JA_Bagasse_Guatemala.pdf

J&A Bagasse & Olote C Page 1 of 4

JUSTIFICATION AND APPROVAL

TO PROCURE USING OTHER THAN FULL AND OPEN COMPETITION

This sole source justification is being prepared using the format in FAR 6.303-2.

Agency and Contracting Activity:

USDA, APHIS, ASD

250 Marquette Avenue, Suite 410 Minneapolis, MN 55401

End User/FOB Destination:

USDA, APHIS, Moscamed Program Guatemala Sterile Fruit Fly Rearing facility El Pino, El Cerinal, Barberena, Santa Rosa, Guatemala San Miguel Petapa Guatemala

1. Nature/Description of Action(s).

The Sterile Insect Rearing Facility in El Pino Guatemala uses processed sugar cane bagasse as a bulking agent in the preparation of the larval diet for rearing fruit flies. This product is referred to as bagasse.

The San Miguel Petapa Anastrepha mass rearing facility, uses processed corn cob also known as “ Olote C” as bulking agent in the preparation of the larval diet for anastrepha.

In order for the sterile insect rearing production activities to continue at these facilities, the USDA Moscamed program is awarding a sole source contract to the contractor Alvagil for the bagasse and Olote C.

The estimated period of performance of the contract is November 15, 2018 – November 14, 2021. A firm fixed price economic price adjustment indefinite delivery indefinite quantity commercial supply contract will be issued for this requirement. The contractor will be required to submit detailed documentation, including wholesaler price quotes, in order to claim an economic price adjustment (EPA). Since the raw materials are being transported to the vendor’s facility, fuel prices will have an effect on the pricing. If the adjustment is due to a rise in fuel, local indices will be reviewed prior to modifying the contract to allow for the EPA. Indices will also be reviewed if an EPA is requested for the cost in the raw materials which are an agricultural commodity and subject to price fluctuation.

These two products were previously being procured from the company Alvagil through the sole source contract AG-6395-C-16-0026 awarded to Alvagil in November 2015.

This contract expires November 30, 2018. Prior to awarding the contract in November 2015, the bagasse and olote was procured through awards made by the Moscamed commission in Guatemala.

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2. Description of Supplies/Services.

The processed sugar cane bagasse and olote "C are dried, chopped, sifted, and packaged in a specific granulometric composition to conform to the Medfly and Mexfly insect rearing program specifications.

The specifications for these products include, bulk density, moisture content, water absorption capacity, foreign debris and packaging.

The diets for the rearing of the Mediterranean fruit fly and Anastrepha mass rearing process are very specific. The diet bulking agent must meet the exact specifications, and in order to ensure successful rearing, there can be no substitutes in the products or the composition of the product. Any and all new products offered must undergo a controlled testing program by the Moscamed production plants. The testing process takes up to 6 to 12 months to complete testing on all cycles.

3. Identification of Statutory Authority.

FAR 6.302-1, Only One Responsible Source and No other Supplies or Services Will Satisfy Agency Requirements.

Citation: 41 U.S.C. 253(c)(1)

4. Demonstration of Contractor's Unique Qualifications.

Alvagil, a vendor located in Guatemala, is the only known manufacturer that produces the bagasse diet bulking agent and “Olote C”. There are no other known manufacturers of bagasse and “Olote C” due to very specific and proprietary machinery used for the process for both products. Additionally there are no known sources that can produce the bagasse and Olote "C" that meets the requirements, specifications, and standards.

The vendor is using equipment he invented specifically for the process of making these products. Additionally, when the specifications and products were developed for use in this program, they were developed in a coordinated effort with the Moscamed rearing facility technical personnel and the contractor Alvagil.

The Moscamed program tried contracting with another vendor several years ago, but the vendor was not able to produce the bagasse that met the programs specifications.

Prior to issuing the contract in November 2015, a sole source notice was posted on the Federal Business Opportunities website. Only one response was received, it was from a vendor located in Texas. The contractor inquired about the requirement and was forwarded the specifications. The contractor questioned if the government would provide a new contractor with the equipment to start up an operation to produce bagasse and olote. Additionally, in conversations with the contractor, he stated he had no current source for the raw products, and had no plan for exporting the product to Guatemala. If the contractor did find a way to produce and export the product from the US to Guatemala, the price would not be as competitive as a vendor located in Guatemala which would have lower labor costs for producing the products, less costs for the raw materials which are sourced locally, plus lower transportation costs.

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5. FedBizOpps (FBO) Announcement/Potential Sources.

If another vendor can provide the same product meeting the specifications, the USDA & Moscamed commission would be interested in receiving a proposal for future contracting consideration as well as samples for testing.

Per FAR 5.201 (b) (1) this justification/sole source notice will be posted on the Federal Business Opportunities website.

6. Determination of Fair and Reasonable Cost.

The contract will have a ceiling price/not to exceed amount of $2,500,000.00 for the three year contract. This is the maximum amount for both products.

The contractor will be required to provide a cost breakdown so the elements of their cost structure could be reviewed for cost reasonableness. The Contracting Officer in conjunction with the Contracting Officer Representative (COR) will conduct a price analysis to determine if the proposed prices will be fair and reasonable. The COR, located in Guatemala, will be able to determine if the prices are in line with commercial pricing in Guatemala and verify the vendor did not overstate or inflate their pricing.

Various aspects of the pricing will also be compared to the contracts issued by the USDA in February 2014 and 2015.

Based on prior awards, the government believes the prices quoted will be fair and reasonable. If any of the prices in the cost breakdown are determined not to be fair and reasonable or competitive, the prices will be negotiated.

7. Description of Market Research.

The program personnel have been using this diet bulking agents for more than 20 years.

They also perform general research and experimentation with the diets in an effort to obtain a higher percentage of flies in the rearing process. This also includes evaluating the diet and researching sources and alternatives available for their diet products. To date they haven't found another vendor either internationally or nationally to obtain the bagasse. Testing other types of corn and rice diets hasn't proved successful in the rearing process.

Although the only vendor for this product is a local Guatemalan source, it should be noted that it is more cost effective approach as opposed to transporting the material to Guatemala from a foreign source.

8. Any Other Supporting Facts.

We have not found another manufacturer that produces the bagasse bulking agent and olote “C” that meets USDA and Moscamed standards and specifications for insect rearing.

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9. Listing of Interested Sources.

As far as the USDA is aware, Alvagil is the only manufacturer that makes the bagasse diet bulking agent and olote “ C” that meets the Moscamed rearing facility specifications. Other than as noted above in section 5 entitled “Demonstration of Contractor's Unique Qualifications”, no other sources have contacted the USDA or Moscamed displaying an interest in providing the product or with information on another source.

10. Actions Taken to Remove Barriers to Competition.

If other manufacturers are available that can provide this supply item, the Moscamed rearing facilities would be interested in receiving a proposal and testing samples.

This justification is accurate and complete to the best of the contracting officer’s knowledge and belief. In accordance with FAR 13.501 this is the only approval needed for this justification.

Corinne Nygren Contracting Officer, USDA, APHIS

Signature_____________________________________ Date__________

Larry Nelson Competitive Advocate, Contracting Officer, USDA, APHIS

Signature_____________________________________ Date__________

10/03/2018