JA Axxis FY20 redacted.pdf

DEFENSE LOGISTICS AGENCY

ENERGY

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6222

April 17, 2020 J&A Tracking Number: 20-0031

Justification for Other than Full and Open Competition

1. Summary/Introduction:

DLA Energy, a component of the Defense Logistics Agency, is the contracting activity. This action is for the purchase of an annual renewal subscription with Axxis Software, LLC (Axxis) for the Axxis Petroleum Subscription package to include the Annual Price Service Subscription and Price History Data Warehouse Subscription under solicitation number SP0604-20-Q-0412.

The contract will support DLA Energy-Finance. The subscription covers a 12-month period starting 06/01/2020 through 5/31/2021. Axxis is the sole producer of the specific proprietary data provided by the subscription, therefore it is the sole responsible source, and no other company is able to fulfill the requirement. Authority for other than full and open competition is 10 U.S.C. 2304(c)(1) and Federal Acquisition Regulation (FAR) 6.302-1.

2. Nature and/or description of the action being approved (FAR 6.303-2(b)(2)):

The action being approved is a firm fixed price contract to Axxis for its Annual Pricing data Subscription. Axxis provides proprietary historical price data that DLA Energy-Finance’s Market Research department requires for market evaluation and for economic price adjustment (EPA) clauses in fuel contracts. This action will use FY20 funding.

3. Description of supplies or services required to meet the agency’s need (including estimated value) (FAR 6.303-2(b)(3)):

DLA Energy requires the Axxis subscription for its proprietary historical price data to support EPA clauses in a number of DLA Energy fuel contracts. The subscription includes weekly rack averages for up to 400 cities, subscription for Enterprise-Wide price history data warehouse licenses, historical pricing data for all Axxis cities and products, custom historical reports for stored queries, price history data warehouse maintenance, and professional services for installation and implementation of price history data warehouse. The estimated dollar value for the yearly subscription is $499,200.00.

4. Identification of the statutory authority permitting other than full and open competition (FAR 6.303-2(b)(4)):

The statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c)(1) or 41 U.S.C. 3304(a)(1), as implemented by FAR 6.302-1. FAR 6.302-1(a)(2) states: “When the . . . services required by the agency are available from only one responsible source, or, for DoD .

. . from only one or a limited number of responsible sources, and no other type of…services will satisfy agency requirements, full and open competition need not be provided for.” In accordance with FAR 6.302-1(a)(2), Axxis is the only source that can satisfy this requirement.

Justification for Other Than Full and Open Competition (Cont’d)

(SP0604-20-Q-0412 – AXXIS)

5. Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited (FAR 6.303-2(b)(5)):

Axxis provides terminal loading rack fuel prices for hundreds of locations around the U.S.

Axxis is one of two companies that provide such comprehensive data that is accepted and utilized by both the commercial industry and DLA Energy. DLA Energy contracts with both companies, which provide similar but uniquely gathered pricing information for the markets serviced by DLA Energy. The pricing information provided by each company is not identical due to the methodologies utilized to gather the source data that the final prices are derived from.

Further, neither company’s subscriptions overlap 100% with the markets serviced by DLA Energy.

When DLA Energy-Finance chooses which price reference to utilize for a given line item, it performs a statistical comparison to see which source’s data tracks the benchmark best over time.

The benchmark used is data provided by The Department of Energy's Energy Information Administration. Having access to both sources ensures the most comprehensive coverage and maximizes DLA Energy-Finance’s ability to use the pricing reference that most closely reflects the product and location that DLA Energy is buying for.

Axxis uses a unique methodology to collect the source data used for its pricing. The pricing information from Axxis is provided in a format that is fed directly into DLA Energy's Enterprise Business System (EBS) to adjust hundreds of contract line items daily for DLA Energy's Direct Delivery contracts. Over 99.9% of the prices are gathered electronically, untouched by human hands. Pricing is provided for 1,250 wholesale terminals and over 370 markets for over 120 petroleum biofuel products. The breath of the pricing information received through Axxis’ subscription ensures that the Government has the necessary pricing information for the contracts utilized in all of the locations that DLA Energy is responsible for servicing. Axxis is the only source that provides customized historical reports that meet the Government’s requirements.

6. Description of the efforts made to ensure that offers are/were solicited from as many potential sources as is/was practicable, including whether a notice was or will be publicized as required by Subpart 5.2 and, if not, which exception under 5.202 applies (FAR 6.303- 2(b)(6)):

On April 3, 2020, DLA Energy-Installation Energy posted an Intent-to-Sole-Source Notice on Beta Sam.GOV that closed on April 20, 2020. No potential sources responded. To date, no other sources have written to express an interest.

7. Determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable (FAR 6.303-2(b)(7)):

The Contracting Officer determines that the price offered by Axxis is fair and reasonable.

Pursuant to FAR 15-404-1(b)(2)(iv), the contracting officer may make a “[c]omparison with competitive published price lists, published market prices of commodities, similar indexes, and discount or rebate arrangements.”

(SP0604-20-Q-0412 – AXXIS)

The price was determined fair and reasonable when compared to competitive published pricing.

Axxis provided a price list that shows $1,003,250.00 as the price a commercial subscriber would pay for a 12-month Enterprise-Wide subscription. The discounted price for DLA Energy for the same 12-month subscription is $499,200.00. This results in an overall savings of $504,050.00 and equates to a 50.24% discount for the same 12-month subscription. Therefore, the Contracting Officer determines the price fair and reasonable when compared to the published price listing.

8. Description of the market research conducted and the results or a statement of the reason market research was not conducted (FAR 6.303-2(b)(8)):

The customer conducted market research by querying potential suppliers to determine which publication, if any, could provide pricing for the various fuels that DLA Energy provides to its customers and is been deemed acceptable across industry. Research revealed that Axxis is one of two companies that are capable of providing the required comprehensive data that is accepted and utilized by both the commercial industry and DLA Energy. DLA Energy already has a contract with the only other capable source.

An Intent-to-Sole-Source Notice was posted to Beta.Sam.gov on April 3, 2020. No vendors responded to the notice resulting in no additional competition to meet this requirement.

Research identified no other authorized vendors for this requirement. Therefore, it has been determined that Axxis is the only source available to meet DLA Energy’s needs at this time.

9. Any other facts supporting the use of other than full and open competition, such as (FAR 6.303-2(b)(9)):

(i) Explanation of why technical data packages, specifications, engineering descriptions, statements of work, or purchase descriptions suitable for full and open competitor have not been developed or are not available.

Purchase descriptions suitable for full and open competition are not available. The information provided by Axxis is proprietary. Therefore, we are unable to develop a specific purchase description that would satisfy the Government’s requirements.

(ii) When 6.302-1 is cited for follow-on acquisitions as described in 6.302-1(a)(2)(ii), an estimate of the cost to the Government that would be duplicated and how the estimate was derived.

Not applicable.

(iii) When 6.302-2 is cited, estimated cost, or other rationale as to the extent and nature of the harm to the Government.

Not applicable.

DTP0035

Sticky Note Accepted set by DTP0035

DTP0035

Sticky Note Completed set by DTP0035

(SP0604-20-Q-0412 – AXXIS)

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition (FAR 6.303-2(b)(10)):

An Intent-to-Sole-Source Notice was posted to Beta.Sam.gov on April 3, 2020. No sources replied to the Notice. Additionally, no sources have written to express an interest.

11. Actions that may be taken to remove or overcome barriers to competition before any subsequent acquisition for the supplies or services are required (FAR 6.303-2(b)(11)):

There are no known actions that will allow DLA Energy to overcome the competition barriers for this requirement.

(SP0604-20-Q-0412 – AXXIS)

I hereby certify that the data, which forms the basis for this justification, is accurate and complete to the best of my knowledge and belief.

TASHA PIRIS

Contracting Specialist

I have reviewed and concur with this Justification.

YEVGENIY MALASHENOK

Assistant Counsel DLA Energy Counsel

I hereby certify that the data, which forms the basis for this justification, is accurate and complete and that the purchase request covers only the minimum requirements to satisfy the needs of the Government.

JAMES REED

Chief, Market Research

Approved:

MARK WARNO

Contracting Officer