Cotton Linters J and A Redacted.pdf

Controlled Unclassified Information (CUI)

Control No: 26-002 Contractor: BAE Systems Ordnance Systems Inc.

Supply/Service: Sheeted Cotton Linters

Department of Army Justification and Approval for Other than

Full and Open Competition

1. Contracting Activity: U.S. Army Contracting Command - Rock Island (ACC-RI), Rock Island, IL, 61299-8000.

2. Description of Action: The Joint Program Executive Office – Armaments & Ammunition (JPEO A&A) requests a firm-fixed-price Delivery Order under Indefinite Delivery Indefinite Quantity (IDIQ) Contract W52P1J-11-D-0013 with BAE Systems Ordnance Systems Inc. (BAE Systems), Radford, Virginia, for the procurement of sheeted cotton linters produced by BAE Systems’ subcontractor, Georgia Pacific (GP), in Memphis, Tennessee. ACC-RI awarded a Undefinitized Contract Action (UCA) to BAE Systems on for the procurement of the sheeted cotton linters utilizing Program Manager for Maneuver Ammunitions Systems Army Fiscal Year (FY)

Procurement Army (PA) dollars and Program Manager for Combat Ammunitions Systems (PM-CAS) Army FY PA dollars. JPEO-A&A (previously the Program Executive Officer Ammunition) approved a combined Acquisition Strategy Report and Acquisition Plan in accordance with Defense Federal Acquisition Regulation Supplement 207.103(d)(i)(B) on 28 August 2009 (“Acquisition Plan/Strategy Radford Army Ammunition Plant 01 January 2011 – 31 December 2035”). An amendment is not required because this acquisition is covered by the aforementioned Acquisition Plan.

3. Description of Supplies/Services: JPEO A&A has an ongoing requirement for sheeted cotton linters, which are a key material used in the production of propellants, particularly in the manufacture of nitrocellulose (NC), which is a primary ingredient in many propellant formulations and propellant products produced at Radford Army Ammunition Plant (RFAAP). Cotton linters are short fibers that remain on the cotton seed after the longer fibers have been removed for textile production. Sheeted cotton linters are processed into sheets, which can be easily handled and incorporated into manufacturing processes. Sheeted cotton linters have high cellulose content, which contributes to their effectiveness as a binder and energy source in propellant formulations. Their physical properties, such as fiber length and density, can influence the performance characteristics of the final propellant. The production of sheeted cotton linters involves cleaning and processing the raw cotton linters to remove impurities, followed by pressing the fibers into sheets. This process ensures uniformity and consistency in the material.

In propellant formulations, sheeted cotton linters serve as a critical component in the

Est Dollar Value:

material. By securing this supply now, the government mitigates the risk of shortages and potential operational disruptions in the future. This is the only opportunity to establish a reliable inventory for the coming years, ensuring that we can meet our requirements without interruption. This action does not include an option provision.

Project Lead Joint Services (PL JS) estimates a dollar value of , based on the Independent Government Cost Estimate.

4. Authority Cited: 10 U.S.C. 3204(a)(2), as implemented by the Federal Acquisition Regulation (FAR) 6.302-2, Unusual and Compelling Urgency.

5. Reason for Authority Cited:

a) As described at FAR 6.302-2(a)(2), full and open competition need not be provided for when the agency’s need for the supplies or services is of such an unusual and compelling urgency that the Government would be unless the agency is permitted to limit the number of sources from which it solicits bids or proposals.

b) On , JPEO A&A was notified by the Office of Secretary of War that GP will be closing its Memphis, Tennessee, location as of

. GP is the only qualified supplier for sheeted cotton linters that meet Military Specification MIL-C-206A. The closure is reportedly attributed to rising feedstock and energy prices, combined with a decline in orders. This is exacerbated by the influence on the overall cellulose market (to include wood pulp cellulose) due to dominance by Chinese entities purchasing US based plants as well as significantly cheaper prices from material produced in China. Upon learning of the closure, JPEO A&A quickly engaged in discussions with GP about the availability of its remaining stock of sheeted cotton linters for an end-of-life bulk purchase.

On , GP confirmed the remaining stock was available, contingent upon receiving a purchase order by . JPEO A&A was not provided enough notice prior to GP’s closing date to utilize normal contracting methods or seek out additional sources. As a result, prompt action was required to secure these materials and ensure continuity of NC production, thereby mitigating any disruptions to the NC supply chain.

c) The JPEO A&A team notified ACC-RI on of the need for an end-of-life purchase and formally submitted a requirement for of sheeted cotton linters. This requirement was subsequently awarded as a UCA on and established under the new Delivery Order (W519TC-26-F-0002) under the RFAAP IDIQ (Production) Contract W52P1J-11-D-0013. The material will be provided as Government

Timely access to NC is vital for ensuring that our forces are equipped with the necessary ammunition to effectively engage in current and future conflicts, thereby maintaining the strategic advantage and safeguarding the lives of our warfighters in the field.

6. Efforts to Obtain Competition: In accordance with FAR 5.202(a)(2), ACC-RI will not synopsize this action. Because this is a sole source action, effective competition is not applicable. Market research indicates that GP is the only qualified source for the cotton linters being procured; therefore, no competition at the subcontractor level is available for this acquisition.

7. Actions to Increase Competition: Once a new cotton linter solution is identified, the USG will continue to have the RFAAP operating contractor procure the cotton linters with the cost being incorporated into the RFAAP IDIQ Production Price Curve. JPEO A&A has a working level Integrated Process Team to work on mid-term and long-term solutions to identify new suppliers for the cotton linters. This collaborative effort positions the team to leverage innovative approaches and emerging technologies, fostering optimism for successful advancements in material sourcing and development. The USG is assessing potential modification to the specifications to broaden supplier participation without negatively impacting production efficiency or NC quality.

A Sources Sought, RFI, is being drafted and will be issued on SAM.gov – Contracting Opportunities website to obtain information from industry regarding the ability to supply sheeted cotton linters to be used for producing NC. The goal of the sources sought is to obtain information regarding the ability to supply of sheeted cotton linter cellulose conforming to Class 2 of MIL-C-206A to support production of NC at RFAAP and the industrial base. Interested contractors with the capability are requested and encouraged to respond with a white paper within 30 days of the posting.

An additional RFI will be issued through the Defense Industrial Base – Consortium to find other mills, with assistance from the United States Department of Agriculture marketing department to reach a broader network of suppliers and evaluate alternate materials.

8. Market Research: JPEO A&A conducted market research in .

Research included an industry analysis to understand the capabilities of potential suppliers, review of alternative suppliers for sheeted linters outside of China, engagements with suppliers on capabilities, review of standards and specifications, consultation with Subject Matter Experts, and an examination of the industry as a whole;

however, no other confirmed sources or production capacities have been identified for this procurement.

Additionally, the USG explored the possibility of acquiring a cotton processing plant similar to GP; however, current financial constraints make this option unfeasible.

Additionally, GP’s plant produces cotton linters on a much larger scale than what the USG requires. The USG only accounts for approximately of GP’s production.

Based on current market research, GP is the only known supplier of cotton linters at this time that could meet the requirements of Military Specification MIL-C-206A for the NC production process.

9. Interested Sources: To date, no additional sources have expressed a written interest in this procurement.

10. Other Facts:

Procurement History: There is no procurement history for a bulk order of cotton linters used for the production of NC. Rather, BAE Systems has purchased cotton linters from GP on an ongoing basis since becoming the operating contractor at RFAAP in 2012. The cost of the cotton linter is incorporated into the price curve for orders made against the IDIQ (W52P1J-11-D-0013). Every fiscal year there is a reconciliation process applied to the price curve based on numerous variables.

This bulk order of cotton linters will need to be accounted for in future reconciliations, as it should not be factored into the price of product when provided as GFM. The production contract at Radford normally incorporates the cost of cotton linters into the pricing of each order. For future orders utilizing these cotton linters, a cost reduction will be necessary, as the government has already covered the expense of the linters.