SUBCONTRACTING

PearlNet is committed to the successful accomplishment of the task orders and will apply each of these elements to ensure success. Our approach in the subcontracting process is based upon:

• Creating a Seaport-e Management Integrated Product Team (IPT) that includes subcontract personnel to provide a streamlined, timely response to all Seaport-e Task Orders
• Assigning a distinct Task Order IPT for each task order assigned to a subcontractor and implemented under this program
• Identifying risk areas, with subcontractors, at the beginning or in the early stages of individual task orders, implementing Risk Mitigation procedures to minimize the risk, and inspecting the work in process to assure mitigation efforts are adequate
• Providing timely corrective actions for problem areas and monitoring those actions to prevent recurrence
• Using Lessons Learned from other programs to maximize the potential for success for each task order.

This section is divided into three parts. The first part describes the process that will be used for the selection of PearlNet's initial Seaport-e subcontractors and vendors. The second part describes the standard process for selection of core subcontractors/vendors based upon follow-on Seaport-e requirements. The third part describes our process for selecting additional, non-core subcontractors, to support follow-on task orders.

Initial Seaport-e Subcontractors/ Vendors Selection

During the Seaport-e Task Order procurement process, PearlNet's strategic approach to meeting the Seaport-e requirements will consist of identifying and qualifying no more than four complementary subcontractors that can perform 100% of the Task Order requirements. In addition, vendors may be added on a case-by-case basis to satisfy unique proprietary hardware or software requirements, or unique task order requirements. PearlNet has elected to go with a small core team in order to develop a team atmosphere rather than a lose mix of vendors with little or no allegiance, and to select team members that specialized rather than those with a range of general capabilities. We are electing to select a team that would complement each other rather than conflict or compete with each other. This complementary team approach offers less conflict, stronger capability through specialization, quicker response and a cohesive approach that in the end results in less risk. The initial subcontractor selection process will begin immediately following the IDIQ award of the Seaport-e contract to PearlNet. PearlNet senior management will begin a carefully orchestrated process to select the core subcontractors. Trade studies will be developed to analyze the Seaport-e requirements, research industry sources, and determine a sound sourcing strategy. The two main criteria used to make the best selection consisting of: (1) Internal: a detailed capability analysis of PearlNet personnel, experience, and resources; and (2) External: assessments of supplemental external capability of known industry sources with proactive management, complementary capability, relevant past performance, financial stability, and cost competitiveness. The corporate management team will prepare and issue a series of capability surveys, and hold face-to-face meetings and discussions with potential candidates. Information on the size of the business, experience of top management, major Customers and contracts, references, quality systems and procedures used, and relevant past performance information will be gathered and incorporated into a master selection folder. Financial status will be reviewed from sources such as Dun and Bradstreet. Past performance will be evaluated using references or PearlNet historical data, if available, and information obtained by contacting subcontractor Customers. A major part of this process is the interview of the subcontractor Customers, any problems noted, and the responsiveness of subcontractor management to correct them and implement long-term solutions. Where the subcontract task is complex, or high-dollar value, the management team conducts a subcontractor site survey. From information obtained we categorize subcontractor candidates into two groups:

Core Subcontractors

Select top-notch provider products and services to Government or Industry with in-place quality and performance standards, having an exemplary reputation with its Customers.

Vendors

Quality vendor of COTS products and/or services that are directly applicable to the SEAPORT-E Task Orders.

Once all proposed subcontractor candidates have been identified and evaluated, the core candidates are rated based upon their core technical capability, past performance and strengths as compared to the supplemental capability needed by PearlNet for the Seaport-e Program. After formal selection of the core subcontractors, the PearlNet Contracts Administrator prepares and issues a Request for Proposal (RFP), using the Seaport-e Statement of Objectives (SOO), Technical Requirements Document (TRD), and other program specific documents. A proposal and performance schedule, terms and conditions, and a subcontractor Statement of Work (SOW) are provided. Nondisclosure Agreements, which protect the exchange of sensitive information and expedite the technical interaction that is required at this phase, will be issued. These requirements will be subsequently updated upon release of the formal Seaport-e Task Order.

Since there will be close cooperation during the process and the core subcontractor(s) will be involved in the requirements during the draft RFP stages, the subcontracted documents will be negotiated and signed within 10 workdays of being issued. This creates the core PearlNet Seaport-e Team that will support the initial and follow-on task orders. We believe this team will offer a strong technical background and will continue to work well together to be responsive and achieve maximum customer satisfaction. Upon selection of the core candidates, a two-tier Integrated Product Team (IPT) organization will be established to respond to the Seaport-e requirements and manage the Seaport-e Program after contract award.

To provide Seaport-e Program Management, PearlNet has established a Tier I Management IPT that is led by the PearlNet Program Manager, Mr. Ron Simmons, and will include a representative from each of the core subcontractors that will be selected as required to perform Task Orders under the Seaport-e contract. Mr. Simmons will assume the role of Program Manager for the Seaport-e program. The Management IPT will be responsible for managing Seaport-e contract performance including proposal preparation and submission to include responding to the basic program requirements as well as overall contract success after award. Tier II IPTs will be established for the individual Task Orders. As new Task Orders are released, IPT Leaders will be assigned by the Management IPT. All Tier II (Task Order) IPT Leaders will be PearlNet employees.

Selection of Vendors for Follow-On Task Orders

The process for selection of vendors for follow-on Task Orders will be somewhat different to that developed for the selection process identified in paragraph 4.1.1.1. Since the core subcontractors will be in-place, the process is greatly streamlined. Resource Managers will have been identified by each core subcontractor to serve on the Seaport-e Management IPT, their responsibilities established, and charters developed to support the team. Upon receipt of a Seaport-e new Task Order, the Management IPT shall establish a program-specific Task Order IPT, headed by an experienced PearlNet Project Manager and supported by PearlNet's Subcontract Administrator. The Task Order IPT Leader initiates a kick-off meeting within three work days after new Task Order RFP release. This three-day period is used for a detailed evaluation of the new Task Order RFP requirements. This evaluation period may be extended by the Task Order IPT Leader depending on the complexity of the Task Order. The membership of the Task Order IPT is dependant on the specific requirements and will consist of Task order IPT leader, Subcontracts Administrator, and a Resource Manager from each of the core subcontractors required for the Task Order.

At the kick-off meeting of the Task Order IPT, the IPT Leader solicits inputs from the Resource Managers and Subcontracts Administrator. Each Resource Manager is given the opportunity to provide their input to the New Task Order. Resource Managers will respond to their respective company's area of expertise. New Task Orders that require the specific expertise outside the core PearlNet Seaport-e team require the Task Order IPT to identify and actively pursue additional subcontractors.

Selection of Additional Vendors

When the scope of work for a new Task Order includes a specific requirement that is not within the core team capability, the Task Order IPT will begin the process of finding additional resources. This process is very similar to the initial selection process identified in paragraph 4.1.1.1 above; however, the responsibility for recommending selection of a specific vendor now rests with the Task Order IPT. The same basic criteria are required of a new subcontractor or vendor. The new vendor must: (1) have the required technical capability; (2) have strong management in-place with the necessary experience and tools to effectively manage their specialty area; (3) have existing quality processes and procedures that are ISO compliant; (4) have excellent past performance in the relevant specialty area; (5) be responsive; and (6) be financially able to meet the commitment of the new Task Order. Once the Task Order IPT has completed its evaluation, it recommends to the Seaport-e Management IPT to add this newly approved subcontractor/vendor to the team for this new Task Order.

Coordinating with Subcontractors

Task Order IPT Leaders have the responsibility and authority to coordinate subcontractor efforts. The Resource Managers of the core subcontractors will be members of the Task Order IPT, as required. They are required and expected to participate in and support the initial kick-off meetings, regular discussions, technical exchanges and management reviews.

The Task Order IPT Leader is responsible for the interaction of the members and encourages direct coordination of their efforts with each other. The Task Order IPT coordinates discussions, facilitates tasks, and is responsible for problem resolution. Each Resource Manager provides inputs at meetings and discussions, assists the Task Order IPT Leader in defining the charter against task order requirements, supports needed tasks, provides strategic inputs to processes and procedures, and assists in developing schedules and metrics. The Task Order IPT Leader coordinates the Task Order effort through the Management IPT as well as with the Customer. If the new Task Order is awarded to PearlNet, the Government is encouraged to participate in the Task Order IPT, if desired.

Integrating with Subcontractors

The Task Order IPT Leader has the responsibility and authority for integrating the subcontractors. This task is accomplished by creating a standard set of guidelines for the Task Order. During the initial selection of core subcontractors, specific responsibilities will be developed for each approved subcontractor based upon their capabilities. Resource Managers are assigned to the Management IPT or appropriate Task Order IPTs to help develop charters, schedules, plans, procedures and performance standards. We will integrate the subcontractor's processes and procedures into the master Seaport-e plan, creating performance metrics as needed and clearly defining the role each subcontractor plays in the Seaport-e Program.

With each new Task Order, the Task Order IPT will create and update these team plans and processes based upon the task order requirements. Subcontractor plans, processes, and procedures will integrate the subcontractor work efforts into the overall plans. This includes building the integrated Program Management Plan (PMP) and integrated Program Management Schedule (PMS), while identifying risks, establishing thresholds, and metrics. Performance metrics and milestones are used to ensure schedules are met and integrated tasks are accomplished. Core subcontractors are included in all applicable Task Order IPT meetings, technical interchanges, discussions and quality reviews, and risk assessment and management meetings. Risk management is a key issue in Task Order evaluation and analysis. Risks are identified, categorized as affecting cost, schedule or performance, risk impact studies are conducted and probability of risk occurrence evaluated. As part of the Risk Management process, the IPT develops workarounds and implements a risk mitigation plan to minimize the impact of the risk. Subcontractor capability, staffing, depth and availability of resources, financial stability, and past performance are elements included in the Risk Management process.

Controlling Subcontractors

The Task Order IPT Leader, supported by the PearlNet corporate Quality Administrator, has the responsibility and authority for control of subcontractor performance. The subcontractor's performance is continually monitored and compared against negotiated standards and the performance metrics established for the subcontracted effort. Reviews are conducted by the IPT Leader and/or corporate Quality Administrator, as needed, to ensure timely and effective completion of assigned subcontractor tasks. Scheduled reviews shall be conducted with individual Resource Managers, minutes of these reviews documented, and corrective actions taken for any problem areas.

Corrective actions are required for all work not performed in accordance with the established standards, or otherwise unsatisfactory work. If discovered through normal work review of quality surveillance, such non-conforming work will be documented, reported, and steps will be taken to correct the discrepancy either immediately, or as soon as practicable. The approach used is to correct the discrepancy on the spot, if possible, and take action to preclude future non-compliance. When immediate action cannot be taken to correct nonconformity, or a condition causing a deficiency, a corrective action report on the deficiency is prepared by the Resource Manager and submitted to the IPT Leader. The Resource Manager will assign suspense dates for correction and take action to preclude future non-compliance. Corrective actions continue until the discrepant condition is resolved. The Resource Manager will forward corrective action reports to the IPT Leader. Any deviations from established standards must go through a formal review process and the appropriate corrective action taken and documented. When issuing a requirement to a core subcontractor, PearlNet formalizes a subcontract Task Order that defines the scope of work, the level of performance required, performance metrics, the schedule or milestones for the tasking, and any unique requirements. For Seaport-e Task Orders, requirements are flowed down in the Subcontract Agreement to the subcontractor from the existing Seaport-e prime contract.

The prime POC is established, normally the IPT Leader and/or Subcontracts Administrator, their responsibility and authority defined, and the issuing and start dates for specific tasks. As changes occur, they are negotiated and incorporated into the subcontract documents by the Subcontracts Administrator.