides satellite ground systems - computer
systems for satellite command and control, data processing,
simulation, and flight software validation. Customers for these
systems include US Government organizations such as National
Aeronautics and Space Administration (NASA), the National Oceanic
and Atmospheric Administration (NOAA), and the US Air Force, as
well as commercial satellite operators, both domestic and foreign.
Through its wholly-owned subsidiary, Integral Marketing, Inc.
(IMI), the Company acts as a manufacturer's representative, selling
electronic test instrumentation and equipment to customers
primarily in Maryland, Virginia and the District of Columbia. (The
Company's other wholly-owned subsidiary, InterSys, Inc. provides
consulting services for satellite design and procurement, but is
presently inactive.)
See Footnote Number 12 of the notes to the Financial
Statements for financial information regarding these segments.
Item 2. Properties
As of March, 1994, ISI renegotiated its lease which obligated
the Company for an additional five years, for an aggregate of
25,600 square feet of office space at its principal location at
5000 Philadelphia Way, Suite A, Lanham, Maryland 20706-4417. The
annual lease cost, including operating expenses, for the facility,
is approximately $242,374.
Item 3. Legal Proceeding
In August 1996 the Company sued International Systems
Integrators, Inc. ("Integrators"), a New Mexico company which had
failed to pay a $232,708 invoice from the Company in respect of
certain software and hardware products sold by the Company to
Integrators and subsequently resold by Integrators to the United
States Air Force. Integrators acted as the prime contractor for
the Air Force and the Company acted as a subcontractor to
Integrators.
The Company believes that it fully complied with the terms of
its subcontract with Integrators. However, Integrators failed to
pay the Company's invoice for the products supplied to Integrators
by the Company under the subcontract. Integrators was paid by the
Air Force for the products supplied by the Company.
The Company sued Integrators, and its principal owner,
Bernadette L. Mares (together with Integrators, the "Defendants"),
for breach of contract, and is seeking to recover the $232,708, the
amount owed under the Company's subcontract with Integrators.
In September 1996, the Defendants filed a counterclaim against
the Company alleging defamation, interference with contractual
relations and extortion, seeking damages from the Company in an
unspecified amount. The Company believes that the Defendants'
counterclaim is entirely without merit and intends to contest it
vigorously. The Company does not believe that the Defendants'
counterclaim will have a material adverse effect on its financial
condition or operations.
In October 1996, the Company filed an answer to the
Defendants' counterclaims. In December 1996 the Company filed a
motion for summary judgment with respect to its claims. In March
1997, the Company's motion for summary judgment was denied by the
court. Discovery is continuing in the case and a trial date has
not yet been set.
Although the Company has fully reserved the receivable it
believes is due under its contract with Integrators, it continues
to pursue vigorously all legal remedies available to it with
respect to this matter.
Item 4. Submission of Matters to a Vote of Security Holders
On March 28, 1996, Integral Systems held their annual
shareholders meeting. A Board of Directors was elected, and is
made up of the following individuals: Steven R. Chamberlain,
Robert P. Sadler, Bonnie K. Wachtel, Louis Brown, Thomas L. Gough,
Dominic A. Laiti, and R. Doss McComas. In September, 1996, Mr.
Louis Brown announced his resignation as a member of the board.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder's Matters
Effective May, 1990, Integral Systems' over-the-counter stock
began trading on NASDAQ. The Company's NASDAQ trading symbol is
ISYS. The range of high and low transaction prices as reported by
NASDAQ and the market makers for each quarterly period during the
fiscal years ended September 30, 1996 and 1995, are shown below:
<TABLE>
<S> <C> <C>
1996 Fiscal Year High Low
First Quarter 28 1/4 22
Second Quarter 27 19
Third Quarter 29 1/2 21 1/2
Fourth Quarter 28 1/2 20 1/2
1995 Fiscal Year High Low
First Quarter 17 3/4 16 3/4
Second Quarter 23 1/2 17 1/2
Third Quarter 28 25 3/4
Fourth Quarter 31 26 1/2
</TABLE>
As of September 30, 1996, there were approximately 436 holders
of record of the Company's Common Stock.
No cash dividends have been paid during the Company's
existence, and none are expected to be declared during the
forthcoming 1997 fiscal year.
Item 6. Management's Discussion And Analysis Of Financial
Condition And Results Of Operations
COMPARISON OF FISCAL YEAR 1996
TO FISCAL YEAR 1995
The components of the Company's income statement as a
percentage of revenue are depicted in the following table for
fiscal years 1996 and 1995. Certain classifications and
presentations from fiscal year 1995 have been changed to be
consistent with fiscal year 1996 formats.
<TABLE>
<S> <C> <C> <C> <C>
% of % of
1996 Revenue 1995 Revenue
(000's omitted) (000's omitted)
Revenue $11,217 100.0 $10,771 100.0
Expenses
Cost of Revenue 8,217 73.2 8,290 77.0
Selling, General & Admin. 1,758 15.7 1,434 13.3
Bad Debt Expense 233 2.1 - -
Prod. Amortization 509 4.5 509 4.7
Other -2 - -38 -.3
Income Taxes 179 1.6 195 1.8
Total Expenses 10,894 97.1 10,390 96.5
Net income $323 2.9 $381 3.5
</TABLE>
Revenue
The Company's principal components of revenue for fiscal years
1996 and 1995 are as follows:
<TABLE>
<S> <C> <C> <C> <C>
% of % of
1996 Revenue 1995 Revenue
(000's omitted) (000's omitted)
Government Revenue $5,686 50.7 $6,239 57.9
Commercial Revenue
EPOCH 4,240 37.8 3,512 32.6
OASYS/DRS/Other 629 5.6 753 7.0
IMI 662 5.9 267 2.5
Total 5,531 49.3 4,532 42.1
Total Consolidated Revenue $11,217 100.0 $10,771 100.0
</TABLE>
Consolidated revenue increased by approximately $450,000
between the fiscal year ended September 30, 1996 and the fiscal
year ended September 30, 1995, principally because of new contract
awards related to the sale of the Company's EPOCH product along
with associated integration services. Revenue increases from EPOCH
related business more than offset a $550,000 decline in the
Company's Government business. The Government decline is believed
to be temporary as new contracts in this segment received at the
end of fiscal year 1996 should provide for higher revenue levels
(compared to both 1996 and 1995) during fiscal year 1997. Although
less than 6% of consolidated Company revenues, Integral Marketing,
Inc. (IMI) achieved approximately 150% of revenue growth in 1996
over 1995.
During fiscal year 1996, the Company derived approximately 49%
of its revenues from the sale of its commercial products and
related services as opposed to 42% of such revenue during the prior
fiscal year. The increase correlates to the Company's conscious
effort to reduce its reliance on the Federal Government, and to
utilize its recently developed software products to gain access to
organizations in order to sell both its products and associated
integration and support services.
Although the Company believes that its full cadre of software
products is important for its future growth and prosperity, to date
the Company's largest product investment relates to the development
of its EPOCH software, a COTS (commercial off-the-shelf) product
for satellite command and control. The Company believes that it is
unique in its status as the only entity with COTS software capable
of "flying" satellites built by any satellite manufacturer in the
world. In fact, during April, 1996 the Company was awarded a
contract (a copy of which has been filed herewith as an exhibit)
by AT&T Corporation that, while accounting for a modest amount
of revenues, is strategically important for the company because it
calls for use of the Company's COTS (and related integration services)
to command and control a fleet of satellites composed of spacecraft
from multiple manufacturers. The Company expects that approximately
75% of the revenue to be derived from this contract will be realized
in fiscal year 1997.
During fiscal year 1996, the Company recorded approximately
$4.2 million of revenue for its EPOCH product and associated
services compared to $3.5 million of revenue during fiscal year
1995. The 1996 EPOCH revenue total included approximately $465,000
of license revenue compared to approximately $345,000 of this
revenue type recorded in 1995. The Company's material agreements
with AT&T Corporation and its subcontract with Allied Signal
Technical Servics Corporation with respect to a project for
the Republic of China National Space Program Office, which are
filed herewith as Exhibits, contain licensing provisions.
Because license revenues have nominal marginal costs
associated with them, this form of revenue is highly important to
the Company's overall profitability. Looking forward to fiscal
year 1997, the Company is encouraged that its current contract
backlog includes in excess of $500,000 of unearned license revenues
for its EPOCH product.
The principal balance of the Company's commercial revenues
pertain to other proprietary products as follows: OASYS (Orbital
Analysis System); DRS (DOMSAT Receive Station); and a collection of
software pertaining to database and information system
applications. During 1996, the Company recorded approximately
$630,000 of revenue related to the sale of products and services
under these programs compared to approximately $750,000 of revenue
recorded last fiscal year. The decrease principally relates to the
Company's decision to cease operations of its information and
database software operation as a discreet profit center. All
software development costs associated with this line of business
have been fully amortized as of September 30, 1996.
Expenses
Cost of revenue as a percentage of revenue for fiscal year
1996 was 73.2% compared to 77.0% for fiscal year 1995. The
improvement in these ratios is principally attributable to gross
margin gains in the Company's EPOCH operation as well as increased
margins at IMI.
SG&A increased in both absolute terms (by approximately
$325,000) and as a percentage of revenue (15.7% vs. 13.3%) in 1996
over 1995. The increases reflect the Company's continued program
to enhance and augment its selling efforts, including a very
concerted effort (and expense) to sell its commercial products
internationally.
During 1996 the Company recorded a non-recurring $233,000 bad
debt expense attributable to a customer's inability to pay.
Despite this reserve, the Company is vigorously pursuing collection
of this receivable. (See Item 3 - Legal Proceedings).
General
Overall, net income as a percentage of revenue was 2.9% in
fiscal year 1996 compared to 3.5% in fiscal year 1995, while pretax
income was approximately $75,000 lower in 1996 compared to 1995.
Were it not for the bad debt expense described above, pretax income
would have been 28% greater in 1996 over 1995. Further the
Company's fourth quarter of fiscal year 1996 included its highest
ever quarterly revenue total ($3.9 million) and its second highest
ever pretax profit level ($448,000). Because of its fourth quarter
performance, its current and significant backlog, and contracts to
be imminently received, the Company believes that results for
fiscal year 1997 will exceed those recorded in fiscal year 1996 for
both revenue and profitability.
Liquidity and Capital Resources
The Company has been profitable on an annual basis since
inception and has been able to generate adequate cash flow from
operations to fund its operating and capital expenses. To
supplement operating cash flows, the Company has access to a line
of credit facility in the amount of $1.2 million which is currently
unused. (See Note 5 of the Notes to Financial Statements). During
fiscal year 1996, the Company used approximately $146,000 for
operating activities and used an additional $739,000 for investing
activities, including approximately $432,000 for newly capitalized
software development costs.
As a result of its current cash reserves, its unused line of
credit, its current profitability and management's internal budgeting
and planning, the Company believes it will have adequate
cash resources to meet its obligations for the foreseeable future.
Although operating and investing activities consumed significant
sums of cash during 1996, the Company does not believe it will have
to rely on external sources of cash (i.e. its line of credit) to
fund its growth and future software development in fiscal year
1997.
In terms of capital purchases, historically the Company has
funded such items through operating cash flow or capital lease.
The Company currently has no plans for major capital purchases in
the ensuing twelve month period, although the Company plans to
continue to invest in the continued development and improvement of
its principal software products, EPOCH and OASYS.
Item 7. Financial Statements and Supplementary Data
The information required by this item is set forth under item
13(a), which information is incorporated herein by reference.
Item 8. Disagreements on Accounting and Financial Disclosure
Not Applicable.
<PAGE>
PART III
Item 9. Directors and Executive Officers, Promoters and Control
Persons, Compliance With Section 16(a) of the Exchange Act.
Name Position with the Company
Steven R. Chamberlain Chairman of the Board
and Chief Executive Officer
Thomas L. Gough President, Chief Operating Officer
and Director
Robert P. Sadler Vice President, Quality Control,
Secretary; Treasurer; and Director
Steven K. Kowal Vice President, Engineering
Manufacturing
Steven A. Carchedi Vice President of Commercial
Systems
Donald F. Mack, Jr. Vice President of Engineering
Kimberly A. Chamberlain Vice President, Chief Financial
Officer
William I. Tittley Vice President, Asia Pacific
Operations
Bonnie K. Wachtel Outside Director
Dominic A. Laiti Outside Director
R. Doss McComas Outside Director
Directors serve until the next annual meeting of stockholders
or until successors have been elected and qualified. Officers
serve at the discretion of the Board of Directors.
Steven R. Chamberlain, 41, a Company founder, has been
Chairman of the Board since June, 1992, President since May 1988
and a Director since 1982. He served as Vice President from 1982
until he became President. From 1978 to 1982, Mr. Chamberlain was
employed by OAO Corporation where he progressed from Systems
Analyst to Manager of the Offutt Air Force Base field support
office. Mr. Chamberlain holds a B.S. degree in Physics from
Memphis State University and has done graduate work in Physics and
Mathematics at Memphis State and the University of Maryland. Mr.
Chamberlain is married to Kimberly A. Chamberlain, who was, at
September 30, 1996, the Vice President and Chief Financial Officer
of the Company. On February 28, 1997, Ms. Chamberlain resigned as
Vice President and Chief Financial Officer of the Company.
Thomas L. Gough, 48, became a member of ISI's staff in
January, 1984. In March of 1996 he was elected to the Board of
Directors of Integral Systems having served as President and Chief
Operating Officer since June, 1992. For three years before being
named President he served as Vice President and Chief Financial
Officer. Prior to joining ISI he was employed by Business and
Technological Systems, Inc., serving initially as a Project Leader
and later as the Software Systems Division Manager. From 1972 to
1977 he was employed by Computer Sciences Corporation where he
progressed from programmer/analyst to section manager. Mr. Gough
earned a BS degree from the University of Maryland where he majored
in Information Systems Management in the School of Business and
Public Administration.
Robert P. Sadler, 46, a Company founder, has been a Director,
Secretary, and Treasurer since 1982. In May 1988, he was appointed
Vice President of Administration, in June, 1992, he was appointed
Vice President, Quality Control. From 1976 to 1982, Mr. Sadler was
employed at OAO Corporation where he progressed from Computer
Analyst to Project Manager. Mr. Sadler obtained a B.S. in
Mathematics and a B.S. in Computer Sciences from Pennsylvania State
University and a M.S. in Management of Information Systems
Technology from George Washington University.
Steve K. Kowal, 43, a Company founder, has been with ISI since
1982. In May 1988 he was appointed Vice President of Engineering
Manufacturing. From 1979 to 1982, Mr. Kowal was employed by OAO
Corporation where he was a manager of hardware development on
several of OAO's major systems. Mr. Kowal holds a B.S. degree in
Electrical Engineering from the University of Delaware.
Steven A. Carchedi, 45, joined the Company in 1991 and is Vice
President of Commercial Systems. Before joining Integral Systems
as a full-time employee in 1991, Mr. Carchedi worked with the
company for two years as an independent business development
consultant. Previously, he worked for Computational Engineering,
Inc., where he held positions as a Mathematician, Program Manager,
Corporate Director, and Vice President of Business Development.
Mr. Carchedi holds a B.S. Degree in Mathematics from Wake Forest
University and a M.A. Degree in Mathematics from the University of
Maryland.
Donald F. Mack, Jr., 43, joined the company in 1986. In July
of 1989, he was appointed Vice President of Engineering. From 1979
to 1986, Mr. Mack was employed by General Electric Corporation's
Space Systems Division where he progressed from design engineer to
a Senior Project Supervisor for systems development. Mr. Mack
holds a B.S. degree in Electrical Engineering from Northeastern
University and a M.S. degree in Electrical Engineering from Johns
Hopkins University.
Kimberly A. Chamberlain, 40, was appointed Vice President and
Chief Financial Officer in April, 1995 and has been with the
company since 1983. Ms. Chamberlain graduated from the University
of Maryland, with a B.S. degree in Business Management in 1985.
Before coming to Integral Systems, Ms. Chamberlain worked at OAO
Corporation. Ms. Chamberlain is married to Steven R. Chamberlain,
the Chairman of the Board and Chief Executive Officer of the
Company. On February 28, 1997, Ms. Chamberlain resigned as Vice
President and Chief Financial Officer of the Company.
William I. Tittley, 53, joined the company in 1992, performing
as Project Manager on the first EPOCH 2000 sale to the Chinese
Government. In March, 1995, Mr. Tittley was made Vice President,
Asia Pacific, to oversee the Company's operations in the Asian
region. Formerly, Mr. Tittley was with the OAO Corporation (from
1977 through 1992), where he performed duties as Director, Space
System Programs, in charge of the technical and financial direction
of aerospace systems programs. Mr. Tittley holds a B.S. in
Aerospace Vehicle Design from the State University of New York, and
a M.S. in Engineering from the California Coast University.
Bonnie K. Wachtel, 42, has served as a Director since May
1988. Since 1984 she has been Vice President, General Counsel and
a Director of Wachtel & Co., Inc., an investment banking firm in
Washington, D.C. Ms. Wachtel serves as a Director of several
corporations including VSE Corporation and Information Analysis,
Inc. She holds a B.A. and M.B.A. from the University of Chicago
and a J.D. from the University of Virginia, and is a Certified
Financial Analyst.
Dominic A. Laiti, 65, was elected director of the Company in
July, 1995. Mr. Laiti is presently employed as an independent
consultant and was President and Director of Globalink, Inc. from
January 1990 to December 1994. He has over twenty-five (25) years
of experience in starting, building, and managing high-technology
private and public companies with annual revenues from two million
to over 120 million dollars. Mr. Laiti was President of Hadron,
Inc. from 1979 to 1989, Vice President of Xonics Inc. from 1972 to
1979 and Vice President of KMS Industries from 1968 to 1972. He is
a former Director of United Press International, Saturn Chemicals
Company, Hadron, Inc., Telecommunications Industries, Inc., MAXXAM
Technology, Inc., and Jupiter Technology, Inc.
R. Doss McComas, 42, joined the Board in July, 1995. Since
1982 he has had various positions with COMSAT RSI, a business unit
of COMSAT supplying products and services to the wireless,
satellite, air traffic control and other specialized markets
worldwide. These positions included General Counsel, Vice
President of Acquisitions, Strategic Planning and International
Marketing, as well as Group Vice President, responsible for the
company's international operations. Currently, he is Chairman and
Chief Executive Officer of Plexsys International, a COMSAT RSI
equity investment. He holds a B.A. degree from Virginia
Polytechnic Institute, a M.B.A. from Mt. Saint Mary's, and a J.D.
from Gonzaga University.
Item 10. Executive Compensation
a. Summary Compensation Table
The following table sets forth compensation received by the
Company's CEO and four highest paid executive officers who earned
over $100,000 during the fiscal year ended September 30, 1996:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts
Other All other
Annual Restricted
Name and Compen- Stock LTIP Compen-
Principal sation Award(s) Options/Payouts sation
Position Year Salary($) Bonus($)($)($)($) SAR(#) ($) ($)(1)
CEO
S. R. Chamberlain 1996 $114,179 $14,000 15,000 $11,486
1995 $108,577 $14,000 7,500 $10,502
1994 $105,998 $13,975 0 $11,208
PRESIDENT
Thomas L. Gough 1996 $101,581 $ 8,000 10,000 $10,061
1995 $ 98,048 $11,000 0 $ 9,318
1994 $ 93,645 $10,980 0 $ 9,677
VP,
Commercial Systems
Steve Carchedi 1996 $ 97,771 $12,000 10,000 $ 9,572
1995 $ 94,926 $12,000 2,000 $ 8,944
1994 $ 91,896 $ 9,479 0 $ 9,479
VP, Engineering
Manufacturing
Steven K. Kowal 1996 $ 97,771 $ 9,000 4,000 $ 9,572
1995 $ 94,926 $ 9,500 0 $ 8,944
1994 $ 91,896 $ 9,479 0 $ 9,452
VP, Asia
Pacific
Operations
William I. Tittley 1996 $ 98,891 $26,456 1,000 $10,684
1995 $ 96,050 $ 7,000 5,000 $ 9,046
1994 $ 93,006 $ 6,018 0 $ 9,779
(1) Employer Pension Contributions
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Percent of Total
Number of Options/SARs
Options/ Granted to
SARS Employees in Exercise Base Expiration
Name Granted Fiscal Year Price($) Date
CEO
S.R. Chamberlain 15,000 18% *$22.50 2001
PRESIDENT
Thomas L. Gough 10,000 12% $23.50 2001
VP, COMMERCIAL SYSTEMS
Steven A.Carchedi 10,000 12% *$22.50 2001
VP, ENGINEERING
MANUFACTURING
Steven K. Kowal 4,000 5% $21.50 2001
VP, ASIA PACIFIC
OPERATIONS
William I. Tittley 1,000 1% $21.50 2001
*Average Price
</TABLE>
b. Compensation Pursuant to Plans
ISI's Board of Directors awards annual bonuses to officers and
employees on a discretionary basis. Currently no formal plan
exists for determining bonus amounts.
Effective October 1, 1987, the Company established a 401K
pension and profit sharing plan under Section 401 of the Internal
Revenue Code. Under the plan the Company contributes annually an
amount equal to 5% of an eligible employee's salary, and may make
additional contributions of up to 7.5% of an eligible employee's
salary. The employee may contribute up to an additional 10% as
salary deferral. In fiscal years 1996 and 1995, the Company
contributed a total of 11% of eligible employees salaries to both
plans.
c. Stock Option Plan
Effective May 25, 1988, ISI established a stock option plan to
create additional incentives for the Company's employees,
consultants and directors to promote the financial success of the
Company. ISI's Board of Directors has sole authority to select
full-time employees, directors, or consultants to receive awards of
options for the purchase of stock under this plan. The maximum
number of shares of ISI Common Stock which may be issued pursuant
to the stock plan was increased from 50,000 to 200,000 during
fiscal year 1994.
A total of 85,600 options were issued and 8,787 options were
exercised during fiscal year 1996; 5,000 options were canceled.
Total options issued and outstanding as of September, 1996 are
117,987. On December 1, 1995, William I. Tittley, the Company's
Vice President for Asia Pacific Operations, exercised options for
2,700 shares. On June 27, 1996, Donald F. Mack, Jr., the Company's
Vice President of Engineering, exercised options for 1,000 shares.
Aggregated Option/SAR Exercises in Last Fiscal Year and
FY-End Option/SAR Values
<TABLE>
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
Number of
Securities Underlying Value of Unexercised
Unexercised Options/ In-the-Money Options
SARs at FY-End(#) SARs at FY-End
Shares Acquired Value Exercisable Exercisable
Name on Exercise (#) Realized Unexercisbale Unexercisable
VP, Asia Pacific
Operations
William I. Tittley 2,700 $46,525 $3,500 $65,875
(unexercisable) (unexercisable)
</TABLE>
d. Compensation of Directors
Presently outside directors who are not employees of the
Company receive $5,000 per year for their services.
e. Termination of Employment and Change of Control
Termination
The Company has no compensatory plan nor arrangement with
respect to any individual named in the Cash Compensation Table
(Item 11(a)) which results or will result from the resignation,
retirement or any other termination of such individual's employment
with the Company or its subsidiaries or from a change in control of
the Company or a change in the individual's responsibilities
following a change in control.
Item 11. Security Ownership of Certain Beneficial Owners and
Management
a. Security Ownership of Certain Beneficial Owners (as of 9/30/96)
None
b. Security Ownership of Management (as of 9/30/96)
<TABLE>
<S> <C> <C>
Name of Owner (1)(2)Shares Percentage of Total Shares
Owned
Steven R. Chamberlain 79,040 7.7%
Thomas L. Gough 37,850 3.7%
Robert P. Sadler 52,340 5.1%
Kimberly A. Chamberlain 10,460 1.0%
Donald F. Mack, Jr. 11,350 1.1%
Steven K. Kowal 43,346 4.2%
Steven A. Carchedi 26,500 2.6%
William Tittley 3,800 .4%
Bonnie K. Wachtel 5,000 .5%
Dominic A. Laiti 5,000 .5%
R. Doss McComas 4,500 .4%
</TABLE>
Officers and Directors as a group 279,186 27.0%
(1) Includes Options
(2) There are no shares issuable to the individuals named in this
table within 60 days.
Item 12. Certain Relationships and Related Transactions
Bonnie K. Wachtel is Vice President, General Counsel and
Director of Wachtel & Co., Inc., one of the Underwriters of ISI's
initial public offering.
Item 13. Exhibits, Financial Statement Schedules, and Reports
on Form 8K
(a) (1) Financial Statements
Independent Auditors' Report - page 1
Balance Sheets as of September 30, 1996 - page 2
Statements of Operations for the Years Ended September 30, 1996,
and 1995 - page 3
Statement of Stockholders' Equity for Years Ended September 30,
1996 and 1995 - page 4
Statements of Cash Flows for the Years Ended September 30, 1996 and
1995 - page 5
Notes to Financial Statements - pages 6 - 15
(2) Material Contracts
Contract, dated 9/27/90 between Integral Systems, Inc. and the U.S.
National Oceanic and Atmospheric Administration, page 36.
(Portions of this exhibit have been omitted pursuant to a request
for confidential treatment filed with the Securities and Exchange
Commission.)
Contract, dated 12/22/94, between Integral Systems, Inc. and the
Republic of China National Space Program Office, page 104.
(Portions of this exhibit have been omitted pursuant to a request
for confidential treatment filed with the Securities and Exchange
Commission.)
Contract, dated 5/17/96, between Integral Systems, Inc. and the U.S.
National Oceanic and Atmospheric Administration, page 164.
(Portions of this exhibit have been omitted pursuant to a request
for confidential treatment filed with the Securities and Exchange
Commission.)
Contract, dated 4/8/96, between Integral Systems, Inc. and AT&T
Corporation, page 421. (Portions of this exhibit have been
omitted pursuant to a request for confidential treatment filed with
the Securities and Exchange Commission.)
All other schedules are omitted since the required information is
not present or is not present in amounts sufficient to require
submission of the schedule, or because the information required is
included in the financial statements and notes thereto.
(b) Reports on Form 8-K
There were no Form 8-Ks filed during fiscal year 1996.
INTEGRAL SYSTEMS, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended September 30, 1996 and 1995
AND
INDEPENDENT AUDITORS' REPORT
TABLE OF CONTENTS
DESCRIPTION PAGES
Independent Auditors' Report 1
Consolidated Balance Sheet as of September 30, 1996 2
Consolidated Statements of Operations for the Years
Ended September 30, 1996 and 1995 3
Consolidated Statements of Stockholders' Equity for
the Years Ended September 30, 1996 and 1995 4
Consolidated Statements of Cash Flows for the Years
Ended September 30, 1996 and 1995 5
Notes to Consolidated Financial Statements 6-15
RUBINO & McGEEHIN CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
6905 ROCKLEDGE DRIVE, SUITE 700
BETHESDA, MARYLAND 20817-1818
301-564-3636
FAX 301-564-2994
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Integral Systems, Inc.
We have audited the accompanying consolidated balance sheet of
Integral Systems, Inc. and its subsidiaries as of September 30, 1996,
and the related consolidated statements of operations, stockholders'
equity, and cash flows for the years ended September 30, 1996 and
1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Integral Systems, Inc. and its subsidiaries as of
September 30, 1996, and the consolidated results of their operations
and their consolidated cash flows for the years ended September 30,
1996 and 1995, in conformity with generally accepted accounting
principles.
RUBINO & McGEEHIN
November 20, 1996
Bethesda, Maryland
<PAGE>
INTEGRAL SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996
ASSETS
Current assets
Cash and cash equivalents $1,369,915
Accounts receivable 4,849,886
Employee receivables 24,200
Prepaid expenses 59,956
Deferred income taxes 73,913
Total current assets 6,377,870
Property and equipment, at cost, net of accumulated
depreciation and amortization of $446,769 399,108
Other assets
Deposits 7,182
Software development costs, net of accumulated
amortization of $1,463,779 1,295,514
Total assets $8,079,674
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable - trade $786,701
Accrued expenses 1,157,356
Billings in excess of revenue for contracts
in progress 128,925
Income tax payable 48,060
Total current liabilities 2,121,042
Commitments and contingencies
Common stock, $.01 par value, 2,000,000 shares
authorized, 952,533 shares issued
and outstanding 9,525
Additional paid-in capital 825,311
Retained earnings 5,123,796
Total stockholders' equity 5,958,632
Total liabilities and stockholders' equity $8,079,674
The accompanying notes are an integral part of the these
consolidated financial statements.
<PAGE>
INTEGRAL SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended September 30, 1996 and 1995
<TABLE>
<S> <C> <C>
Revenue $11,217,148 $10,770,661
Cost of revenue
Direct labor 3,617,255 3,526,899
Direct equipment and subcontracts 1,567,215 2,218,243
Travel and other direct costs 302,373 159,992
Overhead costs 2,729,793 2,385,043
Total cost of revenue 8,216,636 8,290,177
Gross margin 3,000,512 2,480,484
Selling, general and administrative 1,758,248 1,434,296
Product amortization 509,477 508,556
Bad debt expense 232,708 -
Income from operations 500,079 537,632
Other income (expense)
Interest income 65,396 76,222
Interest expense (2,320) (2,529)
Miscellaneous, net (60,787) (35,139)
Income before income taxes 502,368 576,186
Provision for income taxes 179,351 195,483
Net income $323,017 $380,703
Weighted average number of common shares 948,021 942,155
Earnings per share:
Net income $ .34 $ .40
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
INTEGRAL SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Years Ended September 30, 1996 and 1995
<TABLE>
<S> <C> <C> <C> <C> <C>
Common
Stock at Additional
Number of Par Paid-in Retained
Shares Value Capital Earnings Total
Balance, September 30, 1994 938,020 $ 9,380 $ 635,541 $4,420,076 $5,064,997
Stock options exercised 5,726 57 60,896 - 60,953
Net income - - - 380,703 380,703
Balance, September 30, 1995 943,746 9,437 696,437 4,800,779 5,506,653
Stock options exercised 8,787 88 128,874 - 128,962
Net income - - - 323,017 323,017
Balance, September 30, 1996 952,533 $ 9,525 $ 825,311 $5,123,796 $5,958,632
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
INTEGRAL SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended September 30, 1996 and 1995
<TABLE>
<S> <C> <C>
1996 1995
Cash flows from operating activities:
Net income $323,017 $380,703
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 705,793 677,207
Change in deferred taxes (13,194) 20,805
(Increase) decrease in:
Accounts receivable (1,366,109) (1,090,207)
Interest receivable - 10,333
Prepaid expenses and deposits 4,549 (46,815)
Employee receivable (24,200) -
Income tax receivable - 6,361
(Decrease) increase in:
Accounts payable - trade 434,706 145,031
Accrued expenses 282,108 (157,414)
Billings in excess of revenue
for contracts in progress (432,277) 337,288
Income tax payable (60,421) 108,481
Total adjustments (469,045) 11,070
Net cash (used) provided by operating activities (146,028) 391,773
Cash flows from investing activities:
Acquisition of property and equipment (306,799) (217,642)
Software development costs (431,773) (315,470)
Sale of marketable securities - 403,100
Net cash used in investing activities (738,572) (130,012)
Cash flows from financing activities:
Proceeds from issuance of common stock 128,962 60,953
Net (decrease) increase in cash (755,638) 322,714
Cash and cash equivalents, beginning of year 2,125,553 1,802,839
Cash and cash equivalents, end of year $1,369,915 $2,125,553
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
<PAGE>
1. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include
the accounts of Integral Systems, Inc. (the Company) and its
wholly owned subsidiaries, Integral Marketing, Inc. (IMI) and
InterSys, Inc. (InterSys). All significant intercompany
transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
Revenue Recognition
Revenue under cost-plus-fixed-fee contracts is recorded on
the basis of direct costs plus indirect costs incurred and an
allocable portion of the fixed fee. Revenue from fixed-price
contracts is recognized on the percentage-of-completion
method, measured by the cost-to-cost method for each
contract. Revenue from time and materials contracts is
recognized based on fixed hourly rates for direct labor
expended. The fixed rate includes direct labor, indirect
expenses and profits. Material or other specified direct
costs are recorded at actual cost.
Contract costs include all direct material and labor costs
and those indirect costs related to contract performance.
General and administrative costs are charged to expense as
incurred. Provisions for estimated losses on contracts in
progress are made in the period in which such losses are
determined. Changes in job performance, job conditions, and
estimated profitability, including final contract
settlements, may result in revisions to costs and income and
are recognized in the period in which the revisions are
determined. The Company's contracts vary in length from one
to four years.
The fees under certain government contracts may be increased
or decreased in accordance with cost or performance incentive
provisions which measure actual performance against
established targets or other criteria. Such incentive fee
awards or penalties are included in revenue at the time the
amounts can be reasonably determined.
1. Summary of Significant Accounting Policies (continued)
Unbilled accounts receivable represents revenue recognized in
excess of amounts billed. The liability, billings in excess
of revenue for contracts in progress, represents billings in
excess of revenue recognized.
Revenue from commissions for the sale of equipment is
recognized when customer orders are submitted. A reserve is
made for possible reductions in or cancellations of customer
orders.
Depreciation and Amortization
Property and equipment are stated at cost. The Company
follows the policy of providing depreciation and amortization
by charges, on the straight-line method, to operating
expenses at rates based on estimated useful lives as follows:
Classification Estimated Useful Lives
Electronic equipment 3 Years
Furniture and fixtures 5 Years
Leasehold improvements Life of lease
Software 3 Years
Maintenance and repair costs are charged to expense as
incurred. Replacements and betterments are capitalized. At
the time properties are retired or otherwise disposed of, the
property and related accumulated depreciation or amortization
accounts are relieved of the applicable amounts and any gain
or loss is credited or charged to income.
Software Development Costs
The Company has capitalized costs related to the development
of certain software products. In accordance with Statement
of Financial Accounting Standards No. 86, capitalization of
costs begins when technological feasibility has been
established and ends when the product is available for
general release to customers. Amortization is computed on an
individual product basis and has been recognized for those
products available for market based on the products'
estimated economic lives which average five years. Due to
inherent technological changes in software development,
however, the period over which such capitalized costs is
being amortized may have to be modified.
1. Summary of Significant Accounting Policies (continued)
Earnings Per Share
Earnings per share computations are based on the weighted
average number of common shares outstanding during each year
and have been adjusted where appropriate for stock splits.
The exercise of outstanding stock options would not result in
a material dilution of earnings per share.
Cash Concentrations and Cash Equivalents
The Company considers all highly-liquid debt instruments
purchased with a maturity of three months or less to be cash
equivalents. Cash accounts are maintained primarily with one
federally insured financial institution. Balances usually
exceed insured limits, but management does not consider this
to be a significant concentration of credit risk. Included
in the cash balance is $89,057 held in a foreign bank
account.
Reclassification
Certain accounts in the prior year financial statements have
been reclassified for comparative purposes to conform with
the presentation in the current year financial statements.
2. Accounts Receivable and Revenue
Accounts receivable at September 30, 1996 consists of the
following:
Billed
Government - prime contracts $ 669,556
Government - subcontractors 440,871
Commercial customers 1,655,615
Subtotal 2,766,042
Unbilled
Government - prime contracts 827,637
Government - subcontractors 91,269
Commercial customers 1,164,938
Subtotal 2,083,844
Total $4,849,886
2. Accounts Receivable and Revenue (continued)
Unbilled accounts receivable include amounts arising from
the use of the percentage-of-completion or other methods of
recognizing revenue that differ from contractual billing
terms. Substantially all unbilled receivables are expected
to be collected in one year.
During the years ended September 30, 1996 and 1995,
approximately 51% and 58%, respectively, of the Company's
revenue was from prime contracts and subcontracts with
departments and agencies of the U.S. Government. The
remaining revenue consists of commercial contracts and sales
of commercial products. For each of the years ended
September 30, 1996 and 1995, commercial revenue included one
customer which provided revenue in excess of 10% of total
revenue.
3. Property and Equipment
Property and equipment as of September 30, 1996, are as
follows:
Electronic equipment $728,956
Furniture and fixtures 54,898
Leasehold improvements 11,365
Software 50,658
Total property and equipment 845,877
Less: accumulated depreciation
and amortization (446,769)
$399,108
4. Software Development
Software development costs at September 30, 1996, consist of
the following:
Costs incurred $2,759,293
Less: accumulated amortization (1,463,779)
$1,295,514
The total amortization expense for the year ended September
30, 1996 is $509,477.
5. Line of Credit
The Company has a line of credit agreement with a bank at
September 30, 1996 for $1,200,000. Borrowings under the
line of credit bear interest at the bank's prime lending
rate plus one-quarter of one percentage point per annum.
Any accrued interest is payable monthly. The line of credit
is secured by the Company's billed accounts receivable. The
line also has certain financial covenants, including minimum
net worth and liquidity ratios. The line expires February
28, 1998. At September 30, 1996, the Company had no
outstanding balance under the line of credit.
6. Accrued expenses
Accrued expenses at September 30, 1996, consist of the
following:
Accrued payroll $544,974
Accrued vacation 253,950
Payroll taxes 171,054
Retirement plan payable 158,897
Other 28,481
$ 1,157,356
7. Commitments and Contingencies
Leases
The Company is leasing office space for a five-year period
that commenced March 15, 1994. Future minimum lease payments
through March 14, 1999 are as follows:
Years ending September 30, 1997 $219,520
1998 226,048
1999 105,131
$550,699
Lease payments do not include operating expenses, which are
adjusted annually, or utilities. Rent expense was $254,327
and $248,944, for the years ended September 30, 1996 and
1995, respectively.
7. Commitments and Contingencies (continued)
Government Contracts
A significant portion of the revenues of the Company
represent payments made by the U.S. Government and by
contractors that have prime contracts with the U.S.
Government. These revenues are subject to adjustment upon
audit by the Defense Contract Audit Agency (DCAA). Audits by
the DCAA have been completed on the Company's contracts and
subcontracts through the year ended September 30, 1994.
Management is of the opinion that any disallowances by the
Government auditors, other than amounts already provided,
will not materially affect the Company's financial
statements.
Litigation
During the fiscal year ended September 30, 1996, the Company
sold certain of its software products along with specified
hardware to a U.S. Government agency. The procurement
required the Company to sell these items through an
intermediary prime contractor. The value of the contract to
the Company was $232,708.
The Company fully complied with the terms of its contract,
and although the third party prime contractor has been paid
in full by the U.S. Government, the Company has received no
payments to date. In August 1996, the Company filed a
complaint in the Second Judicial District Court of the State
of New Mexico against the prime contractor and its principal
owner individually for breach of contract in an attempt to
recover the value of its contract. Based on discovery
received, the Company subsequently filed a motion for summary
judgment against the defendants.
In September 1996, the defendants filed a counterclaim
against the Company alleging defamation, intentional
interference with contractual relations and the prima facie
tort of extortion. The Company believes the counterclaim is
without merit and will not have a materially adverse effect
on its financial statements.
Although the Company has fully reserved the receivable due
under this contract ($232,708), it continues to vigorously
pursue all legal remedies available to it.
8. Income Taxes
For the years ended September 30, 1996 and 1995, the
provision for income taxes consisted of the following:
1996 1995
Current tax expense
Federal $154,910 $142,972
State 37,635 31,706
192,545 174,678
Deferred tax (benefit) expense (13,194) 20,805
Total provision $179,351 $195,483
At September 30, 1996, the tax effect of significant
temporary differences representing deferred tax assets and
liabilities are as follows:
Asset
(Liability)
Depreciation and amortization $(36,827)
Vacation accrual 99,040
Revenue reserve 11,700
Net deferred income tax asset $ 73,913
The effective income tax rates differ from the statutory
United States income tax rate due principally to the
following:
1996 1995
Federal statutory rate 34.0% 34.0%
State tax, net of federal
income tax benefit 4.6 4.6
Tax-exempt interest - (0.8)
Tax deductible stock option compensation (2.8) (4.1)
Other, primarily change in estimate 0.1) 0.2
Effective rate 35.7% 33.9%
9. Profit Sharing and Employee Benefits Plans
The Company has a profit sharing and 401(k) plan for the
benefit of substantially all employees. Profit sharing
contributions consist of discretionary amounts determined
each year by the Board of Directors of the Company based upon
net profits for the year and total compensation paid. The
401(k) feature allows employees to make elective deferrals
not to exceed 10% of compensation. Effective January 1,
1995, the separate profit sharing and 401(k) plans were
combined into one plan.
The Company also has a money purchase plan. For the years
ended September 30, 1996 and 1995, the money purchase plan
obligated the Company to contribute 5% of eligible salaries
under the plan.
For the years ended September 30, 1996 and 1995,
contributions to the plans totalled $473,552 and $455,269,
respectively.
10. Stock Option Plan
Effective May 25, 1989, as amended on January 1, 1994, the
Company established a stock option plan to create additional
incentives for the Company's employees, consultants and
directors to promote the financial success of the Company.
The Board of Directors has sole authority to select full-time
employees, directors or consultants to receive awards of
options for the purchase of stock under this plan. The
maximum number of shares of common stock which may be issued
pursuant to the stock option plan is 200,000. The price of
the options is set at the stock's bid price on the date of
the Board of Directors meeting at which the option is
granted. Options expire no later than ten years from the
date of grant (five years for greater than ten percent
owners) or when employment ceases, whichever comes first, and
vest over three years.
Stock option transactions under the plan for the years ended
September 30, 1996 and 1995, are summarized as follows:
<TABLE>
<S> <C> <C>
1996 1995
Options outstanding, beginning of year 46,174 30,800
Granted 85,600 21,100
Exercised (8,787) (5,726)
Cancelled (5,000) -
Options outstanding, end of year 117,987 46,174
Option price range $21.50 to $17.75 to
$29.00 $26.00
Options exercisable, end of year 19,012 15,714
Options available, end of year 51,850 132,450
</TABLE>
10. Stock Option Plan (continued)
The Company applies APB Opinion No. 25 in accounting for its
stock option plan, and, accordingly, no compensation cost has
been recognized for the plan. FASB Statement No. 123,
"Accounting for Stock-Based Compensation" (SFAS 123), is
effective for fiscal years beginning after December 15, 1995.
Adoption of SFAS 123 is optional; however, proforma
disclosures as if the Company adopted the cost recognition
requirements under SFAS 123 will be required in the Company's
financial statements for its fiscal year ending September 30,
1997.
11. Supplemental Cash Flow Information
For the years ended September 30, 1996 and 1995, income taxes
paid, net of refunds, were $410,076 and $81,012,
respectively. For the years ended September 30, 1996 and
1995, interest expense incurred and paid was $2,320 and
$2,529, respectively.
12. Business Segment Information
During the year ended September 30, 1996, the Company's
operations included two reportable segments: Satellite
ground systems and electronic test instrumentation and
equipment marketing.
The Company provides satellite ground systems - computer
systems for satellite command and control, data processing,
simulation, and flight software validation. Customers for
these systems include U.S. Government organizations such as
National Aeronautics and Space Administration (NASA), the
National Oceanic and Atmospheric Administration (NOAA), and
the U.S. Air Force, as well as commercial satellite
operators, both domestic and foreign.
Through its wholly-owned subsidiary, IMI, the Company acts as
a manufacturer's representative, selling electronic test
instrumentation and equipment to customers primarily in
Maryland, Virginia and the District of Columbia. (The
Company's other wholly-owned subsidiary, InterSys, provides
consulting services for satellite design and procurement, but
is presently inactive.)
12. Business Segment Information (continued)
Summarized financial information is as follows:
<TABLE>
<S> <C> <C>
1996 1995
Net sales
Satellite ground systems $10,555,371 $10,503,423
Marketing 661,777 267,238
Income before taxes
Satellite ground systems 343,797 615,413
Marketing 158,571 (39,227)
Identifiable assets
Satellite ground systems 6,139,157 4,981,702
Marketing 405,351 163,918
Capital expenditures
Satellite ground systems 305,220 216,896
Marketing 1,579 746
Depreciation and amortization
Satellite ground systems 192,838 165,551
Marketing 3,478 3,100
</TABLE>
Identifiable assets of the respective segments include
accounts receivable, property and equipment, and software
development costs. Cash and cash equivalents and the
remaining assets are considered corporate assets. There were
no significant intercompany sales.
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
INTEGRAL SYSTEMS, INC.
BY: /s/
Steven R. Chamberlain
Chairman of the Board and
Chief Executive Officer
DATE: 5/13/97
BY: /s/
Thomas L. Gough
President, Chief Operating
Officer
Director
DATE: 5/13/97
BY: /s/
Elaine M. Parfitt
Chief Financial Officer,
Principal Accounting Officer
DATE: 5/13/97
<PAGE>
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
Signature Titles Date
Chairman of the Board, Director, Chief Executive Officer
Steven R. Chamberlain 5/13/97
President, Chief Operating Officer, Director
Thomas L. Gough 5/13/97
Vice President of Quality Control,
Secretary & Treasurer; Director
Robert P. Sadler 5/13/97
Director
Bonnie K. Wachtel 5/13/97
Director
Dominic A. Laiti 5/13/97
Director
R. Doss McComas 5/13/97
<PAGE>
<PAGE>
EXHIBIT A
AWARD/CONTRACT
OMB No. 0690-0008 Expiration Date: November 1996
1. THIS CONTRACT IS A RATED ORDER UNDER DPAS (15 CFR 350) RATING
2. CONTRACT NO. |3. EFFECTIVE DATE |4. REQUISITION/PROJECT NO.
50-DDNE-6-90029 | SEE BLOCK 20C | NE-EK3000-6-00004
5. ISSUED BY CODE: OFA 511 ABR |6. ADMINISTERED BY Code:
| (If other than Item 5)
U.S. Dept. of Commerce/NOAA |
PGAS/POD/ADP Contracts Branch |
Room 4301, 1325 East-West Highway |
Silver Spring, MD 20910 |
7. NAME AND ADDRESS OF CONTRACTOR | 8. DELIVERY
| [ ] FOB ORIGIN
Integral Systems, Inc. | [X] OTHER (See below)
5000 Philadelphia Way, Suite A | Suitland, MD and Falcon Air Force
Lanham, MD 20706-4417 | Base.
| 9. DISCOUNT FOR PROMPT PAYMENT
|
Attention: Pat Woods |
Project Manager |
10.SUBMIT INVOICES TO ADDRESS IN : (4 Copies) G.3
11. SHIP TO/ MARK FOR CODE: E/OSD3 |12. PAYMENT WILL BE MADE BY
| CODE: OFA 2212
NOAA/NESDIS Attn: Harold Wood | U.S. Dept. of Commerce/NOAA
FB-4, Room 3308 | Management Service Center
Washington, D.C. 20233 | Caller Service #7025
| Germantown, MD 20874
13. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION
[ ] 10 U.S.C. 2304(c) ( ) [ X] 41 U.S.C. 253(c) ( 1)
14. ACCOUNTING AND APPROPRIATION DATA
INCREASE %%%%%%%%%%% 6 EA5000 8N2ACV00
15A.ITEM 15B.SUPPLIES/ 15C.QUANTITY 15D.UNIT 15E.UNIT 15F.AMOUNT
NO. SERVICES PRICE
Letter Contract for the Integrated Polar Acquisition Control
Subsystem (IPACS) in accordance with the accompanying terms and conditions
and ISI proposals dated 03/21/96 and 04/01/96 as modified by ISI response
dated 07/29/96 to Government questions and ISI revised cost proposal dated
08/12/96. Base Contract Period is 30 months from date of letter contract
award.
15G. TOTAL AMOUNT OF LETTER CONTRACT: %%%%%%%%%%%%%
EXCEPTION TO STANDARD FORM SF26 (REV.4-85) Prescribed by GSA
Page 1 of 2
FAR(48 CFR) 53.214(a)
AWARD/CONTRACT
16. TABLE OF CONTENTS
SEC DESCRIPTION
PAGE(S)
PART I - THE SCHEDULE
A SOLICITATION/CONTRACT FORM 2
B SUPPLIES OR SERVICES AND PRICES/COSTS 4
C DESCRIPTION/SPECIFICATIONS/WORK STATEMENT 51
D PACKAGING AND MARKING 2
E INSPECTION AND ACCEPTANCE 5
F DELIVERIES OR PERFORMANCE 3
G CONTRACT ADMINISTRATION DATA 4
H SPECIAL CONTRACT REQUIREMENTS 13
PART II - CONTRACT CLAUSES
I CONTRACT CLAUSES 19
PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS
J LIST OF ATTACHMENTS 1
PART IV - REPRESENTATIONS AND INSTRUCTIONS
K REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFERORS
L INSTRUCTIONS, CONDITIONS, AND NOTICES TO OFFERORS
M EVALUATION FACTORS FOR AWARD
CONTRACTING OFFICER WILL COMPLETE ITEM 17 OR 18 AS APPLICABLE
17. [] CONTRACTOR'S NEGOTIATED AGREEMENT (Contractor is required to sign
this document and return 3 copies to issuing office.) Contractor agrees
to furnish and deliver all items or perform all the services set forth or
otherwise identified above and on any continuation sheets for the
consideration stated herein. The rights and obligations of the parties to
this contract shall be subject to and governed by the following documents: (a)
this award/contract, (b) the solicitation, if any, and (c) such provisions,
representations, certifications, and specifications as are attached or
incorporated by reference herein. (Attachments are listed herein.)
18. [ ] AWARD (Contractor is not required to sign this document.) Your offer
on Solicitation Number %%%%%%, including the additions or changes made by
you which additions or changes are set forth in full above, is hereby accepted
as to the items listed above and on any continuation sheets. This award
consummates the contract which consists of the following documents: (a) the
Government's solicitation and your offer, and (b) this award/contract. No
further contractual document is necessary.
19A. NAME AND TITLE OF SIGNER 20A. NAME OF CONTRACTING OFFICER
(Type or print) Ina R. Merson
Contracting Officer
19B. NAME OF CONTRACTOR 20B. UNITED STATES OF AMERICA
by by
(Signature of person authorized to sign) (Signature of Contracting Officer)
19C. DATE SIGNED 20C. DATE SIGNED
EXCEPTION TO STANDARD FORM 26 (REV.4-85)
<PAGE>
Page 2 of 2
SECTION B 50-DDNE-6-90029
SECTION B - SUPPLIES OR SERVICES AND PRICE/COSTS
B.1 TYPE OF CONTRACT - COST-PLUS-FIXED-FEE, COMPLETION
B.2 SUPPLIES/SERVICES TO BE FURNISHED AND PRICES COST
B.3 ESTIMATED AND ALLOWABLE COSTS-FULLY FUNDED CONTRACTS
B.4 CONTRACT FEE
B.1 TYPE OF CONTRACT - COST-PLUS-FIXED-FEE, COMPLETION
The Government contemplates award of a cost-plus-fixed-fee
(CPFF) completion contract resulting from this solicitation.
A CPFF contract provides for payment to the contractor of
allowable costs incurred during performance (to the extent
prescribed in the contract and by regulation) and a fixed fee
(profit). Once negotiated, the fixed fee is not subject to
revision based upon the contractor's actual cost, but it may
be adjusted as a result of the changes subsequent to award in
the work or services to be performed under the contract. The
completion form of contract describes the scope of work to be
done as a clearly defined task or job with a definite goal or
target expressed and with a specified end product required.
This form of contract requires the contractor to complete and
deliver the specified end product as a condition for payment
of the entire fixed fee established for the work and within
the estimated cost if possible. However, in the event the
work cannot be completed within the estimated cost, the
Government can elect to require more work and effort from the
contract without an increase in fee, provided it increases the
estimated cost.
B.2 SUPPLIES/SERVICES TO BE FURNISHED AND PRICES/COSTS
The Contractor, as an independent contractor, and not as an
agent of the Government, shall furnish the necessary qualified
personnel, materials, and services required for development,
installation and support of the Integrated Polar Acquisition
and Control Subsystem (IPACS) for the National Environmental
Satellite Data and Information Service (NESDIS). All
Contractor support services shall conform with the terms and
conditions of this contract. This work shall be performed in
accordance with the Statement of Work as set forth in Section
C.
Page B - 1
SECTION B 50-DDNE-6-90029
BASE PERIOD OF PERFORMANCE - FOR THIRTY MONTHS FROM DATE OF
AWARD
ESTIMATED
ITEM NO. SERVICES QUANTITY COST
01 INTEGRATED POLAR ACQUISITION
AND COST SUBSYSTEM 1 SYSTEM
All costs will be incurred in accordance with ISI proposals
dated 03/21/96 and 4/01/96 as modified by ISI response dated
07/29/96 to Government questions and ISI revised proposal
dated 08/12/96, up to ceiling cost of %%%%%%%%%%%%%% .
0001A Hardware necessary for the 1 SYSTEM
development of the Integrated
Acquisition and Control Subsystem
(IPACS) IAW SOW
0001B Software necessary for the 1 SYSTEM
development of the IPACS IAW SOW
0001C System documentation including 1 SYSTEM
Planning Documents, Design Review
Documents, Specification Documents
And Monthly Progress Reports IAW SOW
0001D IPACS Installation IAW SOW 1 SYSTEM
0001E IPACS Testing IAW SOW 1 SYSTEM
0001F IPACS Phase-Over IAW SOW 1 SYSTEM
0001G IPACS Training IAW SOW 1 SYSTEM
0001H IPACS Spare Parts IAW SOW 1 SYSTEM
0001I IPACS Hardware Maintenance 1 SYSTEM
TOTAL COST
TOTAL FIXED FEE
BONUS FEE
* To Be Negotiated
** See Clause B.4 Contract Fee.
TOTAL CEILING COST FOR CLIN 0001 FOR LETTER CONTRACT $
Page B - 2
SECTION B
50-DDNE-6-90029
OPTIONS
0002 Software Technical Support Services 12 Months
in accordance with Section 14.3.2
of the Statement of Work, from contract
month 31 through 42.
TOTAL COST
0003 Technical Support for Hardware 6 Months
Maintenance, Suitland, MD IAW SOW
Section 14.3.1.1 from contract
Month 31 through 36.
TOTAL COST
FIXED FEE
TOTAL CPFF
0004 Technical Support for Hardware 6 Months
Maintenance, Falcon Air Force Base,
Colorado IAW SOW Section 14.3.1.2
From contract month 31 through 36.
TOTAL COST
TOTAL FIXED FEE
TOTAL CPFF
0005 Software Technical Support Services 12 Months
in accordance with Section 14.3.2
of the Statement of Work from contract
month 43 through 54.
TOTAL COST
TOTAL FIXED FEE
TOTAL CPFF
0006 Software Technical Support Services 6 Months
in accordance with Section 14.3.2
of the Statement of Work from contract
month 55 through 66.
TOTAL COST
TOTAL FIXED FEE
TOTAL CPFF
* To Be Negotiated
Page B - 3
<PAGE>
SECTION B
50-DDNE-6-90029
B.3 ESTIMATED AND ALLOWABLE COSTS-FULLY FUNDED CONTRACTS
(a) Estimated Costs
The estimated cost of this letter contract is $
which consists of $%%%%%%%%%%%for reimbursable costs and $
for fixed fee. "Limitation of Cost," clause 52.216-7
"Allowable Cost and Payments," and clause 52.216-8 "Fixed
Fee."
(b) Allowable Costs
(1) Final annual indirect cost rate(s) and the
appropriate Base(s) shall be established in accordance with
Subpart 42.7 of the Federal Acquisition Regulation (FAR)
in effect for the period covered by the indirect cost
rate proposal.
(2) Until final annual indirect cost rates
are established for any period, the Government shall reimburse
the contractor at billing rates established by the appropriate
Government Representative in accordance with FAR 42.704,
subject to adjustment when the final rates are established.
The established billing rates are currently as follows:
Provisional overhead billing rate: of labor
Categories located at company's site.
Provisional G&A billing rate: applied to total
Costs, less subcontracts and direct materials.
B.4 CONTRACT FEE
In performance of this contract the fee shall be divided into
"Fixed Fee"and "Bonus Fee" portions. The "Fixed Fee" is
payable in accordance with FAR 52.216-08 and shall be awarded
for successful achievement of the following contract
milestone(s): (To be Negotiated.) Payment of "Bonus Fee" is
to be made based on the Government's judgmental evaluation of
the contractor's performance and is not subject to the
Disputes clause of this contract.
Page B - 4
<PAGE>50-DDNE-6-90029
SECTION C
DESCRIPTION/SPECIFICATION/WORK STATEMENT
FOR THE
INTEGRATED POLAR ACQUISITION AND CONTROL SUBSYSTEM
January 1996
50-DDNE-6-90029
Table of Contents
1.0 INTRODUCTION 1
1.1 Background 1
1.2 Scope 2
1.3 Document Organization 3
2.0 SYSTEM DESCRIPTION 4
2.1 DMSP Space Segment 4
2.2 Ground Segment 5
2.2.1 Ground System Operations 6
2.2.1.1 SOCC Operations 7
3.0 EQUIPMENT 9
3.1 Government Furnished Equipment (GFE) 9
3.2 Contractor-furnished Equipment 9
4.0 STANDARD DOCUMENTATION 11
4.1 Additional Documentation 12
5.0 IPACS DEPLOYMENT 17
5.1 IPACS Specifications 17
5.1.1 Capacity 17
5.1.2 IPACS System Availability 17
5.1.3 Failure Recovery 18
5.1.4 Remote Access 18
5.2 IPACS Hardware 18
5.3 Operating Environment 18
6.0 IPACS SYSTEM REQUIREMENTS 20
6.1 Telemetry Processing 20
6.1.1 Decommutation 20
6.1.2 Data Display 21
6.1.3 Data Archiving 21
6.1.4 Data Playback 21
6.1.5 Pseudo Telemetry Processing 21
6.1.6 Dump Comparison 22
6.1.7 State Check 22
6.2 Command Processing 22
6.2.1 Command Modes 22
6.2.2 Satellite Loads 23
6.2.3 Command Verification 23
6.2.4 Command Encryption 24
6.2.5 Clock Correction 24
6.2.6 Automatic Retry 24
6.3 Ground System Management 24
6.3.1 Ground System Initialization 25
6.3.2 Ground System Failover 25
6.3.3 Performance Accounting and Reporting 25
6.3.4 Local Area Network (LAN)
Monitoring 25
6.4 History/Trends Subsystem 26
6.4.1 History Archives 26
6.4.2 Trends Processing 26
6.4.3 Trends Analysis 26
6.5 Communications Requirements 27
6.5.1 Wideband Data 27
6.5.2 DMSP INTERNET 27
6.5.3 External Interfaces 27
50-DDNE-6-90029
6.6 IPACS Timing 28
6.7 Advanced Flight Vehicle Simulation
Facility (AFVSF) Integration 28
6.7.1 AFVSF Local Mode Operations 28
6.7.2 AFVSF ARTS Loop-back Mode 28
6.8 DMSP Scheduler 28
7.0 GENERAL TEST REQUIREMENTS 30
7.1 Hardware 30
7.1.1 Hardware Requirements
Determination 30
7.1.2 Hardware Development and
Acquisition 31
7.1.3 Hardware Certification 31
7.2 Software 31
7.2.1 Software Requirements Analysis 31
7.2.1.1 Software Requirements
Review 31
7.2.1.2 Preliminary Software
Design Review 31
7.2.1.3 Critical Software
Design Review 32
7.2.1.4 Software Implementation 32
7.2.2 Process Certification 32
7.2.3 Software Integration Tests 32
7.3 System Tests 33
7.3.1 In-plant System Test 33
7.3.2 On-site System Test 33
7.4 System Acceptance Test 33
8.0 TRAINING PLAN 35
8.1 Contractor-developed Courses 35
8.1.1 IPACS Overview 35
8.1.2 Computer Systems Training 35
8.1.3 Satellite Operations Training 36
8.1.4 Software Maintenance Training 36
8.1.5 Analytical Capabilities Training 37
8.2 OEM Maintenance Training 37
8.3 GFE Maintenance Training 37
9.0 DOCUMENTATION 38
9.1 Operations and Maintenance
(O & M) Manuals 38
9.2 Contractor Supplied Software
and User Manuals 38
9.2.1 Software Maintenance Manual 38
9.2.2 Data Base Manual 39
9.2.3 Users Guides 39
9.3 Source Listings 39
9.4 Interface Control Document 39
10.0 PHASED INSTALLATION REQUIREMENTS 41
10.2 Site Description 41
10.3 IPACS Installation 42
10.4 Cabling 42
10.5 Tools and Equipment 42
11.0 PHASE-OVER REQUIREMENT 44
11.1 Stand Alone Implementation 44
11.2 Phase-Over Plan 44
50-DDNE-6-90029
12.0 MAINTENANCE REQUIREMENTS 46
12.1 In-plant Maintenance on GFE 46
12.2 IPACS Maintenance Service 46
12.2.1 SOCC Maintenance Support 46
12.2.2 FOCC Maintenance Support 46
12.2.3 Depot Level Maintenance 46
13.0 QUALITY ASSURANCE PROGRAM 48
13.1 Definition 48
13.2 Requirements 48
13.2.1 Quality Audits 48
13.2.2 Reviews 49
13.2.3 Reporting and Control 49
13.2.4 Documentation 49
14.0 ADDITIONAL REQUIREMENTS 50
14.1 Spare Parts 50
14.2 Software Development 50
14.2.1 Development Support Hardware 50
14.2.2 Software 50
14.3 Technical Support 51
ANNEX I - DMSP COMMAND, CONTROL, COMMUNICATIONS (C3) SEGMENT
SPECIFICATION TREE dated 01/03/95. 33 Pages
50-DDNE-6-90029
SECTION 1
INTRODUCTION
1.0 INTRODUCTION
The National Environmental Satellite, Data, and Information Service (NESDIS)
of the National Oceanic and Atmospheric Administration (NOAA) is responsible
for operating the civil Television, Infrared Operational Satellite (TIROS)
environmental satellite program. Concurrently the U.S. Air Force (USAF) is
responsible for operating the Department of Defense (DoD) Defense
Meteorological Satellite Program (DMSP). A major activity in support of
these operations is the ground system tracking, telemetry, and command
(TT&C) functions for control of the satellites provided through the
capabilities of the polar satellite ground systems of the two operating
agencies.
1.1 Background
Presidential Decision Directive/NTSC-2 of May 1994 directed that these two
satellite programs converge to produce a single satellite designated the
National Polar Operational Environmental Satellite System (NPOESS) to serve
both civil and military needs. The NPOESS satellite is projected to be
available for launch in Yr. 2004. Until such time, the inventory of TIROS
and DMSP spacecraft under contract will be launched into the two independent
constellations as at present.
As part of the convergence effort, TIROS/DMSP operations will be integrated
as an interim step to the fully converged NPOESS program. Integrated
operations are to be conducted from the existing NOAA Satellite Operations
Control Center (SOCC) located at Suitland, MD, with a Falcon AFB, CO, backup
operations control center (FOCC). TIROS operations are conducted through
NOAA Command and Data Acquisitions (CDA) stations located at Fairbanks, AK,
and at Wallops Station VA. DMSP operations are currently conducted from the
Multipurpose Satellite Operation Center (MPSOC) at Offutt AFB, NE, a DMSP
dedicated tracking station and backup Satellite Operations Center (FSOC) at
Fairchild AFB, WA, and the common user DMSP enhanced Automatic Remote
Tracking Stations (ARTS) of the Air Force Satellite Control Network (AFSCN).
The DMSP enhanced ARTS, capable of supporting DMSP Mission Data Recovery
(MDR) and transfer, are located at Thule, Greenland; New Boston, NH; Oahu,
HI; and, scheduled for activation in 1997, Vandenberg AFB, CA. All AFSCN
ARTS are capable of DMSP telemetry acquisition and satellite commanding.
Transition to NOAA operation will permit the phase out of the dedicated
tracking station at Fairchild AFB and the MPSOC at Offutt AFB.
50-DDNE-6-90029
This document establishes requirements for integration of SOCC and MPSOC
satellite control center functions at the NOAA SOCC to operate in
conjunction with designated tracking stations. The integrated satellite
control center configuration for purposes of this document will be referred
to as the Integrated Polar Acquisition and Control Subsystem (IPACS).
Telemetry, as used in this document, refers to spacecraft and instrument
state of health information and not to sensor science "mission data."
1.2 Scope
This document sets forth the requirements for IPACS. IPACS shall retain all
the functional characteristics of the existing NOAA operational Polar
Acquisition and Control Subsystem (PACS) and incorporate those functions
unique to DMSP operation. IPACS shall provide a DMSP Scheduler function
incorporating, as a minimum, all features of the current PLANS scheduling
capabilities for scheduling DMSP operations. DMSP ground system devices will
be relocated, initially for the contractor's development effort, and then to
the SOCC and FOCC to provide the data handling for telemetry processing,
voice and data encryption, command generation and encryption, and interfaces
to GFE and communications facilities to operate with the AFSCN network.
It is the objective that IPACS maximize the use of PACS features for Man
Machine Interface, telemetry processing, command processing, History and
Trends archiving, and ground system management.
Elements of the IPACS system at the Suitland SOCC, the primary DMSP control
center, will also be provided at a DMSP backup facility to be located at
Falcon AFB,CO. IPACS at FOCC will interface with the AFSCN for DMSP command
and control backup in the event of a communications or SOCC outage, or as
directed by the National Command Authority (NCA).
IPACS shall establish a DMSP operations area within the SOCC, adjacent to
the existing TIROS operations area. Additionally, the IPACS shall provide
current technology processors compatible with the existing PACS
applications software.
The contractor shall be responsible for the design and implementation of
IPACS at the specified locations. The contractor shall provide hardware,
software, installation, testing, training, documentation and post-
installation support in accordance with the requirements set forth in this
document.
50-DDNE-6-90029
1.3 Document Organization
This Statement of Work (SOW) consists of 14 sections, 10 appendices, and one
annex. Section 1 provides an introduction to the requirements for IPACS.
Section 2 presents an overview of the polar orbiting satellite system.
Section 3 lists major items of DMSP
equipment to be furnished by the government Section 4 identifies other
documents relevant to this work. Section 5 presents a general description
of the required IPACS. Section 6 presents IPACS functional requirements.
Sections 7 through 14 address testing, training, documentation, installation
and integration, phase-over, warranty, quality assurance, and additional
requirements, respectively.
50-DDNE-6-90029
SECTION 2
SYSTEM OVERVIEW
2.0 SYSTEM DESCRIPTION
The transitional Integrated Polar Orbiting Environmental Satellite System
will consist of the space-based Advanced TIROS-NOAA (ATN) and the DMSP
satellite flight segments, and the earth-based integrated NOAA and AFSCN
elements of the ground segment. The nominal flight segment for each of the
NOAA and USAF programs is based upon two Operational satellites with highest
operational priority, two partially functioning Standby satellites, and
residual in-orbit assets which may support special purpose test activities.
IPACS will support the DMSP element of the transitional integrated polar
satellite system.
2.1 DMSP Space Segment
DMSP polar orbiting satellites are sun synchronous in that the satellites
cross the equator at the same local sun time each orbit. This provides
consistent illumination of the area observed. The orbital period is
nominally 102 minutes, permitting just over 14 complete earth orbits daily.
As the Earth rotates under each orbit, satellite instruments view a
different portion of the Earth's surface and atmosphere, providing global
observations.
TIROS and DMSP polar spacecraft share a common heritage; both manufactured
by Martin Marietta Astro Space Division (LM-ASD) at E. Windsor, NJ. They
use a common spacecraft bus structure with minor differences in power,
thermal, structure, and ascent phase equipment. There are however major
differences in data types, data rates, data formats, and in the attitude
determination and control subsystem. Payload sensor environmental data from
both satellites are similar in content but are collected by inventories of
significantly different instruments.
Launch procedures are very similar, with both spacecraft launched from the
Vandenberg AFB Western Missile and Space Center (WMSC). Future launches
will employ the Martin Marietta Titan II launch vehicle.
The current constellations of DMSP satellites are of the DMSP 5D-2 series
with the most recent satellite designated F-13. Starting with S-16, DMSP
satellites will be of the series 5D-3, which will include in its payload a
new Special Sensor Microwave Imager/Sounder (SSMIS) replacement for the
current microwave imager, humidity profiler, and temperature sounder.
50-DDNE-6-90029
DMSP downlink transmissions are in the USAF S-band Space Ground Link System
(SGLS) format, in common with other satellite programs supported be the
AFSCN. DMSP operates in the 2200-2300 Mhz band on two carriers which can be
received simultaneously at the ARTS locations. Carrier 1 provides a pilot
signal for normal antenna autotracking and for low speed PCM or analog
telemetry. Carrier 2 is used for PCM digital bit streams at rates from 128
kbps to 2.6624 Mbps. DMSP downlink data is encrypted and under access
control.
Uplink encrypted command transmissions are at 1791.748 Mhz using the SGLS
23-bit command word format, preceded with and followed with a 1 bit-time
tone (total of 25 bit-times) and ternary modulation of the command carrier.
Through the 5D2 spacecraft S-15, the command uplink will be at 75 words-
per-second, 2 KSps (Kilo-Symbols per second) data rate. Beginning with 5D3
S-16, the command uplink message length will be from 1 to 65,534 message
words, at a minimum of 311 words-per-second, at 10 KSps data rate.
2.2 Ground Segment
The ground facilities currently supporting DMSP operations are the FSOC, the
MPSOC, the two communications links with the ARTS through the Operational
Control Nodes (OCN) at the Consolidated Space Operations Center (CSOC)
Colorado Springs, CO and its alternate Consolidated Space Test Center (CSTC)
at Onazuki AFB, Sunnyvale, CA. The OCNs provide DMSP communications access
to the four common-user Enhanced ARTS facilities of "POGO" at Thule, "BOSS"
at New Hampshire, "HULA" in Hawaii, and "COOK" at Vandenberg AFB. The
primary "configured User Segment" for DMSP data consists of the Air Force
Global Weather Central (AFGWC) at Offutt AFB, the Fleet Numerical
Meteorology and Oceanography Center (FNMOC) at Monterey, CA, and DoD real-
time tactical terminals distributed world-wide. Other users include the
National Ice Center, the Air Force 50th Weather Squadron, and the Navy's
CNOC at Bay St. Louis, MS.
The AFSCN ARTS stations are configured with tracking antennas, the RF
equipment, data-handling equipment, and communications links preestablished
prior to the "pass" of the satellite to be acquired. The ARTS have been
implemented with capability for automated configuration by operator-
initiated directives and macro commands.
50-DDNE-6-90029
2.2.1 Ground System Operations
NOAA is to be responsible for maintaining the health of TIROS and DMSP polar
satellites in orbit. This responsibility includes spacecraft in both
operational status and spacecraft which have been placed in standby mode.
Additionally, NOAA will provide a Launch Control Room (LCR) at the SOCC with
facilities for monitoring and initiating command of the spacecraft during
pre-launch, launch, orbit attainment, and flight checkout. The capabilities
necessary to carry-out these operational responsibilities for DMSP are the
command and control functions of IPACS.
A typical sequence of command and control operations for a DMSP polar
spacecraft is as follows:
1. A spacecraft is launched under control of the Western Missile and
Test Center (WMTC) at Vandenberg AFB, Lompoc, CA.
2. Tracking station personnel communicate with SOCC Controllers who
interface with spacecraft engineers temporarily located in
the LCR for Launch and Early Operations (LEO) coverage to
activate, test, and monitor the spacecraft prior to it
achieving operational status.
3. Once orbit is achieved and spacecraft activation is completed,
SOCC personnel begin sustained operation of the satellite for
the collection of mission data.
4. SOCC controllers maintain a 24 hour-a-day operation to control
(command) and monitor state of health telemetry of the
satellite. Satellite operations are controlled by individual
real-time commands or time-tagged sequences of commands
transmitted through ARTS command transmission equipment and
executed in real-time or stored in the spacecraft onboard
processors.
6. ARTS personnel maintain and operate ground station equipment for
linking the station with the spacecraft and for acquiring and
distributing the spacecraft onboard instrument data.
7. As spacecraft are replaced in orbit, satellites replaced are
retained in secondary status for possible use in the event of
failure of an operational satellite and to supplement mission
data provided by the operational satellites.
2.2.1.1 SOCC Operations
SOCC normally directs all command and control as well as data acquisition
activities of the DMSP satellites. It is the focal point for the
coordination of all communications, scheduling
and satellite operations. Specific operations performed at SOCC during the
launch and sustained mission operations phases as related to the IPACS
include:
1. Generating all satellite stored command loads
2. Initiating all command sequences to the satellite
3. Verifying error-free receipt of commands by the satellite
4. Providing encrypted commands for transmission via the AFSCN for
launch and early-orbit support or satellite emergency
operation and for sustained mission operations
5. Monitoring critical satellite telemetry in real-time and playback
modes
6. Monitoring payload instrument health and safety
7. Maintaining satellite telemetry data bases
8. Generating daily satellite onboard processor Stored Command Table
(SCT), OLS, mission sensor configuration, tape recorder
management, and ephemeris load files
9. Analyzing satellite performance
10. Scheduling, monitoring, and controlling SOCC and ARTS equipment
configuration and status
11. Generating SOCC and ARTS configuration schedule files
12. Generating a history file of satellite telemetry, and time-tagged
satellite, SOCC, and ARTS events, including commanding
history files
13. Maintaining data bases of satellite parameters, equipment status,
and communications records.
50-DDNE-6-90029
SECTION 3
EQUIPMENT
3.0 EQUIPMENT
The government, in an effort to minimize TIROS/DMSP integration costs, will
make available to the contractor DMSP front-end equipment for the IPACS.
This includes DMSP-unique equipment currently used for telemetry data pre-
processing, command generation and encryption, communication interfaces,
voice and data encryption, and switching equipment.
3.1 Government Furnished Equipment (GFE)
The government will make available as GFE for contractor relocation, items
of DMSP equipment and associated materials required by the IPACS design.
This equipment is available at Fairchild AFB, WA and Offutt AFB, NE. Table
one reflects the anticipated quantities of major items that will be required
for the IPACS design. Prior to proposal submission, the contractor may
review the GFE at these sites, and shall include in his proposal a complete
list of all GFE required.
DDCP and PACS applications software on magnetic media, will be supplied
to the IPACS contractor as required, after award of the IPACS contract.
3.2 Contractor-furnished Equipment
The contractor shall provide all processors, workstations, peripheral
equipment, switching, and interface devices required by the IPACS system
design not provided as GFE.
SOCC FOCC TOTAL UNIT DESCRIPTION
1 3.Ea. 3 Ea 6 Ea. SCU Satellite Communications Unit
2 3 Ea. 3 Ea. 6 Ea. DDCP Dual Decommutator Command Processor
3 1 Ea. 1 Ea. 2 Ea. AFVSF Advanced Flight Vehicle Simulator
4 4 Ea. 4 Ea. 8 Ea. KG-84 56 Kbps Narrowband Encryptor/Decryptor
5 4 Ea. 4 Ea. 8 Ea. KG-84 Voice Data Encryptor/Decryptor
6 3 Ea. 3 Ea. 6 Ea. KGT-61 Spacecraft Command Encryptor
7 3 Ea. 3 Ea. 6 Ea. KGR-61 Spacecraft Command Decryptor
8 2 Ea. 2 Ea. 4 Ea. KGT-61 AFVSF Command Encryptor
9 1 Ea. 1 Ea. 2 Ea. KGR-61 AFVSF Command Decryptor
10 4 Ea. 4 Ea. 8 Ea. KG-44 Stored Data Decryptor
11 1 Ea. 1 Ea. 2 Ea. AIKEN/Equinox Switch Arrays
12 1 Ea. 1 Ea. 2 Ea. SDM Stored Data Monitor
13 1 Ea. 1 Ea. 2 Ea. LINK/2 INTERNET Multiplexer/Demultiplexer
14 2 Ea. 2 Ea. OTSU W/S Sensor Engineering Support Unit
Table 1: Required GFE
50-DDNE-6-90029
SECTION 4
APPLICABLE DOCUMENTS
4.0 STANDARD DOCUMENTATION
The following Standards, in effect on the date of this Request for Proposal,
form part of this requirement except as otherwise noted, and are included as
Appendices A through F:
Appendix A NESDIS Standard No. S24.801 - Preparation of Operation
and Maintenance Manuals (Rev. 7/30/87)
Appendix B NESDIS Standard No. S24.802 - General Requirements for
Ground Electronic Equipment (Rev. 8/04/87)
Appendix C NESDIS Standard No. S24.803 - Cable and Wire
Identification (Rev. 7/07/87)
Appendix D NESDIS Standard No. S24.804 - General Requirements for
Training on Electronic Equipment (Rev.
8/04/87)
Appendix E NESDIS Standard No. s24.805 -Spare Parts(Rev. 6/24/87)
Appendix F NESDIS Standard No. S24.806 - Software Development, and
Maintenance and User Documentation (Rev.
4/30/87)
These Appendices are located in Section J of this solicitation.
PRIVATE 4.1 Additional Documentation tc \l 2 "4.1 Additional
Documentation"
4.1.1 Annex I, a Jan. 1995 "DMSP C3 Segment Specification Tree",
identifies current additional documentation relevant to the DMSP ground
segment. These documents are available to industry through normal US Air
Force documentation acquisition processes.
4.1.2 Additional documentation as follows, on the NOAA and USAF polar
satellites and ground systems is available at the NESDIS library located in
Camp Springs, Maryland.
1. Performance Specification for the NOAA-K through M Satellites,
NASA Goddard Space Flight Center GSFC-S-480-25, July 1988.
2. NOAA Advanced TIROS-N Satellite Series H-I-J Programming and
Control Handbook, GE Astro Space Division, 28 August 1987.
3. Description of the NOAA/NESDIS Command and Data Acquisition Station
Fairbanks, Alaska, Bendix Field Engineering Corporation, February 1987.
4. PACS Ephemeris and Scheduling Software Users Guide, Integral
Systems, Inc.
5. PACS Critical Design Review (CDR) Day 3, Integral Systems, Inc.
6. PACS Schedule Generation Lab Exercise, Integral Systems, Inc.
7. PACS Scheduling Training Exercise, Integral Systems, Inc.
8. PACS Events Expansion Lab Exercise, Integral Systems, Inc.
9. PACS System Operations Operation Training Course, 7 Vols. Integral
Systems, Inc.
10. PACS Software Maintenance Manual, Vol. 7B, Ephemeris and
Scheduling, Integral Systems, Inc.
11. PACS Operation and Maintenance Manual, Integral Systems, Inc.
12. T.O. 31R2-4-805-11 Defense Meteorological Satellite Program (DMSP) C3
Segment, System Level Operation and Maintenance Instructions, September
1992
13. SS-YD-854-02 Performance Specification for the Command, Control, and
Communications (C3) Segment of the Defense Meteorological Satellite
Program (DMSP) Fairchild Satellite Operations Center (FSOC), August 1986
14. 169472 Fairchild Satellite Operations Center (FSOC) Interface
Specification, December 1986
15. 169469A Prime Item Development Specification for FSOC Switching
Subsystem (SS) of the DMSP C3 Segment Type Designator, B1, April 1989
16. 169468 Prime Item Development Specification Processing Subsystem (PS)
Type Designator B1 for Fairchild Satellite Operations Center (FSOC),
December 1986
17. 169470 Prime Item Development Specification Communications Subsystem
(CS) Type Designator B1 for Fairchild Satellite Operations Center
(FSOC), December 1986
18. DMSP-863 Command, Control, and Communications Segment to Air Force
Satellite Control Network (AFSCN) Interface Specification of the Defense
Meteorological Satellite Program (DMSP), January 1990
19. 163738B Defense Meteorological Satellite Program DMSP Interface to ARTS
(DMSPI) March 1989
20. AFSCN ICD 106A Air Force Satellite Control Network - Defense
Meteorological Satellite Program Interface Control Document, December
1992
21. 178012 Interface Control Document for the Defense Meteorological
Satellite Program (DMSP) Internet Equipment at the Consolidated Space
Operations Center (CSOC), June 1990
22. 178013 Interface Control Document for the Defense Meteorological
Satellite Program (DMSP) Internet Equipment at the Consolidated Space
Test Center (CSTC), June 1990
23. DMSP-861A Defense Meteorological Satellite Program (DMSP) Command,
Control, and Communications (C3) to User Segment, October 1992
24. 169524 Wideband Communications Network for the Defense Meteorological
Satellite Program, September 1988
25. 169525 Narrowband Communications and Dedicated Telephone Network for
the Defense Meteorological Satellite Program, October 1988
26. DMSP-874 DMSP Ground System to the Space Segment Ground Support
Equipment, April 1990
27. 169471 Prime Item Development Specification Data Acquisition Subsystem
(DAS) Type Designator B1 for Fairchild Satellite Operations Center
(FSOC), December 1986
28. 164602A Critical Item Development Specification for the Defense
Meteorological Satellite Program (DMSP) Survivable Antenna Subsystem
Type B2, January 1989
29. 168140 Computer Program Development Specification for the Fairchild
Satellite Operations Center (FSOC) Antenna Positioning Computer Program
Configuration Item (CPCI) Type Designator B5, May 1986
30. SS-YD-854-04 Performance Specification for the Command, Control, and
Communications (C3) Segment Multi-Purpose Satellite Operations Center
(MPSOC) of the Defense Meteorological Satellite Program (DMSP), January
1988
31. 174992 Multi-Purpose Satellite Operations Center (MPSOC) Interface
Specification of the DMSP C3 Segment, May 1989
32. 174994 Prime Item Development Specification for MPSOC Switching
Subsystem (SS) of the DMSP C3 Segment Type Designator, B1, May 1989
33. 170935 Interface Control Document for the Defense Meteorological
Satellite Program (DMSP) Command, Control, and Communications Segment
Mission Planning Support System (PLANS) External Interfaces, May 1994
34. 146984 Defense Meteorological Satellite Program Block 5D-2 Team and
Commanding Subsystems Team/CSF External Interface Control Document,
November 1982
35. 174995 Prime Item Development Specification for MPSOC Processing
Subsystem (PS) of the DMSP C3 Segment Type Designator, B1, May 1989
36. 163873 Interface Control Document for the Defense Meteorological
Satellite Program (DMSP) TEAM/STPS Interface, April 1990
37. 14892B Computer Program Development Specification for the Command
Support Function (CSF) CPCI of the Defense Meteorological Satellite
Program (DMSP) Type Designator B5, April 1989.
38. 164473A Computer Program Development Specification for the Stored
Telemetry Processing System (STPS) of the Defense Meteorological
Satellite Program (DMSP), Type Designator B5, January 1989
39. 143717H Computer Development Specification for the Team Program for the
Real Time Telemetry Subsystem of the Defense Meteorological Satellite
Program (DMSP) Type Designator B5, April 1989
40. 168372 Computer Program Development Specification for the Mission
Planning Support System (PLANS) of the Defense Meteorological Satellite
Program (DMSP) Type Designator B5, September 1989
41. 802292A Computer Development Specification for the Defense
Meteorological Satellite Program (DMSP) X.25 Communications (XCOM)
Function Type Designator B5, February 1990
42. 20681A Defense Meteorological Satellite Program (DMSP) System
Communications Unit (SCU) Interface Control Document, August 1990
43. 174993 Prime Item Development Specification for MPSOC Communications
Subsystem (CS) of the DMSP C3 Segment Type Designator B1, May 1989
44. 169503 Critical Item Development Specification System Communications
Unit (SCU) Type Designator B2, December 1986
45. 801331A Final Computer Program Development Specifications for
Multipurpose Satellite Operations Center Retrofit (MPSOC) Updated to the
NHS ECP, dated November 1989
46. 8000881 Heritage Equipment Modification Program Software Requirements
Specification, 29 April 1994
47. 20001668 Heritage Equipment Modification Program Configuration Item
Development Specification, 29 April 1994
48. Technical Requirements for Defense Meteorological Satellite Program
(DMSP) Mission Planning Subsystem, 12 July 1995.
50-DDNE-6-90029
SECTION 5
IPACS DESCRIPTION
5.0 IPACS DEPLOYMENT
IPACS hardware and software at SOCC and the FOCC will provide for command
and control of the DMSP 5D-2 and 5D-3 polar orbiting satellites.
Contractor-furnished Telemetry and Command Subsystem (TCS) processors will
provide central processing for IPACS operations.
5.1 IPACS Specifications
The contractor shall furnish the IPACS with the following characteristics.
5.1.1 Capacity
IPACS shall be sized with 100% computer reserve capacity for input/output
and for processor computing throughput in Millions of Instructions Per
Second (MIPS), during any 15-minute period of peak load conditions.
Peak load for IPACS is defined as the load which occurs when a station pass
is being taken by each of three tracking antennas, the SOCC is supporting a
satellite launch, and normal background processing is being performed.
Load factors for peak load conditions are defined as the processing of the
following telemetry data streams:
One realtime 10 kbps
Two realtime 60 kbps
Ingest of three stored data streams.
This processing to occur while routine non-realtime processing is being
performed.
5.1.2 IPACS System Availability
IPACS shall support continuous, 24-hour-per-day operation with an overall
availability of 0.998 or greater at the SOCC and FOCC. System
availability is defined as meeting the prime mission capabilities of (1)
commanding the satellite from SOCC or FOCC through the AFSCN in all command
modes, and (2) acquiring and processing real-time telemetry.
5.1.3 Failure Recovery
For normal IPACS operations, the TCS at FOCC will operate as a "hot"
standby, in synchronism with the TCS at SOCC. In this mode SOCC controls
all command and data acquisition activities and provides the FOCC with
"alive" messages maintaining the FOCC TCS in synchronism with the SOCC TCS
state of processing. FOCC will independently receive, process, and monitor
satellite telemetry, and monitor execution of the command schedule. In the
event of a SOCC failure, the FOCC will designate its TCS as the active TCS,
thereby authorizing transmission of commands from the FOCC TCS to the
command system.
IPACS shall contain no single point of failure which will prevent an
operator from restoring normal operations within five minutes. In the event
of a failure affecting long term data bases, full restoration from backup
tape storage shall be accomplished within two hours.
5.1.4 Remote Access
IPACS shall be configured to provide remote logon from either control center
to the IPACS at the SOCC or FOCC to operate the IPACS system over
government furnished communications facilities. IPACS shall provide
capability for DDCP file transfers between SOCC and FOCC, and for remote
access to error logs and monitoring of DDCP operation.
5.2 IPACS Hardware
IPACS furnished hardware will consist of commercially-available equipment of
current technology. Use of special-purpose, customized hardware is to be
avoided to the extent possible. Off-the-shelf equipment furnished shall
have front panel control capabilities for use in the event of automated
control failure or special operational requirements.
5.3 Operating Environment
The DMSP Operations Areas at the SOCC and FOCC shall provide three operating
console positions each supporting a two-man operating crew of a Satellite
System Operator (SSO) and a Crew Chief (CC). Operating consoles for the SSO
and CC will consist of two video display terminals with keyboard and mouse
for each of the two operators. A Ground System Operator position will be
provided with a video display terminal with keyboard and mouse. Two
alternate consoles, each with two video display terminals with keyboard
and mouse, are to be provided. Additionally, IPACS shall provide four
video display terminals with keyboard and mouse for the DMSP scheduling
function, and two additional for the Navigation function, to be located
external to the Operations area.
Additionally, three operating positions, with DEC AlphaStation 400 4/233
workstations identical to those provided with SOMS, co-located with the
TIROS schedulers external to the Operations area, shall be provided.
50-DDNE-6-90029
SECTION 6
SYSTEM REQUIREMENTS
6.0 IPACS SYSTEM REQUIREMENTS
The functionality provided by PACS for NOAA TIROS satellite operation will
be provided by IPACS for TT&C support of DMSP series 5D-2 and 5D-3 satellite
operations. The IPACS will substitute for and provide the functional
equivalent of MPSOC processing functions to interface with contractor-
furnished switching and DMSP communications functions of the control
centers. The IPACS contractor will perform necessary modifications and
development of IPACS and DMSP software and hardware to achieve the required
integrated operation.
6.1 Telemetry Processing
IPACS shall interface with GFE Dual Decommutator and Command Processors
(DDCP) for front-end processing of DMSP telemetry data. IPACS will accept
the output of the DDCP for subsequent processing to present to operators
telemetry information in the same manner and with the same features as
provided by PACS for operation of NOAA TIROS satellites. It shall
incorporate all telemetry processing features provided by the current DMSP
ground system that are required for DMSP operation. Post processing of DDCP
telemetry output data shall be performed in IPACS TCS processors with
capability to perform the display generation, limit sensing, History and
Trends file generation functions for five telemetry data streams
simultaneously. It shall have capability for processing 3000 telemetry
mnemonics required for DMSP operation.
6.1.1 Decommutation
IPACS DDCPs shall decommutate all modes of DMSP telemetry to accommodate the
downlink rates of 2, 10, and 60 kbps, with 4 major and 52 submodes of
telemetry operation. The DDCPs perform the decommutation, deinterleaving,
and data reformatting of the multiplexed Return Link stored mission payload
data, and decommutation of the realtime EST telemetry. The DDCP
decommutation process creates telemetry data point values with
identification ("tagged/value pairs") which are not compatible with existing
PACS telemetry processing features. The IPACS will process decrypted raw
DMSP telemetry tagged/value pairs into a format compatible with the PACS
telemetry processing functions of the TCS. IPACS telemetry display,
History, and Trends data will be accessible by system operators in the same
manner as provided by the PACS.
6.1.2 Data Display
IPACS shall provide display devices including 19" glare-free color monitors
and associated local printers at operator positions, common user color
logging printers, common user color graphic hard copy devices, and high-
speed line printers. IPACS shall provide user- definable color displays
using a page building utility. Each color monitor shall be capable of
simultaneous display of up to four pages. Display formats shall include
Engineering Unit (EU), raw, hex, octal, and text. An operator initiated
filtering capability for event pages shall be provided for display of limit
violations only. Limits shall be data base and user-defined with five
levels of limit violations, including parameter delta limits. Telemetry
displays shall contain mnemonic, value, units and flags for each parameter.
IPACS shall provide a real-time color plot capability for up to four
parameters per plot. IPACS shall provide a dwell data display whereby all
dwell data values are displayed simultaneously.
6.1.3 Data Archiving
IPACS shall provide on-line history files for each of five satellites,
containing telemetry data, data quality, operator inputs, status data, and
events. History files will maintain a record of telemetry data for the
current and most recent ten days in an on-line circular buffer. IPACS shall
provide a method for consolidating and merging fragmented, out-of- sequence
data to form non-overlapping, time-sequential data sets. IPACS shall
provide capability for off-line archive of history file data on removable
storage media, recorded at an operator-established interval.
6.1.4 Data Playback
IPACS shall provide playback of on-line stored and archived telemetry
history data for all real-time processing functions. IPACS shall provide
adjustable playback rates up to a maximum of 100 minor frames per second.
6.1.5 Pseudo Telemetry Processing
IPACS shall create a data base of pseudotelemetry whereby a new telemetry
data point value is created by data base contained algorithms applied to
data points contained in the telemetry data stream. The pseudotelemetry
process shall accept user-defined mnemonics and user-defined equations to
generate pseudotelemetry data points. IPACS shall provide for 100
pseudotelemetry points for each of six satellites. Pseudotelemetry shall be
processed as realtime telemetry, including limit checking for parameter
value and delta value checks.
6.1.6 Dump Comparison
IPACS shall provide automatic comparisons of dump telemetry data when a dump
file is closed as well as manually initiated dump comparison to compare dump
data with a reference file. It shall provide a scrolling monitor display of
comparison results as well as a printed dump comparison report.
6.1.7 State Check
IPACS shall provide a state check capability whereby a record of the
satellite status at Loss of Signal (LOS) is automatically compared with the
satellite status at a subsequent Acquisition of Signal (AOS). The
comparison will be corrected for the status changes attributable to
scheduled stored command table executed commands between acquisitions and
will identify status changes that were not scheduled.
6.2 Command Processing
Control of and operation of DMSP satellite equipment and instruments shall
be by means of a ground-to-satellite command link over which IPACS-generated
digital commands are transmitted. IPACS shall provide on-line command
generation capability for TCS binary command input to the DDCP to convert to
ternary signal for input of the KGT-61 encryption equipment.
6.2.1 Command Modes
IPACS shall support simultaneous command operations for up to four command
configurations per TCS. Commands shall be initiated by operator keyboard
entry, by automated schedule control based on Universal Time Coordinated
(UTC) time tags, or by a command procedure or control file.
6.2.2 Satellite Loads
IPACS shall interface with the DDCPs which provide uplink formatting for
transmission of DMSP satellite loads. Satellite loads include Standard
Control Processor (SCP) onboard processor stored command table, ephemeris,
Power On Processor (POPS), Programmable Information Processor (PIP) loads,
Star Table, OLS program loads, and mission sensor loads. The IPACS TCS
shall provide command load verification by memory dump and automatic dump
comparison.
6.2.3 Command Verification
IPACS shall support the following command verification functions:
Criticality checking
Prerequisite state checking
Telemetry Verification (TV)
Command Verification (CV)
Command Authentication (CA)
The criticality checking function shall be used to identify critical
spacecraft commands. These commands must be validated by the spacecraft
controller before they are sent. The list of critical commands shall be
maintained within the command database.
The prerequisite state checking function shall determine, through spacecraft
telemetry, that the spacecraft is in the proper state to issue a specific
command. The command database will indicate which commands have
prerequisite states and how to check that state. An example might be that
the spacecraft tape recorder may only be placed into fast forward (or
rewind) from a stopped condition.
The TV function shall, at an operator-established interval, search received
telemetry for expected changes among selected discrete bi-level telemetry
values. These values correspond to commanded states, and indicate proper or
improper execution of a particular command.
The CV function shall consist of relating a transmitted command with the
Command Verification (CV) word returned in the satellite telemetry. During
real-time commanding, CV words shall be examined to determine that commands
are successfully received and executed. On-line, real-time verification of
commands will be accomplished by the DDCP, which will monitor the CV words
contained in the satellite telemetry. CV words shall be available for
display in hexadecimal and the equivalent English descriptor, in
standardized monitor screen locations. Provision shall be made to enable,
disable, and adjust the CV time delay.
The CA status is generated by the spacecraft Command Authentication
equipment and is contained in the Equipment Status Telemetry (EST).
Authentication will be verified in the DDCP and occurs before the DDCP
transfers commands for encryption and uplink transmission. Authentication
will not be applied to command loads. The time the ground system spends
awaiting the spacecraft response shall be operator selectable. The operator
shall be provided with spacecraft and ground system authentication status
and shall be able to carry out all functions for management of the
authentication process.
6.2.4 Command Encryption
Command encryption for DMSP is performed by the KGT-61 provided as GFE. The
DDCP provides synchronization for the ground-to-space key generators (KG).
The IPACS via shall interface with the KG equipment to initiate, monitor,
key and resync the satellite COMSEC equipment and attach authentication
messages to satellite commands.
6.2.5 Clock Correction
IPACS shall, by operator selection, calculate the drift from ground system
time by the satellite command clock. IPACS shall automatically generate the
command sequences to correct satellite clocks.
6.2.6 Automatic Retry
IPACS shall provide an automatic command retry function which can be enabled
or disabled by the CSO. The retry function shall be initiated upon command
verification failure. Indication of a successful command shall terminate
the retry process. Operator capability to select up to three automatic
retries and to stop or skip commands shall be provided.
6.3 Ground System Management
IPACS shall provide centralized, automated management of the DMSP SOCC,
FOCC, and ARTS SCU ground system configuration, providing configuration
control and status data collection on hardware and primary interfaces. The
IPACS equipment control and monitor function shall be implemented using the
Operational Monitor, Status and Control (OMSC) of the PACS, modified
to accommodate DMSP devices and interfaces, including protocols, drivers,
and control devices. Ground system management shall originate from a daily
schedule, command procedure, or manual operator input. OMSC software is to
be retained to the extent possible.
6.3.1 Ground System Initialization
The TCS shall accept schedule driven or operator-entered configuration
directives to initialize and terminate data paths for Pre-pass, Pass, and
Post-pass Operations. It shall initialize all baseband equipment, telemetry
and command paths, switching, KG crypto devices, SCUs, and external
interfaces.
6.3.2 Ground System Failover
IPACS shall provide capability for operator initiated directives to cause
failover to redundant equipment and interfaces in the event of failure of
on-line equipment or interfaces.
6.3.3 Performance Accounting and Reporting
IPACS shall provide an on-line accounting system to automatically log all
data segments recovered, equipment configurations in effect, data collection
opportunities missed, system failures encountered and link errors
experienced. This program shall maintain statistics for daily, weekly, and
monthly periods, and for individual orbits. As a minimum, it shall generate
the same information currently contained in the PACS System Performance and
Data Accountability Report (SPADAR), and shall produce reports upon request.
6.3.4 Local Area Network (LAN) Monitoring
The IPACS LAN provided to interconnect computers, work stations, and
peripheral devices shall include a performance monitoring capability. The
LAN will be monitored for traffic loading and errors, and will automatically
detect and correct transmission errors. IPACS shall provide a LAN
monitoring station which shall output major errors for inclusion as events
in the IPACS equipment status.
6.4 History/Trends Subsystem
IPACS shall process all modes of DMSP telemetry to present to system
operators access to history and trends data in a manner compatible with PACS
telemetry processing functions of the TCS. Such processing is to be
accomplished by addition to or modification of either or both the IPACS or
DDCP hardware and software. IPACS processing shall create and process
History and Trends archival files to be accessible to all IPACS users.
6.4.1 History Archives
IPACS shall automatically store telemetry data for up to four satellites,
including dwell and dump data, with associated quality data, in time-indexed
history archive files. IPACS shall automatically merge all realtime and
stored mode telemetry for each satellite, removing all duplicate data and
filling data gaps as missing data becomes available. IPACS shall create
daily history files corresponding to an actual satellite orbit.
IPACS shall provide on-line history files for the current and most recent
ten days in an on-line circular buffer and automatically purge the oldest
data. Via operator initiation, IPACS shall provide capability for off-line
archive of history files on removable storage media.
6.4.2 Trends Processing
IPACS shall incorporate automated processes to retrieve history data for
statistical analysis and on-line storage of resultant trends data. Data
resulting from the trends analysis shall be maintained on-line for each of
four satellites for a period of one year, then archived to tape.
6.4.3 Trends Analysis
IPACS shall automatically process history file data to determine the
minimum, maximum, mean, variance, and standard deviation values for each
parameter over each orbit to create an M3 data file. M3 data files shall
be written to a Trends Data Base on a per-orbit basis. IPACS shall provide
the capability to copy history data into an operator's designated work space
where additional user-defined statistical measures can be generated beyond
those produced by the automatic trends processing.
6.5 Communications Requirements
IPACS shall interface with AFSCN communications networks for acquiring data
from, and commanding through the AFSCN ARTS locations. It shall interface
with GFE Time Division Multiplexer (TDM) Satellite Communications
Units (SCU) to send operational and configuration parameters for routing of
data through AFSCN wideband and DMSP INTERNET links. IPACS will access
status data and timing from the SCU.
6.5.1 Wideband Data
AFSCN wideband communications links will consist of a 230.4 Kbps DOMSAT
"Forward Link" half-duplex channel to each of the ARTS for data
transmissions, and a 3.2256 Mbps DOMSAT "Return Link" encrypted channel
from each of the four DMSP enhanced ARTS.
Forward link transmissions will consist of 30 Kbps simulated housekeeping
telemetry, 28.8 Kbps Commanding, and 1.2 Kbps file transfer data. Return
Link channels for receiving data from the ARTS, will provide 3.2256 Mbps
multiplexed channels for 2.6624 Mbps mission data, 2, 10, or 60 Kbps
housekeeping telemetry, 28.8 Kbps command echo data, 1.2 Kbps file transfer
data, and 600 bps site status data from the DMSP enhanced ARTS for a total
of four 3.2256 Mbps receive channels at the SOCC and FOCC.
IPACS shall provide for the routing of wideband data as received, to the
Sensor Engineering Support Unit at the SOCC.
6.5.2 DMSP INTERNET
IPACS shall interface with the DMSP INTERNET of leased full-duplex, 56 Kbps
channels to interconnect DMSP control centers with AFSCN control centers and
with the sustaining engineering support facilities at the Payload
Integration and Test Facility (PITF), Vandenberg AFB, and LM-ASD. The IPACS
shall not preclude upgrade to 1.544 Mbps (T1) INTERNET interconnection
links.
6.5.3 External Interfaces
The SOCC/FOCC will interface via AUTODIN with USSPACECOM SSC to receive
orbital element sets and with SPADOC, in support of DMSP operations.
6.6 IPACS Timing
IPACS shall be configured to accept GFE GPS timing reference at the SOCC
and FOCC for distribution to IPACS TCS computers. IPACS shall maintain
time-of-day to an accuracy of one millisecond for use by applications
software.
6.7 Advanced Flight Vehicle Simulation Facility (AFVSF) Integration
IPACS shall incorporate the AFVSF provided as GFE to support operator
training, system checkout, procedure validation, flight software validation,
and loop-back testing through the ARTS.
6.7.1 AFVSF Local Mode Operations
IPACS shall configure SOCC/FOCC routing and processing such that acquisition
of data and commanding the AFVSF will appear to control center operators as
an in-orbit satellite.
It shall route operator generated, or stored commands to the command
processing function of the DDCP for formatting and subsequent encryption as
input to the AFVSF. It shall route AFVSF telemetry output for decryption
and input to the DDCP for telemetry processing for input to IPACS for
handling as a realtime DMSP satellite pass.
6.7.2 AFVSF ARTS Loop-Back Mode
IPACS shall configure SOCC/FOCC routing and processing such that AFVSF
telemetry output will be routed to an ARTS for loop-back operation. IPACS
shall interface through the SCU to AFSCN Forward Link communications to the
ARTS DMSPI rack for loop-back via the Return Link. Operation of the AFVSF
in the ARTS loop-back mode will appear to control center operators as an in-
orbit satellite.
6.8 DMSP Scheduler
IPACS shall provide a DMSP Scheduler capability as an adaptation of the
Satellite Operations Management System (SOMS) developed for scheduling
NOAA's TIROS satellites. It shall be of the same architecture, using
hardware of the same type and model as the SOMS. It shall be a design goal
to reuse the existing SOMS software and/or operations framework to the
maximum extent possible, subject to the constraints of cost, schedule, and
technical risk/feasibility. The contractor shall develop and deliver the
DMSP Scheduler complete with the rules and resource data bases to meet the
unique requirements of DMSP operations.
The DMSP Scheduler shall provide functional duplication of all the existing
PLANS capabilities, including ephemeris generation, scheduling, daily
planning, and flight code configuration, modified as necessary for proper
interaction within the IPACS framework. The baseline design shall duplicate
all existing PLANS external interfaces precisely, including both input files
and products received from the Air Force and output files and products
supplied to the Air Force.
50-DDNE-6-90029
SECTION 7
ACCEPTANCE TEST AND DEMONSTRATION PROGRAM
7.0 GENERAL TEST REQUIREMENTS
The hardware and software developed under this contract shall be designed,
implemented, and certified using a formalized methodology consistent with
best commercial practices. All software and hardware delivered shall be
verified and accepted via a structured and comprehensive test program,
designed by the contractor and approved by the government, to ensure the
delivered product is fully compliant with user requirements.
The contractor shall conduct a series of reviews to establish that system
requirements have been properly identified and satisfied by the system
design and implementation approach. The contractor shall conduct system
reviews including a System/Software Requirements Review, a Preliminary
Design Review and a Critical Design Review.
IPACS shall be developed and tested in phases, according to the provisions
of the Quality Assurance program, (Section 13), and in keeping with test
plans prepared by the contractor. All testing, whether conducted in-plant or
on-site, shall be conducted in accordance with contractor-developed test
plans and detailed test procedures approved by the government prior to
commencement of testing.
7.1 Hardware
Hardware included in the IPACS design, both GFE and contractor-furnished,
after analysis shall be certified by the contractor as acceptable for
inclusion in the IPACS configuration.
7.1.1 Hardware Requirements Determination
The contractor shall analyze system requirements, develop a specific
hardware architecture, evaluate candidate equipment, and designate the
specific equipment selections (by make and model) prior to the CDR. The
contractor shall document the hardware design in a Hardware Configuration
Description document.
7.1.2 Hardware Development and Acquisition
Hardware developed or acquired for use in IPACS shall be fully compatible
with the GFE hardware. The contractor shall ensure that devices developed
or purchased for IPACS comply with the technical requirements, are available
in sufficient quantity, and will continue to be supported by the respective
vendors.
7.1.3 Hardware Certification
The contractor shall certify the suitability of each distinct hardware item
developed or purchased for use in IPACS. Tests shall be performed to ensure
that each item is compatible with the remainder of IPACS. After a
successful compatibility test, additional units of a particular item need
only pass receiving tests, or contractor acceptance tests for IPACS
certification. Hardware certification test reports shall be provided to the
COTR. The government reserves the right to witness hardware certification
testing. There shall be no formal acceptance of hardware by the government
until the on-site Systems and Acceptance Tests are satisfactorily completed.
7.2 Software
7.2.1 Software Requirements Analysis
The contractor shall conduct a requirements analysis and shall develop the
design for the IPACS software. The design shall be the result of a logical,
and structured process and may incorporate current CAD/CASE technology. The
contractor shall document this design in a Software Design Description
incorporating design specifications for each process, and identifying each
component module. The contractor shall generate test procedures to verify
the performance requirements for each process.
7.2.1.1 Software Requirements Review
The contractor shall conduct a formal Software Requirements Review (SRR).
This SRR shall formalize system requirements and properly identify the
software processes to meet the requirements.
7.2.1.2 Preliminary Software Design Review
As part of the system Preliminary Design Review (PDR), the contractor shall
present the system software design and establish that it satisfies system
functional and performance requirements. The contractor shall submit
models, simulations, and load calculations as necessary to substantiate the
proposed design. The contractor shall develop top-level design
specifications for each process, and shall identify each module to be
incorporated in the processes, as a PDR requirement.
7.2.1.3 Critical Software Design Review
As part of the system Critical Design Review, the contractor shall deliver a
complete Software Design Description (SDD), with design specifications for
each process. The contractor shall also deliver a Software Verification
Plan (SVP) which incorporates test specifications for each of the processes
to be developed.
7.2.1.4 Software Implementation
The contractor shall code, document and integrate individual software
processes and modules in accordance with NESDIS Standard No. S24.706,
included in Appendix F.
7.2.2 Process Certification
The contractor shall conduct tests to validate and certify each process.
The contractor shall provide test procedures, data, and results to the
government, for each process. The tests and test results shall be
reproducible by government personnel or government contractors, to verify
the functional performance of each process and to demonstrate that their
performance is consistent with the overall system design.
7.2.3 Software Integration Tests
Software integration tests shall be conducted by the contractor in the
contractor's software development facility, upon the availability of
certified software processes. Integration tests shall be conducted as the
certified processes are integrated into the system. The number and
frequency of integration tests shall be a function of the number of
processes in the approved design. Integration tests shall impose an
expanding set of criteria, evolving to incorporate increasingly the system
requirements developed during the design phase. The government reserves the
right to witness integration tests. As was the case in process testing, the
contractor shall provide test procedures, test data, and test results which
can be used by the government or its contractors to duplicate contractor
integration testing.
7.3 System Tests
System tests will be conducted by the contractor in the contractor's
development facility upon the successful conclusion of software integration
tests. An In-plant System Test will be conducted with the hardware
configuration provided for developmental purposes. On-site System Tests
will be conducted after system delivery to the SOCC and FOCC where the final
equipment configuration, with requisite communications services are in
place.
7.3.1 In-plant System Test
An In-plant System Test shall be conducted at the contractor's facility for
each deliverable version of IPACS. DMSP satellite telemetry, recorded on 7
channel 1/2 inch analog instrumentation tape, will be furnished by the
government, and shall be used as primary data input for in-plant system
testing. All software modules and all hardware system components shall
satisfactorily complete System Testing as a prerequisite for installation at
the government facilities. The contractor shall propose a plan for
conducting the In-plant System Test. These tests shall be conducted in
accordance with contractor-provided, government-approved, test plans and
procedures, using government-provided personnel as test operators, at the
discretion of the contractor.
7.3.2 On-site System Test
An On-site System Test shall be conducted at the SOCC and at the FOCC upon
delivery, installation, and initialization of delivered equipment. Tests
shall be conducted in parallel with live operations and may use live,
recorded, or simulated telemetry inputs, as appropriate. Tests shall be
designed to avoid loss of operational data and shall result in no impact to
ongoing DMSP operations. These tests shall be conducted in accordance with
contractor-provided, government-approved, test plans and procedures, using
government-provided personnel as test operators.
7.4 System Acceptance Test
System acceptance shall occur only after the system has passed functional,
peak load and durability testing. On-site System Tests when successfully
completed will certify the functionality of the system. A peak load test
shall be performed, using simulated data if necessary, to verify the peak
load capacity of the system, as described in section 5.1.1. Durability
testing shall be conducted with the system accepting normal DMSP operational
workload during the durability test period. Each day, during the system
acceptance testing periods, the government will make available and schedule
AFSCN ARTS, e.g. antennas, command equipment, receivers etc., for test
purposes. Available time blocks are determined by the DMSP operational
schedule and will be coordinated through the DMSP Planning activity. AFSCN
communications facilities between the SOCC, FOCC, AFSCN, and DMSP locations
will be installed and made available as required for use during the testing
period.
The performance period for durability testing shall begin after successful
conclusion of the On-site System Tests at SOCC and FOCC and shall end when
the system has met the standard of performance for 30 consecutive calendar
days at each location. Acceptance will occur after the system has operated
for 30 days in conformance with contract specifications at an availability
of 0.998 or greater.
50-DDNE-6-90029
SECTION 8
TRAINING
8.0 TRAINING PLAN
The contractor shall develop and submit a training plan not later than six
months prior to the scheduled delivery of the system. This training plan
shall be consistent with the provisions of NESDIS Standard No. S24.804,
included as Appendix D. This plan shall define courses of study recommended
by the contractor to qualify the government O&M personnel on the new system,
and include instructor lesson plans for on-going USAF training at FOCC. The
plan shall identify course locations, schedules, durations, and recommended
training aids. Upon the government's approval of the training plan, the
contractor shall develop courses of instruction for all contractor-developed
hardware and software, and shall arrange appropriate courses of study for
OEM system components.
8.1 Contractor-developed Courses
The contractor-provided training plan shall include contractor-developed
courses of instruction covering each of the system functions. Training to
be provided by the contractor is discussed below. The government will have
the right to videotape all or any portions of the training provided.
8.1.1 IPACS Overview
The training plan shall include four 2-day system familiarization seminars,
each accommodating twelve persons. Two seminars shall be held in the
Suitland area, and two at Falcon AFB. These sessions shall be scheduled by
the COTR for the primary benefit of supervisory and managerial personnel.
Topics shall include SOCC and FOCC hardware capabilities, interfaces,
systems software, applications software, and mission support capabilities.
8.1.2 Computer Systems Training
The training plan shall include six 5-day courses of instruction for the
specific benefit of personnel operating the IPACS computers. Each course
shall accommodate eight persons. Three courses shall be held in the
Suitland area, and three at FOCC at Falcon AFB. Topics to be covered shall
include operation and diagnostic testing of each IPACS computer and
peripheral device, use of the vendor-provided computer operating system,
loading and initiating foreground and background processes, and system
utility and housekeeping programs.
Computer Systems Training is a companion course to Satellite Operations
Training described below.
8.1.3 Satellite Operations Training
The training plan shall include six 5-day courses of instruction for the
specific benefit of satellite operations personnel at the SOCC and FOCC.
Each course shall accommodate ten persons. Three courses shall be held in
the Suitland area, and three at FOCC at Falcon AFB. Topics in this course
shall include hardware start-up, computer program loading and
initialization, display generation and selection, MMI command structures and
system responses, telemetry limit adjustment, display console diagnostics
and reconfiguration, and the use of all system operational functions. This
course shall use hands-on techniques, and the course material provided each
student shall include a comprehensive explanation of each function key,
system command, system response, display function, and graphic device
capability. Training on operation of crypto equipment will be included.
When scheduling Satellite Operation Training, the prerequisite nature of
Computer System Training discussed above shall be considered.
8.1.4 Software Maintenance Training
The training plan shall include one 15-day course of instruction for the
specific benefit of software maintenance personnel. This course shall be
held in the Suitland area and shall accommodate eight persons.
Two major components of this course shall be systems software and
applications software. The systems software portion shall cover the
operating system, compilers, assemblers, link editors, file managers and
utilities. The applications portion shall include a refresher in the
programming language used, descriptions of each program, process and module,
and permanent file, as well as descriptions of all temporary files and
internal interfaces.
Course material provided each student shall include two volumes covering
each of the major topics and including process flow diagrams and other
information necessary for troubleshooting, for updating the operating
system, for replacing data bases, for linking temporary code patches, and
for regenerating the real-time applications program.
8.1.5 Analytical Capabilities Training
The training plan shall include two 5-day courses of instruction for the
specific benefit of satellite engineers providing sustaining engineering
support for the satellite and its instruments. One course shall be held in
the Suitland area, and one in the FOCC. Each course shall accommodate eight
persons. Each course shall include the use of analytical software or
functions provided with the system, and techniques for developing, reducing
and handling telemetry information.
8.2 OEM Maintenance Training
The training plan shall include training on the operation and maintenance of
other Original Equipment Manufacturer (OEM) supplied items. OEM training
shall include one course each at SOCC and FOCC to accommodate six persons at
each location. Length of training shall be consistent with complexity of
equipment and material covered. Proposed courses may be conducted by the
equipment manufacturer with administration and content of these courses the
responsibility of the IPACS contractor.
8.3 GFE Maintenance Training
The training plan shall include training on the operation and maintenance of
GFE-supplied items. GFE training shall include one course each at SOCC and
FOCC to accommodate six persons at each location. Proposed courses may be
conducted by the equipment manufacturer with administration and content of
these courses the responsibility of the IPACS contractor.
50-DDNE-6-90029
SECTION 9
DOCUMENTATION
9.0 DOCUMENTATION
Sections 9.1 through 9.4 below, address IPACS documentation requirements.
9.1 Operations and Maintenance (O & M) Manuals
The contractor shall provide O & M manual(s) for all hardware provided with
IPACS. One of the O & M manuals shall provide an overview of the entire
IPACS including a functional description of each major element. The
overview manual shall be illustrated with diagrams providing a graphic
presentation of IPACS, its inputs and outputs, and its relationship with
other elements of the polar ground system.
Each O & M manual shall comply with the provisions set forth in Appendix A,
NESDIS Standard No. s24.801 - Preparation of Operations and Maintenance
Manuals. The contractor shall provide copies of draft manuals to be used by
students attending the hardware, operations and maintenance training. The
government shall have two months to review these documents and provide
comments to the contractor. The contractor shall incorporate all comments
provided by the government into the final documents. The contractor shall
have two months to incorporate all comments provided by the government into
the final documents. The contractor shall provide 16 final copies of O & M
manuals prior to the completion of IPACS final acceptance.
9.2 Contractor Supplied Software and User Manuals
Manuals shall be provided as defined in the following subsections and shall
be written in accordance with standards for documentation listed in Appendix
F, and FIPS Publication 38 as stated in the following subsections. All
contractor-supplied software other than commercially available computer
manuals shall be covered in this documentation.
9.2.1 Software Maintenance Manual
Scope and content of the Software Maintenance Manuals shall be in accordance
with Section 2, Software Maintenance Documentation, of Appendix F.
Twelve sets of the final Software Maintenance Manual shall be delivered to
the government within two weeks after completion of training.
9.2.2 Data Base Manual
The contractor shall supply data base documentation describing all data base
elements contained in IPACS. This includes all operator and system-
modifiable data areas in memory or stored in external disk or tape. The
data and file description must be in accordance with FIPS Publication 38,
sections 3.2 and 3.5.
Twelve copies of the final Manuals, incorporating "as built" changes, shall
be delivered two months after the start of acceptance testing.
9.2.3 Users Guides
Scope and content of the Operator/User manuals shall be in accordance with
section 3.3.5 of NESDIS Standard No. S24.801, and section 3 of NESDIS
Standard No. s24.806.
Twenty-five copies of the final Operator/User manuals shall be delivered to
the government within two weeks after completion of the satellite operations
training course.
9.3 Source Listings
Three copies of final IPACS software source code, in both hard copy and
machine readable format, must be provided by the contractor within thirty
days after final acceptance. Listings are to be delivered in bound form
with each module labeled. Source code shall be in accordance with the
software development standards given in Appendix F. Listings of all code
and data areas loaded into RAM or ROM of any IPACS custom interfaces must be
provided.
9.4 Interface Control Document
The IPACS contractor shall prepare an Interface Control Document describing
all electrical and data transfer media interfaces with IPACS, excepting
operator interfaces.
Description of electrical interfaces shall include at least the following:
Narrative description of purpose of interface and explanation of events
and states of the interface
Applicable industry or Federal standards
Location
Physical and electrical characteristics such as cable type and
length, connector types, pin configurations, voltages,
impedances, timing information
Description of interfaces with data transfer media shall include at least
the following:
Narrative description of the interface including purpose and use
Applicable industry or Federal standards
Physical description of media
Format of data on media
Data content, including block/record/file lengths, header and trailer
descriptions, bit and word assignments, and any other
information useful in describing the data content for
interface purposes.
50-DDNE-6-90029
SECTION 10
INSTALLATION AND INTEGRATION
PRIVATE 10.0 PHASED INSTALLATION REQUIREMENTS tc \l 1 "10.0 PHASED
INSTALLATION REQUIREMENTS"
The contractor shall deliver, install, and integrate IPACS at the Suitland
SOCC and the Falcon FOCC on a phased basis. Sufficient GFE will be made
available to initially install three operational data processing "strings"
at the SOCC. The installation the SOCC will demonstrate the functional
capabilities of the IPACS and establish Initial Operating Capability (IOC).
Additional GFE will be made available after closure of the Offutt AFB MPSOC
for installation of three data processing strings at FOCC.
10.1 Site Plan
Three months after award of contract, the contractor shall provide the COTR
with an installation and integration schedule and preliminary site
preparation requirements for power, air conditioning, floor space, etc.
Preliminary site preparation requirements shall include requirements for the
physical security of GFE KG cryptographic equipment, as defined by National
Security Agency (NSA) standards. A detailed site plan shall be submitted to
the COTR six months prior to IPACS delivery and shall specify the location
of electrical and communications terminations furnished by others in the
area allocated for IPACS installation. At least three months prior to
delivery at each site, the contractor shall visit the sites to discuss the
IPACS delivery, installation, and integration with the NOAA and USAF Site
Managers, staff, and the COTR.
10.2 Site Description
SOCC is located in FB-4, Suitland, Maryland. The SOCC DMSP polar operations
command and control center has been allocated approximately 2600 ft.2 of
environmentally-controlled raised floor space for the IPACS Operations Area.
DMSP operations at the SOCC will be collocated with the TIROS polar and
GOES geostationary satellite operation, which have a similar allocation of
floor space. A common user Launch Control Room contains government
furnished workstations which will be available to support launch and early
orbit operations for the three satellite programs.
FOCC is located at Falcon AFB, outside Colorado Springs, CO. Floor space
with protected power, raised floor, and air conditioning comparable to the
SOCC DMSP operations area will be made available. The IPACS contractor
shall participate with designated USAF management to facilitate FOCC site
preparation for the IPACS installation.
10.3 IPACS Installation
Three months prior to installation, the contractor shall submit an updated
version of the installation schedule and site preparation requirements to
the COTR. While installing and checking out the IPACS, the contractor must
recognize the existing SOCC operates on a 24-hour, 7-day-a-week schedule.
Hence, to assure minimum disruption of operations, the contractor is
required to coordinate all activities with the SOCC Operations Manager (or
his authorized representative) and the COTR.
10.4 Cabling
The contractor shall provide and install all inter- and intra- system
(signal and power) cabling associated with the IPACS equipment. The
contractor shall maintain isolation of classified and non-classified signal
cables as specified in NACSEM 5203, dated 1982 (Confidential). This
includes, but is not limited to cabling to and from existing station
equipment, AC power, and interconnection to the signal ground system at each
location. All cables shall be in accordance with Appendix C, NOAA NESDIS
Standard No. s24.803 for Cable and Wire Identification.
10.5 Tools and Equipment
Tools, test equipment, and other necessary items for on-site installation,
alignment, checkout, and testing shall be supplied by the contractor.
Certain items, such as specialized test equipment and tools that are
property of the government may be available on a non- interference basis.
Utilization of such equipment shall be arranged through the COTR in advance
and coordinated with the NESDIS Site Manager at time of use.
A set of all crimping tools and their associated manuals, necessary for the
proper construction and assembly of interface cables, shall be delivered to
each site, and become government property.
Any unique test equipment developed by the contractor for testing or
checkout of IPACS shall be delivered to each site, and become government
property.
50-DDNE-6-90029
SECTION 11
PHASE-OVER
11.0 PHASE-OVER REQUIREMENT
The contractor shall produce a Phase-Over Plan for government approval to
phaseover primary DMSP operations from the MPSOC to the SOCC, and to verify
FOCC operational readiness. Installation and integration of IPACS at SOCC
will occur while ongoing TIROS operations are being conducted with orbiting
TIROS satellites. Delivery schedules for IPACS equipment shall be
coordinated with SOCC management to minimize disruption to ongoing TIROS
operations. The objective of the phase-over activity is to install and
integrate IPACS and achieve operational capability prior to deactivating
existing DMSP MPSOC control capabilities.
11.1 Stand Alone Implementation
IPACS shall be implemented in a phased manner to permit integration and
checkout as an independent operating facility, without interrupting ongoing
satellite operations. On-site system testing of delivered hardware and
software shall be conducted to demonstrate functionality, prior to
interfacing with the AFSCN. Interfacing with operational AFSCN facilities
for test purposes shall be conducted in a coordinated and controlled manner.
11.2 Phase-Over Plan
Systems tests will demonstrate full IPACS functional capability at the SOCC
to achieve Initial Operational Capability (IOC). The contractor shall
develop, submit for the government's approval, and maintain the status of an
IPACS phase-over plan identifying all interfaces with SOCC and AFSCN
equipment and facilities necessary to verify system performance. The
initial phase-over plan shall be submitted 30 weeks after award of contract.
Final plan shall be submitted one month before installation begins and
updated as required throughout the phase-over period until final acceptance
after full functional and durability tests have been successfully completed.
The phase-over plan shall include a period of operations in parallel with
MPSOC control of the on-orbit DMSP satellites. During this period the SOCC
will demonstrate functionality and reliability prior to IPACS assumption of
operational status. Parallel operations will include telemetry processing,
responses to operator directives, and generation of realtime commands and
command loads for input to the DDCP that will be inhibited before
transmission to an ARTS.
Upon acheiving IOC the SOCC will assume operational control of the DMSP
satellites to permit closure of the MPSOC to make available required GFE for
installation at FOCC. The phase-over plan shall include the FOCC on-site
system test and durability test and additionallly a test of the SOCC
failover capabilities inherent in the IPACS design.
50-DDNE-6-90029
SECTION 12
MAINTENANCE SERVICES
12.0 MAINTENANCE REQUIREMENTS
IPACS maintenance requirements are discussed below. Different approaches
will be used to maintain GFE and contractor-furnished system elements.
Depot maintenance for GFE will be in accordance with existing logistic
support provisions of the government. The IPACS contractor shall provide
remedial and preventative maintenance for GFE at the SOCC and FOCC during
the interval beginning with delivery of the GFE to the contractor and ending
six months after acceptance of IPACS.
Maintenance provisions shall be in addition to those provided by
manufacturer's warranties, but do not exclude the use of warranties.
12.1 In-plant Maintenance on GFE
The contractor shall be responsible for all remedial and preventive
maintenance of GFE while it is at his facilities for developmental purposes.
The contractor will provide GFE maintenance with in house resources or by
sub-contract with a qualified services contractor.
The contractor shall also be responsible for installation of engineering
changes and software upgrades or changes as required to keep GFE hardware
and software updated to the current revision level. Engineering changes and
software updates issued within 30 days of acceptance are to be installed
within 60 days after acceptance.
Records shall be kept and reports made to the government on all maintenance
performed and on engineering changes installed on the GFE prior to
acceptance of IPACS.
12.2 IPACS Maintenance Service
The contractor shall provide remedial and preventive maintenance service, as
described below, on all hardware, from IOC until final acceptance. The
IPACS contractor shall provide both preventative and remedial maintenance on
all contractor supplied and GFE IPACS hardware.
12.2.1 SOCC Maintenance Support
The IPACS contractor shall provide both preventative and remedial
maintenance on all contractor supplied and GFE IPACS hardware at SOCC until
successful completion of the Acceptance Test. Maintenance shall be provided
at SOCC on a 24-hour-per-day, 7-day-per-week basis. Remedial maintenance
activities shall begin on-site within four hours of the government's notice
requesting service by the contractor. A hardware engineer/technician with
at least one year of active participation in the development of IPACS shall
be resident at the SOCC and available to assist in training, implementation
actions, and problem resolution.
12.2.2 FOCC Maintenance Support
The IPACS contractor shall provide both preventative and remedial
maintenance on all contractor supplied and GFE IPACS hardware at FOCC until
successful completion of the IPACS Acceptance Test. Maintenance shall be
provided at FOCC on a 24 hour per day, 7 day per week basis. Remedial
maintenance activities shall begin on-site within four hours of the
government's notice requesting service by the contractor. A hardware
engineer/technician with active participation in the development of IPACS
shall be resident at the FOCC and available to assist in training,
implementation actions, and problem resolution.
12.2.3 Depot Level Maintenance
The IPACS contractor shall warrant, for a five-year period, the availability
of depot repair for all contractor-furnished IPACS equipment and provide
addresses and telephone numbers of the depot repair facilities for all
modules incorporated in IPACS.
Maintenance for government furnished KG crypto equipment will be performed
by established USAF depot level maintenance procedures.
50-DDNE-6-90029
SECTION 13
QUALITY ASSURANCE
13.0 QUALITY ASSURANCE PROGRAM
It shall be the responsibility of the contractor to establish and conduct a
program of Quality Assurance. The program shall ensure that items delivered
under contract are of the highest quality, conform to the established
technical requirements, are delivered according to established schedules,
and are developed with an effective utilization of resources.
13.1 Definition
Quality Assurance, in the context of this document, refers to the planned
and systematic pattern of actions necessary to provide confidence that
products delivered under contract comply with all technical requirements,
and are developed in an effective and timely manner.
13.2 Requirements
The contractor shall submit a Quality Assurance Plan (QAP) for government
approval which applies to all software delivered under this contract. This
includes purchased software, software which is adapted from the existing
PACS, and contractor-developed software. The QAP shall be a comprehensive
document describing the specific methodologies, techniques, inspections and
tests which assure the quality of the software delivered.
13.2.1 Quality Audits
The contractor, in performance of this contract, shall conduct audits of the
developing products. The QAP shall describe the audit procedures to be
used, it shall identify the documents to be audited, the type of audit to be
conducted (walk-thru, inspection, validation, etc.), the number and
frequency of audits, and the proportionate size of the sample to be audited.
13.2.2 Reviews
The contractor, in performance of this contract, shall conduct formal
reviews as listed below. The QAP shall describe the content and objectives
of each and shall describe the mechanisms for incorporating changes
resulting from these reviews.
1. IPACS Requirements Review
2. Software Requirements Review
3. Preliminary Design Review (PDR)
4. Critical Design Review (CDR)
5. Software Verification Review
6. Managerial Reviews
13.2.3 Reporting and Control
The QAP shall describe a plan for reporting progress and status in the
performance of this contract. The QAP shall prescribe the types of reports
to be issued (status reports, test reports, problem resolution reports,
resource utilization reports, etc.) the content of these reports, the
frequency, the distribution, and the responsible reporting element or
function in the contractor's organization.
13.2.4 Documentation
The contractor, in satisfaction of this contract, shall produce and deliver
the documents indicated below. The QAP shall describe these documents, and
prescribe the structure and content of each.
1. Software Requirements Specification (SRS)
2. Software Design Description (SDD)
3. Software Verification Plan (SVP)
4. Software Verification Report (SVR) (may be included in monthly
reports)
5. Other (Integration Test Plans, User Guides)
50-DDNE-6-90029
SECTION 14
ADDITIONAL REQUIREMENTS
14.0 ADDITIONAL REQUIREMENTS
14.1 Spare Parts
The contractor shall provide spare parts in accordance with Appendix E,
NESDIS Standard No. s24.805. This standard provides for spare parts at the
module and component levels, and for documentation and special tools. For
all failure prone assemblies, such as power supplies, spares shall be
provided at the 10 percent level. Spare parts for all commercial equipment
including computers and computer peripherals are to be provided to the
module or subassembly level. Individual components on spared subassemblies
are not required for commercially available hardware. Redundant subsystems
contained within IPACS do not satisfy the requirement for spare parts, and
will be provided spare parts in compliance with NESDIS s24.805.
14.2 Software Development
14.2.1 Development Support Hardware
The contractor shall provide any and all hardware needed for software
development support (e.g., high-speed line printers; PROM or PAL
programmers; logic analyzers, and other test equipment).
14.2.2 Software
The contractor shall deliver the source code and listings of all IPACS-
specific software and all system developmental utilities used in developing
unique IPACS software (source editor, compilers, assemblers, etc.) on a disk
or tape in a system-compatible form. The contractor shall provide an IPACS
computer system performance monitor. This monitor shall show the processor
loading, memory loading, Disk I/O, etc. for IPACS running in real-time or
under an IPACS real-time simulation mode. If such utilities are contractor-
licensed, then utilities licensed for the government's use must be purchased
and delivered.
IPACS shall be delivered with the most recent release of the Operating
System and all other commercial software. If a new release of any article
of delivered commercial software occurs within six months prior to system
acceptance, an earlier release may be delivered but the new release shall be
provided and integrated within two months after acceptance.
14.3 Technical Support Options
In addition to the maintenance requirements described in section 12.2, the
contractor, shall as options, supply engineering/technical support for
hardware and for software maintenance. The support shall start at the time
of expiration of the six month support as specified in section 12.2, and
shall be provided on an 8-hour-per-day 5-day-per-week basis.
14.3.1 Technical Support for Hardware Maintenance
The contractor shall offer as options extension of the hardware maintenance
technical support as specified in section 12.2, to be provided on an 8 hour
per day 5 day week basis.
14.3.1.1 The contractor shall offer as an option, extension of the hardware
maintenance technical support at the SOCC as specified in section 12.2.1.
14.3.1.2 The contractor shall offer as an option, extension of the hardware
maintenance technical support at the FOCC as specified in section 12.2.2.
14.3.2 Technical Support for Software Maintenance
Two (2) staff-years of technical support at SOCC are required per year over
three (3) one- year periods. Two systems engineers or technicians, each
with at least one year of active participation in the development of IPACS,
shall be resident at SOCC. The Systems engineers or technicians shall
assist the government in hardware implementation actions and problem
resolution. The engineers or technicians shall also assist the government
in the planning, implementation, installation and integration of changes and
enhancements to the IPACS, and assist in software optimization, utilization
and problem solving for IPACS.
<PAGE>
Section D 50-DDNE-6-90029
SECTION D - PACKAGING AND MARKING
TABLE OF CONTENTS
D.1 PACKING FOR DOMESTIC SHIPMENT
D.2 PREPARATION FOR DELIVERY
D.3 CONTAINER MARKING
D.4 UNPACKING INSTRUCTIONS: COMPLEX OR DELICATE EQUIPMENT
D.1 PACKING FOR DOMESTIC SHIPMENT
Material shall be packed for shipment in such a manner that will
ensure acceptance by common carriers and safe delivery at
destination. Containers and closures shall comply with the
Interstate Commerce Commission regulations, Uniform Freight
Classification Rules, or regulations of other carriers as
applicable to the mode of transportation.
D.2 PREPARATION FOR DELIVERY
All technical data to be delivered to the Government shall be
adequately packaged and packed to insure delivery to the
Government in an undamaged condition.
D.3 CONTAINER MARKING
Containers shall be clearly marked as follows:
1. Name of Contractor
2. Contract No.
3. Description of items contained therein
4. Consignee's name and address
D.4 UNPACKING INSTRUCTIONS: COMPLEX OR DELICATE EQUIPMENT
Location on Container. When practical, one set of the unpacking
instructions will be placed in a heavy water-proof envelope
prominently marked "UNPACKING INFORMATION" and firmly affixed to
the outside of the shipping container in a protected location,
preferably between the cleats on the end of the container
adjacent to the identification marking. If the instructions
cover a set of equipment packed in multiple containers, the
instructions will be affixed to the number one container of the
set. When the unpacking instructions are too voluminous to be
affixed to the exterior of the container, they will be placed
inside and directions for locating them will be provided in the
envelope marked "UNPACKING INFORMATION".
Marking Containers. When unpacking instructions are provided
shipping containers will be stenciled "CAUTION--THIS EQUIPMENT
MAY BE SERIOUSLY DAMAGED UNLESS UNPACKING INSTRUCTIONS ARE
CAREFULLY FOLLOWED. UNPACKING INSTRUCTIONS ARE LOCATED (state
where located)." When practical, this marking will be applied
adjacent to the identification marking on the side of the
container.
Page D - 2
<PAGE>
Section F 50-DDNE-6-90029
SECTION F - DELIVERIES OR PERFORMANCE
TABLE OF CONTENTS
F.1 PLACE OF PERFORMANCE
F.2 PERIOD OF PERFORMANCE (CAR 1352.212-72) (JUL 1985)
F.3 MAJOR FIELD MODIFICATIONS
F.4 TIME OF DELIVERY
F.5 CLAUSES INCORPORATED BY REFERENCE (FAR 52.252-2) (JUN 1988)
F.6 LIQUIDATED DAMAGES
F.1 PLACE OF PERFORMANCE
The services and supplies to be furnished under this contract
shall be performed and delivered to:
U.S. Department of Commerce/NOAA/NESDIS
Federal Office Building #4
Suitland and Silver Hill Roads
Washington, D.C. 20233
and
Falcon Air Force Base
Colorado Springs, Colorado
F.2 PERIOD OF PERFORMANCE (CAR 1352.212-72) (JUL 1985)
ALTERNATE I (DEC 1985)
The period of performance of this contract is for thirty months,
beginning 05/20/96 to 11/20/98, unless changed through the
exercise of options, or contract modifications.
F.3 MAJOR FIELD MODIFICATIONS
If the Government requests on-site field modification of
equipment, the Contractor shall provide it on the same basis as
furnished to other customers for the same type of equipment as
supplied under the contract. Engineering changes may also be
sponsored by the Contractor. Any on-site field modification of
equipment will be by mutual agreement of both parties.
Page F - 1
F.4 TIME OF DELIVERY
The Government requires delivery to be made according to the
delivery schedule listed in Section J, Attachment #12, of this
letter contract. All parties agreed that the start date for
contract performance was 05/20/96, which is the date given in the
letter of intent for the start of contract performance.
By acceptance of this contract award, the contractor acknowledges
and accepts the critical importance of on-time delivery in
accordance with Delivery Schedule, Attachment #12, Section J.
Because of the critical importance of on-time delivery, Bonus Fee
(see Section B) and Liquidated Damages (see F.6 LIQUIDATED
DAMAGES) have been negotiated and included in this contract.
F.5 CLAUSES INCORPORATED BY REFERENCE (FAR 52.252-2) (JUN 1988)
This contract incorporates one or more clauses by reference, with
the same force and effect as if they were given in full text.
Upon request, the Contracting Officer will make their full text
available.
I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSES
CLAUSE
NUMBER DATE TITLE
52.242-15 AUG 1989 STOP-WORK ORDER--ALTERNATE I (APR 1984)
52.242-17 APR 1984 GOVERNMENT DELAY OF WORK
52.247-34 NOV 1991 F.O.B. DESTINATION
F.6 LIQUIDATED DAMAGES
In the event the contractor fails to make delivery of a fully-
functioning system in accordance with the schedule established
herein, the Contractor shall pay to the Government, as fixed and
agreed, liquidated damages for each calendar day's delay the sum
of $ * but not for more than * days.
A fully-functioning system is one that has been documented by the
Government to have passed all applicable tests in accordance with
SECTION C, Section 7 Acceptance Test and Demonstration Program,
and SECTION E, INSPECTION AND ACCEPTANCE.
Except with respect to defaults of subcontractors, the Contractor
shall not be liable for liquidated damages when delays arise from
causes beyond the control of and without the fault or negligence
of the Contractor. Such causes may include, but are not
restricted to, Acts of God or of the public enemy, acts of the
Government, in either its sovereign or contractual capacity,
fires, floods, epidemics, quarantine restrictions, strikes,
freight embargoes, and unusually severe weather; but in every
case the delay must be beyond the control of and without the
fault or negligence of the Contractor. If the delays are caused
by the default of a subcontractor, and such default arises out of
causes beyond the control of both the Contractor and the
subcontractor and without the fault or negligence of either of
them, the Contractor shall not be liable for liquidated damages
for delays, unless the supplies or services to be furnished by
the subcontractor were obtainable from other sources in
sufficient time to permit the Contractor to meet the performance
schedule.
* To Be Negotiated.
<PAGE>
Section H 50-DDNE-6-90029
SECTION H - SPECIAL CONTRACT REQUIREMENTS
TABLE OF CONTENTS
H.1 INSURANCE COVERAGE (CAR 1352.228-73) (JUL 1985)
H.2 UNAUTHORIZED INSTRUCTIONS FROM GOVERNMENT PERSONNEL
H.3 ORGANIZATIONAL CONFLICT OF INTEREST (CAR 1352.209-70)
(JUL 1985)
H.4 HOLIDAYS AND ADMINISTRATIVE LEAVE
H.5 DISSEMINATION OF CONTRACT INFORMATION
H.6 CONTRACTOR COMMITMENTS, WARRANTIES AND REPRESENTATIONS
H.7 HARMLESS FROM LIABILITY
H.8 COMPLIANCE WITH LAWS
H.9 NOTICE TO THE GOVERNMENT OF DELAYS
H.10 AUTHORITY TO OBLIGATE THE GOVERNMENT
H.11 ENGINEERING CHANGES
H.12 DUPLICATION OF EFFORT
H.13 OPTION TO EXTEND THE TERM OF THE CONTRACT -- COST-PLUS-
FIXED-FEE CONTRACT
H.14 KEY PERSONNEL
H.15 TECHNOLOGY SUBSTITUTION
H.16 TECHNOLOGY SUBSTITUTION PLAN
H.1 INSURANCE COVERAGE (CAR 1352.228-73) (JUL 1985)
Pursuant to the clause "Insurance - Work on a Government
Installation (52.228-7)," the Contractor will be required to
present evidence to show, as a minimum, the amounts of insurance
coverage indicated below:
(a) Workers Compensation and Employer's Liability. The
Contractor is required to comply with applicable Federal and
State workers' compensation and occupational disease statutes.
If occupational diseases are not compensable under those
statutes, they shall be covered under the employer's liability
section of the insurance policy, except when contract operations
are so commingled with a Contractor's commercial operations that
it would not be practical to require this coverage. Employer's
liability coverage of at least %%%%%%%%% shall be required, except
in States with exclusive or monopolistic funds that do not permit
workers' compensation to be written by private carriers.
(b) General Liability. The Contractor shall have bodily
injury liability insurance coverage written on the comprehensive
form of policy of at least %%%%%%%%%% per occurrence.
(c) Automobile Liability. The Contractor shall have
automobile liability insurance written on the comprehensive form
of policy. The policy shall provide for bodily injury and
property damage liability covering the operation of all
automobiles used in connection with performing the contract.
Policies covering automobiles operated in the United States shall
provide coverage of at least %%%%%%%%% per person and %%%%%%%%%% per
occurrence for bodily injury and %%%%%%%%%% per occurrence for
property damage.
(d) Aircraft Public and Passenger Liability. When aircraft
are used in connection with performing the contract, the
Contractor shall have aircraft public and passenger liability
insurance. Coverage shall be at least %%%%%%%%%% per person and
%%%%%%%%%% per occurrence for bodily injury, other than passenger
liability, and %%%%%%%%%% per occurrence for property damage.
Coverage for passenger liability bodily injury shall be at least
%%%%%%%%%% multiplied by the number of seats or passengers,
whichever is greater.
H.2 UNAUTHORIZED INSTRUCTIONS FROM GOVERNMENT PERSONNEL
a. The Contractor will not accept any instructions issued
by any other person employed by the U.S. Government other than
the Contracting Officer or the Contracting Officer's Technical
Representative (COTR) acting within the limits of their
authority.
b. No information, other than that which may be contained
in an authorized amendment to this contract will be considered as
grounds for deviation from any stipulations of the contract's
terms and conditions.
H.3 ORGANIZATIONAL CONFLICT OF INTEREST (CAR 1352.209-70)
(JUL 1985)
(a) The Contractor warrants that, to the best of the
Contractor's knowledge and belief, there are no relevant facts or
circumstances which could give rise to an organizational conflict
of interest, as defined in FAR Subpart 9.5, or that the
Contractor has disclosed all such relevant information.
(b) The Contractor agrees that if an actual or potential
organizational conflict of interest is discovered after award,
the Contractor will make a full disclosure in writing to the
Contracting Officer. This disclosure shall include a description
of actions which the Contractor has taken or proposes to take,
after consultation with the Contracting Officer, to avoid,
mitigate, or neutralize the actual or potential conflict.
(c) Remedies - The Contracting Officer may terminate
this contract for convenience, in whole or in part, if it deems
such termination necessary to avoid an organizational conflict of
interest. If the Contractor was aware of a potential
organizational conflict of interest prior to award or discovered
an actual or potential conflict after award and did not disclose
or misrepresented relevant information to the Contracting
Officer, the Government may terminate the contract for default,
debar the Contractor from Government contracting, or pursue such
other remedies as may be permitted by law or this contract.
(d) The Contractor further agrees to insert provisions
which shall conform substantially to the language of this clause,
including this paragraph (d), in any subcontract or consultant
agreement hereunder.
H.4 HOLIDAYS AND ADMINISTRATIVE LEAVE (Modified FEB 1996)
NOAA personnel observe the following days as holidays:
New Year's Day Columbus Day
Washington's Birthday Veterans' Day
Memorial Day Thanksgiving Day
Independence Day Christmas Day
Labor Day Martin Luther King's Birthday
Any other day designated by Federal statute
Any other day designated by Executive Order
Any other day designated by the President's proclamation
When any such day falls on a Saturday, the preceding Friday is
observed. When any such day falls on a Sunday, the following
Monday is observed. Observance of such days by Government
personnel shall not be cause for an extension to the delivery
schedule or period of performance or adjustment to the price,
estimated cost, or fee(s), if any, except as set forth in the
contract.
Except for designated around-the-clock or emergency operations,
contractor personnel will not be able to perform on-site under
this contract with NOAA on holidays set forth above. The
contractor will not charge any holiday as a direct charge to the
contract. In the event Contractor personnel work during a
holiday observed by the contractor other than those above, no
form of holiday or other premium compensation will be reimbursed
as either a direct or indirect cost. However, this does not
preclude reimbursement for authorized overtime work.
In the event NOAA grants administrative leave to its Government
employees at the site, on-site Contractor personnel shall also
be dismissed if the site is being closed. However, the
Contractor shall continue to provide sufficient personnel to
perform around-the-clock requirements of critical efforts already
in progress or scheduled and shall be guided by the instructions
issued by the Contracting Officer or her/his duly appointed
representative. In each instance when the site is closed to
Contractor personnel as a result of inclement weather,
potentially hazardous conditions, explosions, or other special
circumstances, the Contractor will direct its staff as necessary
to take actions such as reporting to its own site(s) or taking
appropriate leave consistent with its policies. The cost of
salaries and wages to the Contractor for the period of any such
site closure shall be a reimbursable item of direct cost under
the contract for employees whose regular time is normally a
direct charge if they continue to perform on contract work;
otherwise, the costs are reimburseable as indirect costs in
accordance with the Contractor's established accounting policy.
Contractor personnel performing on-site under this contract with
NOAA shall limit their observation of holidays to those set forth
above. In the event Contractor personnel work during a holiday
other than those above, no form of holiday or other premium
compensation will be reimbursed as either a direct or indirect
cost. However, this does not preclude a reimbursement for
authorized overtime work.
When NOAA grants administrative leave to its Government
employees, on-site Contractor personnel shall also be dismissed.
However, the Contract shall continue to provide sufficient
personnel to perform around-the-clock requirements of critical
efforts already in progress or scheduled and shall be guided by
the instructions issued by the Contracting Officer or her/his
duly appointed representative. In each instance when
administrative leave is granted to Contractor personnel as a
result of inclement weather, potentially hazardous conditions
explosions, or other special circumstances, it will be without
loss to the contractor. The cost of salaries and wages to the
Contractor for the period of any such excused absence shall be a
reimbursable item of direct cost under the contract for employees
whose regular time is normally direct charge and a reimbursable
item of indirect in accordance with the Contractor's established
accounting policy.
H.5 DISSEMINATION OF CONTRACT INFORMATION
Unless otherwise provided in this contract, the Contractor shall
not:
publish
permit to be published
distribute for public consumption
any information, oral or written, concerning the results of, or
conclusions made pursuant to, performance under this contract,
without prior written consent of the Contracting Officer, until
such time as the Government may have released such information to
the public.
H.6 CONTRACTOR COMMITMENTS, WARRANTIES AND REPRESENTATIONS
Any written commitment by the Contractor within the scope
of this contract shall be binding upon the Contractor. Failure
of the Contractor to fulfill any such commitment shall render the
Contractor liable for liquidated or other damages due to the
Government under the terms of this contract. For the purpose of
this contract, a written commitment by the Contractor is limited
to the proposal submitted by the Contractor, and to specific
written modifications to the proposal. Written commitments by the
Contractor are further defined as including (1) any warranty or
representation made by the Contractor in a proposal as to
hardware or software performance; total systems performance;
other physical, design, or functioning characteristics of a
machine, software package, or system, or installation date; (2)
any warranty or representation made by the Contractor concerning
the characteristics or items described in (1) above made in any
publications, drawings, or specifications accompanying or
referred to in a proposal; and (3) any modification of or
affirmation or representation as to the above information and
items which is made by the Contractor in or during the course of
negotiations, whether or not incorporated into a formal amendment
to the proposal in question.
H.7 HARMLESS FROM LIABILITY
The Contractor shall hold and save the Government, its officers,
agents and employees, harmless from liability of any nature or
kind, including costs and expenses to which they may be subject,
for or on account of any or all suits or damages of any character
whatsoever resulting from injuries or damages sustained by any
person or persons or property by virtue of performance of this
contract, arising or resulting in whole or in part from the
fault, negligence, wrongful act or wrongful omission of the
Contractor, or any subcontractor, their employees, agents, etc.
H.8 COMPLIANCE WITH LAWS
Contractor shall comply with all applicable laws and rules and
regulations having the force of law which deal with or relate to
yperformance hereunder or the employment by the Contractor of the
employees necessary for such performance, and shall procure such
permits, licenses and other required authorizations from the
United States and from State and local authorities as may be
necessary in connection with beginning or carrying on to
completion of the contract work, and shall at all times comply
with all United States, State and local laws in any way affecting
the contract work.
H.9 NOTICE TO THE GOVERNMENT OF DELAYS
In the event the Contractor encounters difficulty in meeting
performance requirements, or when it anticipates difficulty in
complying with contract delivery schedule or date, or whenever
the Contractor has knowledge that any actual or potential
situation is delaying or threatens to delay the timely
performance of this contract, the Contractor shall immediately
notify the Contracting Officer, and the Contracting Officer's
Technical Representative, in writing, giving pertinent details,
provided, that this data shall be informational only in character
and that this provision shall not be construed as a waiver by the
Government of any delivery schedule or date or of any rights or
remedies provided by law or under this contract.
H.10 AUTHORITY TO OBLIGATE THE GOVERNMENT
The Contracting Officer is the only individual who can legally
commit or obligate the Government to the expenditure of public
funds. No cost chargeable to the executed contract can be
incurred before receipt of a fully executed contract or specified
authorization from the Contracting Officer (FAR 1.6).
H.11 ENGINEERING CHANGES
a. After contract award, the Government may solicit, and
the Contractor is encouraged to propose independently,
engineering changes to the ADPE, or other requirements of this
contract. These changes may be proposed to save money, to
improve performance, to save energy, or to satisfy increased data
processing requirements. However, if proposed changes to improve
performance are necessary to meet increased data processing
requirements of the user, those requirements shall not exceed the
contract requirements by more than 25%. If the proposed changes
are acceptable to both parties, the Contractor shall submit a
price change proposal to the Government for evaluation. Those
proposed engineering changes that are acceptable to the
Government will be processed as modifications to the contract.
b. This clause applies only to those proposed changes
identified by the Contractor, as a proposal submitted pursuant to
the provisions of this clause. As a minimum, the following
information shall be submitted by the Contractor with each
proposal:
1. A description of the difference between the
existing contract requirement and the proposed change, and the
comparative advantages and disadvantages of each;
2. Itemized requirements of the contract which must be
changed if the proposal is adopted, and the proposed revision to
the contract for each such change;
3. An estimate of the changes in performance and cost,
if any, that will result from adoption of the proposal;
4. An evaluation of the effects the proposed change
would have on collateral costs to the Government, such as
Government-furnished property costs, costs of related items, and
costs of maintenance and operation; and
5. A statement of the time by which the change order
adopting the proposal must be issued so as to obtain the maximum
benefits of the changes during the remainder of this contract.
Also, any effect on the contract completion time or delivery
schedule shall be identified.
c. Engineering change proposals submitted to the
Contracting Officer shall be processed expeditiously. The
Government shall not be liable for proposal preparation costs or
any delay in acting upon any proposal submitted pursuant to this
clause. The Contractor has the right to withdraw, in whole or in
part, any engineering change proposal not accepted by the
Government within the period specified in the engineering change
proposal. The decision of the Contracting Officer as to the
acceptance of any such proposal under this contract shall be
final and shall not be subject to the "Disputes" clause of this
contract.
d. The Contracting Officer may accept any engineering
change proposal submitted pursuant to this clause by giving the
Contractor written notice thereof. This written notice may be
given by issuance of a modification to this contract. Unless and
until a modification is executed to incorporate an engineering
change proposal under this contract, the Contractor shall remain
obligated to perform in accordance with the terms of the existing
contract.
e. If an engineering change proposal submitted pursuant to
this clause is accepted and applied to this contract, an
equitable adjustment in the contract price and in any other
affected provisions of this contract shall be made in accordance
with this clause and other applicable clauses of this contract.
When the cost of performance of this contract is increased or
decreased as a result of the change, the equitable adjustment
increasing or decreasing the contract price shall be in
accordance with the "Changes" clause rather than under this
clause, but the resulting contract modification shall state that
it is made pursuant to this clause.
f. The Contractor is requested to identify specifically any
information contained in the engineering change proposal which
the Contractor considers confidential or proprietary and which
the Contractor prefers not be disclosed to the public. The
identification of information as confidential or proprietary is
for informational purposes only and shall not be binding on the
Government to prevent disclosure of such information. Offerors
are advised that such information may be subject to release upon
request pursuant to the Freedom of Information Act. (5 U.S.C.
552).
H.12 DUPLICATION OF EFFORT
The Contractor hereby certifies that costs for work to be
performed under this contract and any subcontract hereunder are
not duplicative of any costs charged against any other Government
contract, subcontract or other Government source. The Contractor
agrees to advise the Contracting Officer, in writing, of any
other Government work it has performed or is performing which
involves work directly related to the purpose of this contract.
The Contractor also certifies and agrees that any and all work
performed under this contract shall be directly and exclusively
for the use and benefit of the Government, not incidental to any
other work, pursuit, research or purpose of the Contractor whose
responsibility it will be to account for it accordingly.
H.13 OPTION TO EXTEND THE TERM OF THE CONTRACT -- COST-PLUS-
FIXED-FEE CONTRACT
The Government has the option to extend the term of this
contract for three additional twelve month periods. If more than
thirty days remain in the contract period of performance, the
Government, without prior written notification, may exercise this
option by issuing a contract modification. To exercise this
option within the last thirty days of the period of performance,
the Government must provide to the Contractor written
notification prior to that last thirty-day period. This
preliminary notification does not commit the Government to
exercising the option.
Exercise of an option will result in the following contract
modifications:
(a) The "Period of Performance" clause (CAR 1352.212-73) is
modified for each respective option period as follows:
Period Start Date End Date
Option I To Be Filled in at Contract Definitization.
Option II To Be Filled in at Contract Definitization.
Option III To Be Filled in at Contract Definitization.
(b) The "Estimated and Allowable Cost" clause (1352.242-70)
is modified to reflect increased estimated costs and fixed fees
for each respective option period as follows:
Estimated
Period Cost Fixed Fee Total
Option I To Be Filled in at Contract Definitization
Option II To Be Filled in at Contract Definitization
Option III To Be Filled in at Contract Definitization
(c) If this contract contains "not to exceed amounts" for
elements of other direct costs (ODC), those amounts are increased
as follows:
Other Direct Cost Items
To Be Specified at Contract Definitization
Option I
Option II
Option III
Option IV
H.14 KEY PERSONNEL
(a) The Contractor shall assign to this contract the
following key personnel:
Project Engineer %%%%%%%%%%
Lead for Hardware %%%%%%%%%%
Lead for Software %%%%%%%%%%%%%%%%
Systems Engineer %%%%%%%%%%%%%%%%
b) During the first ninety (90) days of performance, the
Contractor shall make no substitutions of key personnel unless
the substitution is necessitated by illness, death, or
termination of employment. The Contractor shall notify the
Contracting Officer within 15 calendar days after the occurrence
of any of these events and provide the information required by
paragraph (c) below. After the initial 90-day period, the
Contractor shall submit the information required by paragraph (c)
to the Contracting Officer at least 15 days prior to making any
permanent substitutions.
(c) The Contractor shall provide a detailed explanation of
the circumstances necessitating the proposed substitutions,
complete resumes for the proposed substitutes, and any additional
information requested by the Contracting Officer. Proposed
substitutes should have comparable qualifications to those of the
persons being replaced. The Contracting Officer will notify the
Contractor within 15 calendar days after receipt of all required
information of the decision on substitutions. The contract will
be modified to reflect any approved changes of key personnel.
H.15 TECHNOLOGY SUBSTITUTION
H.15.1 OVERVIEW
All items (e.g., hardware, system software) and support
services (maintenance, training, documentation, installation, and
technical support services) shall be the most modern and cost
effective available at the time of delivery and installation.
The contractor shall propose substitute items whenever the
contractor or its subcontractor is offering replacement or
substitutes for the components in question and the contractor
offers the particular product to any of its commercial or
Government customers. The Government may request that those
items be substituted for comparable items originally offered.
The Government reserves the right to accept or reject proposed
substitutions.
H.15.1.1 MINIMUM QUALIFICATIONS FOR ACCEPTANCE OF SUBSTITUTIONS
a. The substitute item shall meet or exceed the applicable
requirements and specifications of this contract.
b. Any substitute item shall be fully compatible with the
existing hardware and software installed at the time
the substitute is proposed for use.
c. The substitute item shall have capacity and performance
characteristics equal to or better than those of the
component it is to replace. The criteria used
originally for selecting the winning vendor's
components will be used to determine acceptability of
substitute items.
d. The substitute item shall offer the same or increased
function as the item it is to replace.
e. The price of the item shall be equal to or more cost-
effective than the item it is to replace, based on the
same evaluation as done under the solicitation.
H.15.1.2 TECHNOLOGY SUBSTITUTION MODIFICATION PROCEDURE
To propose a substitute item, the contractor shall submit a
written proposal to the Contracting Officer, addressing each of
the applicable qualifications in Section C and any other
attributes of the substitute item of which the Government should
be aware. Additionally, the contractor agrees to demonstrate the
proposed item prior to delivery, if requested by the Government.
H.15.1.3 BENEFIT TO THE GOVERNMENT
All proposed technology modifications, substitutions, and
additions to the contract shall be evaluated as to their benefit
to the Government. In determining the comparative life cycle
costs of such proposals, the performance costs over the remaining
life of the contract shall be included.
H.15.2 OTHER MODIFICATIONS/SUBSTITUTIONS/ADDITIONS
H.15.2.1 BENEFIT TO THE GOVERNMENT
All other proposed modifications, substitutions, and
additions to the contract shall be evaluated as to their benefit
to the Government. In determining the comparative life cycle
costs of such proposals, the performance costs over the remaining
life of the contract shall be included.
H.15.2.2 SUBMISSION OF PROPOSALS
No equipment shall be substituted until the contractor has
submitted a proposal to the Contracting Officer with adequate
supporting justification. Furthermore, an agreement between the
Contracting Officer and the contractor must also be reached and
authorized, by written modification to the contract, to effect
such substitution. The Government may allow component
substitutions when, in the opinion of the Contracting Officer it
is in the best interest of the Government to do so.
H.16 TECHNOLOGY SUBSTITUTION PLAN
a. The contractor is responsible for developing and
maintaining, throughout the course of this contract, a
technology substitution plan that conforms to the
clause provided in Section H.8 and to the requirements
in this section. This plan shall enable the contractor
to propose, and the Government to consider, alternate
hardware and software which meets the following
characteristics:
1) Meets at a minimum all of the applicable mandatory
requirements of the solicitation
2) Is functionally equivalent or superior to current
items to be furnished under the contract
3) Will maintain or improve successful systems
performance
4) Will facilitate or maintain ease of maintenance or
use
5) Will be supportable for the life of the contract
6) Has been successfully utilized in actual
performance
7) Will provide a greater value to the Government
than the hardware or software currently under
contract.
b. Technology substitution specified in the plan and in
Section H.8 is applicable only to hardware or software
not yet installed at the time the improvement is
authorized by the Government. Replacement of already-
installed contractor hardware or software will be
considered by the Government under Clause H.11
ENGINEERING CHANGES, should either the Government or
the contractor so request.
c. Hardware or software installed pursuant to this clause
shall be subject to the same warranties, maintenance
credits, downtime credits, and acceptance procedures as
items already under contract.
d. The contractor will be periodically evaluated on the
quality of the technology substitution program, based
upon the contractor's approved plan.
<PAGE>
PART II - CONTRACT CLAUSES
SECTION I - CONTRACT CLAUSES
TABLE OF CONTENTS
I.1 CLAUSES INCORPORATED BY REFERENCE (FAR 52.252-2) (JUN
1988)
I.2 REQUIREMENT FOR CERTIFICATE OF PROCUREMENT INTEGRITY-
MODIFICATION (FAR 52.203-9) (SEP 1995)
I.3 LIMITATION ON PAYMENTS TO INFLUENCE CERTAIN FEDERAL
TRANSACTIONS (FAR 52.203-12) (JAN 1990) (DEVIATION NOV
1990)
I.4 RIGHTS TO PROPOSAL DATA (TECHNICAL) (FAR 52.227-23) (JUN
1987)
I.5 AUTHORIZED DEVIATIONS IN CLAUSES (FAR 52.252-6) (APR 1984)
I.6 WARRANTY EXCLUSION AND LIMITATION OF DAMAGES
(FIRMR 201-39.5202-6) (OCT 1990)
I.7 RESERVED
I.8 OPTION TO EXTEND THE TERM OF THE CONTRACT (FAR 52.217-9)
(MAR 1989)
I.9 OPTION TO EXTEND SERVICES (FAR 52.217-9) (MAR 1989)
I.10 52.216-24 LIMITATION OF GOVERNMENT LIABILITY (APR 1984)
I.11 52.216-25 CONTRACT DEFINITIZATION (APR 1984)
I.12 52.216-26 PAYMENTS OF ALLOWABLE COSTS BEFORE
DEFINITIZATION (APR 1984)
I.13 52.222-35 AFFIRMATIVE ACTION FOR SPECIAL DISABLED
AND VIETNAM ERA VETERANS (COMMERCE DEPARTMENT DEVIATION)
(MAR 1995)
I.1 52.252-2 CLAUSES INCORPORATED BY REFERENCE (JUN 1988)
This contract incorporates one or more clauses by
reference, with the same force and effect as if they were given
in full text. Upon request, the Contracting Officer will make
their full text available.
I. FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSES
NUMBER TITLE DATE
52.202-1 DEFINITIONS OCT 1995
52.203-3 GRATUITIES APR 1984
52.203-5 COVENANT AGAINST CONTINGENT FEES APR 1984
52.203-6 RESTRICTIONS ON SUBCONTRACTOR JUL 1995
SALES TO THE GOVERNMENT
52.203-7 ANTI-KICKBACK PROCEDURES JUL 1995
52.203-10 PRICE OR FEE ADJUSTMENT FOR SEP 1990
ILLEGAL OR IMPROPER ACTIVITY
52.204-4 PRINTING/COPYING DOUBLE-SIDED JUN 1996
ON RECYCLED PAPER
52.209-6 PROTECTING THE GOVERNMENT'S JUL 1995
INTEREST WHEN SUBCONTRACTING WITH
CONTRACTORS DEBARRED, SUSPENDED,
OR PROPOSED FOR DEBARMENT
52.211-5 NEW MATERIAL MAY 1995
52.211-7 OTHER THAN NEW MATERIAL, RESIDUAL MAY 1995
INVENTORY, AND FORMER GOVERNMENT
SURPLUS PROPERTY
52.215-2 AUDIT AND RECORDS - NEGOTIATION AUG 1996
52.215-22 PRICE REDUCTION FOR OCT 1995
DEFECTIVE COST OR PRICING DATA
52.215-24 SUBCONTRACTOR COST OR PRICING OCT 1995
DATA
52.215-26 INTEGRITY OF UNIT PRICES OCT 1995
52.215-27 TERMINATION OF DEFINED BENEFIT MAR 1996
PENSION PLANS
52.215-33 ORDER OF PRECEDENCE JAN 1986
52.215-39 REVERSION OR ADJUSTMENT OF PLANS MAR 1996
FOR POSTRETIREMENT BENEFITS OTHER
THAN PENSIONS (PRB)
52.215-40 NOTIFICATION OF OWNERSHIP CHANGES FEB 1995
52.216-7 ALLOWABLE COST AND PAYMENT AUG 1996
52.216-8 FIXED FEE APR 1984
52.219-8 UTILIZATION OF SMALL, SMALL OCT 1995
DISADVANTAGED AND WOMEN-OWNED
BUSINESS CONCERNS
52.219-9 SMALL, SMALL DISADVANTAGED AND AUG 1996
WOMEN-OWNED BUSINESS SUBCONTRACTING
PLAN
52.219-16 LIQUIDATED DAMAGES - SUBCONTRACT OCT 1995
PLAN
52.222-2 PAYMENT FOR OVERTIME PREMIUMS JUL 1990
52.222-20 WALSH-HEALEY PUBLIC CONTRACTS ACT APR 1984
52.222-26 EQUAL OPPORTUNITY APR 1984
52.222-28 EQUAL OPPORTUNITY PREAWARD APR 1984
CLEARANCE OF SUBCONTRACTS
52.222-36 AFFIRMATIVE ACTION FOR APR 1984
HANDICAPPED WORKERS
52.222-37 EMPLOYMENT REPORTS ON SPECIAL JAN 1988
DISABLED VETERANS AND VETERANS
OF THE VIETNAM ERA
52.223-2 CLEAN AIR AND WATER APR 1984
52.223-6 DRUG-FREE WORKPLACE JUL 1990
52.225-9 BUY AMERICAN ACT - TRADE
AGREEMENTS ACT - BALANCE OF
PAYMENTS PROGRAM JAN 1994
52.225-11 RESTRICTIONS ON CERTAIN FOREIGN MAY 1992
PURCHASES
52.227-1 AUTHORIZATION AND CONSENT JUL 1995
52.227-2 NOTICE AND ASSISTANCE REGARDING AUG 1996
PATENT AND COPYRIGHT INFRINGEMENT
52.227-3 PATENT INDEMNITY APR 1984
52.227-14 RIGHTS IN DATA-- ALT II, ALT III JUN 1987
52.228-7 INSURANCE - LIABILITY TO THIRD MAR 1996
PERSONS
52.232-17 INTEREST JUN 1996
52.232-18 AVAILABILITY OF FUNDS APR 1984
52.232-20 LIMITATION OF COST APR 1984
52.232-23 ASSIGNMENT OF CLAIMS JAN 1986
52.232-25 PROMPT PAYMENT MAR 1994
52.232-28 ELECTRONIC FUNDS TRANSFER APR 1989
PAYMENT METHODS
52.233-1 DISPUTES OCT 1995
52.233-3 PROTEST AFTER AWARD (ALT. I) JUN 1985
52.237-2 PROTECTION OF GOVERNMENT APR 1984
BUILDINGS, EQUIPMENT, AND
VEGETATION
52.242-1 NOTICE OF INTENT TO DISALLOW COSTS APR 1984
52.242-3 PENALTIES FOR UNALLOWABLE COSTS OCT 1995
52.242-4 CERTIFICATION OF INDIRECT COSTS OCT 1995
52.242-13 BANKRUPTCY JUL 1995
52.243-2 CHANGES--COST REIMBURSEMENT AUG 1987
ALTERNATE II (APR 1984)
52.244-2 SUBCONTRACTS (COST-REIMBURSEMENT MAR 1996
AND LETTER CONTRACTS)
Paragraph E Blank - No exceptions
52.244-5 COMPETITION IN SUBCONTRACTING MAR 1996
52.245-3 IDENTIFICATION OF GOVERNMENT- APR 1984
FURNISHED PR0PERTY
52.245-5 GOVERNMENT PROPERTY (COST- JAN 1986
REIMBURSEMENT, TIME-AND-MATERIAL,
OR LABOR-HOUR CONTRACTS)
52.245-19 GOVERNMENT PROPERTY FURNISHED
"AS IS" APR 1984
52.248-1 VALUE ENGINEERING MAR 1989
52.249-6 TERMINATION (COST-REIMBURSEMENT) SEP 1996
52.249-14 EXCUSABLE DELAYS APR 1984
52.253-1 COMPUTER GENERATED FORMS JAN 1991
I.2 REQUIREMENT FOR CERTIFICATE OF PROCUREMENT INTEGRITY --
MODIFICATION (FAR 52.203-9) (SEP 1995)
(a) Definitions. The definitions set forth in FAR 3.104-4
are hereby incorporated in this clause.
(b) The Contractor agrees that it will execute the
certification set forth in paragraph (c) of this clause when
requested by the Contracting Officer in connection with the
execution of any modification of this contract.
(c) Certification. As required in paragraph (b) of this
clause, the officer or employee responsible for the
modification proposal shall execute the following
certification:
CERTIFICATE OF PROCUREMENT INTEGRITY--
MODIFICATION (NOV 1990)
(1) I, [Name of certifier]
, am the officer or employee
responsible for the preparation of this modification
proposal and hereby certify that, to the best of my
knowledge and belief, with the exception of any
information described in this certification, I have no
information concerning a violation or possible
violation of subsection 27(a), (b), (d), or (f) of the
Office of Federal Procurement Policy Act, as amended*
(41 U.S.C. 423), (hereinafter referred to as "the
Act"), as implemented in the FAR, occurring during the
conduct of this procurement [contract and modification
number]. .
(2) As required by subsection
27(e)(1)(B) of the Act, I further certify that to the
best of my knowledge and belief, each officer,
employee, agent, representative, and consultant of
[Name of Offeror] who
has participated personally and substantially in the
preparation or submission of this proposal has
certified that he or she is familiar with, and will
comply with, the requirements of subsection 27(a) of
the Act, as implemented in the FAR, and will report
immediately to me any information concerning a
violation or possible violation of subsections 27(a),
(b), (d), or (f) of the Act, as implemented in the FAR,
pertaining to this procurement.
(3) Violations or possible violations:
(Continue on plain bond paper if necessary and label
Certificate of Procurement Integrity - Modification
(Continuation Sheet), ENTER NONE IF NONE EXISTS)
[Signature of the officer or employee responsible for
the modification proposal and date]
[Typed name of the officer or employee responsible for
the modification proposal]
* Subsections 27(a), (b), and (d) are effective on
December 1, 1990. Subsection 27(f) is effective on June
1, 1991.
THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF
AN AGENCY OF THE UNITED STATES AND THE MAKING OF A FALSE,
FICTITIOUS, OR FRAUDULENT CERTIFICATION MAY RENDER THE MAKER
SUBJECT TO PROSECUTION UNDER TITLE 18, UNITED STATES SECTION
1001.
I.3 LIMITATION ON PAYMENTS TO INFLUENCE CERTAIN FEDERAL
TRANSACTIONS (FAR 52.203-12) (JAN 1990) (DEVIATION NOV 1990)
(A) Definitions.
"Agency," as used in this clause, means executive agency as
defined in 2.101.
"Covered Federal action," as used in this clause, means any
of the following Federal actions:
(a) The awarding of any Federal contract;
(b) The making of any Federal grant;
(c) The making of any Federal loan;
(d) The entering into of any cooperative agreement; and,
(e) The extension, continuation, renewal, amendment, or
modification of any Federal contract, grant, loan, or cooperative
agreement.
"Indian tribe" and "tribal organization," as used in this
clause, have the meaning provided in section 4 of the Indian Self
- -Determination and Education Assistance Act (25 U.S.C. 450B) and
include Alaskan Natives.
"Influencing or attempting to influence," as used in this
clause, means making, with the intent to influence, any
communication to or appearance before an officer or employee of
any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection
with any covered Federal action.
"Local government," as used in this clause, means a unit of
government in a State and, if chartered, established, or
otherwise recognized by a State for the performance of a
governmental duty, including a local public authority, a special
district, an intrastate district, a council of governments, a
sponsor group representative organization, and any other
instrumentality of a local government.
"Officer or employee of an agency," as used in this clause,
includes the following individuals who are employed by an agency:
(a) An individual who is appointed to a position in the
Government under title 5, United States Code, including a
position under a temporary appointment.
(b) A member of the uniformed services as defined in subsection
101(3), title 37, United States Code.
(c) A special Government employee, as defined in section 202,
title 18, United States Code.
(d) An individual who is a member of a Federal advisory
committee, as defined by the Federal Advisory Committee Act,
title 5, United States Code, appendix 2.
"Person," as used in this clause, means an individual,
corporation, company, association, authority, firm, partnership,
society, State, and local government, regardless of whether such
entity is operated for profit or not for profit. This term
excludes an Indian tribe, tribal organization, or any other
Indian organization with respect to "Reasonable compensation," as
used this clause, means, with respect to a regularly employed
officer or employee of any person, compensation that is
consistent with the normal compensation for such officer or
employee for work that is not furnished to, not funded by, or not
furnished in cooperation with the Federal Government.
"Reasonable payment," as used in this clause, means, with
respect to professional and other technical services, a payment
in an amount that is consistent with the amount normally paid for
such services in the private sector.
"Recipient," as used in this clause, includes the Contractor
and all subcontractors. This term excludes an Indian tribe,
tribal organization, or any other Indian organization with
respect to expenditures specifically permitted by other Federal
law.
"Regularly employed," as used in this clause, means, with
respect to an officer or employee of a person requesting or
receiving a Federal contract, an officer or employee who is
employed by such person for at least 130 working days within 1
year immediately preceding the date of the submission that
initiates agency consideration of such person for receipt of such
contract. An officer or employee who is employed by such person
for less than 130 working days within 1 year immediately
preceding the date of the submission that initiates agency
consideration of such person shall be considered to be regularly
employed as soon as he or she is employed by such person for 130
working days.
"State," as used in this clause, means a State of the United
States, the District of Columbia, the Commonwealth of Puerto
Rico, a territory or possession of the United States, an agency
or
instrumentality of a State, and multi-State, regional, or
interstate entity having governmental duties and powers.
(B) Prohibitions.
(1) Section 1352 of title 31, United States Code,
among other things, prohibits a recipient of a Federal contract,
grant, loan, or cooperative agreement from using appropriated
funds to pay any person for influencing or attempting to
influence an officer or
employee of any agency, a Member of Congress, an officer or
employee of Congress, or an employee of a Member of Congress in
connection with any of the following covered Federal actions: the
awarding of any Federal contract; the making of any Federal
grant; the making of any Federal loan; the entering into of any
cooperative agreement; or the modification of any Federal
contract, grant, loan, or cooperative agreement.
(2) The Act also requires Contractors to furnish a
disclosure if any funds other than Federal appropriated funds
(including profit or fee received under a covered Federal
transaction) have been paid, or will be paid, to any person for
influencing or attempting to influence an officer or employee of
any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection
with a Federal contract, grant, loan, or cooperative agreement.
(3) The prohibitions of the Act do not apply under the
following conditions:
(i) Agency and legislative liaison by own employees.
(A) The prohibition on the use of appropriated funds, in
subparagraph (b)(1) of this clause, does not apply in the case of
a payment of reasonable compensation made to an officer or
employee of a person requesting or receiving a covered Federal
action if the payment is for agency and legislative liaison
activities not directly related to a covered Federal action.
(B) For purposes of subdivision (b)(3)(i)(A) of this
clause, providing any information specifically requested by an
agency or Congress is permitted at any time.
(C) The following agency and legislative liaison activities
are permitted at any time where they are not related to a
specific solicitation for any covered Federal action:
(1) Discussing with an agency the qualities and
characteristics (including individual demonstrations) of the
person's products or services, conditions or terms of sale, and
service capabilities.
(2) Technical discussions and other activities
regarding the application or adaptation of the person's products
or services for an agency's use.
(D) The following agency and legislative liaison activities
are permitted where they are prior to formal solicitation of any
covered Federal action--
(1) Providing any information not specifically
requested but necessary for an agency to make an informed
decision about initiation of a covered Federal action;
(2) Technical discussions regarding the preparation
of an unsolicited proposal prior to its official submission; and
(3) Capability presentations by persons seeking
awards from an agency pursuant to the provisions of the Small
Business Act, as amended by Pub. L. 95-507, and subsequent
amendments.
(E) Only those services expressly authorized by subdivision
(b)(3)(i)(A) of this clause are permitted under this clause.
(ii) Professional and technical services.
(A) The prohibition on the use of appropriated funds, in
subparagraph (b)(1) of this clause, does not apply in the case
of--
(1) A payment of reasonable compensation made to an
officer or employee of a person requesting or receiving a covered
Federal action or an extension, continuation, renewal, amendment,
or modification of a covered Federal action, if payment is for
professional or technical services rendered directly in the
preparation, submission, or negotiation of any bid, proposal, or
application for that Federal action or for meeting requirements
imposed by or pursuant to law as a condition for receiving that
Federal action.
(2) Any reasonable payment to a person, other than an
officer or employee of a person requesting or receiving a covered
Federal action or any extension, continuation, renewal,
amendment, or modification of a covered Federal action if the
payment is for professional or technical services rendered
directly in the preparation, submission, or negotiation of any
bid, proposal, or application for that Federal action or for
meeting requirements imposed by or pursuant to law as a condition
for receiving that Federal action. Persons other than officers
or employees of a person requesting or receiving a covered
Federal action include consultants and trade associations.
(B) For purposes of subdivision (b)(3)(ii)(A) of this
clause, "professional and technical services" shall be limited to
advice and analysis directly applying any professional or
technical discipline. For example, drafting of a legal document
accompanying a bid or proposal by a lawyer is allowable.
Similarly, technical advice provided by an engineer on the
performance or operational capability of a piece of equipment
rendered directly in the negotiation of a contract is allowable.
However, communications with the intent to influence made by a
professional (such as a licensed lawyer) or a technical person
(such as a licensed accountant) are not allowable under this
section unless they provide advice and analysis directly applying
their professional or technical expertise and unless the advice
or analysis is rendered directly and solely in the preparation,
submission or negotiation of a covered Federal action. Thus, for
example, communications with the intent to influence made by a
lawyer that does not provide legal advice or analysis directly
and solely related to the legal aspects of his or her client's
proposal, but generally advocate one proposal over another are
not allowable under this section because the lawyer is not
providing professional legal services. Similarly, communications
with the intent to influence made by an engineer providing an
engineering analysis prior to the preparation or submission of a
bid or proposal are not allowable under this section since the
engineer is providing technical services but not directly in the
preparation, submission or negotiation of a covered Federal
action.
(C) Requirements imposed by or pursuant to law as a
condition for receiving a covered Federal award include those
required by law or regulation and any other requirements in the
actual award documents.
(D) Only those services expressly authorized by
subdivisions (b)(3)(ii)(A)(1) and (2) of this clause are
permitted under this clause.
(E) The reporting requirements of FAR 3.803(a) shall not
apply with respect to payments of reasonable compensation made to
regularly employed officers or employees of a person.
(iii) Selling activities by independent sales
representatives.
The prohibition on the use of appropriated funds, in
subparagraph (b)(1) of this clause, does not apply to the
following sales activities before an agency by independent sales
representatives, provided such activities are prior to formal
solicitation by an agency and are specifically limited to the
merits of the matter;
(a) Discussing with an agency (including individual
demonstrations) the qualities and characteristics of the person's
products or services, conditions or terms of sale, and service
capabilities; and
(b) Technical discussions and other activities regarding the
application or adoption of the person's products or services for
an agency's use.
(C) Disclosure.
(1) The contractor who requests or receives from an
agency a Federal contract shall file with that agency a
disclosure form, OMB standard form LLL, Disclosure of Lobbying
Activities, if such person has made or has agreed to make any
payment using nonappropriated funds (to include profits from any
covered Federal action), which would be prohibited under
subparagraph (b)(1) of this clause, if paid for with appropriated
funds.
(2) The contractor shall file a disclosure form at the
end of each calendar quarter in which there occurs any event that
materially affects the accuracy of the information contained in
any disclosure form previously filed by such person under
subparagraph (c)(1) of this clause. An event that materially
affects the accuracy of the information reported includes--
(i) A cumulative increase of %%%%%%%%%% or more in the amount paid
or expected to be paid for influencing or attempting to influence
a covered Federal action; or
(ii) A change in the person(s) or individual(s) influencing or
attempting to influence a covered Federal action; or
(iii) A change in the officer(s), employee(s), or Member(s)
contacted to influence or attempt to influence a covered
Federal action.
(3) The Contractor shall require the submittal of a
certification, and if required, a disclosure form by any person
who requests or received any subcontract exceeding %%%%%%%%%% under
the Federal contract.
(4) All subcontractor disclosure forms (but not
certifications) shall be forwarded from tier to tier until
received by the prime Contractor. The prime Contractor shall
submit all disclosures to the Contracting Officer at the end of
the calendar quarter in which the disclosure form is submitted by
the subcontractor. Each subcontractor certification shall be
retained in the subcontract file of the awarding Contractor.
(D) Agreement. The Contractor agrees not to make any payment
prohibited by this clause.
((E) Penalties.
(1) Any person who makes an expenditure prohibited
under paragraph (a) of this clause or who fails to file or amend
the disclosure form to be filed or amended by paragraph (b) of
this clause shall be subject to civil penalties as provided for
by 31 U.S.C. 1352. An imposition of a civil penalty does not
prevent the Government from seeking any other remedy that may be
applicable.
(2) Contractors may rely without liability on the
representation made by their subcontractors in the certification
and disclosure form.
(F) Cost allowability. Nothing in this clause makes allowable
or reasonable any costs which would otherwise be unallowable or
unreasonable. Conversely, costs made specifically unallowable by
the requirements in this clause will not be made allowable under
any other provision.
I.4 RIGHTS TO PROPOSAL DATA (TECHNICAL) (FAR 52.227-23) (JUN
1987)
Except for data contained on pages N/A , it is agreed
that as a condition of award of this contract, and
notwithstanding the conditions of any notice appearing thereon,
the Government shall have unlimited rights (as defined in the
Rights in Data-General clause contained in this contract) in and
to the technical data contained in the proposal dated
03/21/96 as revised by ISI response dated 07/29/96 to Government
Questions, upon which this contract is based.
I.5 AUTHORIZED DEVIATIONS IN CLAUSES (FAR 52.252-6) (APR 1984)
(a) The use in this solicitation or contract of any
Federal Acquisition Regulation (48 CFR Chapter 1) clause with an
authorized deviation is indicated by the addition of
"(DEVIATION)" after the date of the clause.
(b) The use in this solicitation or contract of any
Commerce Acquisition Regulation clause with an authorized
deviation is indicated by the addition of "(DEVIATION)" after the
name of the regulation.
I.6 WARRANTY EXCLUSION AND LIMITATION OF DAMAGES (OCT 1990)
(FIRMR 201-39.5202-6)
Except as expressly set forth in writing in this
agreement and except for the implied warranty of merchantability,
there are no warranties expressed or implied.
In no event will the Contractor be liable to the
Government for consequential damages as defined in the Uniform
Commercial Code, section 2-715, in effect in the District of
Columbia as of January 1, 1973, i.e.--
Consequential damages resulting from the seller's
breach include--
(a) Any loss resulting from general or particular
requirements and needs of which the seller at the time of
contracting had reason to know and which could not reasonably be
prevented by cover or otherwise; and
(b) Injury to person or property proximately
resulting from any breach of warranty.
I.7 RESERVED
I.8 OPTION TO EXTEND THE TERM OF THE CONTRACT (FAR 52.217-9)
(MAR 1989)
(a) The Government may extend the term of this contract by
written notice to the Contractor within 30 days; provided, that
the Government shall give the Contractor a preliminary written
notice of its intent to extend at least 30 days before the
contract expires. The preliminary notice does not commit the
Government to an extension.
(b) If the Government exercises this option, the extended
contract shall be considered to include this option provision.
(c) The total duration of this contract, including the exercise
of any options under this clause, shall not exceed 5 years, 6
months.
I.9 OPTION TO EXTEND SERVICES (FAR 52.217-8) (AUG 1989)
The Government may require continued performance of any services
within the limits and at the rates specified in the contract.
These rates may be adjusted only as a result of revisions to
prevailing labor rates provided by the Secretary of Labor. The
option provision may be exercised more than once, but the total
extension of performance hereunder shall not exceed 6 months.
The Contracting Officer may exercise the option by written notice
to the Contractor within the period specified in the Schedule.
I.10 52.216-24 LIMITATION OF GOVERNMENT LIABILITY (APR 1984)
(a) In performing this contract, the Contractor is not
authorized to make expenditures or incur obligations exceeding
%%%%%%%%%% dollars.
(b) The maximum amount for which the Government shall be liable
if this contract is terminated is %%%%%%%%%% dollars.
I.11 52.216-25 CONTRACT DEFINITIZATION (APR 1984)
(a) A Cost-plus-fixed fee type of definitive contract is
contemplated. The Contractor agrees to begin promptly negotiating
with the Contracting Officer the terms of a definitive contract
that will include (1) all clauses required by the Federal
Acquisition Regulation (FAR) on the date of execution of the
letter contract, (2) all clauses required by law on the date of
execution of the definitive contract, and (3) any other mutually
agreeable clauses, terms, and conditions. The Contractor agrees
to submit a cost-plus-fixed fee type of proposal and cost or
pricing data supporting its proposal.
(b) The schedule for definitizing this contract is:
Begin Cost Negotiations 10/08/96
Definitization of Contract 11/30/96
(c) If agreement on a definitive contract to supersede this
letter contract is not reached by the target date in paragraph
(b) above, or within any extension of it granted by the
Contracting Officer, the Contracting Officer may, with the
approval of the head of the contracting activity, determine a
reasonable price or fee in accordance with Subpart 15.8 and Part
31 of the FAR, subject to Contractor appeal as provided in the
Disputes clause. In any event, the Contractor shall proceed with
completion of the contract, subject only to the Limitation of
Government Liability clause.
(1) After the Contracting Officer's determination of price or
fee, the contract shall be governed by--
(i) All clauses required by the FAR on the date of
execution of this letter contract for either
fixed-price or cost-reimbursement contracts, as
determined by the Contracting Officer under this
paragraph (c);
(ii) All clauses required by law as of the date of the
Contracting Officer's determination; and
(iii) Any other clauses, terms, and conditions mutually
agreed upon.
(2) To the extent consistent with subparagraph (c)(1) above, all
clauses, terms, and conditions included in this letter contract
shall continue in effect, except those that by their nature apply
only to a letter contract.
I.12 52.216-26 PAYMENTS OF ALLOWABLE COSTS BEFORE
DEFINITIZATION (APR 1984)
(a) Reimbursement rate. Pending the placing of the definitive
contract referred to in this letter contract, the Government
shall promptly reimburse the Contractor for all allowable costs
under this contract at the following rates:
(1) One hundred percent of approved costs representing
progress payments to subcontractors under fixed-price
subcontracts; provided, that the Government's payments
to the Contractor shall not exceed 80 percent of the
allowable costs of those subcontractors.
(2) One hundred percent of approved costs representing
cost-reimbursement subcontracts; provided, that the
Government's payments to the Contractor shall not exceed
85 percent of the allowable costs of those
subcontractors.
(3) Eighty-five percent of all other approved costs.
(b) Limitation of reimbursement. To determine the amounts
payable to the Contractor under this letter contract, the
Contracting Officer shall determine allowable costs in accordance
with the applicable cost principles in Part 31 of the Federal
Acquisition Regulation (FAR). The total reimbursement made under
this paragraph shall not exceed 85 percent of the maximum amount
of the Government's liability, as stated in this contract.
(c) Invoicing. Payments shall be made promptly to the
Contractor when requested as work progresses, but (except for
small business concerns) not more often than every 2 weeks, in
amounts approved by the Contracting Officer. The Contractor may
submit to an authorized representative of the Contracting
Officer, in such form and reasonable detail as the representative
may require, an invoice or voucher supported by a statement of
the claimed allowable cost incurred by the Contractor in the
performance of this contract.
(d) Allowable costs. For the purpose of determining allowable
costs, the term "costs" includes--
(1) Those recorded costs that result, at the time of the
request for reimbursement, from payment by cash, check,
or other form of actual payment for items or services
purchased directly for the contract;
(2) When the Contractor is not delinquent in payment of costs
of contract performance in the ordinary course of
business, costs incurred, but not necessarily paid,
for--
(i) Materials issued from the Contractor's stores
inventory and placed in the production process for use
on the contract;
(ii) Direct labor;
(iii) Direct travel;
(iv) Other direct in-house costs; and
(v) Properly allocable and allowable indirect costs
as shown on the records maintained by the Contractor
for purposes of obtaining reimbursement under
Government contracts; and
(3) The amount of progress payments that have been paid to the
Contractor's subcontractors under similar cost standards.
(e) Small business concerns. A small business concern may
receive more frequent payments than every 2 weeks and may invoice
and be paid for recorded costs for items or services purchased
directly for the contract, even though it has not yet paid for
such items or services.
(f) Audit. At any time before final payment, the Contracting
Officer may have the Contractor's invoices or vouchers and
statements of costs audited. Any payment may be (1) reduced by
any amounts found by the Contracting Officer not to constitute
allowable costs or (2) adjusted for overpayments or underpayments
made on preceding invoices or vouchers.
I.13 52.222-35 AFFIRMATIVE ACTION FOR SPECIAL DISABLED
AND VIETNAM ERA VETERANS (COMMERCE DEPARTMENT DEVIATION)
(MAR 1995)
(a) Definitions.
"Appropriate office of the State employment service system", as
used in this clause, means the local office of the Federal-State
national system of public employment offices with assigned
responsibility for serving the area where the employment opening
is to be filled, including the District of Columbia, Guam, the
Commonwealth of Puerto Rico, and the Virgin Islands. "Employment
openings", as used in this clause, includes full-time employment,
temporary employment of more than three days duration, and
part-time employment but does not include (1) executive and top
management positions, (2) positions that will be filled from
within the Contractor's organization or under a customary and
traditional employer-union hiring arrangement, or (3) openings in
an educational institution that are restricted to students of
that institution.
"Positions that will be filled from within the Contractor's
organization", as used in this clause, means employment openings
for which no consideration will be given to persons outside the
Contractor's organization (including any affiliates,
subsidiaries, and parent companies) and includes any openings
which the Contractor proposes to fill from regularly established
"recall" lists.
(b) General.
(1) Regarding any position for which the employee or
applicant for employment is qualified, the Contractor shall
not discriminate against the individual because the individual
is a special disabled or Vietnam Era veteran. The Contractor
agrees to take affirmative action to employ, advance in
employment and otherwise treat qualified special disabled and
Vietnam Era veterans without discrimination based upon their
disability or veterans' status in all employment practices
such as--
(i) Employment;
(ii) Upgrading;
(iii) Demotion or transfer;
(iv) Recruitment;
(v) Advertising;
(vi) Layoff or termination;
(vii) Rates of pay or other forms of
compensation; and
(viii) Selection for training, including
apprenticeship.
(2) The Contractor agrees to comply with the rules,
regulations, and relevant orders of the Secretary of
Labor (Secretary) issued under the Vietnam Era Veterans'
Readjustment Assistance Act of 1972 (the Act), as
amended.
(c) Listing openings.
(1) The Contractor agrees to list all employment openings
existing at contract award or occurring during contract
performance, at an appropriate office of the State
employment service system in the locality where the
opening occurs. These openings include those occurring
at any Contractor facility including one not connected
with performing this contract. An independent corporate
affiliate is exempt from this requirement.
(2) State and local government agencies holding Federal
contracts of %%%%%%%%% or more shall also list all their
openings with the appropriate office of the State
employment service.
(3) The listing of employment openings with the State
employment service system is required at least
concurrently with using any other recruitment source or
effort and involves the obligations of placing a bona
fide job order, including accepting referrals of veterans
and nonveterans. This listing does not require hiring
any particular job applicant or hiring from any
particular group of job applicants and is not intended to
relieve the Contractor from any requirements of Executive
orders or regulations concerning nondiscrimination in
employment.
(4) Whenever the Contractor becomes contractually bound to
the listing terms of this clause, it shall advise the
State employment service system, in each State where it
has establishments, of the name and location of each
hiring location in the State. As long as the Contractor
is contractually bound to these terms and has so advised
the State system, it need not advise the State system of
subsequent contracts. The Contractor may advise the
State system when it is no longer bound by this contract
clause.
(5) Under the most compelling circumstances, an employment
opening may not be suitable for listing, including
situations when (i) the Government's needs cannot
reasonably be supplied, (ii) listing would be contrary to
national security, or (iii) the requirement of listing
would not be in the Government's interest.
(d) Applicability.
(1) This clause does not apply to the listing of employment
openings which occur and are filled outside the 50 States, the
District of Columbia, the Commonwealth of Puerto Rico, Guam, and
the Virgin Islands.
(2) The terms of paragraph (c) above of this clause do not
apply to openings that the Contractor proposes to fill
from within its own organization or under a customary and
traditional employer-union hiring arrangement. This exclusion
does not apply to a particular opening once an employer decides
to consider applicants outside of its own organization or
employer-union arrangement for that opening.
(e) Postings.
(1) The Contractor agrees to post employment notices stating (i)
the Contractor's obligation under the law to take affirmative
action to employ and advance in employment qualified special
disabled veterans and veterans of the Vietnam era, and (ii) the
rights of applicants and employees.
(2) These notices shall be posted in conspicuous places that
are available to employees and applicants for employment.
They shall be in a form prescribed by the Director, Office of
Federal Contract Compliance Programs, Department of Labor
(Director), and provided by or through the Contracting Officer.
(3) The Contractor shall notify each labor union or
representative of workers with which it has a collective
bargaining agreement or other contract understanding,
that the Contractor is bound by the terms of the Act, and
is committed to take affirmative action to employ, and
advance in employment, qualified special disabled and
Vietnam Era veterans.
(f) Noncompliance. If the Contractor does not comply with the
requirements of this clause, appropriate actions may be taken
under the rules, regulations, and relevant orders of the
Secretary issued pursuant to the Act.
(g) Subcontracts. The Contractor shall include the terms of this
clause in every subcontract or purchase order of %%%%%%%%% or more
unless exempted by rules, regulations, or orders of the
Secretary. The Contractor shall act as specified by the Director
to enforce the terms, including action for noncompliance.
Section I 50-DDNE-6-90029
Page I - 1
<PAGE>
PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER
ATTACHMENTS -
SECTION J - LIST OF ATTACHMENTS
Attachment No. Title No. of Pages Date
1 Appendix A NESDIS Standard No. 20 09/26/95
s24.801 - Preparation of Operation
and Maintenance Manuals
(Rev. 7/30/87)
2 Appendix B NESDIS Standard No. 25 07/15/92
s24.802 - General Requirements for
Ground Electronic Equipment
(Rev. 8/04/87)
3 Appendix C NESDIS Standard No. 24 07/19/90
s24.803 - Cable and Wire
Identification (Rev. 7/07/87)
4 Appendix D NESDIS Standard No. 6 08/04/87
s24.804 - General Requirements for
Training on Electronic Equipment
(Rev. 8/04/87)
5 Appendix E NESDIS Standard No. 8 01/24/90
s24.805 - Spare Parts (Rev. 6/24/87)
6 Appendix F NESDIS Standard No. 14 04/30/87
s24.806 - Software Development, and
Maintenance and User Documentation
(Rev. 4/30/87)
7 Reserved
8 Reserved
9 Reserved
10 Glossary 2 N/A
11 Department of Defense Form 254 9 DEC 1990
12 Deliverables and Schedule 3 N/A
Section J 50-DDNE-6-90029
Page J- 1
<PAGE>
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