DCSOR22129_Redacted.pdf

DEFENSE LOGISTICS AGENCY CONTRACTING SERVICES OFFICE 8000 JEFFERSON

DAVIS HIGHWAY RICHMOND, VIRGINIA 23297

J&A No. DCSO-R2-21-29

Justification for Other than Full and Open Competition

(1) Identification of the agency and contracting activity:

Requiring Activity: DLA HQ 72 8725 John J. Kingman Road Fort Belvoir, VA 22060

Contracting Activity: DLA Contracting Services Office – Richmond 8000 Jefferson Davis Hwy. Richmond, VA 23297-5441

(2) Nature and/or description of the action being approved:

In accordance with FAR 13.501(a) this justification authorizes and approves this acquisition to be limited to one source. The service required is a follow-on contract with IHS Global, Inc. for a cost analyzer subscription service for Defense Logistics Agency (DLA) that provides forecasts and analyses of over 750 commodity prices and wages by industry. The focus is to provide global coverage which includes forecaster coverage for North America (US, Canada, and Mexico) as well as coverage for Europe and Asia. Current support is being provided under contract number SP4703-16-M-0057 which is scheduled to expire on September 27, 2021.

The agency intends to issue a purchase order to IHS Global, Inc. on a non-competitive basis via open market.

(3) Description of the supplies or services required to meet the agency’s needs (including the estimated value):

The proposed acquisition is to acquire annual subscriptions for IHS Markit’s Pricing & Purchasing Service – Global & Premium, product code 2000011609. The Cost Analyzer subscription provides forecasts and analyses of over 750 commodity prices and wages by industry; the focus is global coverage, this includes forecast coverage for North America (US, Canada, and Mexico) as well as coverage for Europe and Asia. Forecasts are updated quarterly. Each update contains ten years of historical and forecast observations respectively, both at quarterly and annual periods. Various average hourly earnings, producer price, consumer price, and employment cost indices are also included in the service. The Cost Analyzer allows clients to access data quickly and perform customized cost analysis.

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The Cost Analyzer enables clients to identify appropriate contract escalators, build composite cost-escalator indices, create company-specific budgets, and compare various forecasts and historical perspectives. IHS Global (USA), Inc's (IHS) Cost Analyzer helps users evaluate contractor price proposals (labor and material escalation rates) covering multiple years. Most proposals contain economic assumptions about future periods. The microeconomic forecasts provided in the IHS Global Insight subscription assist DLA acquisition personnel test the reasonableness of these assumptions underlying bids, offers and price proposals received, and to develop Government awards and negotiation positions for firm-fixed-price, flexibly priced and cost reimbursable type contracts. Furthermore, IHS labor and material inflation indicators are used in validating prices of contracts containing economic price adjustment clauses. IHS has a proven forecast accuracy track record that facilitates minimization of unexpected price adjustments. IHS economic forecasts are also used as an efficient means of identifying and reexamining price growth of major acquisition programs. The total estimated value of this requirement is $ . The appropriation year for the bear year is FY2021 DWCF.

The estimated period of performance (PoP) is from 28 September 2021 – 27 September 2022 offering a base PoP of 12-months followed by four, 12-month option years.

(4) Identification of statutory authority permitting other than full and open competition:

10 U.S.C. 2304(c)(1), One source or limited sources.

(5) Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

This requirement is being pursued in accordance with FAR 13.501(a) only one responsible source and no other supplies or services will satisfy agency requirements. This requirement must be met in accordance with the policies and laws and within time constraints; seeking other sources will result in unacceptable delays in fulfilling the agency’s requirements.

IHS Global Inc is the sole source and provider of national forecasts and analyses of commodity prices and wages by industry with selected international and regional coverage, derived from a robust interconnected econometric modeling methodology, with a consistently accurate forecasting track record. Note the econometric modeling methodologies utilized to generate these time-series and analytics as well as the feed, navigation, retrieval, and analysis tools offered in conjunction with this unparalleled information set are proprietary to IHS Global Inc.

For the past ten years, IHS Global Inc provided DLA with access, search, and retrieval of its electronic databases and publications installed on its server at its facilities and made available through its search interface. The interface environment is HTML. The system is accessed, and search results are delivered via the Internet/Web. Access is controlled through passwords for individual users; each user must have their own unique username and password combination for access to subscription content. Authorized users can search and retrieve text on demand, view records on their desktop, and download or print items in HTML, Microsoft Word, Microsoft Excel, and PDF. Databases and publications are updated daily, weekly, monthly, quarterly, and or annually. Information retrieval services are offered by annual

CUI- Source Selection Information- See FAR 2.101 and 3.104 Page | 3 subscription. Subscriptions include webcasts and conferences. Users have telephone and e-mail access to research staff as well as Customer Care.

Additionally, DLAD 15.404-1(b)(2) recommends utilization of Global Insights to access indexes that estimate future price changes. In addition, Global Insights is a useful source for a wide range of global economic data, as well as economic indicators for several nations, Global Insights provides surveys of industrial supply chains and commodity specific price indices. These are helpful in determining the market tone for several materials on DLA-SM's "Watch List." It provides a potential source for identifying and characterizing potential trouble in sourcing critical materials.

(6) Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by Subpart 5.2 and, if not, which exception under 5.202 applies:

DCSO intends to issue a combined synopsis/solicitation via sam.gov. All quotes received other than sole source vendor will be evaluated.

(7) A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable:

The Contracting Officer determines the anticipated cost to the government will be fair and reasonable, and that the resulting contract represents the best value to the Government, by comparing proposed prices to historical prices paid for the same or similar supplies/services.

(8) Description of market research conducted and results or a statement of the reason market research was not conducted:

This sole source follow-on effort is to provide continued support DLA Headquarters for continuing subscription services to the cost forecasting service for requirements for 30 user accesses to IHS global macroeconomic forecasts. The IHS Cost Analyzer provides clients with a unique combination of historical and forecast time-series data as well as analytics generated from its Advisory Services, Business Intelligence, and Data Products Divisions; IHS is the sole source and provider of this exclusive data set. The econometric modeling methodologies utilized to generate these time-series and analytics as well as the feed, navigation, retrieval, and analysis tools offered in conjunction with this unparalleled information set, are proprietary to IHS. These databases contain proprietary content that is protected by copyright and other similar laws. IHS retains copyright and protection for all material that is written and produced through the efforts of IHS management and staff. These materials cannot be obtained from another source. In addition, IHS forecasts have historically been the only source for economic data used in DLA’s predictive models. It is imperative to maintain the consistency in the data source to generate statistically sound forecasts.

Market Research was conducted, using the internet, to identify possible alternatives to the tool that

CUI- Source Selection Information- See FAR 2.101 and 3.104 Page | 4 would potentially provide similar or near similar information as the current service provided by IHS.

Most of the companies included in the research only provide consulting services as it pertains to cost/price analysis and marketing strategies. No companies were found that provide a web-based tool which allows access via a user password and provides the data that IHS provides. Further research as to systems utilized by other DoD disciplines and other Federal Government offices have shown that no other tool besides IHS is currently being utilized, specifically within the DoD. In addition, GSA Advantage and BETA.SAM was reviewed. GSA Advantage did not provide any available alternatives and BETA.SAM did provide other Federal Government Agencies using Sole Source authority to acquire this and other subscription services provided by IHS:

a. Dept. of Energy, Record ID DE-SoL-0010931

b. Dept. of the Interior, Record ID 140D0418Q0555

c. Dept. of the Navy, Record ID N64267-18-T-0061

d. Dept. of the Treasury, Record ID 5000060901

e. Dept. of Commerce, Record ID NF-FKA500-21-01448

A RFI was not posted because the customer provided enough information via the information above.

(9) Other facts supporting the use of other than full and open competition:

N/A

(10) Listing of sources that expressed, in writing, an interest in the acquisition:

IHS Global, Inc. is the only source available that can meet this requirement. As such, they are the only ones that have expressed interest in this acquisition.

(11) Actions, if any, the agency will take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required:

For the reasons set forth in Paragraph 5 by DLA, DLA will continue to exercise competition as often as possible and is required to conduct ongoing reviews to keep abreast of new technology, both in industry and in the Government. DLA uses a variety of vendors, manufacturers, and contracts to fulfill its requirements and will continue its practice of surveying the market to ensure full and open competition is sought when possible.