FA520919RA005 J&A Post.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition

FOR OFFICIAL USE ONLY

FOR OFFICIAL USE ONLY20 Apr 2017

NOTE: If a Justification and Approval was approved for the preceding acquisition, a copy of the approved J&A for the predecessor action must be included in the staff package for approval of the instant J&A. This applies to J&A staff packages that are submitted for review and approval at a level above the contracting officer. The predecessor J&A will be used as a reference document by the approving official.

Choose the funding level for this J&A Document: _____________________________________________________

Contracting Activity: 374th Contracting Squadron (374 CONS)

Purchase Request / Local ID Number: N/A

Program / Project (and PE, if applicable): Leasing Railway Tank Cars (RTCs)

Program Type (PEO or Other Contracting): N/A

10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1 Only One Responsible Authority (include full title): Source and No Other Supplies or Services Will Satisfy Agency Requirements

Estimated Contract Cost (including options): J&A Type: Class Individual

COORDINATION (AFFARS 5306.304(a) )

APPROVAL (AFFARS 5306.304(a) )

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FOR OFFICIAL USE ONLY20 Apr 2017

I. Contracting Activity.

374th Contracting Squadron Specialized Flight (374 CONS/PKS) Unit 5228 APO AP 96328-5228 (Yokota Air Base, Fussa-shi Tokyo 197-0001)

II. Nature and/or description of the action being processed.

This action will be awarded as a new contract for a recurring requirement. Type of contract is a firm-fixed-price contract.

III. Description of supplies/services required to meet agency needs.

The Contractor shall provide all personnel, equipment, tools, materials, supervision, and other items and services in connection with leasing 45-ton Japanese commercial standard railway tank cars (RTCs) to Defense Logistics Agency (DLA) Energy, Japan in accordance with the terms and conditions of the resulting contract and applicable Government of Japan (GOJ) laws and trade practices. The Contractor shall provide four (4) sets (1 set = 12 cars, a total of 48 cars) of 45-ton RTCs (US Gallons liquid loading capacity) suitable for transportation of Jet Propellant-8 (JP-8) fuel and properly registered with the owner of the main railways, Japan Freight Railway Company (JFRC).

The Contractor shall provide maintenance and repairs as a result of normal wear and tear to keep RTCs in satisfactory operable condition. The Contractor will provide a replacement car within 30 calendar days when any car is due for the JFRC mandatory periodic inspections. No more than two (2) RTCs can be out of service at any one time due to the mandatory inspections. The fixed price shall include all costs inclusive the costs to meet the requirement.

PERIOD OF PERFORMANCE: 01 January 2019 through 31 December 2019 as Base Year with 9 option years for a total of 10 years.

BASIS FOR REQUESTING TOTAL OF 10 YEARS INCLUDING OPTIONS: The legal durable period of RTCs in Japan (Ministry of Finance Order Concerning Durable Life for Depreciable Assets) for depreciation purposes is 15 years. On the other hand, its period of service is generally about 20 years. Once the durable period for depreciation is complete, prices typically go down significantly. Currently, the existing first 12 RTCs are 8 years old, the second 12 RTCs are 7 years old, the third 12 RTCs are 6 years old, and the last 12 RTCs are 5 years old. By having a total of 10 years, the estimated price for a total of 48 RTCs is expected to decrease starting from the 7th year.

TOTAL ESTIMATED VALUE: __________________________________________________________

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TYPE OF FUNDS: Defense Working Capital Funds - Defense, 97X4930 appropriations will fund this effort for each year.

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IV. Statutory authority permitting Other than Full and Open Competition.

10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1 Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements, required by FAR 6.303-2(b)(4).

V. Demonstration that the contractor's unique qualifications or nature of the acquisition requires the use of the authority cited above (applicability of authority).

RTCs are used to transport JP-8 fuel from the U.S. Government (USG) Fuel Terminal at Tsurumi (NAVSUPFLC Yokosuka, Fuel Department) to Yokota Air Base (the 374th Logistics Readiness Squadron, Fuel Management Flight). Delivered fuels are used to support military flights outbound from Yokota Air Base

In accordance with market research, only Japan Oil Transportation (JOT) is identified to be capable of leasing out 48, 45-ton RTCs for the exclusive use by the USG in the Japanese industry.

Service Category (S-CAT) Thresholds for Service Acquisitions within the AF:

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable.

Multiple sources sought (in 2013, 2014, 2015, 2017, and 2018) resulted in receiving no response for any of them. Market research identified a few potential sources, however, they all responded that they are not interested or capable of providing the required number of RTCs.

Other Actions: Synopsis is exempted per FAR 5.202(a)(12) and FAR 25.401(b). Nevertheless, the solicitation will be posted on the Government Point of Entry (GPE) upon issuance, FedBizOpps.

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

First, technical evaluations will be conducted to determine that the Contractor is capable of providing RTCs satisfying the Government requirement. After technical capability is determined to be acceptable, proposed price will be evaluated through price analysis by obtaining information other than certified cost or pricing data from the Contractor by including any price-related information. Anticipated cost to the Government for the subject requirement will be considered to be fair and reasonable in comparison with historical, the current unit prices, and market prices. Defense Contract Audit Agency (DCAA) audit may be requested if identified to be necessary after price analysis.

VIII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

Market research was conducted by synopsis of the proposed acquisition, advising industry of the pending acquisition and soliciting inquiries from potential sources. Market research identified a few potential sources. However, only one of them is interested or capable of satisfying the Government needs. It revealed that the availability of 45-ton cars for lease is extremely limited. JOT is the only source available in the market.

Market research also identified that railway containers are available in the market. However, railway container's loading capacity is less than 50% of a 45-ton RTC. It would require not only increased number

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FOR OFFICIAL USE ONLY20 Apr 2017 of containers, but also take longer traveling hours. Furthermore, fuel loading and off-loading facilities at the Tsurumi Fuel Terminal and Yokota Air Base would require major renovation to accommodate containers. Once renovated, they would not be utilized for RTCs. Considering capacity, speed, and lack of facilities, railway containers cannot be alternatives to RTCs.

IX. Any other facts supporting the use of Other Than Full and Open Competition.

None.

X. List of sources, if any, that expressed interest in the acquisition.

No company other than JOT have expressed any interest in this acquisition.

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.

At this time, the agency does not have the power or capability to remove or overcome any barriers to competition before making subsequent acquisitions for leasing RTCs. Other companies are reluctant to invest heavily in providing 45-ton RTCs for lease. No other vital alternative is identified to be available in the local Japanese market.

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Certification by the technical/requirements personnel.

As evidenced by our signatures above, we certify that any supporting data contained herein, which is our responsibility, is both accurate and complete.