18-17_J&A_redacted.pdf

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JUSTIFICATION

FOR OTHER THAN FULL AND OPEN COMPETITION

SOLICITATION HTC71118RW002

SEALIFT TRANSPORTATION FOR NAVAL STATION GUANTANAMO BAY, CUBA

(NSGB)

1. Contracting Activity: United States Transportation Command, Acquisition Directorate, Sealift Services Division (TCAQ-I), 508 Scott Drive, Scott AFB Illinois 62225-5357.

2. Nature and/or Description of the Action being Approved:

In accordance with DOD Directive 5158.04, the Commander U.S. Transportation Command (USTRANSCOM) is responsible for sealift readiness and assigned the mission to "Provide effective and efficient air, land and sea transportation for the Department of Defense (DOD), in times of peace and war." This action is in support of a Fixed-Price, Indefinite Delivery Indefinite Quantity (IDIQ) contract with relevant equitable price adjustment for the allowance of fluctuations in marine fuel prices (Bunker Adjustment Factor - BAF). USTRANSCOM will award a single contract under this justification to the lowest priced technically acceptable small business Voluntary Intermodal Sealift Agreement (VISA) ocean common or contract carrier whose prices are considered to be fair and reasonable. Offerors past performance will be evaluated and must be deemed to be acceptable in accordance with the Source Selection criteria.

Offerors for Sealift Transportation for Naval Station Guantanamo Bay (NSGB) provide U.S. flag service to the extent authorized by the Cargo Preference Act of 1904 (10 USC 2631), the Cargo Preference Act of 1954 (46 USC 55303), or other applicable laws. Consistent with DFARS 247.573-(b)(2) direct purchase of ocean transportation services, and in support of USTRANSCOM’s readiness mission, an offeror of U.S. flag service that participates in the VISA program receives priority for ocean requirements over an offeror of US flag service that does not participate in VISA.

To support VISA, and thus maintain DoD sealift readiness with a viable US Flag vessel(s) and US merchant mariners, full and open competition is limited to small business US Flag VISA participants, vessel owning/controlling carriers.

3. Description of Supplies/Services Required to Meet the Agency’s Needs:

The purpose of this acquisition is to contract dedicated liner service for containerized and break bulk cargo between Jacksonville, Florida (JaxPort) and NSGB. The services being procured by this contract provide the primary logistical support for the American Forces stationed in Guantanamo Bay, Cuba and the sole means of surface transportation between the United States and Cuba. The contract will provide both break bulk and intermodal container service, including terminal handling, stevedoring, loading, and discharging in CONUS and at NSGB. At Jacksonville, the cargo shall be loaded and discharged at JaxPort/Blount Island. At NSGB, the cargo is loaded and discharged with carrier provided equipment at Wharf Bravo. The primary cargo being transported on the inbound leg to JaxPort is hazardous waste. Service is required every 14 days for delivery of cargo consisting of perishable food, personally owned vehicles (POV’s), house hold goods, and various other DoD mission critical and life supporting cargo.

The total estimated value of this procurement is

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4. Statutory Authority Permitting Other Than Full and Open Competition:

Authority for this acquisition is 10 U.S.C. 2304(c) (3), and FAR 6.302-3, Industrial Mobilization; Engineering, Developmental, or Research Capability; or Expert Services, (limiting competition to VISA participant, vessel owning and/or operating common or contract carriers.)

5. Demonstration That the Proposed Contractors’ Unique Qualifications or the Nature of the Acquisition Requires Use of the Authority Cited Limiting awards to VISA participant, vessel owning/controlling carriers is necessary to support DoD sealift readiness. This readiness posture is primarily attained through the VISA program.

1) The VISA program is a readiness program established under the authority of the War and National Defense Production Act of 1950 (50 USCS App Section 2061). It is a mechanism by which U.S. ocean carriers pledge their owned/controlled assets to meet DoD requirements in the event of a contingency. An ocean carrier’s commitment of owned/controlled transportation assets to the VISA program is recognized by granting to the VISA participant a priority in contract and/or task order awards. In addition, on January 30, 1997, the Secretary of Defense (SECDEF) approved VISA as an alternative to the Sealift Readiness Program (SRP) for the purposes of Section 909 of the Merchant Marine Act of 1936. Furthermore, a VISA Stage III commitment satisfies the requirement of Section 653 of the Maritime Security Act (PL 104-239) for an Emergency Preparedness Program approved by the SECDEF in order for carriers to qualify for subsidy contracts.

2) In explaining the VISA program, Enclosure E5.3 of Department of Defense Instruction (DoDI) 4500.57, Transportation and Traffic Management (March 18, 2008) states: "The Department of Defense relies on the private sector for transport of a significant portion of its wartime and peacetime cargo. The relationship between the Department and the private sector is critical to mobilization, deployment, and sustainment of military forces. The goal of VISA is to provide assured access to the U.S. flag ocean transportation industry through the contractual pledges by carriers of their vessels and intermodal systems capacities, in return for priority for DoD peacetime business. Accordingly, when the Department determines that commercial sealift capacity is required, the priorities listed in Section E5.4.1 through Section E5.4.7 will be applied." These VISA priorities benefit a VISA participant, defined in the VISA document as a U.S. vessel operator and all U.S. subsidiaries and affiliates of that U.S. vessel operator that own, operate, charter or lease ships and intermodal equipment in the regular course of their business and in which the entity holds a controlling interest.

3) As suggested above, DoD relies heavily upon VISA carriers for transportation of peacetime and contingency military cargoes. In addition, USTRANSCOM has recognized the continuing need for a formalized program for the acquisition of sealift augmentation under less than full mobilization conditions. In fact, USTRANSCOM 's mission, which involves support of the warfighter in peace and war anywhere in the world , compels the VISA priority for U.S.

ocean carriers pledging owned/controlled U.S. flag ocean assets crewed primarily by U.S.

mariners to DoD in the event of a contingency. Unlike foreign companies, U.S. companies are subject to U.S. law, including requisitioning statutes, and are more likely to perform their VISA obligation to support DoD in a national security situation. U.S. companies also are more likely to be eligible to plan with DoD for contingencies in a classified environment and to perform classified aspects of the transportation mission. Although there have not been recent instances where foreign flag crews have declined to perform or threatened to not perform transportation for

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DoD to a particular destination in a national security situation, U.S. crews are considered more reliable to achieve contingency objectives and can meet contract security requirements.

4) Participation in the VISA program represents a risk to the carriers in the event of mobilization. VISA carriers will see significant disruption to their commercial operations in activation. Furthermore, there is limited capacity of U.S. flag vessels owned/operated by U.S.

companies and crewed by U.S. mariners. The VISA priorities for DoD cargo strengthens the US flag ocean carrier industrial base and provides operational advantages to DoD in performing national security missions.

5) This acquisition action is for the purpose of acquiring international cargo transportation and distribution services using ocean common or contract carriers offering regularly scheduled commercial liner service for cargo and equipment movements to and from NSGB. Offerors must participate in the VISA program and have ownership/control of their transportation assets in order to be eligible for contract award. Restricting participation to vessel owning/controlling carriers provides an incentive to carriers to commit their fleets to and otherwise participate in the critical VISA readiness program.

6) Likewise, it is noted that in the commercial sector, non-vessel owning or controlling companies (freight forwarders and third-party logistics (3PL) companies) are often utilized to maximize value. Allowing 3PL companies to participate in this acquisition is a disincentive to vessel owning carriers to commit fleets to the VISA readiness program as 3PLs cannot contribute ocean assets thereto.

7) Finally, it is essential operationally that USTRANSCOM have a direct contractual relationship with the vessel owning/controlling companies. USTRANSCOM must be able to interact directly with the vessel owning/controlling companies in order to conduct joint planning efficiently and to discuss possible route changes, vessel positioning, and US Flag ocean carrier capacity throughout the life of the contract. US flag ocean carriers are also required to efficiently conduct joint planning, plan with DoD for contingencies in a classified environment, and perform classified aspects of the transportation mission. The ability of USTRANSCOM to mobilize an asset without a direct contractual relationship with the asset owner (i.e.

subcontractors) presents too great a risk to readiness.

8) It is important to provide the strongest incentive to participate in the vital VISA readiness program and best maintain the industrial base of US flag ocean carriers and to ensure the ability to directly interact with the vessel owning/controlling carriers. Limiting competition to VISA participant, vessel owning/controlling carriers is essential in maintaining viable strategic sea partners, the continued success of the Defense Transportation System, and to maintain the sources of ocean carrier services in the interest of national defense.

6. Description of Efforts Made to Ensure That Offers are Solicited From as Many Sources As Is Practicable:

The NSGB requirement will be synopsized to include the anticipation of four priced one-year option periods in accordance with FAR 5.203(a).

7. Determination by the Contracting Officer That the Anticipated Cost to the Government Will Be Fair and Reasonable:

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This procurement will be advertised in the Federal Business Opportunities. Market research has indicated that there is an expectation of obtaining at least two small business VISA participant, vessel owning/controlling offers that will be competitive in terms of market prices and quality of service.

8. Description of the Market Research Conducted and the Results or a Statement of the Reasons Market Research Was Not Conducted Sources were sought and identified through Requests for Information (RFIs) posted on FedBizOps 5 October 2017 and 26 October 2017. Through analysis of the market, review of current USTRANSCOM shipping and VISA contracts all known carriers that operate in the region were also contacted via e-mail. The results of the market research confirmed that international sealift transportation service is commercial in nature and is readily available in the marketplace. Furthermore, the Market Research indicates there is a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of market prices and quality. Therefore, this requirement is suitable for a small business set-aside. We received responses to the Market Research Questionnaire RFI that was posted to Federal Business Opportunities and emailed to all VISA participants and USC-8 carriers. Of the responses received, were small businesses and were large businesses. TCAQ-I confirmed that of the small businesses that responded, of the carriers are current VISA participants and currently own/operate vessel(s).

9. Any Other Facts Supporting the Use of Other Than Full and Open Competition:

Third party logistics providers (3PLs) and freight forwarders generally do not own transportation assets. 3PLs/forwarders merely arrange the performance through subcontracts to transportation providers. Therefore, 3PLs and freight forwarders likely will not meet the minimum personnel requirements to perform the ocean services under 52.219-14.

10. A Listing of Sources, If Any, That Expressed in Writing An Interest in the Acquisition:

Listed below in the table are the carriers who responded to the RFIs.

Carrier Name Business Size VISA Participant

11. A Statement of 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.

This requirement has been changed from the previous Base Year plus 2 Option Years Period of Performance to a Base Year plus 4 Option Years Period of Performance based on RFI feedback from interested parties stating that a longer term contract would encourage more competitive pricing.

GOULD.TIMOTHY.A.

Digitally signed by GOULD.TIMOTHY.A DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=USAF, cn=GOULD.TIMOTHY.A Date: 2018.02.15 11:03:19 -06'00'

OLENICK.JEFFREY.PAUL. Digitally signed by OLENICK.JEFFREY.PAUL.

Date: 2018.02.19 20:55:40 -06'00'

5 Mar 2018THOUVENOT.TAMARA.D. Digitally signed by THOUVENOT.TAMARA.D.

DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=USAF, cn=THOUVENOT.TAMARA.D.

Date: 2018.03.05 15:33:58 -06'00'