single_source_justification_pension_grouplife_insurance_1_Redacted.pdf

Single Source Justification (Simplified Acquisition)

November 2018 Page 1 of 2

Section A: General Contract Information

Is this a Bridge Action as defined in the AF Bridge Action Reduction Plan? Yes No

Contracting Activity: 501 CSW/PK, Building 516, RAF Alconbury, Huntingdon, Cambridgeshire, PE28 4DA

Project/Program Name: Stavanger LNDH Pension and Group Life Insurance

Purchase Request / Local ID Number: Multiple

Estimated Contract Cost (including Options):

Section B: Description of the Supplies/Services Required

The requirement is to provide pension and group life insurance to nine local national direct hire (LNDH) personnel and four pensioners for fiscal year 20. The contractor shall provide commercial off-the-shelf pension and group life insurance which covers the difference between pension payable from the Norwegian social security and 66 percent of annual salary. Full pension is obtained after 30-year membership and the payments are lifelong (from age 67). All insurances from Norwegian social security together with the pension insurance will give 66% of salary. The contractor is also to provide payment of a pension to surviving spouse and/or dependent children in event of a member's death. The contractor shall also provide disability pension in case a member becomes disabled.

The service must be in compliance with USAFEI 36-752, which is outlined in chapter 15. The contractor shall provide a pension plan which covers the difference between pension payable from the Norwegian social security and 66 percent of annual salary.

Full pension is obtained after 30-year membership, and the payments are lifelong (from age 67). The pension for surviving spouse is set to 60% of employee's pension, for life. The pension for surviving dependent children until age 21, min 15% of basic social security amount (G), 50% of employee's pension for the first child, then 25% for any other child, for each child between 18-21 years age, and additional 25% of the employee's pension. Disability pension, 100% of accrued pension, partly disability gives partly payment of disability pension. Waiver of insurance premium, from the date when employee's ability to work has been reduced with minimum 25%, for a period of 12 months. The reduced premium equals the % of reduced ability to work.

Adjustment of entitlement is effective on the date of notification of salary changes. Active pension payments will be adjusted in accordance with 100% of changes in basic social security amount (G). Guarantee interest on pension funds: 3%. Contractor shall provide each employee with an annual information pamphlet regarding his or her pension benefits.

Section C: Justification for Soliciting from a Single Source or Brand Name

Due to recent changes in Norwegian Pension Laws, insurance companies are required to apply a different standard than previous Norwegian law permitted. Previous law required the employer to cover the difference between Norwegian Social Security payments upon retirement and up to 66 percent of the employee's salary. Air Force Instruction 36-752 was written to this standard and requires this coverage. Current law standards are more akin to a U.S. 401K plan wherein a percentage of the employee's salary is paid to the employee for their investment towards retirement. Current law also permits employers to maintain the pension insurance policies held under previous pension law. Employers that maintain pension insurance under the previous law are not allowed to transfer to another insurance company without changing the policy to the new standard. Should the United States Government transition, to a different insurance provider IAW the new labor law, the policy would violate USAFEI 36-752.

Section D: Efforts to Obtain Competition

Due to changes in the Norwegian Pension Laws other service providers are not available to provide the same or similar pension coverage as mandated by USAFEI 36-752. Two pension insurance providers in Norway (Sparebank 1 and DNB Liv) were contacted by phone on 14 Aug 2018 regarding their ability to provide same pension insurance scheme for LNDH personnel at 426 ABS as mandated by AFI 36-752. Both companies verified that they could not provide the required pension insurance scheme to new customers as required under the existing AFI. A follow-up review with DNB Liv and another pension insurance provider, Sparebank1 was conducted on 16 Aug 2019, which

Single Source Justification (Simplified Acquisition)

November 2018 Page 2 of 2 again revealed that they could not provide the required pension insurance scheme to new customers as required under the existing AFI.

Storebrand also confirmed this practice during a conversation with their corporate helpdesk on 16 Aug 2019. Thus, due to the most recent pension reform mandated by Norwegian Law, the current pension insurance scheme mandated in USAFEI 36-752, Chapter 15, is no longer available as an option on the open market. Companies with this particular pension insurance scheme are allowed to continue to keep it for its existing and future employees and as such, only Storebrand remains a viable vendor.

Section E: Steps to Preclude Future Single Source or Brand Name Awards

Due to the limitations in moving this specialized service to another vendor, the US Government does not foresee any changes that would remove or overcome any barriers to competition for subsequent acquisitions for the services. The current defined benefit pension scheme for LNDHs is currently only offered to existing customers within the Norwegian insurance companies.

The only viable option to expand our commercial opportunities for this service, would be re-defining the requirement. This is not currently possible, as USAFEI 36-752, chapter 15 outlines the level of coverage in which LNDH personnel are entitled to.

Section F: Contracting Officer's Determination

I have determined, in accordance with FAR 13.106-1(b)(1), that the circumstances of this contract action deem only a single source is reasonably available.

Date

30-Sep-2019

Typed Name and Rank/Grade of Contracting Officer

KRISTIAN M. PERLAS, E-6

Signature of Contracting Officer