Approved Justification.pdf

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. Agency and Contracting Activity.

This Justification and Approval is to request authority for Other Than Full and Open Competition supporting requirements generated for the Department of Health and Human Services (DHHS). The contracting activity for this requirement is the Air Force Material Command (AFMC) Air Force Life Cycle Management Center (AFLCMC) / HBKAB. The purchase request number supporting this contract action is F4FDAY0182A102.

II. Nature and/or description of the action being approved.

Due to circumstances described herein, the activity requests authority to acquire capacity expansion of Nitrile Butadiene Rubber (NBR) gloves production and packaging listed in the document using Other Than Full and Open Competition as prescribed by FAR 6.302-2, Unusual and Compelling Urgency. Firm Fixed Price (FFP) letter contract FA8527-20-C-0005 was awarded 14 Jul 2020. The period of performance (PoP) is 14 Jul 2020 through 13 Jul 2021.

This sole source requirement will be purchased from the following company:

Renco Corporation DBA: American Performance Polymers LLC 1 Beaver Dam Road Suite 6 Manchester, MA 01944-1298 Cage: 75149 Size: Small

III. Description of the supplies/services required to meet agency needs (including the estimated value).

This requirement is for the procurement of the necessary production/packaging capability and equipment to expedite existing delivery schedules for NBR gloves to United States Government agencies. The requirements are shown below:

This requirement is for an increase in production capacity by Renco Corporation through installation of the following: one (1) production line; ten (10) dipping lines; and, two (2) fast dipping lines. In addition, this requirement will allow for roofing repairs, procurement of lighting, build two (2) loading docks, procurement of storage tanks, and procurement of solar roofs for the expansion of their Colebrook, NH facility. As a result, Renco Corporation will increase its existing domestic NBR gloves production by at least 500 million annually. Renco Corporation is responsible for securing the Department of Health and Human Services' (DHHS) approval on the expanded production capability and shall ensure planning and execution regarding all necessary certifications of the proposed facility and upgrades are in compliance with appropriate certifications of local, state, and federal regulations.

Compared to pre-crisis levels, Renco Corporations' domestic production of NBR gloves were determined to be 25 million units. Renco Corporation plans to make further investments in their production facilities to increase capacity over the next few years to allow for three (3) billion units to be produced domestically. To enable the production capacity to achieve a rate of 500 million units in its phase 1 approach, Renco Corporation will require the support of the U.S.

Government. Without the issuance of the letter contract, significant acquisition delays would delay the manufacturing capabilities needed to reduce the current strain on domestically produced NBG gloves in response to the COVID-19 pandemic.

PERIOD FISCAL YEAR ESTIMATED TOTAL

Basic FY20 Not To Exceed (NTE) $22,420,000.00

The nominal Contract Line Item Numbers (CLINs) anticipated for each period are as follows:

Unit of CLIN DESCRIPTION COST QTY/Min/Max/BEQ Measure 0001 Capacity Expansion FFP 1 LOT

Total estimated contract value is a NTE of $22,420,000.00. The basis of this estimated cost was derived from Renco Corporation’s spend plan/timeline dated 25 Jun 2020. The PoP of the contract is 14 Jul 2020 through 13 Jul 2021.

IV. Statutory authority permitting other than full and open competition.

10 U.S.C. 2304(c) (2), as implemented by FAR 6.302-2, Unusual and Compelling Urgency.

V. Demonstration that the contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited above (applicability of authority).

On 13 Mar 2020, the President declared a national emergency, under section 501(b) of the Stafford Disaster Relief and Emergency Assistance Act 42 USC 5121-5207 (the “Stafford Act”), recognizing the threat that the novel (new) coronavirus known as SARS-CoV-2 poses to national security. On 25 Mar 2020, Under Secretary of Defense for Acquisition and Sustainment Ms.

Ellen Lord established the COVID-19 Joint Acquisition Task Force (JATF). Led by the Principal Deputy Assistant Secretary of Defense, Acquisition Enablers, Ms. Stacy Cummings, the JATF team includes acquisition professionals from all Military Departments and DoD Agencies, and is synchronizing and supporting the acquisition execution of DoD’s COVID-19 response to the interagency (Federal Emergency Management Agency (FEMA) and DHHS) for medical resources. On 27 Apr 2020, the Head of the Contracting Agency for DHHS, Assistant Secretary for Preparedness Response (ASPR), signed a Determination and Findings in accordance with the authority of the Economy Act (31 U.S.C. 1535), as implemented in subpart

17.5 of the Federal Acquisition Regulation (FAR), on behalf of the requesting agency, DHHS, to enter into an inter-agency agreement for acquisition assistance with the servicing agency, the

Department of Defense (DoD), and the United States Air Force (USAF). In accordance with the Economy Act, DHHS is in need of urgent acquisition assistance that only USAF can provide within the time-frame required. The global pandemic drives the need for DHHS to rapidly support, maintain, and expand critical United States (US) industrial capacity for medical supplies and services. The DoD, through the JATF, has significant expertise, robust capability, and extensive processes in place to acquire supplies and services necessary to expand US industrial production in response to the COVID-19 pandemic.

Public health requires the immediate increase of production capability to meet critical inventory and production gaps for NBR gloves in order to maintain a facility, producer, manufacturer, or other supplier available for furnishing supplies and or services in case of a national emergency or to achieve industrial mobilization. Current US production capacity of NBR gloves and other Personal Protection Equipment is so inadequate that on 23 Mar 2020, the President issued Executive Order 13910, “Preventing Hoarding of Health and Medical Resources to Respond to the Spread of COVID-19,” delegating to DHHS the authority to enforce. Failure to immediately increase production capability will deplete NBR glove inventories, leaving the Government and the nation critically unprepared for this and future pandemic emergencies.

Several internet searches, vendor surveys and vendor discussions were conducted by AFWERX and Mitre to find companies that could manufacture gloves in the United States. Additional research was conducted through Thomas Net to search for companies who could produce Federal Drug Administration approved gloves, but Renco Corporation was the only capable manufacturer who can produce medical grade Nitrile gloves. Other companies were considered for capacity expansion with regards to building an industrial base, but all other companies did not produce medical Nitrile gloves for the purposes of this requirement. Renco Corporation also has an established base and established suppliers for NBR material and will be using this capacity expansion to be able to develop raw material on their own in the US after their Phase 1 approach.

Accordingly, Renco Corporation, is the only firm capable of providing the requirements described in Section III above without the DHHS experiencing unacceptable delays in fulfilling its requirements.

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was or will be publicized as required by subpart 5.2 and, if not, which exception under FAR 5.202 applies.

In accordance with FAR 5.202 (a) (2), the contracting officer did not submit the notice required by FAR 5.201 because the contracting officer determined that the proposed contract action is made under the conditions described in FAR 6.302-2 and the Government’s support of the COVID-19 pandemic response would have been seriously injured if the agency complies with the time periods specified in FAR 5.203.

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The overall cost of this acquisition will be negotiated in accordance with procedures in FAR 15.404-1 (b), and include a statement of price reasonableness confirming the ultimate price to the Government is fair and reasonable.

VIII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

Market Research was conducted and completed on 01 Jun 2020 in accordance with FAR 10.001 and 10.002. The market research techniques used are as follows:

Queries were conducted within the JATF’s Panjiva supply chain illumination tool data base and through various vendor surveys conducted (AMMEX, Aurelia Gloves, Dynarex, Illinois Gloves, Kimberly-Clark, Renco Corporation, and Sempermed) based on the description in search of potential sources.

According to market research conducted by the JATF, Renco Corporation was the only contractor manufacturing NBR gloves in the United States. Other contractors that were contacted were simply distributors, subsidiaries and or based in Asia.

Nitrile gloves rely on NBR to be produced. There are two (2) components in the composition of the glove, butadiene and acrylonitrile, which are combined by co-polymerization for the end result. This rubber is almost exclusively produced in Southeast Asia and the majority of shipments to the US for all American glove distributors come from Thailand, Malaysia, China, Indonesia, Hong Kong and Singapore. The DHHS glove assessment shows that Renco Corporation is the only company manufacturing in the US while all other companies are distributors.

Additional market research was not conducted due to the unusual and compelling urgency nature of this acquisition as doing so would have delayed the award to this COVID-19 response.

The capacity expansion for NBR gloves production and packaging is considered a commercial item as defined by FAR 2.101. The capacity expansion for NBR gloves production and packaging will be used by the DHHS and the commercial medical industry.

Research found that in the US there are many companies that manufacture infectious disease medical supplies but not NBR gloves. These type Emergency Infectious Disease Medical Supplies are purchases by non-Government and Government entities such as public and private Hospitals, Ambulance and Air Ambulance services companies, Doctors’ Offices, Private and Government Health Care System among others. The market research shows that most common Emergency Infectious Disease Medical supplies procured to deal with the COVID-19 pandemic are surgical masks, kids face masks/small face masks, N95 respirators, surface disinfectant wipes, surface disinfectant cleaners, hand wipes, hand sanitizers, hand soap, exam gloves, infrared thermometers, isolation gowns, shoe covers, eye protection, germicidal bleach, toilet paper, viral culture swabs, portable ventilators, transport ventilators, medical beds and portable medical beds but not NBR gloves.

The market research concludes Renco Corporation is the only US source with US based manufacturing facility for NBR gloves.

IX. Any other facts supporting the use of Other Than Full and Open Competition.

None.

X. List of any sources that expressed, in writing, an interest in the acquisition.

None. See Section VI above.

XI. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before making subsequent acquisitions for the supplies or services required.

No actions are planned to remove or overcome any barriers to competition for future acquisitions as this is a one-time buy to cover all known present requirements.

There was not a prior J&A, therefore higher level approval in accordance with DFARS PGI 206.304(a) (S-70) (ii) does not apply.

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Certification by the technical/requirements personnel.

As evidenced by my (our) signature(s) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.