USC-9_Other_Than_Full_and_Open_FINAL_JA_(Signed).pdf

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FOR OFFICIAL USE ONLY

JUSTIFICATION

FOR OTHER THAN FULL AND OPEN COMPETITION

SOLICITATION #: HTC711-19-R-W001

UNIVERSAL SERVICE CONTRACT (USC)-9

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 Fixed-Price, multiple award, Indefinite Delivery/Indefinite Quantity (IDIQ) contracts with relevant equitable price adjustments for the allowance of fluctuations in marine fuel prices (Bunker Adjustment Factor - BAF), foreign currency exchange rates (Currency Adjustment Factor - CAF), and inland Continental United States (CONUS) fuel prices (Fuel Adjustment Factor – FAF) for international and domestic surface transportation using intermodal services of ocean carriers. USTRANSCOM will award multiple contracts under this justification to all technically acceptable, vessel owning or controlling carriers offering regularly scheduled commercial liner service at prices considered to be fair and reasonable using best value source selection procedures. If they are a large business, offerors must have acceptable small business subcontracting plans to receive an award.

New entrants to the marketplace offering U.S. flag or combination U.S. flag service where only foreign flag service exists, may be awarded a contract anytime during the contract periods as required by the Cargo Preference Act of 1904. Such awards shall only be made to offerors who are vessel owning or controlling carriers, propose fair and reasonable pricing, and have an acceptable business and technical proposal.

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

This requirement provides for international ocean, domestic, and intermodal commercial liner transportation services in support of DOD shippers and other U.S. Government agencies for the resupply of the U.S. forces on a worldwide basis, humanitarian assistance, and military assistance to foreign governments, peacekeeping operations, and exercises. Affected cargo consists of military equipment and related supplies including food, spare parts, and other sustainment items shipped by the Defense Logistics Agency (DLA), supermarket-type commodities shipped by the Defense Commissary Agency (DeCA), department store merchandise shipped by Army and Air Force Exchange Service (AAFES) and Navy Exchange (NEXCOM), mail shipped by the Military Postal Service, and personal property including privately owned vehicles of DOD personnel.

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The contracts will be awarded with a base year plus four one-year option periods beginning 1 Sep 19 through 31 Aug 20, 1 Sep 20 through 31 Aug 21 for Option Year 1, 1 Sep 21 through 31 Aug 22 for Option Year 2, 1 Sep 22 through 31 Aug 23 for Option Year 3, and 1 Sep 23 through 31 Aug 24 for Option Year 4. The contract may be extended for up to six months in accordance with FAR 52.217-8, Option to Extend Services.

The cost estimate for USC-9 is projected at $926,804,386 for the base year, $942,560,059 for Option Year 1, $958,583,580 for Option Year 2, $974,879,502 for Option Year 3, $991,452,454 for Option Year 4, and $495,726,227 for the 6-month extension, for a total contract value of $5,290,006,208 over five and a half years. This estimate is derived from current contract costs, preliminary cargo volume forecast data for all of the routes solicited, anticipated cost increases due to forecasted market conditions and planned changes to required performance standards.

The USC requirement will encompass approximately 45,000 lines of rates and cover geographical areas not covered by other contracts. The trade lanes covered by USC are listed below and apply to both inbound and outbound cargo movement.

Route Description 01 U.S. West Coast - Far East 02 Continental Europe, United Kingdom, Ireland - Middle East, South Asia, Indian Ocean 03 U.S. West Coast - Hawaii 04 Middle East, South Asia, Indian Ocean Interport 05 U.S. East Coast - Continental Europe, United Kingdom, Ireland 06 U.S. East Coast - Mediterranean 07 U.S. East Coast - Middle East, South Asia, Indian Ocean 08 U.S. East Coast - Far East 09 U.S. East Coast - Hawaii 10 U.S. Gulf Coast - Scandinavia, Baltic Sea 11 U.S. Gulf Coast - Continental Europe, United Kingdom, Ireland 12 U.S. Gulf Coast - Mediterranean 13 U.S. Gulf Coast - Middle East, South Asia, Indian Ocean 14 U.S. Gulf Coast - Far East 15 U.S. Gulf Coast - Hawaii 16 Hawaii - Far East 17 U.S. Great Lakes - Continental Europe, United Kingdom, Ireland 18 Caribbean Interport 19 Far East Interport 20 Mediterranean Interport 21 Canada East Coast - Mediterranean 22 Canada East Coast - Continental Europe, United Kingdom, Ireland 23 U.S. West Coast - Continental Europe, United Kingdom, Ireland 24 Scandinavia, Baltic - Continental Europe, United Kingdom, Ireland 25 U.S. West Coast - Mediterranean 26 U.S. West Coast - Alaska 27 Hawaii - Continental Europe, United Kingdom, Ireland

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Route Description 28 U.S. West Coast - Central America/Mexico 29 Alaska Interport 30 U.S. East Coast - Greenland 31 U.S. East Coast - Iceland 32 U.S. East Coast - Scandinavia, Baltic Sea 33 U.S. East Coast - Azores 34 Continental Europe, United Kingdom, Ireland - Mediterranean 36 Mediterranean - Hawaii 37 U.S. East Coast - Caribbean 39 U.S. East Coast - Central America/Mexico 40 Africa Interport 42 U.S. Gulf Coast - Caribbean 43 U.S. Gulf Coast - Central America/Mexico 45 U.S. Great Lakes - Far East 46 U.S. Great Lakes - Mediterranean 47 U.S. West Coast - Middle East, South Asia, Indian Ocean 48 Continental Europe, United Kingdom, Ireland Interport 49 Far East - Continental Europe, United Kingdom, Ireland 50 Far East - Mediterranean 51 Far East - Middle East, South Asia, Indian Ocean 52 U.S. East Coast - Black Sea 53 U.S. West Coast - South America 54 U.S. West Coast - Oceania 55 U.S. East Coast - South America 56 U.S. Gulf Coast - South America 57 Mediterranean - Middle East, South Asia, Indian Ocean 58 Far East – South America 60 U.S. East Coast - Africa 61 Far East - Oceania 62 Continental Europe, United Kingdom, Ireland - Iceland 63 Iceland - Mediterranean 64 Continental Europe - Azores 65 Central America/Mexico - Continental Europe, United Kingdom, Ireland 66 Central America/Mexico - Mediterranean 67 U.S. West Coast - Africa 68 Central America/Mexico - South America 69 Central America/Mexico - Oceania 70 Azores - Mediterranean 71 Continental Europe, United Kingdom, Ireland - Africa 72 Continental Europe, United Kingdom, Ireland - Oceania 73 U.S. Gulf Coast - Africa 74 Mediterranean - Africa 75 Africa - Middle East, South Asia, Indian Ocean

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Route Description 76 Central America/Mexico Interport 77 U.S. East Coast - Oceania 78 U.S. Gulf Coast - Oceania 79 Hawaii - Oceania 80 Oceania – Middle East, South Asia, Indian Ocean 81 Oceania Interport 82 Alaska - Far East 83 Alaska - Oceania 84 Caribbean - Central America, Mexico 85 Hawaii - Middle East, South Asia, Indian Ocean 86 Mediterranean - Scandinavia, Baltic Sea 88 Continental Europe, United Kingdom, Ireland - Caribbean 89 Mediterranean - Oceania 90 Far East - Africa 91 Alaska - Middle East, South Asia, Indian Ocean 92 Caribbean - Middle East, South Asia, Indian Ocean 93 Far East – Central America/Mexico 96 Black Sea Interport 97 Continental Europe, United Kingdom, Ireland – Black Sea 98 Scandinavia, Baltic Sea Interport 99 Caribbean - Africa CA Caspian Sea Interport

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

Authority for this acquisition is FAR 6.302-3, Industrial Mobilization; Engineering, Developmental, or Research Capability; or Expert Services (limiting competition to asset owning or controlling companies).

5. Demonstration That the Proposed Contractors’ Unique Qualifications or the Nature of the Acquisition Requires Use of the Authority Cited:

a. FAR 6.302-3, Industrial Mobilization; Engineering, Developmental, or Research Capability; or Expert Services Authority.

(1) This acquisition is for the purpose of acquiring international and domestic cargo transportation and distribution services using ocean common carriers offering regularly scheduled commercial liner service for requirements that may arise in any part of the world.

(2) In the commercial sector non-asset owning or controlling companies (freight forwarders and third-party logistics companies) are often utilized to maximize value. Non-asset owning or controlling companies do not have control of ocean vessels and this limits their ability to implement route changes, diversions, or vessel positioning. It is operationally essential that USTRANSCOM have a direct contractual relationship with the asset owning or controlling companies. USTRANSCOM must have the ability to interact directly with the asset owning or

USC-9, J&A Page 5 of 7 controlling companies in order to conduct joint planning efficiently and to discuss possible route changes, vessel positioning, and U.S. flag capacity throughout the life of the contract. Asset owning or controlling companies have control of ocean vessels and are able to implement route changes, diversions, or vessel positioning in response to USTRANSCOM operational requirements. Therefore, it is operationally necessary to limit competition to asset owning/operating companies. 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.

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

The USC requirement will be synopsized in accordance with FAR 5.203(a). There are currently 27 USC ocean carrier contracts. The current USC-8 ocean carriers are:

Alaska Marine Lines, Inc. AKMR American President Lines Ltd, Inc. APLS American Roll On Roll Off Carrier, LLC AROF Austral Asia Line AUSW Central Gulf Lines, Inc. CEGL Crimson Shipping Co. Inc. CMSW Crowley Liner Services, Inc. CAMN Crowley Puerto Rico Services, Inc. CPRC Farrell Lines Incorporated FRLN Foss International Inc. FSIQ Hamburg SUD North America, Inc. SUDU Hapag-Lloyd USA, LLC HLUS Liberty Global Logistics, LLC LGLT Maersk Line, Limited MAEU Matson Navigation Company, Inc. MATS National Shipping of America, LLC NSHA Pasha Hawaii Holdings LLC PHHD Polynesia Line, Limited PLLU Schuyler Line Navigation Co., LLC SYLF Sealift Inc. SLFI Superior Maritime Services, Inc. SQMS Toho Shipping K.K. TOHO TOTE Maritime Alaska, Inc. TOTE TOTE Maritime Puerto Rico, LLC TMGT Trailer Bridge, Inc. TRBR US Ocean USCE Young Brothers, LTD YBRL

All contractors who attended the USC-9 industry day or who responded to the draft Performance Work Statement (PWS) will be notified when the Request for Proposal is posted to the Federal Business Opportunities website.

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

The anticipated cost to the Government for this contract action and all option years will be considered fair and reasonable based on competition, comparison with current year prices, the Federal Maritime Commission of service contracts, and commercial tariffs.

8. Description of the Market Research Conducted and the Results or a Statement of the Reasons Market Research Was Not Conducted:

Market research was sought through various publications (Journal of Commerce, American Shipper, etc.) and websites (MARAD, Federal Maritime Commission) to ensure that all possible sources for these services were considered. The U.S. Department of Transportation Maritime Administration has a website that lists all U.S. Flag Voluntary Intermodal Sealift Agreement (VISA) participants. Further, an industry day was held for all interested parties and a draft PWS was posted to FBO for industry comment.

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

Not Applicable

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

All current USC Ocean Common Carriers identified in paragraph 6 above have expressed a written interest in this acquisition.

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:

To be in compliance with the Cargo Preference Act, if a non-contract holding carrier offers U.S.

flag service on a route that none of the USC carriers offer service, USTRANSCOM will negotiate a contract with the new carrier.

12. Contracting Officer 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.

WILLIAM R. HENDERSON

Contracting Officer

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13. Technical/Requirements Personnel Certification:

I certify that the supporting data under my cognizance that are included in the justification are accurate and complete to the best of my knowledge and belief.

WILLIAM H. FUGATE

Services Acquisition Manager

14. WRITTEN DETERMINATION OF THE APPROVING OFFICIAL IDENTIFYING

THE CIRCUMSTANCE THAT APPLIES TO THE ACTION:

Based on the above cited justification, I hereby determine the circumstance in FAR 6.302-3 applies to this justification for other than full and open competition.

GAIL M. JORGENSON

SES, DAF