J&A_Redacted.pdf

FOUO – Source Selection Information – See FAR 2.101 & 3.104

FOUO – Source Selection Information – See FAR 2.101 & 3.104

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

CONTRACTING ACTIVITY: DLA Land & Maritime, SAPD PROGRAM/PROJECT: Eaton Bridge Contract for SPM7MX-13-D-0079 AUTHORITY: 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1

ESTIMATED CONTRACT COST (MAXIMUM):

TYPE DETERMINATION: Individual

I. CONTRACTING ACTIVITY

The contracting activity for this action is the Defense Logistics Agency (DLA), Land and Maritime, Strategic Acquisition Programs Directorate (SAPD), Basic Contract Administration Branch (ZDA) located in Columbus, Ohio. The Contracting Officer is Hilary Schroeder. This is a justification for other than full and open competition.

II. NATURE AND/OR DESCRIPTION OF THE ACTION BEING PROCESSED

This acquisition will result in the issuance of a maximum five-month firm-fixed price contract to be awarded in accordance with FAR Parts 12 and 13. The award is intended to act as a bridge contract until the completion of a follow-on competition, which includes the items addressed herein. This short-term contract will adopt the terms and conditions of contract SPM7MX-13-D- 0079 by reference for the administrative convenience of the Government. A follow-on acquisition for a long-term contract for these items is currently being worked by SAPD-ZC under solicitation number SPE7MX-18-R-0044, with the acquisition planning for that effort having started in June of 2017.

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED TO MEET THE

AGENCY’S NEEDS

1. On April 20, 2013, contract SPM7MX-13-D-0079 was awarded to Eaton-Aeroquip LLC (Eaton) using FAR Part 12 acquisition procedures. The procurement was for various CAGE and part number National Stock Numbers (NSNs) using a Justification for Other than Full and Open Competition. The solicitation was open to the public; however, Eaton was the only offeror for these NSNs, and was subsequently awarded the contract. Requirements for this contract included providing NSNs that were spare or replacement parts supporting thousands of aircraft and helicopter platforms, some of which include Black Hawk Helicopters, Chinook Helicopters, C-5 Galaxy Aircraft, OH-58 Kiowa Helicopters, FMS A-7 Aircraft, Medivacs, U.S. Coast Guard Helicopters, and Search and Rescue Helicopters. The original solicitation (SPM7MX-12-R- 0143) was for 286 NSNs that could be split out and awarded under separate contracts. The resulting Eaton contract numbered SPM7MX-13-D-0079 was awarded for 28 of those NSNs that were deemed to be commercial. The contract was awarded with a three-year base period and two

FOUO – Source Selection Information – See FAR 2.101 & 3.104 one-year options. The final option was exercised in 2017 with the current period of performance (PoP) scheduled to end on April 29, 2018, and while there is a follow-on competition underway, there is an expected ongoing need for several of the critical items in the interim.

2. Under the contemplated contract, Eaton will continue to provide the attached list of select NSNs while the Government simultaneously competes the requirement for a new Long Term Contract (LTC). The aforementioned list includes 15 different NSNs, which were prioritized for this bridge effort. This list includes Core items, SuperKID items, and critical parts, the majority of which have purchase requests (PRs) scheduled to generate within the next month. As with contract SPM7MX-13-D-0079, this effort will remain an Indefinite Delivery Indefinite Quantity (IDIQ) contract. The contract maximum for five-months will be which equates to five months of the forecasted annual demand value (ADV). The contract minimum will be which equates to the contemplated maximum. Once the minimum is met, the Government will be under no further obligation to order from this contract and may use any other vehicle deemed appropriate to meet its requirements.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION

The statutory authority permitting other than full and open competition for this action is 10 USC 2304(c)(1), as implemented by FAR 6.302-1.

V. DEMONSTRATION THAT THE CONTRACTOR’S UNIQUE

QUALIFICATIONS OR NATURE OF THE ACQUISITION REQUIRES THE USE OF

THE AUTHORITY CITED ABOVE (APPLICABILITY OF AUTHORITY)

In accordance with FAR 6.302-1, the supplies required for this short-term bridge effort have been found to be available from only one responsible source. Eaton is the only known source that can continue to provide the items on the attached list in the short-term without causing unacceptable delays. As stated above, these critical NSNs support various aircraft and helicopter platforms. These platforms are used for search and rescue, observation, utility, transport, combat and direct fire support. Justification to provide for other than full and open competition in awarding a maximum five-month contract is as follows:

1. Eaton has been successfully manufacturing and providing the supplies discussed herein under the previous contract, SPM7MX-13-D-0079, since 2013 and has held DLA long-term contracts for these items for more than ten years. Eaton is the only responsible source that is known to be able to continue to seamlessly provide these supplies in the short-term without causing unacceptable delays. The most recent contract for these items was awarded to Eaton in 2013. . Additionally, Eaton has been providing these items to DLA for the last ten years. The SAPD is now conducting a competition for follow-on support but needs continued coverage for a critical subset of the items until that effort is awarded. Therefore, the planned acquisition is a maximum five-month bridge to ensure Warfighter needs for these NSNs are met while also preventing any unnecessary delays

FOUO – Source Selection Information – See FAR 2.101 & 3.104 in receiving the items during competition of the follow-on effort. The anticipated five-month contract will ensure the Government the flexibility and security of knowing that critical Warfighter support will be continued. Once the contract minimum is met, the Government will be under no further obligation to utilize this contract and may award and begin to use the successor contract, or any other contract vehicles available, prior to the end of the contemplated five-month PoP. This coverage is necessitated due to the stock position and criticality of the selected items from contract SPM7MX-13-D-0079. Of the 15 NSNs contemplated for this effort, eight items are Core items, which are established business-drivers that have significant readiness impacts, and two of those are SuperKIDs, which have some of the highest DLA customer demand. All 15 of the items are designated as critical parts. One of items currently has no Stock on Hand (SOH), and two of the items have backorders. PRs for 11 of these items are scheduled to generate within the next month, and PRs for the remaining four items are scheduled to generate within the next two to six months. Without adequate IDIQ support, the SAPD anticipates backorders and declining stock positions to continue to accumulate. According to the procurement history, over 100 orders have been placed against contract SPM7MX-13-D-0079 for the NSNs contemplated herein in the past five months, which is the anticipated period of time remaining to fully compete and award a follow-on LTC for these items. The SAPD’s Time to Award (TTA) standards for non-certified cost or pricing data projects is 215 days, or approximately seven months; however, the follow-on acquisition is already underway, and the current contract is valid through April 29, 2018, necessitating approximately five months of continued bridge coverage for these critical items. The lack of a contract vehicle through which to continue to procure these items would likely result in backorders, causing degraded support to the Warfighter. This backlog would further jeopardize DLA’s long-term ability to adequately support the troops. Eaton has been providing all of these items to DLA continuously since 2008, Additionally, Eaton has been the only contractor to provide 13 of the 15 items to DLA Land and Maritime in the past ten years, and it has been the only contractor to provide the remaining two items to DLA Land and Maritime in the past five years. Eaton has the manufacturing capabilities, people and processes in place to continue to quickly and effectively provide these items during the bridge period while adopting the previously negotiated terms and conditions of contract SPM7MX-13-D-0079 for a seamless transition. Based on the Government’s market research and the facts outlined herein, Eaton is the only contractor that can immediately provide the requirements of the short-term effort in accordance with the terms and conditions required by the Government.

2. An attempt to award this short-term IDIQ to any other source would result in unacceptable delays in fulfilling the Government’s requirements. While there is a current LTC competition underway, it is projected to take five more months to complete, and DLA has ongoing, near-term demands for the items listed herein. Twelve of the 15 NSNs see at least monthly demands, and four of these NSNs have an Annual Demand Frequency (ADF) of between 195 and 515. Annual Demand Quantities (ADQs) for ten of these NSNs range from 153 to over 9,600. As stated above, in the past five months, there have been over 100 orders issued for these NSNs, and they all have additional projected near-term demands. With the present lack of support, DLA will likely begin to see large numbers of backorders ultimately causing harm to the Warfighter. A short-term IDIQ contract is necessary due to the anticipated volume of orders over the contemplated period of performance, as well as the fact that without an IDIQ there would be

FOUO – Source Selection Information – See FAR 2.101 & 3.104 unacceptable delays caused by the increased amount of time it would take for items to get to the Warfighter. Any effort to compete an interim IDIQ contract would likely result in significant delays, as a competition for this type of short-term contract would likely take several months – thus negating any benefit from pursuing a short-term interim contract. For this short-term effort, Eaton, by virtue of its position as the incumbent contractor, is the only vendor that can step in and provide immediate support under an IDIQ contract.

3. Likewise, interim spot buys would cause unacceptable delays in fulfilling the Government’s needs. The Administrative Lead-Time (ALT) for orders placed off of an IDIQ contract is just one day, whereas the ALT for a spot buy would add approximately two weeks, if not more, to the award process for each order. The increased timeline for these items would cause a degradation in service to the Warfighter. An IDIQ contract to bridge the time until an LTC is awarded is needed to maintain adequate support and coverage. Any spot buys would still need to be competed (or would require an approved exception), and at an expected 100-plus orders over the interim period, this would add several weeks onto the lead-time for each buy of every item, causing DLA and its Maritime customers prevalent and unacceptable delays in coverage and support.

4. Again, all of the items contemplated herein are critical items, with many of them being high-need Core and SuperKID items. Additionally, 11 of the 15 NSNs are designated as Most Critical, with the failure of the items rendering the weapon systems that they support inoperable. As such, any delay in getting the items to the Warfighters would be unacceptable as a delay of any kind could result in entire weapon systems becoming temporarily unusable. Due to the individual order volume, item criticality, and the degradation in service that would likely occur if support was delayed for any number of weeks or months for each order, Eaton is both the only responsible source and the only firm capable of providing the supplies described in Section III above in the short-term without causing DLA to experience unacceptable delays in fulfilling Warfighter needs.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

In accordance with FAR Part 5, both a synopsis of the proposed contract action, as required by FAR 5.201(b)(1)(i), and a copy of this justification, as required by FAR 6.305(a), will be, or have already been, published via the FedBizOpps (FBO) website. The notice of proposed contract action was posted on March 9, 2018 and allows any interested party to submit a capability statement, proposal or quotation in response to the notice. Although no responses have been received to date, interested parties have the opportunity to respond to the notice through March 26, 2018. Additionally, a Sources Sought Notice was posted to FBO to gauge contractor interest and ability to provide the requirements for this bridge contract. Through this publication, all interested parties were able to view a summary of the contemplated effort, which included a list of all of the required items, and were able to submit their companies’ information and demonstrate potential interest to the Government. Section V above justifies the use of a sole-source, short-term, bridge contract while the ongoing, long-term support for these NSNs is being

FOUO – Source Selection Information – See FAR 2.101 & 3.104 competed. Extensive market research has also been conducted for the follow-on LTC, and all interested parties are permitted to compete for that effort.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

The Contracting Officer has determined that the anticipated cost to the Government will be fair and reasonable and has done so based on the following considerations:

1. The Government has more than ten years of price history for these requirements, including 1,675 orders on M, V, C and D type contracts. These serve as solid benchmarks for the current effort, as no change in scope has occurred.

2. As the proposed pricing, terms and conditions were already contemplated and evaluated prior to award of contract SPM7MX-13-D-0079, the contractor has agreed to hold the final option year prices in the event that this five-month effort is approved. These prices were already determined to be fair and reasonable during the original acquisition. Other than certified cost or pricing data was obtained, and Eaton provided commercial sales invoices for the exact part numbers of the items herein. Previous contract price history was also reviewed to analyze the price of these NSNs. This included a comparison of proposed prices received in response to the solicitation to previously proposed prices and previous Government and commercial contract prices for the same or similar items. There was, and remains, adequate contract price history for all of the items. Additionally, Eaton did not propose price increases for the base period or option years under contract SPM7MX-13-D-0079, so the pricing realized by this bridge effort will be the same as the 2013 pricing. Because the previously evaluated prices will remain the same, the Contracting Officer has determined that the expected cost to the Government will be fair and reasonable for this effort. In order to verify this, the prices will be reevaluated to ensure they remain fair and reasonable prior to award of this bridge effort.

3. The Government’s estimated cost for this effort is based on the forecasted ADVs of these NSNs. As stated in Section III, the contract maximum is based on five months of ADV.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE

RESULTS, OR A STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT

CONDUCTED

The Strategic Acquisition Programs Directorate has recently performed market research pertaining to these NSNs while planning for the long-term follow-on effort and in preparing this J&A. The results are as follows:

1. Market research was performed for this maximum five-month effort in accordance with FAR 7.102 and 10.001, and several of the market research techniques described in FAR 10.002(b)(2) were utilized. These items are currently being provided to DLA by Eaton and were determined to be commercial after reviewing commercial sales orders for the exact items. The

FOUO – Source Selection Information – See FAR 2.101 & 3.104 items are acquired by DLA on a CAGE and part number basis, and as addressed above, Eaton is the only company to have provided the majority of them to DLA Land and Maritime for the past ten years.

2. In accordance with DFARS PGI 206.302-1, a Sources Sought Notice/Request for Information (RFI) was posted to FBO specifically for this bridge effort on February 20, 2018, with all responses due by February 26, 2018. The notice requested responses from interested parties and focused on whether a company currently manufactures the contemplated NSNs;

whether it has competed on a DLA contract for these NSNs in the past; whether it has provided these NSNs to DLA in the past; whether it is considered a small business under the applicable NAICS code; and whether it supplies any of these NSNs on a commercial basis. All of these are determining factors as to whether another contractor has the capability to provide the required items within the necessary timeframes. The initial list posted for market research included all of the NSNs from contract SPM7MX-13-D-0079; however, this list has been subsequently pared down to the most critical 15 items. Two contractors responded to the RFI. These included Eaton and B&H International LLC (B&H). Eaton responded on February 23, 2018 and indicated that it is a large business that currently manufactures all of the required NSNs. It stated that it has provided all of the NSNs to DLA in the past, and the POC provided information regarding commerciality of the NSNs. B&H responded on February 21, 2018 and indicated that while it is a small business, it does not manufacture the items, it has not provided the items to DLA in the past, and that it has not supplied these NSNs commercially. The RFI also instructed interested offerors to provide a capability statement indicating their company’s ability to provide the items.

No such statement was provided by B&H. The Contracting Officer followed up with B&H on February 22, 2018 for additional information. The Contracting Officer asked the company POC whether there were specific NSNs from the list that they were interested in/able to provide and whether they had provided any of the NSNs to any other agency or entity in the past. B&H did not respond to the Contracting Officer’s inquiries. As such, there was no indication that any other company could provide the necessary items within the timeframe and in accordance with the terms and conditions required by the Government. As a result of the market research conducted on FBO, as well as the Government’s additional market research and previous long-term procurement history, the Government has determined that Eaton is the only contractor currently capable of providing this interim support without causing unacceptable delays to the warfighters.

3. In preparation for the follow-on LTC, Sources Sought Notices were posted to FBO in both June and October of 2017; however, no responses were received. Additional Market Surveys were sent to 12 companies that were listed in the Procurement History and Sources tabs in the Project Development spreadsheet. Eight of the 12 companies did not respond.

4. The above-listed market research provides support that the proposed path will provide the most timely, best value to DLA. This is the only known path that ensures that DLA can

FOUO – Source Selection Information – See FAR 2.101 & 3.104 maintain necessary support while preventing unnecessary delays until the long-term contract can be fully competed and awarded. As discussed in Section VI, it is also reiterated that any interested contractor has been afforded the opportunity to submit a capability statement, proposal or quotation for this short-term effort in response to the special notice posted to FBO on March 9, 2018. However, to date, no such responses have been received from any interested parties, which further supports the Government’s determination that Eaton is the only responsible source that can provide the necessary supplies within the required constraints of this bridge effort.

IX. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND

OPEN COMPETITION

The essential facts of this justification for other than full and open competition are detailed in the sections above. This bridge contract only serves to provide necessary interim support until a follow-on, long-term contractor is able to assume responsibility. This action ensures that the Warfighters will remain fully supported without experiencing unacceptable delays in the interim.

X. LIST OF SOURCES, IF ANY, THAT EXPRESSED INTEREST IN THE

ACQUISITION

Eaton-Aeroquip LLC and B&H International LLC

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

1. As stated above, the SAPD is currently conducting a long-term, competitive acquisition for the supplies described herein. As the follow-on contract will be competitive, the only potential barriers to competition remaining are the code and part number requirements for these items. Through publicized market research efforts and synopses, information and input from any other interested contractors is being sought and considered for that effort in order to devise an approach that removes barriers to the maximum extent feasible. All requirements for the long-term effort will also be, or have already been, publicized, from initial market research through award, to ensure potential sources are identified and that any prospective barriers to competition can be appropriately addressed. For that effort, market surveys were sent to everyone listed in the procurement history and sources tabs in the project development spreadsheet. Two Sources Sought Notices were also posted to FBO to gauge and garner interest. The SAPD is moving forward with the most competitive acquisition strategy feasible for the follow-on LTC. The completion of market research, promotion of competition, allowance of adequate proposal preparation time, and elimination of barriers is being addressed to best facilitate the acquisition of the required items. The sole purpose of this short-term bridge contract is to provide for continued support of these critical Maritime items, contracting for the shortest amount of time practicable, until the competitive follow-on contract is awarded.

FOUO – Source Selection Information – See FAR 2.101 & 3.104

2. It is noted that the need for a bridge contract is not due to lack of advance planning or inadequate procurement execution. The SAPD began planning for the expiration of contract SPM7MX-13-D-0079 approximately ten months in advance of the expected contract expiration, which is well in advance of its TTA standards for this type of effort. The Strategic Sourcing Branch (ZA) started a project for these NSNs (among many others) on June 1, 2017 under project number CM17152006. Market research commenced on June 8, 2017 with a Sources Sought Notice posted to FBO. While no responses were received, the acquisition planning continued with a technical review of the required NSNs. Another Sources Sought Notice was posted to FBO on October 4, 2017, again with no responses from any potentially interested parties. The project was subsequently assigned to SAPD-ZC in November of 2017, and is being worked under solicitation number SPE7MX-18-R-0044. Since no substantive market research was garnered through the publications and requests issued on FBO, the pre-award buyer took the necessary additional steps to obtain usable market research after the project was assigned. In doing this, the buyer sent market surveys directly to companies listed in DLA’s procurement history and potential sources lists in an attempt to obtain the required market research and necessary information to move forward. These lists included the 12 approved sources for all of the parts on the solicitation, which includes the 15 NSNs discussed herein, as well as 60 other NSNs. Only four of the 12 companies responded, and only three of the four indicated any interest in the requirements. Of these three potential offerors, two were only interested in one NSN each.

Neither of these NSNs are included on this bridge request. The third company, and only company that indicated a broader interest, was Eaton. Upon obtaining the usable market research, the pre-award buyer was able to formulate an appropriate acquisition strategy and begin the formal acquisition process.

3. Steps are being taken within the SAPD as a whole in order to avoid similar bridge requests or the need for additional bridge contracts in the future. , Division Chief, SAPD-ZC, has spearheaded this effort as a result of the instant request. The mitigation plan includes “pushing” follow-on acquisition projects to pre-award buyers, rather than the current “pulling” process that allows projects to remain in project development or with the market research team until certain parameters are met, whether adequate market research information is able to be obtained prior to being assigned to a buyer or not. The mitigation plan includes assigning all follow-on projects to pre-award buyers within a specified timeframe and prioritizes the assignment of these follow-on efforts over new acquisitions in order to ensure adequate support is maintained and no gaps in coverage or bridge contracts are necessitated.

XII. CONTRACTING OFFICER’S CERTIFICATION

In accordance with FAR 6.303-2(b)(12), the Contracting Officer’s signature on the Coordination and Approval Document evidences that he/she has determined this document to be both accurate and complete to the best of his/her knowledge and belief.

XIII. TECHNICAL/REQUIREMENTS PERSONNEL’S CERTIFICATION

In accordance with FAR 6.303-2(c), and as documented in the contract file, the technical and/or requirements personnel has certified that any supporting data contained herein, which is their responsibility, is both accurate and complete.

CERTIFICATION/APPROVAL:

HILARY R. SCHROEDER

Contracting Officer DLA Land & Maritime, SAPD-ZDA

Attachment: NSN Listing (To access attachment, click the paper clip icon to the left.)

FOUO – Source Selection Information – See FAR 2.101 & 3.104

SCHROEDE

R.HILARY.R.

1407151522

Digitally signed by

SCHROEDER.HILA

RY.R.1407151522

Date: 2018.04.03 07:24:08 -04'00'