EXHIBIT A – STATEMENT OF WORK
Statement of Work and Budget (SOW) for Services to be Delivered by the Colorado Advanced Manufacturing Alliance (CAMA) to the State of Colorado – Office of Economic Development and International Trade (OEDIT)
This SOW outlines the scope of work that the Colorado Advanced Manufacturing Alliance (“CAMA” or “Contractor”) will be performing as a contractor for the State of Colorado’s Office of Economic Development (the “State” or “OEDIT”). The SOW consists of ten projects on which the Contractor may work concurrently, in sequence, or a combination thereof.
1. Colorado Advanced Industries Supply Chain Initiative
2. SMART Colorado Executive Team & Strategic Operational Plan
3. Colorado Digital Manufacturing Commons Planning
4. Regional SMART Center Team Development
5. Regional Defense Diversification and SMART Center Planning Process
6. Supply Chain Direct Assistance Proposal
7. Startup Work and Development of a Southern and a Central Colorado SMART Center
8. Innovation Assistance Proposal
9. Southern Colorado SMART Center Workforce Development Services Expansion
10. Coordinate federal opportunities for manufacturers within Colorado’s Advanced Industries.
This Contract is funded by the U.S. Department of Defense (“DoD”) defense industry adjustment program. Consistent with this federal program, this Contract is intended to assess the negative impact of reduced DoD spending in Colorado and develop data and strategies for alternatives, including advanced manufacturing industries.
The primary goal for the overall Colorado defense industry adjustment program is to provide immediate and sustained assistance to Colorado firms and employees negatively impacted by reduced DoD procurement (primarily impacting the aerospace sector as well as Colorado’s advanced industries manufacturing base) and to coordinate assistance to the Colorado jurisdictions where these firms and individuals are located. The focus of this Contract is on the Interstate 25 corridor (from Fort Collins south to Pueblo (the “SMART Corridor” or “Corridor”)) because of its density of defense aerospace and other firms in Colorado.
1. Responsible Administrator -- State
Contractor's performance hereunder shall be under the direct supervision of OEDIT’s Senior Manager of Advanced Industries, who is hereby designated as the responsible administrator of this Contract.
2. Responsible Administrator -- Contractor
The administrator of this Contract for the Contractor are Tim Heaton.
Contractor shall promptly notify the State if any responsible administrators cease to provide Services hereunder. If Contractor wishes to replace its responsible administrators, it shall notify the State and seek its approval for a replacement, which shall not be unreasonably withheld. Such notice shall specify why the change is necessary, who the proposed replacement is, what their qualifications are, and when the change would take effect. All notices sent under this subsection shall be sent in accordance with the Notices and Representatives provisions of this Contract.
Within 10 business days from the date Contractor submits to the State proof of completion of an Outcome (“Submittal”), the State shall review, inspect, and assess such Submittal and notify the Contractor, in writing, if the Submittal, or part thereof, does not materially conform to the requirements of this SOW. The notice shall specify in detail the basis for rejection. Contractor shall then have 10 business days from the date of receipt of such notice in which to correct the non-conforming elements identified in the notice. The State shall then have 5 business days to confirm that the identified non-conformance has been corrected. If the State determines that non-conformance has not been corrected, this process shall repeat until the State accepts the Submittal or until the termination date of this Contract, whichever occurs first. Any Submittal that has been rejected but not yet accepted by the termination date of this Contract shall be deemed not accepted. A Submittal shall be deemed accepted if the State does not provide notice as set forth herein.
The Contractor shall send invoices once a month to the State. Each invoice shall describe the work performed for each Project and the percentage to completion of such Work. The State shall pay, upon acceptance in accordance with the Outcome Acceptance and Evaluation Procedure above, each such invoice within 45 day, except that the State may retain 10% of each amount invoiced for each Project (“Retainage”). The State shall pay all Retainage for each Project upon full completion and acceptance of each Project.
The Contractor will provide a monthly status report describing the Work performed and the tasks completed.
The State shall be pay the following amounts for each listed Project, once each such Project is completed in accordance with the terms of this Contract and by the deadline set forth below, and accepted by the State in accordance with the Outcome Acceptance and Evaluation procedures set forth herein.
1. Creation and delivery of a digital or web-based tool that identifies impacted manufacturers (the “Impacted Manufacturers’ Tool”).
2. Creation of and delivery of digital or web-based a tool that identifies opportunities for business diversification (the “Business Diversification Tool”).
3. Creation and delivery of a digital or web-based tool that identifies opportunities for supplier diversification the “Supplier Diversification Tool”).
Together, these three tools are also referred to as “Tools.”
The Contractor will work with OEDIT, existing aerospace, defense and manufacturing stakeholders, and industry to create, manage, and lead an advisory group consisting of expert individuals from the above listed stakeholders. With the assistance of this advisory group, the Contractor will create tools that map Colorado defense industry supply chain assets and show and build market diversity for defense suppliers within Colorado. This effort will produce a web‐based directory of defense contractors, businesses, and suppliers as well as related advanced industries businesses and suppliers.
There are three primary envisioned uses for the Tools:
1. to identify manufacturers that are negatively affected by reduced DoD spending for the purpose of outreach by CAMA, OEDIT and other Tool users to inquire whether they desire assistance,
2. to understand the advanced industries related to their business and associated opportunities for diversification, and
3. to help companies seeking to diversify their supplier base (or those that are just interested in more diverse contracting) identify suitable firms in Colorado
Likewise, the main users of the tool will be (a) entities seeking to provide assistance to impacted DoD”) suppliers and businesses, and (b) companies seeking to diversify their product market or supplier base.
This supply chain proposal will feed directly to Project #6. This Project # will have the following main components:
1. Aggregation and qualification of existing supply chains: This effort includes some basic research to identify suppliers in cooperation with the Supply Chain Direct Assistance Proposal (project 6 below) and the Region SMART Centers Planning Process discussed in project 5. It also looks to engage the suppliers as active participants in the initiative, committed to working with partner organizations to advance market diversification objectives.
2. Organization of a web‐based supplier directory: Concurrent to the identification and recruitment of participating suppliers, the Contractor will create a web‐based directory, populated and subsequently utilized for a variety of communication objectives, including an outreach / educational objective that targets existing defense industry suppliers.
a. New market opportunities identified in the directory will be premised on the cumulative production capacities (the supply chain profile) of the entire supply chain, as well as the dynamics and needs of adjacent advanced industries supply chains. Participating suppliers will be presented to new markets as a comprehensive supply chain offering while also connecting suppliers as individual firms to potential new markets.
b. Work outcomes from both the planning section (aligning strategies along identified industry clusters and targeting markets) and the work to increase advanced industries activities will serve to qualify market diversification potential and related supply chain market access strategies based on existing production capacities.
3. Outreach to and promotion of defense-impacted supply chains: This element is intended to increase awareness by suppliers of market diversification opportunities and the service menu of the State’s Manufacturer’s Edge (“MEP”). This next phase includes the development of programming content aimed at the suppliers regarding available resources and pathways for them to enhance market and production performance. The Contractor will create several channels of communication, including web‐based, one‐on‐one consultation and conference /seminar formats. These communication channels will be employed prior to, during, and after the supply chain mapping effort in order to maximize the effectiveness of the effort.
a. Going forward from this phase are ongoing efforts to promote the supply chain to new markets, engage new suppliers to the web‐based directory, continued outreach and coordination with MEP, training initiatives, and integrating regional resources as a complete menu of services available to participating firms.
1. Create advisory group made up of subject matter experts drawn from regional suppliers and buyers and other organizations familiar with the defense industry and the unique market dynamics related to defense contracting, as well as individuals with expertise in the advanced industries more broadly.
2. Develop a comprehensive engagement strategy with regional industry leaders that the Contractor will employ prior to, during, and after the conclusion of specified milestones of the mapping effort.
3. Map the defense supply chain and adjacent advanced industries supply chains of Colorado.
4. Inventory and aggregate existing supply chain and potential suppliers.
5. Create a web-based directory tool.
6. Specific outreach and promotion of supply chain and web-based directory tool.
1. Create an executive management team consisting of statewide industry leaders, with the following roles and responsibilities:
a. Oversight of the Contract management and ensuring accountability for attainment of goals
b. Develop a strategy for businesses and industries to achieve defense independence
c. Approve the tactical operations of CAMA during the course of the Contract
d. Hold periodic executive sessions which benchmark the progress of the program and the Contact
e. Provide ongoing communication to the general public as to progress
The objective of this effort is to develop a statewide and regional strategy (that will be distributed in a report afterwards) focused on the Advanced Industries within Colorado. The Contractor will use this strategy as a mechanism through which the Contractor will make recommendations for diversification of defense-dependent sectors of Colorado industries. The overall approach will include building upon the work finished to date by PricewaterhouseCoopers on the State’s Advanced Industries Assessment, as well as completing an analysis and consolidation of existing statewide, regional, and locally developed economic studies/industry cluster studies, such as the key Industry network plans. Products and lessons from the effort will inform the Supply Chain Proposal (Project 1 above), the Regional SMART Center Team Development Process (Project 4 below) and the Regional SMART Centers (Project 7 below).
1. Identify subcontractors and industry partners that can assist with the necessary outreach;
2. Identify the SMART Colorado Executive Team;
3. Prepare project;
4. Conduct SMART Executive Team Session – at least one meeting every month
5. Review and finalize Strategic Operational Plan with session results;
7. Inventory and assess existing economic development strategies (contrast & compare them in a regional context; identify local “comparative advantages”, identify gaps for further study in a future grant phase)
8. Align current strategies (take out redundancies; notions unsupported by the economic climate; consensus on direction and movement)
9. Prepare reports on the subject on how to diversify economic base (create defense independence strategy as an overall regional goal)
10. Formation of a SMART Colorado Executive Team (foster collaboration, communication, and examine organizational structure; regional buy‐in on recommended statewide aligned economic development strategies). The Executive Team will be responsible for the following:
a. Encourage leaders to define their roles and identify themselves for certain initiatives;
b. Foster collaboration, communication and examine regional structure; and
c. Address how the study recommendations will impact reductions in DoD procurement and determine the best strategies to assist the dislocated workers and suppliers.
11. Develop as needed charters, by-laws and governance structure documents for the component of SMART Colorado that will direct this effort.
12. Develop a strategic operational plan for action (finalize the aligned strategy) that includes:
a. Prioritized planning
b. Short-Mid and Long-term goals and objectives
c. Allocation of resources
d. Budget and Funding
e. Suggestions for use of partnerships to alleviate defense impacts
1. One Digital Lab seminar in each of the regions defined below.
2. Submission of application to Digital Lab.
The State is participating in the Digital Lab for manufacturing. In connection with this participation Colorado is pursuing a pilot program of a Digital Manufacturing Commons within the State’s supply chain. This will require seminars and programs to educate manufacturers on the opportunities as well as promote the software and system development to lead to effective implementation. Digital manufacturing provides an opportunity for firms in the defense aerospace sector to diversify their market offerings as well as a way to reduce R&D costs. The State requires assistance in this area to establish a plan for standing up the pilot network.
1. Host no less than three Digital Lab seminars for manufacturers and advanced industries companies, at least one each in Southern Colorado, Metro Denver and Northern Colorado.
2. Collect feedback from leaders in academia, industry and government to define scope of pilot.
3. Establish a working group to plan for the pilot of the digital manufacturing commons.
4. Apply for pilot through the Digital Lab.
1. Host a two-day session of industry leaders, academic leaders, and government leaders and generate a report on the state of advanced manufacturing and future strategies for success.
Organized by the Contractor, SMART Center teams representing Northern Colorado, Metro Denver, Southern Colorado, and the Western Slope regions will convene for a 2-day event. This session will be an opportunity to provide business and government leaders from these regions with a vision and develop goals for a defense-diversified SMART Colorado. The Contractor will engage national‐level speakers on technology-based economic development to discuss the importance and significance of regionalism and collaborative relationships to foster advanced industries. Representatives of other successful regions will be sought with the assistance of the Brookings Institution, National Governor’s Association, and federal agencies participating in the Investing in Manufacturing Community Partnership (IMCP) to provide other sessions during the event that connects and builds on the SMART Colorado Strategic Operational Plan in project 2 above. Efforts will focus on implementation strategies identified as part of the SMART Colorado Executive Team session.
1. Identify regional SMART Center representatives for Northern Colorado, Southern Colorado, Metro Denver, and the Western Slope.
2. Determine and set specific agenda items and education/training needs in consultation with all partners
3. Indentify and invite speakers / facilitators
4. Coordinate event logistics
5. Host the event from start to finish.
1. Development of regional solutions for emerging sector trends and workforce needs and report;
2. Develop and report on strategies for identifying new markets
3. Develop and report on four regional development plans that include approaches for defense diversification of the advanced industry clusters in those regions that comprise those regional defense industries.
4. Develop and report on four plans detailing steps to develop a SMART Center in each region as well as steps to implement and create each center (with programs / adjustment mechanisms informed by the regional development plans).
5. SMART Center facility requirements including equipment and programming with strategy plan, operations plan, budget and advisory board in place.
The Contractor will plan and facilitate the engagement of city and county partners for each of the four regional SMART Centers and their anticipated contracting with consultant(s) to conduct a defense diversification study that builds upon the aerospace sector. Such planning will involve facilities and communities along the Corridor which have the shared strategic goal of developing a regional economic development strategy focused on strengthening their respective advanced industries cluster and defense industry diversification. Such development studies will align closely with the unified recommendations from the SMART Colorado Executive Team and several recent economic development studies and sector partnership work on ways for each region to take advantage of its advanced manufacturing base as well as the density of local advanced industries firms. The development of such an industry focused strategy provides immediate opportunities for impacted DoD Tier 1, Tier 2, Tier 3 and Tier 4 suppliers to identify new target markets and replace jobs lost from the reduction in DoD procurement in the Corridor. Outreach and promotion identified in Project 1 will provide the suppliers with the ability to support the advanced industries and open up new markets for them.
Partners will also include community colleges, local economic development organizations and local NGOs as well as industry leaders.
1. Manage, project, and facilitate meetings.
2. Create a steering committee of manufacturers and strategic partners to guide the procurement process for manufacturing procurement in each region
3. Hire consultant to create an advanced industries strategy for each region to improve and accelerate economic development in the advanced industries and develop strategy to create a SMART Center in each region as well as develop the advanced industries clusters in each region.
4. Review strengths and weaknesses of the advanced industries and communities.
5. Benchmark similar efforts in North America.
6. Organize focus groups and interviews with regional stakeholders to help identify local and regional strategic activities, regional clusters and major economic assets in the advanced industries--such effort will leverage the work completed by PriceWaterhouse-Coopers under a separate agreement and will also dovetail with surveys and focus groups being contemplated to be completed by Edison Welding Institute thus achieving economies of scale and leverage existing resources and initiatives.
7. Identify advanced industries workforce needs and gaps and develop strategy to meet those needs and fill those gaps.
8. Identify industry and supply chain supplier needs and gaps and develop strategy to meet those needs and fill those gaps.
9. Identify industry and supply chain technology needs and gaps and develop strategy to meet those needs and fill those gaps.
10. Define, quantify, estimate and evaluate each of the above initiatives and develop implementation plan for each regional SMART Center.
11. Identify facility needs and potential facility options.
12. Identify initial equipment needs based on current demands.
13. Identify additional equipment requirements through Advanced Industries assessments and the supply chain mapping effort (Project 1).
14. Identify and recruit additional public and industry partners to assist with development of both the SMART Center and programming.
15. Research innovative sector development initiatives and develop proposed actions, legislation and programs that the government, industry, and _business could follow to advance the goals of this Contract for the region, identify existing and future sector trends, capacity and workforce development needs via industry engagement and design niche projects; and
16. Guided by the supply chain mapping activities identified in Project 1, identify DoD procurement-impacted supplier companies that could benefit from these new markets and develop strategies for the State to meet the advanced industries market needs identified.
1. By the deadline, at least 30 firms will have received consulting services. CAMA will submit a report of what activities it has engaged in and how the companies benefitted from them.
As companies are identified in the supply chain mapping efforts, CAMA will provide direct assistance to up to 30 firms (up to 10 for each region), which work under this Contract has identified as having been negatively affected by or currently being particularly susceptible to changes in defense procurement. The assistance will be targeted to expand the capabilities of those firms to build successful businesses in an environment that is independent form DoD contracting and funding. The Contractor will be informed by the supply chain mapping effort (Project 1) and the SMART Colorado and SMART Center Planning Assistance (Project 5) listed in the above sections. The Contractor will identify program assistance recipient companies through the supply chain mapping effort and will have the opportunity to request this assistance in response to the supply chain mapping outreach effort. Project 1 and Project 6 will be done concurrently, with Project 6 starting as soon as impacted suppliers are identified to quickly offset the impact and consequences from defense‐related cuts and improve the supplier’s competitiveness and efficiencies.
The focus of this effort is to help individual companies recognize their core competencies to determine their opportunities for efficiency improvements to position them to compete in an environment that favors advanced manufacturing and that is independent from DoD funding. The supply chain mapping effort will drive early impact results through specific customized improvements efforts for specific companies. Assistance approaches such as that employed by Manufacturer’s Edge have been shown to increase firms’ operational efficiencies, improve response times, and create new market opportunities through innovative and new products or services. In coordination with the supply chain mapping initiative, the contracted entity will identify negatively affected firms as well as those particularly susceptible to changes in defense procurement defense suppliers and provide a customized supply chain assistance platform as determined by the supplier’s needs.
Criteria to determine those firms particularly susceptible to changes in defense procurement will be based on U.S. Department of Labor Trade Adjustment Assistance Program criteria; specifically (at least 1 of the 3 criteria must apply):
1. The firm must be a prime defense contractor or first, second, third, fourth, or lower tier subcontractor to a prime contractor affected by defense budget reductions within an identified time frame;
2. The firm must experience a loss of or an imminent threat of a loss of at least 5% of sales and / or production over _______________[insert base on which the percentage is calculated], or of a major product line (defined as 25% of total sales or production), and in employment;
3. At least 5% of the firm’s loss in sales / production over _______________[insert base on which the percentage is calculated], must be attributable to defense budget reductions within an identified time frame.
Completion of the Supply Chain Assistance platform allows for high level identification of workforce skill development needs that may be addressed through the regional SMART Center in coordination with the area technical college’s incumbent worker training programs. Using the following service delivery model, this effort will provide customized services resulting from one‐on‐one engagement with a minimum of 30 DoD procurement‐impacted suppliers. This approach includes:
Š Comprehensive Diagnostics
Š Change Readiness Assessment
Š ISO Gap Analysis
Š ISO Certifications
1. Market supply chain related programs to suppliers specifically and negatively affected by reductions in DoD procurement.
2. Hold information sessions on the program offerings with ________ at least ____ per ____ and in ____ regions.
3. Contract, schedule and deliver Diagnostic, Change Readiness Assessments and ISO Gap analyses to up to 30 DoD suppliers in both public and private settings.
4. Identify and prioritize impact-based next steps for participating companies to achieve desired business growth and recovery.
5. Contract, schedule and deliver project work and public sessions (ISO Implementation) .
6. Monitor, measure, track and report impacts of marketing measures and program and project delivery to all stakeholders.
1. No later than 60 days before the end date of the Contract, two physical locations will be in operation and servicing the needs of the regional industry community based on the feedback of the regional subcommittees.
The Contractor will open and fully operate two or more facilities (“SMART Centers”) with related programming needs and provide the resources, equipment and support for the regions in accordance with the goals of this Contract. The first two SMART CENTERS shall be in the Colorado Springs area and in the Metro Denver.
Based on regional and key industry work facilitated by OEDIT since 2011 as well as sector partnership work facilitated by the Colorado Workforce Development Council, there is a need for a vertically-integrated SMART Center in Southern Colorado, Metro Denver and Northern Colorado to address technology commercialization and adoption, workforce development and business development. The advanced industries assessment, currently underway with PricewaterhouseCoopers, identifies a need for assistance to small and medium enterprises (SME) as well as second stage companies in the SMART Corridor. Using the data and conclusions from these studies, to the extent they are relevant and acceptable to OEDIT, the Contractor will identify funding for planning and development of programming.
The Contractor will create a plan for a SMART Center through Project 5. This plan will include the establishment of a facility containing necessary equipment and staff that will provide design, engineering, marketing, prototype and production / distribution services for Colorado SMEs. Such Centers may include research, supply chain management, tech shop capabilities and hands-on advanced manufacturing training centers. This proposal will fund the initial design and start-up of these centers but the OEDIT intends to submit a future request for financial assistance for future startup and equipment costs. Through the OEDIT’s industry work and assessments to date, additive manufacturing is a critical element for advancing aerospace and defense companies. As such training and education is needed for existing businesses and their incumbent workers. The Contractor will solicit donations of 3D composite printers from industry.
1. Formalize SMART Center regional teams of representatives from academic institutions, industry and government.
2. Negotiate lease terms that are acceptable to the State for two facilities meeting the specification requirements identified in Project 5 (above) and enter into such leases for terms of no less than one years.
3. Procure necessary equipment and physical resources necessary to deliver the SMART Center programming in alignment with other training programs, such as those currently being funded by the Department of Labor. This programming will focus on hands-on training marketed and geared specifically to Colorado’s defense industry with focused training programs in order to deliver the business and technology needed for defense-impacted firms to diversify into adjacent sectors. The curricula required for this training is developed in Project 9.
4. Create a process for monitoring and measuring to track dislocated workers and suppliers impacted from layoffs due to reductions in DoD procurement.
5. Monitor, measure, track and report impacts of planning to all stakeholders.
1. The Contractor will develop a report that outlines the process and the resources by which it will provide incentives and funding to firms who require assistance in using the SMART Center physical and human capital.
2. The Contractor will provide a report of the organizations that are serviced through the aforementioned process and of the service outcomes .
As part of the long-term sustainability of the SMART Centers, each center will develop a fee for service component of funding. In order to engage subject matter experts, start-up companies, high-growth companies and supply chain partners and incentivize participation in the SMART Centers, the Contractor, in collaboration with OEDIT, will develop an innovation assistance program for negatively impacted firms to offset the costs of using the facilities and resources of the SMART Center. This project builds on the business and technical consulting services provided in Project 6 and the facility and equipment development outlined in Project 7 by providing defense impacted firms with follow-on technology adoption and assistance services and hands-on training. This funding offsets the service costs for initial defense impacted firms to take advantage of these services at no cost in a typically fee for service environment. This proposal will provide a required match to the Colorado Advanced Industries grants and together will provide incentives for defense impacted firms to utilize the facility, identify new markets and new technologies thereby diversifying into new sectors.
1. Develop business model for innovation assistance with goals, strategy and metrics
2. Conduct outreach to subject matter experts on _____________.
3. Provide SMART Center services to firms
4. Provide consulting services and assistance on technology adoption consulting
5. Demonstrate technology to ________________
6. Provide training and retraining to workers.
1. The Contractor will develop and deliver to OEDIT a strategic plan for integrating advanced manufacturing into Colorado’s workforce development and educational system. The plan will incorporate input from relevant institutions such workforce investments boards, community colleges and industry.
Building on the workforce training needs identified in Project 5 and using the resources and equipment procured in Project 7, additional curricula around emerging industry technologies will be developed.
In connection therewith, the Contractor will obtain OEA financial assistance for meeting space and some equipment due to the insufficiency of the TAACCT or Workforce Investment Act (WIA) that is available, as well as due to the complex and evolving workforce needs of the defense industry and advanced industries. The SMART Center workforce components include:
1. Equipment for technical training in the areas of ____________________
2. Support to businesses, who offer internships, in the form of consultation and position matching services
3. Conference rooms or flexible space to accommodate a number of training providers and workshops for dislocated workers, including: chairs, tables, computers, scanners, copy machines, software.
1. Conduct outreach to defense industry and advanced industries firms to identify workforce development gaps between the skill required by defense and those required by advanced industry and non-defense needs.
2. Identify gaps in the TAA Colorado Helps Advanced Manufacturing Project (CHAMP) and local workforce center and community college resources and develop ways to address these gaps.
3. Develop curricula and hire staff to support training activities beginning with necessary curriculum and staff related to additive manufacturing.
4. Purchase the materials needed for the conference room to accommodate training providers and workshops for supply chain dislocated workers.
5. Track how many DoD dislocated workers attended the workshops and used the conference room and equipment.
 The Digital Manufacturing & Design Innovation (DMDI) Institute is part of President Obama’s National Network for Manufacturing Innovation. The DMDI Institute will address the life cycle of digital data interchanged among myriad design, engineering, manufacturing and maintenance systems, and flowing across a networked supply chain.