260206_JA 25-0035_COCO_Schofield.Barracks_HI_Redacted.-final.pdf

DEFENSE LOGISTICS AGENCY

HEADQUARTERS

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6221

J&A Tracking Number: 25-0035

Justification for Other than Full and Open Competition

1. Summary/Introduction:

Defense Logistics Agency (DLA) Energy is the contracting activity for petroleum products and services for the Department of Defense (DoD). TPM Inc. (TPM), provides Contractor-Owned, Contractor-Operated (COCO) fuel services on leased Government property at Schofield Barracks, Hawaii, (HI). This Justification & Approval (J&A) is for the addition of two option periods under the authority found at Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(iii); one twelve-month option from February 1, 2026, to January 31, 2027, priced at $60,000.00 per month (total $720,000.00) and one six-month option from February 1, 2027, - July 31, 2027, priced at $62,000.00 per month (total $372,000.00). The total value of the action is $1,092,000.00.

The resultant modification to contract SP0600-98-D-5885 will increase the contract�s value by $1,092,000.00 from The initial twelve-month option is funded with FY 2026 Defense Working Capital Funds (DWCF); the remaining option will be funded at the time of option exercise.

TPM provides COCO fuel storage services using best commercial standards at Schofield Barracks, HI. The contractor operates, maintains, manages, and provides retail/bulk fuel services modification will be awarded prior to January 31, 2026, with performance starting February 1, 2026.

2. Nature and/or description of the action being approved (FAR 6.303-2(b)(2)):

The procurement of these services for the two option periods is being conducted using a negotiated bilateral modification to the contract in accordance with (IAW) FAR 43.103(a)(3) and contract clauses FAR 52.217-8 (Nov 1999) and FAR 52.217-9 (Mar 2000). The authority to extend this contract is codified in 10 U.S.C. § 2922.This is a performance-based requirement.

Successful performance will be measured by full compliance with the Performance Work Statement (PWS). Under this contract for COCO services, the contractor is responsible for furnishing all labor and materials to perform the fuel services including accounting and administration, storage and distribution operations, and maintenance of the COCO facilities. As explained below, TPM is the only responsible source currently capable of performing acceptable services at Schofield Barracks without delays, additional costs, or other adverse impacts to the

Justification for Other Than Full and Open Competition (Cont�d) SP0600-98-D-5885 � TPM Inc.

4. Identification of the statutory authority permitting competition other than full and open (FAR 6.303-2(b)(4)):

This J&A is based upon the authority of 10 U.S.C. § 3204(a)(1), as implemented by FAR 6.302-1 � Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements, and more specifically, the authority of FAR 6.302-1(a)(2)(iii). The services sought are highly specialized and award of this requirement to another source at this time would likely result in substantial duplication of costs to the Government that is not expected to be recovered through competition and would result in unacceptable delays in fulfilling the agency�s requirements.

5. Demonstration that the proposed contractor�s unique qualifications or the nature of the acquisition requires use of the authority cited (FAR 6.303-2(b)(5)):

disposal, and restoration of the land leased from Schofield Barracks during this contract. The two option periods will allow TPM the time to complete these tasks preventing service interruption.

TPM currently possesses the facilities, equipment, and personnel to sustain the services during the period of performance. A new contractor would need preparation time prior to beginning performance to acquire the infrastructure and permits and be willing to obtain all associated risks of the facilities and any environmental concerns to fulfill the contract. Furthermore, a new contractor would require time to develop and implement operations and training plans and to train personnel. Historically, newly awarded contracts for similar services have required preparation periods of 12 to 18 months after contract award prior to the start of COCO fuels storage services.

Conducting full and open competition for the extension of this contract is not in the best interest of the Government because it would result in substantial duplication of cost to the Government that is not expected to be recovered through competition. The installation of new storage tanks and associated facilities is one primary cost element of the startup costs for a new contractor. For example, the start-up costs associated with COCO fuel facilities for two current COCO service contracts at Laughlin Air Force Base, TX contract no. SPE603-19-C-5010 and Joint Base San Antonio, TX, contract no. SPE603-19-C-5011, were $3.6 million and $7.1 million, respectively based on the four-year base period value for these contracts. Awarding a contract to a new service provider at Schofield Barracks would result in duplication of costs, similar to the two mentioned

SP0600-98-D-5885 � TPM Inc.

contracts, where an incoming service provider would incur similar start-up costs while establishing new COCO fuel facilities.

Award of these option periods is more cost effective than procurement of a new 30-year contract for the same services under 10 U.S.C. § 2922. The contract was awarded in 1998 for a period of twenty years, the maximum period authorized by statute at the time. The statute has since been amended to authorize a total period of 30 years, commensurate with the useful commercial life for these types of facilities. While the Government will ultimately need to re-procure these services using full and open competition at the conclusion of the 30-year period, it is in the Government�s best interest to avoid this premature duplication of costs by taking advantage of the maximum commercial viability of the COCO facilities. For example, the existing tanks are covered by warranty essentially eliminates the cost risk associated with potential tank replacement. The extension of up to 18 months allows the Government to maximize the value of the start-up costs expended during the base period of the contract.

Even though Schofield Barracks has already identified a new site and begun site preparation activities, including installation of utilities, potentially extending roads, and various site surveying activities, soliciting these services under a full and open competition at this time would result in service interruption and mission failure. By extending the current contract, the Government will avoid the interruption of services, and will maximize on the value already invested in the current COCO facility by extending its use and saving on start-up costs.

6. Description of the efforts made to ensure that offers are/were solicited from as many potential sources as is/was practicable, including whether a notice was or will be publicized as required by Subpart 5.2 and, if not, which exception under 5.202 applies (FAR 6.303-2(b)(6)):

On February 18, 2025, an intent to sole source synopsis was posted to the System for Award Management (SAM.gov) to provide notice of this non-competitive action and to solicit capability statements from other potential vendors. The deadline to respond was March 5, 2025. DLA Energy received only one response, and that was from

After reviewing the company�s capability statement, which indicated the company wrote proposals and offered consultations, the Contracting Officer determined that the company�s statement failed to show that it could meet the Government�s service requirements.

7. Determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable (FAR 6.303-2(b)(7)):

TPM�s offered price is comparable to the current prices being paid under contract SP0600-98-D- 5885 after considering inflation. The Contracting Officer compared the proposed pricing offered by TPM with the Independent Government Cost Estimate (IGCE) of The

SP0600-98-D-5885 � TPM Inc.

total value of $1,092,000.00 was determined fair and reasonable based on a comparison with the IGCE per FAR 15.404-1(b)(2)(v).

8. Description of the market research conducted and the results or a statement of the reason market research was not conducted (FAR 6.303-2(b)(8)):

DLA Energy routinely solicits these services competitively and receives competition from various companies who regularly offer. DLA Energy conducted market research, which indicated that these services are available commercially. DLA Energy supplemented the information about general market conditions for these services by posting an Intent to Sole Source notice to SAM.gov to determine whether there were additional firms who would offer on this requirement.

As stated above, only one firm responded, however their capability statement did not indicate their company could perform the services under this requirement.

9. Any other facts supporting the use of other than full and open competition, such as (FAR 6.303-2(b)(9):

(i) Explanation of why technical data packages, specifications, engineering descriptions, statements of work, or purchase descriptions suitable for full and open competition have not been developed or are not available.

Not applicable.

(ii) When 6.302-1 is cited for follow-on acquisitions as described in 6.302-1(a)(2)(ii), an estimate of the cost to the Government that would be duplicated and how the estimate was derived.

(iii) When 6.302-2 is cited, estimated cost, or other rationale as to the extent and nature of the harm to the Government.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition (FAR 6.303-2(b)(10):

As stated above, DLA Energy FESBA received only one response to the posted synopsis, which came from . After reviewing the company�s capability statement, which indicated it wrote proposals and offered consultations, the Contracting Officer determined that the company�s statement failed to show that it could meet the Government�s service requirements.

11. Actions that may be taken to remove or overcome barriers to competition before any subsequent acquisition for the supplies or services are required (FAR 6.303-2(b)(11)