ConsolwAttachment22R0110.pdf

DEFENSE LOGISTICS AGENCY

LAND AND MARITIME

P.O. BOX 3990

COLUMBUS, OHIO 43218-3990

MEMORANDUM FOR THE FILE

SUBJECT: Consolidation Determination- DLA Land and Maritime, for SPE7LX-22-R-0110

Background:

This DLA Land and Maritime acquisition is for a 5 year Indefinite Quantity Contract

(IQC) issued under FAR Part 12 Acquisition of Commercial Products for Air Intake Cleaners and Filter Elements. The acquisition will include a population of 2 National Stock Numbers (NSNs), which support the Heavy Expanded Mobility Tactical Truck (HEMTT). This acquisition is being pursued to provide continued or improved supply availability to preclude backorders, reduce administrative and production lead-times (ALT and PLT), decrease potential contract administration actions, and obtain reduced and stable unit pricing.

DLA Land and Maritime intends to enter into a firm-fixed price, long-term contract (LTC) with a maximum contract period of 5 years, consisting of a 3 year base period and two 1 year option periods. The total estimated annual demand value is $644,626.73. The estimated 5 year value is $3,223,133.65. The estimated contract maximum dollar value is $5,801,640.57.

Best value trade-off procedures will be utilized and will be all or none by NSN. A single award is anticipated as opposed to multiple awards.

Based on the procurement history and a technical review, these items will be procured under Other Than Full and Open competition per the authority of 10 U.S.C. 3201 (c) (1), FAR 6.302- 1.

• It was determined to be in the best interest of the warfighter and the Agency to initiate the development of a LTC that supports spare parts for the various ships described above.

• This contract will provide repair and replacement parts for military customers both in the Continental United States and Outside the Continental United States.

The support of these items will be through DLA Direct (DD).

• An add/delete clause will not be utilized.

These items were previously procured via spot buy purchases and Long Term Contracts.

Accordingly, the proposed acquisition constitutes a consolidation of contract requirements as defined in FAR 2.101 and 7.107-2 because the proposed procurement will result in a single contract for items that DLA Land and Maritime previously procured under separate contracts each of which were lower in cost than the total cost of the contract for which offers will be solicited.

Market Research:

Consolidation Determination SPE7LX-22-R-0110

• DLA Land and Maritime conducted market research, consisting of a market survey issued to 1 past supplier. As of August 3, 2022, one response was received.

• The market survey sought and gathered information regarding commerciality, shipping costs, option periods, pricing, and electronic data interchange (EDI) capability. Maradyne Corporation (0DBY7) is the manufacturer for these NSNs, the items are not quantity sensitive; quantity price breaks were not provided and estimated delivery days is 112 days for both NSNs.

• Market research was conducted on the technical data and the approved sources and all information was current and correct.

• Maradyne Corporation is a small business manufacturer that is an interested vendor.

Additionally, a review of the past buy history shows that competitive offers were received from 2 or more small business concerns and Oshkosh, the large business approved source, has at least 1 small business distributor that has historically been awarded contracts for these items.

• Sources sought posted to FedBizOpps on September 12, 2022 and closed on September 17, 2022. No responses were received.

Small Business Impact: These items are available from two sources: Maradyne Corp. (CAGE 0DBY7) and Oshkosh Defense LLC (CAGE 75Q65) and are being solicited on an “all or none” basis by CLIN, so small businesses will have the opportunity to provide only one or all of the items.

One possible negative impact is that, once awarded on a LTC, these NSNs may not be available for competition for the full five years, if all options are exercised, unless an additional source is approved. However, this impact is mitigated by the fact that if any additional sources are approved, the particular NSN(s) will be resolicited to incorporate the new source.

Procurement history shows that Maradyne Corp. a small business manufacturer, has primarily been the provider for these items. Whether these NSNs are acquired via individual purchase orders or solicited for a five-year IQC, Maradyne Corp. controls whether they offer the items through dealers and distributors or if they provide them directly to the Government.

As required by FAR 7.107-2(a)(3), the Consolidation Determination was coordinated with the DLA Land and Maritime Small Business Office and Small Business Administration. The Consolidation Determination was attached to the DD2579, Small Business Coordination Record, when it was submitted for review and approval.

Benefit Analysis:

The details of the proposed approach are discussed in the Acquisition Plan. The proposed acquisition approach results in the following benefits:

1. Relationship Management: Orders from a LTC will provide a continuous relationship between the contractors and the contracting activity. After award issuance, the contract(s) will be assigned to a Basic Contract Administrator (BCA). The BCA and an

Administrative Contracting Officer (responsible for post award actions on delivery orders) will be responsible for ensuring Purchase Requests are sourced properly to this contract and tracking delivery. The BCA will also be responsible for exercising any options until contract expiration. Having a primary contact within the administration area will ensure that potential quality/delivery issues will be resolved more efficiently and quickly than individual spot buys. Also, contractors are more likely to be proactive in seeking avenues to resolve quality/delivery discrepancies since the items are on contract for an extended period of time.

2. Acquisition Cycle: Administrative Lead Time (ALT) will be reduced because items will not have to be procured via individual purchase orders (spot buys) each time a requirement arises. Requirements will source automatically to the proposed LTC using DLA’s automated procurement system, which will generate delivery orders against the contract. As of October 17, 2022, in the Land Supply Chain, the average ALT for delivery orders on LTC was 1.6 days, 72 days for small buys, and 113.5 days for large purchase awards, and 19 days for PACE awards. Using this data for comparison, there is a minimum savings of 70.4 when comparing the proposed LTC approach to small buys, 111.9 days compared to large purchases, and 17.4 days compared to PACE buys.

3. Cost: The vendor(s) will reduce duplicate efforts and thereby lower administrative costs associated with quoting on multiple solicitations over the same period. Additionally, the vendor(s) may be able to reduce material costs for items on a LTC by using long-term production planning, which allows buying raw material or finished materials in bulk, resulting in quantity discounts. These efficiencies can result in reduction of Government costs. There are also internal Government benefits from using a LTC, such as decreased inventory capital investment requirements as a result of lowered ALT, since quicker and more reliable vendor delivery means that less stock is required to be kept on-hand. Also, the Government’s administrative and operational costs to initiate and manage multiple solicitations, evaluations, award decisions, and contracts is significantly reduced, ordering is automated, and the automated ordering process time is almost instantaneous.

The advantages of this project include cost avoidance for the Government, workload reduction, opportunity for continued participation in a supplier partnership, little disruption of the current flow of items to the customer, and minimal level of maintenance. These benefits are interrelated and largely result from elimination of the numerous separate contract actions (with associated lead-time and contracting resource requirements) now required to support Maritime based weapon systems on a worldwide basis.

The benefits of this consolidation are critical to the Agency’s mission success. DLA is the military’s premier logistics provider, and it is imperative that DLA structures its contract actions to maximize benefits while minimizing costs. The consolidation does this by reducing administrative costs which, in turn, helps to keep DLA’s cost recovery rate low. Critical benefits include increased material availability, reduction in lead time, and increased warfighter equipment operational readiness.

Alternative Contracting Approaches:

The Contracting Officer considered the less consolidated alternatives in developing the acquisition strategy for this project. The least consolidated, but also least beneficial, approach would be to procure the items via individual purchase orders (spot buys). This approach would not achieve the efficiencies, cost avoidance, and other benefits when compared to the acquisition strategy proposed.

Another less consolidated contracting strategy would be to procure these items using Automated Indefinite Delivery Contracts (IDCs). However, Auto IDCs are typically shorter than LTCs. Therefore these NSNs should not be placed on Auto IDCs. This approach would therefore not achieve the efficiencies and other benefits of the proposed approach.

A third approach that is only slightly less consolidated than that proposed is to separately solicit for and award individual LTCs for each NSN. While this approach seeks to leverage the contract administration advantages of long-term delivery order contracts, it provides very little practical difference from the first alternative above. This approach would require greater resources both to award and administer (even if the contracts were awarded to the same vendor) and would take substantially longer to award than the proposed approach. Therefore, this alternative contracting strategy is substantially less beneficial than the proposed approach because it significantly decreases efficiencies during the pre-award cycle and provides no better benefits associated with competition than the proposed approach, as both approaches allow for the individual evaluation and award of each NSN.

Determination:

For the reasons stated above, I hereby determine:

a. This proposed acquisition constitutes a consolidation of contract requirements.

b. The contract requirements being consolidated exceed $2 million.

c. There are non-quantifiable benefits of consolidating the contract requirements.

d. The expected benefits do not meet the thresholds for a substantial benefit at FAR 7.107-2(d)(1), but are critical to the Agency’s mission success.

e. The procurement strategy provides for maximum practicable participation by small business.

f. The consolidation of contract requirements is necessary and justified.

LINDA J KELLY Date Deputy Director Strategic Acquisition Programs Directorate

ATTACHMENTS:

1: NSN Data 2: Approved Manufacturer and Part Numbers

CUI SPE7LX-22-R-0110

NSN Data

Source Selection Information See FARs 2.101 and 3.104

NSN FSC NIIN KID ITEM PC CHAIN SK ADV PRICE AVG ZBPR (MAUC) MILTON ADQ MILTON ADF

2940011527890 2940 011527890 3 AIR CLEANER,INTAKE 3012310 LAND $37,328.98 $1,426.89 $1,434.97 26 25 2940013501680 2940 013501680 1 FILTER ELEMENT,INTA 3012310 LAND Y $607,297.75 $151.68 $177.53 3,407 1,706

ADV $644,626.73

3 Year $1,933,880.19 5 Year $3,223,133.65

Consolidation Memo Attachment #1

Source Selection Information See FARs 2.101 and 3.104

NIIN

011527890 013501680

STANDARD PRICE PEAK_NXTGE

N

SOH MTH_STKDW NEXT PR COMMERC

IAL

AAC AMC AMSC PIC QCC FAT WSEC WSIC Base_Unit Order_unit

1,364 CPS 17 0 0 Z 1 C 2 CAA 0 J EA

181 CPS 1282 0 0 Z 1 R 2 CAA 0 L EA

Source Selection Information See FARs 2.101 and 3.104

NIIN

011527890 013501680

CONVERSION_FACTOR Leadtime ALT PLT PO_DI_Qty_ALL PO_DI_Qty_Exclude_90Day_Lat e

PR_DI_Qty BO_Lines BO_QTY Returns_Method_Code ICG

1 141 15 126 40 40 0 0 N NORM

1 117 5 112 1,054 1,054 0 0 N NORM

Source Selection Information See FARs 2.101 and 3.104

NIIN

011527890 013501680

Item_Standardization_Cod e

Replacement_NSN DPAS_Priority_Ratin g

DPAS_Rating_Pro_Ind NAIC CRITICAL_PART_IND Special_Procedure_Code Flight_Safety_Ind

5 DO C9 333618 X

6 DO C9 336390 X

Source Selection Information See FARs 2.101 and 3.104

NIIN

011527890 013501680

Life_Support_Indicat or

Inventory_Category_Code Shelf_Life_Type Precious_Metal_Indicator_Co de

DMS_CASE Catalog_Activity_Cod e

Sole_Source_Review_Co de

Surge_Indicator

H A 00000 N H A 00000 N

Source Selection Information See FARs 2.101 and 3.104

NIIN

011527890 013501680

Coverage_Duration Supply_Planner Product_Specialist Tech_Ops_Review_Co de

Tech_Ops_Review_Date Haz_Mat_Ind_CD Cross_Dis_Chain_Mat_STAT

001 DKH0023 DTS0120 N 11/28/2018

001 DMS0214 DJL0099 N 12/13/2017

Source Selection Information See FARs 2.101 and 3.104

NIIN

011527890 013501680

Cross_Plant_Mat_Stat Packaging_Review_Co de

FCST_CON_RAT

E

HIST_CON_RATE LAST_DMD_DT UMMIPS BIC_BMDS BIC_BMDS_EXDT BIC_BDEMILCD PR00

N 0 2/7/00 6/13/2022 $0.00 NR A 1831.02

N 0 10/21/09 7/5/2022 $0.00 NR A 226.53

Source Selection Information See FARs 2.101 and 3.104

NIIN

011527890 013501680

MGMT_ASSUMED_DKEY_CDRETAIL_ITEM

5/12/1983 CC 0

12/26/1991 CC 0

Source Data

Source Selection Information See FARs 2.101 and 3.104

NSN CHAIN

Profit

Center CAGE Name 1 PART NUMBER RNCC RNVC

2940011527890 LAND 3012310 0DBY7 MARADYNE CORPORATIO L116D10K090S 3 2

2940011527890 LAND 3012310 75Q65 OSHKOSH DEFENSE, LLC 1308990 5 2

2940013501680 LAND 3012310 0DBY7 MARADYNE CORPORATIO W250D59KTSSWP 3 2

2940013501680 LAND 3012310 0DBY7 MARADYNE CORPORATIO W-250D59KTS 5 2

2940013501680 LAND 3012310 75Q65 OSHKOSH DEFENSE, LLC 2GE894 5 2

ConsolidationMemo Attachment #2