AoI-0002 DOMESTIC INDUSTRIAL BASE EXPANSION OF KEY CHEMICALS FOR ACRYLONITRILE (Revision 3).pdf

AoI-0002 DOMESTIC INDUSTRIAL BASE EXPANSION OF KEY CHEMICALS FOR ACRYLONITRILE

BUTADIENE RUBBER (NBR)

1. Glove Industrial Base Expansion Area of Interest (AoI) Background

The recent COVID-19 Public Health Emergency has illuminated the importance of increasing the

United States’ domestic capacity to manufacture medical gloves, Acrylonitrile Butadiene

Rubber (NBR) and key chemicals to produce NBR for glove manufacturing. To date, the United

States Government (USG) has invested in the domestic production of approximately 1.5B nitrile gloves per month that is capable of meeting 41% of the nation’s demand for acute and non-acute care nitrile gloves. The USG believes it will need to expand NBR production to 270K wet metric tons annually to “feed” the U.S. domestic nitrile glove production, which should drive increased demand for key chemicals for NBR production. To date, the USG has invested in the domestic production of 90K wet metric tons of NBR. The U.S. currently has four key chemical requirements to support this AoI. Acrylonitrile (ACN) is needed at a total of 180M lbs (~82K metric tons) but no less than 80M lbs (~36.3K metric tons). Methacrylic Acid (MAA) is needed at a total of 17.8M lbs (~8.1K metric tons) but no less than 12M lbs (~5.4K metric tons). Butadiene

(BD) is needed at a total of 360M lbs (180K metric tons) but no less than 80M lbs (~36.4K metric tons). Additionally, the USG is interested in expanding domestic production of dispersions for

NBR production by 16M lbs annually. The intent of this AoI is to understand the industry’s ability to increase the medical glove raw material (key chemicals) capacity. The country’s ability to increase and sustain domestic manufacturing capacity to a minimum of 1.5 billion medical gloves per month is critical to not only respond to the current pandemic or future pandemics but also to ensure the security of glove manufacturing within the US. Securing key chemicals is an essential piece to this success.

The Office of the Secretary of Defense for Acquisition and Sustainment (OSD(A&S)) Joint Rapid

Acquisition Cell (JRAC), Defense Assisted Acquisition (DA2), Personal Protective Equipment

(PPE) Team and Department of the Air Force Acquisition Team (DAF ACT) need to understand industry’s ability to increase domestic manufacturing of the key chemicals in manufacturing

NBR:

● Acrylonitrile

● Methacrylic acid

● Butadiene

● Dispersions

2. AoI Expansion Request

This AoI solicits solution briefs to support the Department of Health and Human Services

Assistant Secretary for Preparedness and Response (DHHS/ASPR) priorities for meeting public health/pandemic needs to expand domestic production capacity of glove manufacturing NBR key chemicals within the next 6-30 months. Offerors can respond based on their resident expertise and ability to expand domestic manufacturing. The DA2 would like to understand industries’ ability to expand their domestic capacity to produce key chemicals in manufacturing

NBR:

● Acrylonitrile

● Methacrylic acid

● Butadiene

● Dispersions

This effort is to carry out various provisions of the Defense Production Act. As such, and for purposes of the Defense Production Act, “domestic sources” generally means:

A business concern –

a) that performs in the United States or Canada substantially all of the research and development, engineering, manufacturing, and production activities required of such business concern under a contract with the United States relating to a critical component or a critical technology item; and

b) that procures from business concerns described in subparagraph (A) substantially all of any components and assemblies required under a contract with the United States relating to a critical component or critical technology item.

All resultant contracts of this AoI will be subject to the Priority Access language identified in the

Commercial Solutions Opening and below.

By entering into this [CONTRACT/AWARD/AGREEMENT)], the

[CONTRACTOR/RECIPIENT/AWARDEE] agrees to be legally bound to provide the U.S.

Government with Priority Access for a 10-year period, starting from the completion of the capacity/expansion project that is the subject of this

[CONTRACT/AWARD/AGREEMENT], notwithstanding the conclusion of any other commitments at the end of this [CONTRACT/AGREEMENT/AWARD]’s period of performance. “Priority Access” is defined, for the purposes of this

[CONTRACT/AGREEMENT/AWARD], as: “upon a determination by the HHS Secretary that [FILL IN DESCRIPTION] is needed to prepare for or respond to a disease, health condition or other threat to the public health that causes a public health emergency or a credible risk of such an emergency, the U. S. Government has priority access to

[CAPACITIES THAT THE U.S. GOVERNMENT WILL RECEIVE PRIORITY ACCESS TO] over any other non-rated ((Defense Priorities and Allocations System (DPAS)/ Health

Resources Priority and Allocations System (HRPAS)) contract or order, and, for the purpose of assuring such priority, shall be required to accept and perform such

DPAS/HRPAS rated contracts or orders in preference to any other non-rated

(DPAS/HRPAS) rated contracts/orders during this 10 year period.” If the

[CONTRACTOR/RECIPIENT/AWARDEE] novates or otherwise transfers responsibility for performance under this [CONTRACT/AWARD/AGREEMENT] and the commitments herein to any other entity, the Priority Access requirement shall follow the transfer, and this language concerning Priority Access shall be included in any transfer agreement and affirmed by the transferee. The parties agree to negotiate in good faith for continued U.S. Government Priority Access, as defined herein, to extend beyond this 10-year period.

3. Specific Information for KEY CHEMICALS DOMESTIC PRODUCTION for NBR

With increase demand of medical glove manufacturing, there is also an interest in manufacturing the key chemicals (acrylonitrile and methacrylic acid) required to manufacture NBR. This AoI is focused on growing the industrial capability to produce the NBR key chemicals for medical glove manufacturing within the US.

1) What would be required for your company to increase domestic production of all or some of the key chemicals (acrylonitrile or methacrylic acid) in the US?

2) Provide a list of your company’s current production capacity (metric tons (MT)) or where production would occur of key chemicals (acrylonitrile and/or methacrylic acid) (Table 1 -sample).

Table 1 - Sample list of current Manufacturing Key Chemical Production

MANUFACTURING

LOCATION

KEY CHEMICAL(S)

(acrylonitrile, methacrylic acid, butadiene and/or dispersions)

CAPACITY (MT)

3) Does your company have all the current Good Manufacturing Practices and Food and Drug

Administration regulatory approvals for the manufacture of the key chemicals? If not, what is the company’s strategy to have this in place?

4) Provide a list of proposed key chemical(s) (acrylonitrile and/or methacrylic acid) capacity.

An example format is shown in Table 2. The timeline to initial key chemical production (from contract award) should take into consideration completion of applicable permits, equipment purchases and installation, facility set up (utilities, water treatment, testing etc.).

Table 2 - Sample List of Key Chemical Production Data Requested

LOCATION

KEY CHEMICAL

(acrylonitrile , methacrylic acid, butadiene and/or dispersions )

FACILITY

COST ($)

TOTAL

COST ($)

TIMELINE

FROM

CONTRACT

AWARD

(MONTHS)

5) Explain what method you used to justify and prioritize your chosen location(s).

a. Does this include existing property or new real property?

6) Address required capital investments and additional projected costs (i.e. facilities, labor etc.).

7) Identify barriers to domestic production and their impacts (i.e. regulatory, legal, legislative, policy, decreased business due to higher production costs, etc.)

8) Provide an estimate of sustainment plans/expectations for this domestic capability.

9) Describe plans to remain commercially viable without continual government demand or investment to justify your decision, INCLUDING YOUR OVERALL SUPPLY CHAIN STRATEGY

AND STEPS YOU WOULD TAKE TO ENSURE SUPPLY CHAIN RESILIENCE AGAINST

DISRUPTION.”

10) Identify any foreign suppliers within your supply chain and identify your plan to source from domestic sources as appropriate and the method used to justify your decision.

11) Describe partnerships, licensing arrangements or other commercial agreements that might help to reach scale more quickly and what terms and conditions would be required.

12) Is there an opportunity for cost sharing? Provide either a dollar amount or percentage of proposed cost.

13) Please provide multiple options with low, medium and high levels of investment. Is it possible to compress your production schedule? If so, please provide details on the cost and benefit of each level of investment.

14) This contract is to increase the US industrial base only. There is no implied or explicit intent to follow this contract with further contractual arrangements with the government to purchase equipment. Your proposal must prepare your company to be self-sufficient and not dependent on any further government investment. If you place any contingencies in your proposal for future product purchases, your proposal will be disqualified.

15) This solicitation is not intended for material distributors or resellers but is focused solely on material manufacturing capacity.

16) If you are purchasing equipment/machines from a foreign source, please provide information of the source and timelines of purchase to machine set up.

a) If foreign workers will be assisting with the equipment set up, are work visas being considered and will there be impacts to the timeline.

17) Please ensure that you provide as much information you can, that it is thorough, and accurate, as this is the only information being evaluated moving forward in the CSO Process.

You will be competing with other offerors for the industrial base expansion.

18) Do you have a business continuity plan and have you identified critical equipment and power sources to maintain that equipment during an outage, cyber incident, etc.?

19) What regulatory and quality standards would be needed to implement production, e.g. ISO 9001?

20) What safety, health & environmental (SHE) certifications would be needed (e.g., Responsible Care certification, ISO 14001, OHSAS 18001, etc.)? What timelines would be needed for each of these certifications if not already obtained?

21) Provide any additional relevant information for consideration by the review team.

4. SPIRAL 1 through 3– Submission Requirements ALL overarching CSO submission requirements are applicable to any AOI submission.

1) All guidance governing the content and evaluation criteria for required submission can be found the below at the following JRAC DA2 CSO link:

https://sam.gov/opp/7504925c5ade4052a4c46f2513b5d9b6/view

2) Solutions briefs for this Area of Interest shall be submitted at the email below:

KeyChemicals.cso.dafact@afwerx.af.mil mailto:nbr.cso.dafact@afwerx.af

3) Once submission is received, offerors will receive a Response Submission Number via email.

Please ensure that your solution brief has your firm’s point of contact information to include Name, Title, Phone number and Email.

5. AoI Open Period

1) Questions pertinent to this AoI should be sent to KeyChemicals.cso.dafact@afwerx.af.mil by 4:00 PM CST, 12 November 2021.

2) Solution Briefs may be submitted immediately upon reviewing this AOI. Solutions Briefs will be accepted until 7 December 2021, 4:00 PM CST.

a) Amendments to previously submitted solutions will be accepted. Solution amendments shall be clearly marked and the original tracking number shall be included in the subject of the email.

3) Evaluations will begin within two business days of the posting of this AOI.

4) Questions concerning this AOI can be sent to the following email:

KeyChemicals.cso.dafact@afwerx.af.mil

*Companies are advised that any Prototype Other Transaction Agreement (OTA) awarded in response to this Area of Interest may result in the award of a follow-on production contract or transaction without the use of competitive procedures. The follow-on production contract or transaction will be available for use by one or more organizations in the Department of Defense and, as a result, the magnitude of the follow-on production contract or agreement could be significantly larger than that of the prototype OTA. As such, any Prototype Other Transaction

Agreement will include the following statement relative to the potential for follow-on production: "In accordance with 10 U.S.C. 2371b(f), and upon a determination that the prototype project for this transaction has been successfully completed, this competitively awarded prototype OTA may result in the award of a follow-on production contract or transaction without the use of competitive procedures.”