JA 6.302-1SPE7LX21R0136 Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

SOLICITATION – SPE7LX21R0136

DLA Land & Maritime Justification for Other Than Full & Open Competition (December 2021)

ORIGINAL

1. The Defense Logistics Agency, DLA Land and Maritime, is the contracting activity.

2. The action being approved is the acquisition of supplies on other than a full and open competition basis. The resulting contract will be Firm Fixed-Price with Annual Price Adjustments, Indefinite Quantity Contract under FAR Part 12 for a 3-year base period with the option to extend the contract for two additional years in one-year increments.

In addition to those NSNs specified in the solicitation, the scope of this solicitation will include all DLA and DOD managed NSNs for the items listed in attachment #1 for which Fairbanks Morse (7PZX0) is the approved source. NSNs within the scope may be added to this initiative or any resulting contract later, in accordance with Procurement (Proc) - Note L27-Addition and Deletion of Items.

3. The supplies required to meet the using activity’s needs are described at attachment #1.

End Item description and Weapon System: See attachment #2

The parts listed at attachment #1 are for the repairs and services of specific engine lines: PA6, ALCO, FM 48/60, PC 2.5 PC 4.2, OP, FM 28/33 used on the Ohio Class SSN (Trident) Ship, LPD-17 Class Amphibious Transport Dock, USNS Henry J. Kaiser Class Tao, Whidbey Island Class LSD, Bob Hope Class T-AKR 300, Littoral Combat Ship, and other weapon system platforms. Although provides customized power solutions for critical applications and these applications include power generation, emergency back-up power for nuclear plants, ship propulsion, shipboard power, and mechanical drive pumping.

The estimated three-year base period value is , with an estimated total value (Base + Option) of and a maximum contract value of .

4. The statutory authority permitting other than full and open competition is: 10 U.S.C. 2304(c) (1) - Available from only one or a limited number of sources and no other type of items will satisfy the Agency needs.

5. If restricted to the only source(s) of supply, include source(s) and CAGE code: See attachment #3

The manufacturers listed in attachment #3, is the current source, approved by the design control activity to supply these items. Accordingly, per DFARS 209.270, DLA is required to procure only from sources approved by the design control activity.

The Quality Assurance Specialist has indicated that the AMC/AMCS code for all these NSNs are current and up to date, and that Fairbanks Morse (7PZX0) is the only sources approved by the design control activity. Per the Quality Assurance Specialist these items will be used to replace parts (See Attachment #3) for the Fairbanks Morse diesel engines use in the Ohio Class SSN (Trident) Ship, LPD-17 Class Amphibious Transport Dock, USNS Henry J. Kaiser Class Tao, Whidbey Island Class LSD, Bob Hope Class T-AKR 300, Littoral Combat Ship, and other weapon system platforms. These items are the only replacement parts that will function properly in the end item in accordance with the military requirements.

The Government lacks the technical data needed to acquire these items competitively. Fairbanks Morse is the only source known to possess the complete technical data for these items. As such Fairbanks Morse (7PZX0) is the only source approved by the design control activity as they retain the data, rights, manufacturing knowledge, or technical data that is not economically available to the Government, and the data or knowledge is essential to maintaining the quality of the part.

An alternate source must qualify in accordance with the design control activity’s procedures, as approved by the cognizant Government engineering activity. The qualification procedures must be approved by the Government engineering activity having jurisdiction over the part in the intended application.

The use of the authority cited below:

AMC 1. Suitable for competitive acquisition for the second or subsequent time.

AMC 2. Acquire, for the second or subsequent time, directly from the manufacturer.

The use of the authority cited is based on:

AMSC C. This part requires engineering source approval by the design control activity in order to maintain the quality of the part. Existing unique design capability, engineering skills, and manufacturing knowledge by the qualified source(s) require acquisition of the part from the approved source(s). The approved source(s) retain data rights, manufacturing knowledge, or technical data that are not economically available to the Government, and the data or knowledge is essential to maintaining the quality of the part. An alternate source must qualify in accordance with the design control activity's procedures, as approved by the cognizant Government engineering activity. The qualification procedures must be approved by the Government engineering activity having jurisdiction over the part in the intended application. If one source is approved, AMCs 3, 4, or 5 are valid. If at least two sources are approved or if data is adequate for an alternate source to qualify in accordance with the design control activity's procedures, AMCs 1 or 2 are valid.

AMSC D. The data needed to acquire this part competitively is not physically available, it cannot be obtained economically, nor is it possible to draft adequate specifications or any other adequate, economical description of the material for a competitive solicitation. AMCS 3, 4, or 5 are valid.

AMSC P. The rights to use the data needed to purchase this part from additional source(s) are not owned by the Government and cannot be purchased, developed, or otherwise obtained. It is uneconomical to reverse engineer this part. This code is used in situations where the Government has the data but does not own the rights to the data.

(November 2021)

If only one source has the rights or data to manufacture this item, AMCs 3, 4, or 5 are valid. If two or more sources have the rights or data to manufacture this item, AMCs 1 or 2 are valid.

AMSC R. The Government does not own the data or the rights to the data needed to purchase this part from additional sources. It has been determined to be uneconomical to buy the data or rights to the data. It is uneconomical to reverse engineer the part. This code is used when the Government did not initially purchase the data and/or rights. If only one source has the rights or data to manufacture this item, AMCs 3, 4, or 5 are valid. If two or more sources have the rights or data to manufacture this item, AMCs 1 or 2 are valid.

6. Efforts to ensure that offers are solicited from as many sources as practicable are:

a. The acquisition will be synopsized on or about June 1, 2022, and it will run for 15 days. At the completion of the synopsis period, the RFP will be solicited on the internet for 30 days, via the DLA Internet Bid Board System (DIBBS).

b. Alternate offeror’s will not be evaluated and forwarded for approval to the Engineering Support Activity

(ESA).

7. I hereby determine that the anticipated cost to the Government will be fair and reasonable.

a. Certified Cost or Pricing data is not required, as the acquisition is being solicited as commercial under FAR Part 12. Past procurement, history will be reviewed, and a price analysis will be performed using the producer price indexes from the Bureau of Labor Statistics. The buyer only intends to award the NSNs if a fair and reasonable price determination can be made.

b. Commercial price comparison, price analysis, Producer Price Index (PPI), learning curve analysis, and/or informal cost breakdown will be used to evaluate the price.

8. Market Research/Efforts to Obtain Competition:

a. The product specialist reviewed these NSNs for the project during project creation, and no new sources were found. DLA Land and Maritime conducted various forms of market research including the publishing of a formal Sources Sought notice and market survey to www.SAM.gov. In addition to the publishing of a Sources Sought notice, the Market Survey team contacted the sole source and several dealers from the procurement history.

b. For items with an AMCS of “C”, “D”, “P”, and “R” the solicitation will contain Procurement Note L04 – Offers for Part Numbered Items, which increases competition by permitting the considerations of alternate offers.

Market Survey [10 U.S.C. 2304(f)(3)(D)]: A market survey was conducted on/during: July 30, 2021 – August 25, 2021.

DLA Land & Maritime Justification for Other Than Full & Open Competition (November 2021)

Names of vendors contacted: 5

1. Fairbanks Morse (7PZX0)

2. CHAND LLC (1D5X4)

3. J.G.B. Hose (61125)

4. Pioneer Industries (66200)

5. Dela Technology (2U435)

Total number and names of vendors that responded to the market research: 4.

1. Fairbanks Morse (7PZX0): Fairbanks Morse LLC, is interested in an LTC however, their business with

DLA Land and Maritime has been through their alliance partner CHAND LLC.

2. CHAND LLC (0D5X4): Interested in the LTC and authorized distributor for Fairbanks Morse.

3. J.G.B. Hose (61125): Fairbanks Morse’s lone distributor, Chand, LLC, will be the only place for you to obtain market survey information. They will not provide us anything but quotes for open DLA solicitations.

4. Pioneer Industries (66200): FME will not support an LTC/IDQ.

Techniques used to conduct survey: emails, SAM.Gov, Market survey questionnaire and attachments, and follow-up phone calls.

Types of information requested: # of base years, # of option years, priced option years versus EPA, FOB origin or destination, quantity breaks, commerciality, commercial sales invoices, Understanding of cost/price data.

Summary of information received: At the time the Sources Sought was posted, numerous sources were in the process of submitting their SAR packages for these items. Maritime was tasked to provide SAPD with a list of interested sources in a Long-Term Contract. The conclusion of the sources sought is that the companies listed below indicated an interest.

Company Name

CAGE

CODE

Business Size

KTR

Interested in an LTC

3 Base Years w/ 2 Options Total 5 Yrs.

Contract

KTR PREFERS

A FIRM FIXED

PRICE

CONTRACT

KTR WILL

PROVIDE COST &

PRICING DATA IF

REQUIRED

Commercial Items

Fairbanks Morse 7PZX0 Large Business No - - - - CHAND, L.L.C. 0WY76 Large Business Yes Yes

J.G.B. Enterprises 61125 Small Business No - Pioneer Industries 66200 Small Business No - - - - Dela Technology 2U435 Small Business No Response - - - -

Commercial: Per FAR 2.101 (b) the items in this solicitation have been determined to be commercial. It is the Contracting Officer’s determination that these NSNs will be solicited as commercial. For the reasons stated below, these items covered by this initiative shall be commercial and will be procured under FAR Part 12. The following commerciality determination has been made:

Market research analysis I/A/W FAR 12.101 (a) was conducted and based on CHAND response to the market survey they indicated that theses NSNs were commercial. CHAND LLC did not provide unredacted commercial invoices as they are hesitant in providing unredacted invoices. CHAND provided 57 pages of proprietary information related to the commerciality of the items.

These items can be bought on the following website https://www.fairbanksmorse.com/ and https://www.chand.com/. Vendors must register for online ordering.

To determine the commerciality of these items, it was sent commerciality’s questions to CHAND LLC, which they responded. See below:

1. Are items offered for sale to the public? Fairbanks Morse has been offering the PC 2.5 an OP Engines to the public for decades. This includes spare parts, services, upgrades, and maintenance to these engine lines.

2. Has it been sold to other than the Government? Yes. For the PC 2.5 Engines, parts and services, we have not only offered for sale to the public, but have recorded sales for some of the following end users: (not all inclusive)

City of Nebraska City, Nebraska City of Key West, Florida City of Chanute, Kansas Bermuda Electric Northeast Utilities City of Forest City, Iowa Many more

For the PC OP Engines, parts and services, we have not only offered for sale to the public, but have recorded sales for some of the following end users: (not all inclusive) City of Ipswich, Massachusetts Thumb Electric Cooperative Cordova Electric Cooperative Exelon Nuclear Detroit Edison Company UniSea Incorporated City of Kahoka, Missouri

3. Who is your customer? Listed above in #2

4. Do you have distributors for these items? We have a distribution teaming agreement with

CHAND.

5. Could the basic item be for a commercial application with minor modifications for the

Government? Yes. Our Engines, parts and services often are modified to meet government specification and needs.

6. How are they different? The only differences in our Commercial vs Government sales, are the specifications required by the government to meet their criteria. This would be the only substantial differences.

7. Does the manufacturer offer any discounts? Is there a dealer discount? Is there a discount for the federal government?

8. What is the percentage of government sales versus commercial sales?

of FM sales are either direct commercial and/or FAR 12 commercials.

The Contracting Officer has determined that these NSNs for this project are commercial items as it meets the definition of a commercial item of a type customarily used by the general public or by non-

DLA Land & Maritime Justification for Other Than Full & Open Competition (November 2021) governmental entities for purposes other than governmental as found in FAR 2.101 and DLAD 12.102 (a) (S-91).

9. Additional facts supporting other than full and open competition are:

a. Based upon the technical certification on file in DLA Land and Maritime – VEP technical data is not available and cannot be developed to permit full and open competition. The data presently available reflects the minimum needs of the Government.

b. A technical review was completed by Kurtis Starin / Quality Assurance Specialist for FLD-LTC. The subject NSNs have been identified as sole/limited source items. No other sources or adequate technical data could be identified or located for competitive procurement. If new sources are approved prior to award, the solicitation will be reissued allowing for the new source(s) a chance to compete for this acquisition.

10. A listing of sources, if any, indicating an interest in the acquisition is: CHAND LLC (0D5X4) expressed an interest in the acquisition. As such, this company will be in the solicitation mailing list.

11. The following actions are being taken to identify additional sources:

a. The solicitation will contain procurement note L04– Offers for Part Numbered Items SEP 2016 and M06 - Evaluation of Offers for Part Numbered Items (SEP 2016).

b. Planned actions for the future to overcome any barriers to competitions will be periodic market research and sources sought.

12. The Contracting Officer searched for the previous award listed in the contract history at Record Management for previous Justifications as required by the Defense Federal Acquisition Regulation Supplement (DFARS) and Procedures, Guidance, and Information (PGI) 206.304, and was not able to locate Justifications as these NSNs were purchases under the Simplified Acquisition Procedures.

Attachments: To view, it may be necessary to click on the paperclip symbol in the left margin of the e-document.

I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief. If not exceeding $750,000, this signature serves as the approval.

RICHARD J. MATZ

Contracting Officer

APPROVAL/CERTIFICATION

I have reviewed and approve this justification:

MARY E. SHEARER

Competition Advocate

MARK A. BROWN (SES)

Head of the Contracting Activity (HCA)

APPROVAL REQUIREMENTS

[X] $750,000 to $15,000,000 Competition Advocate

[X] $15,000,000 to $100,000,000 Head of Contracting Activity (HCA)

MATZ.RICHARD.JAM

ES.1080066615

Digitally signed by

MATZ.RICHARD.JAMES.1080066615

Date: 2022.05.23 13:53:44 -04'00'

SHEARER.MARY.E.12

50702449

Digitally signed by

SHEARER.MARY.E.1250702449

Date: 2022.05.23 15:22:37 -04'00'

BROWN.MARK.ALBERT

.1041175032

Digitally signed by

BROWN.MARK.ALBERT.1041175032

Date: 2022.05.24 08:21:53 -04'00'