J A 12-23 Theater Express for Public Review.pdf

JUSTIFICATION AND APPROVAL

USTRANSCOM JUSTIFICATION FOR

OTHER THAN FULL AND OPEN COMPETITION

THEATER EXPRESS

1. CONTRACTING ACTIVITY.

United States Transportation Command, Contract Airlift Division, Commercial International Branch, USTRANSCOM/TCAQ-CI, 508 Scott Drive, Building !900W, Scott AFB IL 62225- 5357.

2. NATURE AND/OR DESCRIPTION OF ACTION BEING APPROVED.

The United States Central Command (CENTCOM) requires continued contract support for the less than planeload air cargo transportation services provided under the Theater Express program. The final option year for the Theater Express contracts expires on 31 March 2012.

The contracts include FAR clause 52.217-8, Option to Extend Services, permitting extension of services for up to six additional months. This Justification and Approval authorizes the execution ofF AR clause 52.217-8 allowing service to continue for three additional months from I April2012 to 30 June 2012 and increasing the program ceiling from $868M to $977M. The execution of this option is necessary to bridge the gap between the expiration of the current contract and award of the follow-on contract. The extension authorized by FAR 52.217-8 is anticipated to be executed via a modification to the current contract for the additional three month period of performance. Executing the extension under FAR 52.217-8 will increase the program's estimated ceiling by $109M (from $868M to $977M). The original program ceiling was established at $868M. The current value of this contract based on actual expenditures is $731M as of31 Dec 2011. Assuming the three remaining months of the Option Year One performance period average the contract historical monthly average expenditure of the current contract value at the end of Option Year One, 31 Mar 2012, is estimated to be below the original program ceiling. Assuming that the program averages per month during the three month extension, the total estimated value of this extension is estimated to be Therefore the total program value is estimated to be $977M at the end of the three month extension of services ($! 09M) above the original program ceiling. This extension is limited to the time necessary for USTRANSCOM to enter into another contract for the required services.

Original Program Ceiling Actual Expenditures (as of 31 Dec 11) Estimated Expenditures (I Jan- 31 Mar 12) Estimated Contract Value (31 Mar 12) 3-Month Extension of Services (I Apr- 30 Jun 12)

Modified Proe;ram Ceiline;

$868M $731M

$977M

3. DESCRIPTION OF THE SERVICES REQUIRED TO MEET THE AGENCY'S

NEEDS.

The CENTCOM Theater Express program provides international commercial scheduled air cargo transportation services primarily within the CENTCOM Area of Responsibility (AOR) as required by the Air Mobility Division (AMD), Combined Air Operations Center (CAOC), and Airlift Control Team (ALCT). Transportation services include time-definite, port-to-port pick up and delivery, Intransit Visibility (lTV), and customs processing and clearance of 463L palletized and roll-on/roll-off cargo to CENTCOM Forward Operating Bases, Forward Operating Locations (FOBs/FOLs). Carriers are responsible for all personnel, training, supervision, equipment, Prior Permission Requests (PPRs), Diplomatic Clearances (DIPS), and customs clearances procedures. The Theater Express program augments military airlift capability in support of the war fighters operating in the CENTCOM Theater. The program provides international transportation of cargo delivered within 72 hours.

The current THX program is supported by five Civil Air Reserve Fleet (CRAF) carriers: Air Transportation International (ATI), Evergreen International Airlines (EVE), Federal Express (FED), National Air Cargo (NAC), and United Postal Service (UPS). The contracts include a base year and one option year, ending 31 March 2012.

4. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION.

The authority for a limited number of responsible sources to prevent unacceptable delays in agency requirements is 10 U.S.C. 2304(d)(l)(B)(ii) and the Federal Acquisition Regulation (FAR) 6.302-1 (a)(2)(iii)(B).

5. DEMONSTRATION THAT THE PROPOSED CONTRACTOR'S UNIQUE

QUALIFICATIONS OR NATURE OF THE ACQUISITION REQUIRES THE USE OF

THE AUTHORITY.

The use of authority 10 USC 2304( d)(l )(B)(ii) is essential to prevent unacceptable delays in this critical service supporting war fighters operating in the CENTCOM AOR. Failure to continue performance via a contract extension would have a detrimental impact on the war fighters' mission within the CENTCOM AOR. This program transported approximately 270 million pounds of cargo to multiple locations within the CENTCOM AOR during Fiscal Year (FY) 2011. TCAQ-CI is actively pursuing a follow-on contract with an anticipated base year period of performance beginning on 1 July 2012. The delay in the acquisition of the follow-on contract is a result of an inaccurate Independent Government Cost Estimate (IGCE) which initially forecasted the program's total value at As a result of a change to the basis of the IGCE along with updates to requirement and price forecasts, the revised IGCE forecasted a total value of Exceeding the $1B threshold required additional source selection procedures and milestones which were not accounted for in the original milestones which were developed when the follow-on acquisition was expected to maintain a program value below $lB. Therefore, the extension of services provided by the contractual authority ofF AR 52.217-8 will be executed to extend services until the follow-on contract is awarded.

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The incumbent contractor(s) Air Transportation International (ATI), Evergreen International Airlines (EVE), Federal Express (FED), National Air Cargo (NAC), and United Postal Service (UPS) are the only sources that can provide the required services without interruption until the contract is re-awarded. They have all required equipment in place and are positioned to continue daily support for the 3-month period of contract extension required.

6. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS IS PRACTICABLE.

On 14 October 2011, a synopsis with accompanying Draft solicitation documents was posted to Federal Business Opportunities (FedBizOpps) to notifY potential offerors of the pending re competition for Theater Express services. On 29 Dec 2011, the official solicitation documents were posted to FedBizOpps. In accordance with a class Justification and Approval posted to FedBizOpps on 25 August 2011, this requirement is limited to Civil Reserve Air Fleet (CRAP) participants in accordance with statutory authority I 0 USC 2304( c )(3 ), Industrial Mobilization.

7. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE.

The city-pair rates were determined fair and reasonable at time of contract award based on comparison between each contractor's competitively proposed rates. The option year rates were determined fair and reasonable based on fixed adjustments to each offerors fair and reasonable rates according to the Economic Price Adjustment (EPA). The EPA adjustment allows for annual increases based on a Producer Price Index (PPI) specific to the industry, in this case NAICS 481112, Scheduled Air Freight Transportation. The EPA adjustment permits standard increases based on inflation of costs specific to that industry. EPA adjustments to rates previously determined fair and reasonable maintain rates that are fair and reasonable since the allowable rate adjustment is the same for all contractors. Exercising FAR clause 52.217-8 requires the contractors to perform at the rates specified in the contract for the period of the extension.

8. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE

RESULTS OR A STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT

CONDUCTED.

Market research has been conducted for the follow-on procurement. For purposes explained in the class Justification and Approval approved on 3 March 20 II, this requirement is limited to participants in the CRAP program. The incumbents along with two other entities have expressed interest in competing for the follow-on requirement. Market research indicates that other CRAP carriers may be able to perform this requirement by subcontracting with foreign flag entities operating in the region.

9. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND

OPEN COMPETITION.

None.

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II. A STATEMENT OF THE ACTIONS, IF ANY, THE AGENCY MAY TAKE TO

REMOVE OR OVERCOME ANY BARRIERS TO COMPETITION BEFORE MAKING

ANY SUBSEQUENT ACQUISITION FOR THE SUPPLIES OR SERVICES REQUIRED.

A large-scale follow-on competitive procurement effort will be conducted in FY12. The requested extension will allow this requirement to be competed among the CRAF carriers.

12. CONTRACTING OFFICER'S CERTIFICATION.

I certify that the data supporting the recommended use of other than full and open competition is accurate and complete to the best of my knowledge and belief.

f'ri.\AJ .... ~. - ~c~'N.muE Contracting Officer

30~~ lL.

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13. TECHNICAL/REQUIREMENTS PERSONNEL CERTIFICATION.

1 certify that the data supporting the recommended use of other than full and open competition is z:t:nzsr:2?~M, oo~;.r CHRISTOPHER N. OMDAL, Lt Col, USAF CENT COM J4-Mobility Air Branch

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CONTRACTING ACTIVITY: USTRANSCOM TCAQ-CI

PROGRAM/PROJECT: Theater Express

AUTHORITY: 10 USC 2304(d)(l)(B)(ii), Limited to Prevent Unacceptable Delays in Agency Requirements

ESTIMATED CONTRACT COST: Increase of$109M from $868M to $977M

REVIEW AND APPROVAL:

KERI A. LINDSCO

Chief, Commercial International Branch

SANDRA M. HALAMA

Chief, Contract Airlift Division

Office of the Staff Judge Advocate

WILLIAM T. RACHAL

Competition Advocate

SANDRA M. HALAMA

Head of the Contracting Activity

Senior Procurement Executive

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FEB 1 4 2012

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