D3383 Redacted J A.pdf

JUSTIFICATION FOR OTHER T~IAN FULL AND OPEN COMPETITION UNDER AUTHORITY

OF 10 U.S.C.2304 (c)(l) FOR FULL FOODSERVICE PRIME VENDOR GEORGIA AND

SURROUNDING AREAS

1. Defense Logistics Agency (DLA) Troop Support, Subsistence Supply Chain, is the contracting activity.

2. The action being approved is the ability to solicit for DLA requirements on an other than full and open competition basis.

3. The proposed acquisition will be an indefinite-delivery, indefinite quantity, fixed price with Economic Price Adjustment (EPA) bridge contract (SPM300-12-D-3383) for a period of 285 days (which includes the sixty (60) day implementation period for the Subsistence Total Order and Receipt System (STORES) should the incumbent firm not get the follow-on award) to provide for perishable and semi-perishable Subsistence supplies to DLA customers in Georgia and surrounding areas. Based on current annual usage/sales, the estimated dollar value for this proposed contract is $23,209,134.22 for 285 days. The guaranteed minimum is 10% of the estimated dollar value or $2,320,913.42 and the maximum ceiling is 250% of the estimated dollar value or $58,022,835.55. The current action will result in the award of a third bridge contract effective from October 17,2011 through July 28, 2012.

4. The applicable statutory authority permitting other than full and open competition is lO U.S.C.2304 (c)(l), as implemented by FAR Part 6.302-1- Only One Responsible

Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. The use of this authority is necessary to provide uninterrupted food supplies to DLA customers in the Georgia area. The original contract SPM300-04-D-3l05 consisted of a base period of one ( 1) year, followed by four ( 4 ), one (I) year option periods and was awarded on August 20, 2004. The first bridge contract (SPM300-09-D-3324) was awarded on October 16, 2009 with effective dates from October 17, 2009 through October 16,2010. The current bridge contract (SPM300-l0-D-3401) was awarded on October 17, 2010 with effective dates from October 17, 20 I 0 through October 16, 20 II.

Both bridges contracts were needed to allow for the resolution of ongoing pricing issues.

The follow on competitive procurement has not yet been awarded. The required foodservice supplies are deemed to be available only from the current contractor in the timeframe required, and award to any other source would result in unacceptable delays in fulfilling the agency's requirements; therefore, the proposed bridge contract with current Prime Vendor contractor, U.S. Foodservice-Atlanta, is necessary to provide uninterrupted food service. Only U.S. Foodservice-Atlanta will be able to meet DLA customer requirements starting October 17, 2011 through July 28, 2012, because they are the only food supplier in the Georgia area that has a fully implemented STORES electronic catalog. The implementation phase of a STORES electronic catalog requires sixty (60)

Source Selection Information SeeFAR2.10! P:n~13.10~·

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION UNDER AUTHORITY

SURROUNDING AREAS

days. Award to any other potential food supplier would cause an unacceptable break in supply.

Failure to have a follow-on contract in place on October 17, 2011 is a result of ongoing Subsistence Prime Vendor (SPY) pricing issues. After identifying concerns regarding the possibility of significant price risk to the Government, the existing Prime Vendor pricing provisions were revised to guard against such risk; therefore, the Government developed a new provision, 52.231-9P03, Rebates/Discounts and Price Related provisions (DSCP Jan 2008), for all solicitations and contracts (CONUS and OCONUS), which resulted in protests from industry. Specifically, letters were received from major SPY contractors and the industry group, International Foodservice Distributors Association (IFDA) on behalf of its entire membership. On January 31, 2008 an Agency-level protest was lodged against a pending Prime Vendor solicitation, which contained the amended version of 52.23l-9P03. As a result, Subsistence decided that it needed to research, review and revise rebates and pricing provisions included in its CONUS SPY program solicitations. The Rebates/Discounts language appeared to be settled for both CONUS/OCONUS on January 7, 2009; however, this issue remained ongoing as described in further detail in the following paragraphs.

The second pricing issue involved unresolved issues with the Economic Price Adjustment (EPA) clause. At the direction ofDLA-HQ, DLA Troop Support considered changing its business model for Prime Vendor contracts which had previously used an EPA clause based on Actual Material Cost. In December 2008, DLA Troop Support presented DLA HQ with a list of alternatives to the use of an EPA based on Actual Material Cost.

Subsequently, it was decided that the use of a Price Redetermination clause would be more appropriate in controlling excess pass-through charges; however, the use of a Price Redetermination clause would require a class deviation in accordance with FAR 1.402 and 1.403, DFARS 201.403 and DLAD 1.403 (a). On April27, 2009, DLA-HQ granted approval to proceed with the follow-on acquisitions using the original EPA- Actual Material Cost clause in lieu of Price Redetermination.

In September 2009, IFDA sent further correspondence objecting to the revised language for both the EPA and Discounts/Rebates and Price Related Provisions. Subsequent rounds of correspondence were issued by both DLA Troop Support and IFDA, and a meeting between both parties was held in February 20 l 0 at DLA Troop Support. A follow-up meeting was held at a vendor site in June 2010. As a result of these meetings, it was determined that additional changes were required in the language of both the EPA and Rebates/Discounts and Price Related Provisions. Though comments were still being exchanged, the first Low Price Technically Acceptable (LPTA) solicitation using the DLA-HQ approved pricing language (Texas/New Mexico, SPM300-10-R-0047), was issued on October 27, 2010.

A pre-proposal conference with potential offerors was held on November 5, 2010. At that time, industry representatives initiated further discussions about the solicitation pricing provisions. This led to further discussions within the agency. The Rebates/Discounts and Related Price Provisions was revised and included in Amendment

SeeFAR2.101 ~nd3.104

SURROUNDING AREAS

0007 of the Texas/New Mexico solicitation. A pre-award protest was filed with the Government Accountability Office (GAO) on February 9, 2011. At this time, the closing date of the Texas/New Mexico solicitation was extended to April 08, 2011. An additional pre-award protest and two supplemental protests were filed with GAO in response to this solicitation. The GAO dismissed all protests in May 2011, and Subsistence was, therefore, able to issue the combined solicitation for the Georgia and Alabama/Florida Panhandle regions on May 11, 20 II. Another protest was filed with the Court of Federal Claims (COFC) on June 10, 2011, once again objecting to the Rebates/Discount language contained in all recently issued CONUS solicitations, including the Georgia and Alabama/Florida Panhandle solicitation. A COFC hearing was held on August 17, 2011; a ruling was received on September 27, 2011. The ruling remains under review by the Department of Justice and DLA Troop Support.

The proposed bridge contract is required to allow for solicitation, closure, evaluation, negotiation, transition phase (60 days to allow for implementation of a STORES catalog in the event the incumbent does not get the award) and award of the follow-on contract.

In order to assure customers uninterrupted, continued foodservice support after October 16, 2011 (expiration date of the current contract), the effective date of this bridge contract will be from October 17, 2011 through July 28, 2012 for a period of 285 days. The first bridge contract was effective October 17, 2009 through October 16, 2010 and the current bridge contract is effective October 17, 2010 through October 16, 2011.

Failure to make award to US Foodscrvice-Atlanta will result in a break in Prime Vendor support. The military customers rely on the DLA Prime Vendor contract for all of their foodservice needs. The absence of this contract for any time will result in the inability of our military customers to order food and associated supplies. Failure to feed our military servicemen and women would constitute mission failure for DLA and our military customers.

Should a competitively awarded contract be put into place ahead of the projected timeframe and the guaranteed minimum has been met under this bridge contract, the bridge contract will be terminated at that time.

6. As required by FAR 5.2, a notice will be published in FedBizOpps. All information pertinent to the special notice will be available to the general public at website \Y\\~~_cLl'~,11"LII<LJ1lii. In addition, this justification will be made available for public inspection, after award, in accordance with FAR 6.305.

7. As the Contracting Officer, I hereby determine that the anticipated cost to the Government will be fair and reasonable based on price analysis which will include an overall assessment of market conditions and a comparison of the offered distribution fee and item prices with recently awarded CONUS Prime Vendor contracts.

Source Selection Informatior, See FAR 2.1012rrd 3.10~·

SURROUNDING AREAS

8. With the exception of synopsizing this requirement, no additional market research was conducted and no other firms will be solicited since the required foodservice supplies are only available from the incumbent contractor in the timeframe required.

9. Only US Foodservice-Atlanta has a fully implemented STORES electronic catalog. The required foodservice supplies are available only from the current contractor in the timeframe required, and award to any other source would result in unacceptable delays in fulfilling the agency's requirements.

10. US Foodservice-Atlanta is the only source expected to express an interest in the proposed bridge contract.

ll. The follow-on acquisition was solicited on a full and open competition basis on May ll, 20 ll and all future acquisitions for these requirements will be competed on a full and open competition basis.

12. As the Contracting Officer, I hereby certify that this justification is accurate and complete to the best of my knowledge and belief

Contracting Officer

I hereby certify that the requirements which form the basis of this justification are accurate, that these supplies meet the Government's needs in accordance with applicable specifications and that. this justification is accurate and complete to the best of my know~edg · belief.

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3 &.-C .;zv/1 /w~ /.1 ~ /

DATE GINA VASQUEZ ~ -;?(

Chief, CONUS Prime Vendor Subsistence Supply Chain

I have reviewed this justification and recommend approval.

•l 3 1.0- .. I J

DATE J. ANICHELLE

DLA Troop Support Competition Advocate

SeeFAR2.10l and3.104

SURROUNDING AREAS

I have reviewed this justification for legal sufficiency.

DATE JUDITH GEYER

DLA Counsel- Troop Support

I have reviewed and hereby approve this justification.

DATE

Executive Director DLA Troop Support Contract and Acquisition Management

Source Selection Informatio:n See FAR 2.101 ~nd 3.104