DMEA - JA_24-0009_Redacted_.pdf

DEFENSE LOGISTICS AGENCY

ENERGY

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6222

J&A Tracking Number: 24-0009

Justification for Other than Full and Open Competition Defense Microelectronics Activity (DMEA) Solicitation SPE601-24-R-0308

1. Summary/Introduction:

Defense Logistics Agency Energy (DLA) is the contracting activity for Aerospace products and services for the Department of Defense (DOD). This Justification and Approval (J&A) covers solicitation SPE601-24-R-0308, for the acquisition for High Purity Liquid Nitrogen (LN2), NSN 9135-01-708-5967, that meets or exceeds grade 4.8 (nominally 99.998% pure) in accordance with SEMI C59-1104 specification for LN2, to be delivered on a FOB Destination basis into contractor-provide tank, in support of DMEA facility in McClellan, California. The requirement for LN2 includes the price of the product, tank fees, installation/removal of equipment, detention fee, and telemetry usage fees for contractor furnished equipment necessary to provide LN2. This J&A covers the total procurement of approximately 4,200,000 U.S. gallons (USG) of LN2 to be delivered on a FOB Destination basis with anticipated firm-fixed price requirements estimated value of based on the current market value. Messer, LLC is the sole owner of the existing tank system, therefore it is the sole responsible source for product delivery into tank, and no other supplier is able to fulfill the requirement pursuant to 10 U.S.C. . The contract authorized by this justification shall be awarded to Messer, LLC, CAGE Code 00741.

2. Nature and/or description of the action being approved (FAR 13.5 & FAR 6.303-2(b)(2):

The approved action entails a Justification and Approval (J&A) for awarding a five-year LN2 contract for FOB Destination delivery into a contractor-provided tank at the DMEA facility, justified under the authority of 10 U.S.C. 3204. The contract will be structured as a single five-year Firm-Fixed-Price Requirement-type contract. The period of performance spans from December 1, 2024, to November 30, 2029. Funding for this endeavor will be sourced from Defense Working Capital Funds.

3. Description of supplies or services required to meet the agency’s need (including estimated value) (FAR 13.5 & FAR 6.303-2(b)(3)):

Requirements are subject to change based on customer’s mission needs. The below Independent Government Estimate (IGE) for the five (5) year requirement is which represents the estimated quantity multiplied by the anticipated yearly estimated unit price.

Justification for Other Than Full and Open Competition (Cont’d)

(SPE601-24-R-0308 – MESSER LLC)

interruptions. Messer, LLC holds ownership of the existing 13,000-gallon liquid nitrogen (LN2) tank, four vaporizers, and dewar delivery system situated on the DMEA facility premises. No alternative vendor possesses authorization to deliver liquid nitrogen to this specific vendor owned system. Seeking competitive offers would be futile given the anticipated awardees ownership of the existing storage and delivery system. Given the criticality of LN2 to DMEA's operations, any disruption in supply could result in substantial damage to sensitive electronic tools and equipment. Consequently, the commencement of de-installing existing system and subsequent installation of another supplier’s storage system, along with its integration into DMEA’s nitrogen distribution infrastructure, is projected to exceed the acceptable duration DMEA equipment can be without product. Additionally, the lead time for this transition remains undetermined, further exacerbating concerns regarding competing this requirement and continuity of supply. In accordance with DFARS 213.501 Special Documentation Requirement, the prior approved Justification and Approval will be routed with this document.

6. Description of the efforts made to ensure that offers are/were solicited from as many potential sources as is/was 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 (FAR 13.5 & FAR 6.303-2(b)(6)):

Industrial gases specialist Messer did acquire the majority of Linde’s business in North America and certain Linde and Praxair business activities in South America with effect from 1 March 2019 in a joint venture – called Messer Industries.

On November 14, 2023, DLA Energy Aerospace issued a Sources Sought Notice (SSN) on SAM.gov, indicating the Government's intention to procure High Purity Liquid Nitrogen and ancillary services in support of product delivery.

In response to the SSN issued under DMEA solicitation SPE601-24-R-0308, two companies submitted their capability statements Messer, LLC (the incumbent) and Linde, Inc.

The requirement section evaluated capability statements and concluded that Messer, LLC possesses full capability to meet the specified requirements. Additionally, the customer confirmed that Messer, LLC has been satisfactorily fulfilling its obligations under the current DMEA contract.

Conversely, Linde's capability statement was assessed as incapable of meeting the requirement due to the following reasons:

Linde indicated that it would require approximately two weeks under optimal conditions to install the extensive tank system, which raises concerns regarding the timely deployment of necessary infrastructure.

Furthermore, Linde's closest product fill-point is located 86 miles from the customer's location, compared to Messer's fill-point, which is approximately 17 miles from the DMEA facility. This

Justification for Other Than Full and Open Competition (Cont’d)

(SPE601-24-R-0308 – MESSER LLC)

significant disparity in proximity may result in increased transportation costs and potential supply interruptions due to traffic constraints, posing operational challenges for the customer.

Based on current requirements, the customer receives 3-5 deliveries per week via 6,500-gallon tanker trucks. As delineated in Paragraph 5, the customer's equipment is highly sensitive, and any interruption in the continuous supply of product would result in catastrophic damage to tools and equipment, causing immediate mission failure. The customer’s mission cannot fail.

In accordance with FAR 13.501(a)(1)(iii) - The agency shall make publicly available the justification required by FAR 13.501(a)(1)(ii) as required by 10 U.S.C. 3204(f) and 41 U.S.C.

3304(f). The justification shall be made publicly available within 14 days after contract award.

7. Determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable (FAR 6.303-2(b)(7)):

The DLA Energy Aerospace Energy Contracting Officer will ensure that the cost to the Government will be evaluated to be fair and reasonable in accordance with FAR 13.106-3 based on comparison of the proposed price with prices found reasonable on previous purchases. The Contracting Officer will utilize the historical pricing data to form a valid basis for comparison.

The prior price will be adjusted to account for materially differing terms, conditions, quantities, market, and economic factors. Expert technical advice will be obtained as part of technical evaluations to ensure the product meets customer needs.

8. Description of the market research conducted and the results or a statement of the reason market research was not conducted (FAR 6.303-2(b)(8)):

On November 14, 2023, DLA Energy Aerospace issued a Sources Sought Notice (SSN) on SAM.gov, indicating the Government's intention to procure High Purity Liquid Nitrogen and ancillary services in support of product delivery. Notifying Industry Partners, the procurement would fall under the authority of Federal Acquisition Regulation (FAR) 13.501(a), which governs Sole Source acquisitions, and FAR 13.106-1(b)(1)(i), which stipulates that only one source is available to meet the Government's needs.

As addressed in Paragraph 6, based on capability statement submitted, Messer, LLC (the incumbent) was the only vendor capable of performing the requirement, due to Messer’s sole ownership of existing tank system.

9. Any other facts supporting the use of other than full and open competition, such as (FAR

13.5 & FAR 6.303-2(b)(9)):

(i) Explanation of why technical data packages, specifications, engineering descriptions, statements of work, or purchase descriptions suitable for full and open competition have not been developed or are not available.

Not Applicable (N/A).