JA_Crosstex_Redacted.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition

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Was a J&A approved for the preceding acquisition? Yes No

Is this a new or amended J&A Document? New Amended ( Prior to Award Only! )

Is this a Bridge Action as defined at AFFARS 5302.101? Yes No

Dollar Value of this Acquisition: < $700K > $700K and < $13.5M > $13.5M and < $93M > $93M

Contracting Activity: Air Force Life Cycle Management Center Agile Combat Support Directorate (AFLCMC/WN)

Purchase Request (if available): F4FDAY0191A102 / FA8626-20-C-0001

Program / Project (and PE, if applicable): Capital Expansion for Surgical Mask Production

Program Type (PEO, Enterprise, of Operational): COVID-19 DoD Joint Acquisition Task Force (JATF)

Authority: 6.302-2 – 10 USC 2304(c)(2), Unusual and Compelling Urgency

Estimated Contract Cost (including options): $ 3,500,000 J&A Type: Class Individual

COORDINATION (AFFARS 5306.304(a) )

Date

14 Jul 2020

Project Lead / Program Mgr / Requiring Activity

Signature

Date

Contracting Officer

Chief of the Contracting Office

15 Jul 2020

Local Legal Reviewer

30 Jul 2020

Procurement Analyst

30 Jul 2020

Chief of the Contracting Office (COCO)

31 Jul 2020

Competition Advocate

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APPROVAL (AFFARS 5306.304(a) )

Date Senior Contracting Official (SCO)

THOMAS D. ROBINSON, SES, DAF

AFLCMC/PK /

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I. Agency and Contracting Activity.

Department of the Air Force, Air Force Materiel Command (AFMC), Air Force Life Cycle Management Center Agile Combat Support Directorate (AFLCMC/WN), Bldg 16, Area B, 2275 D Street, WPAFB, OH 45433-7239

II. Nature and/or description of the action being approved.

This individual Justification and Approval (J&A) is for the award of a new contract to Crosstex International, Inc.

(hereafter referred to as Crosstex) to expedite and expand the domestic industrial base to ensure a sustainable supply chain is able to provide U.S. FDA 510(k) cleared surgical masks. Surgical masks have been identified as a critical item of PPE and have been depleted within the existing Strategic National Stockpile. Much of the surgical mask supply is sourced from overseas factories in Asia and specifically China. This creates a vulnerable supply chain that is dependent on foreign sources who may not export masks in times of crisis. The COVID-19 Joint Acquisition Task Force (JATF) expects this supply chain problem to persist as states reopen and the demand for respirators and masks increases in response. Additionally, the national demand from industries outside of healthcare will further strain the supply chain as respirators and surgical masks will be required for workers in food processing and other industrial applications.

Crosstex has provided a solution to expand their capacity to increase the U.S. FDA 510(k) cleared surgical mask production by at least 100 million masks annually to support a total production of surgical masks per year by November 2021. The production expansion will be accomplished in Crosstex's up-state New York facilities. The contract for this effort was awarded 17 July 2020 as an Undefinitized Contract Action (UCA) with an NTE of $3.5M. It is a commercial, FAR Part 12 acquisition employing a Firm-Fixed Price contract type. Definitization is planned to be complete within 180 days from contract award.

In addition, this contract will have a 70-week Period of Performance (PoP). In accordance with AFFARS 5306.302-2(d)(1) (ii), the authority for the Air Force to make the determination that exceptional circumstances apply to allow a POP that exceeds one year is the SCO or the J&A approval authority, whichever is higher. For this dollar value, the J&A approval authority is normally the Competition Advocate. Therefore, in order to comply with AFFARS 6.302-2(d)(1)(ii), the approval authority for this J&A has been elevated to the SCO. The exceptional circumstances are due to Crosstex's solution to increase their capacity by installing new mask production lines. In order to maximize cost quantity discounts, all lines needed to be ordered together and could not be divided into separate contracts. However, the installation of the lines has to be handled consecutively to ensure safe execution which extends the PoP past one year.

III. Description of supplies/services required to meet agency needs (including the estimated value).

The Agile Combat Support (ACS) Directorate anticipates a contract to Crosstex to procure and implement the necessary equipment purchases to expedite existing delivery schedule of U.S. FDA 510(k) cleared surgical masks. In order to increase their production capacity, Crosstex has proposed that they will install mask production lines in their facilities in up-state New York. As a result, Crosstex shall increase its existing domestic surgical mask production by at least 100 million masks annually. Crosstex shall be responsible for securing FDA approval on the expanded production capability and shall ensure planning, execution, and follow-through regarding all necessary certification of the proposed facility and equipment upgrades to comply with the appropriate certifications and local, state, and federal regulations.

Crosstex has obtained a quote from the fabricator of its existing mask machine lines for $ for the delivery of machine lines. The fabricator has estimated for delivery of the first incremental machine line, with additional lines delivered every thereafter. This manufacturing growth will significantly improve the United States' production footprint for critical surgical masks. To fully execute the entire production capacity expansion will require support of the U.S. Government to provide an additional $ investment. Without the issuance of the UCA, significant acquisition delays will severely hamper the manufacturing capabilities needed to reduce the current strain on the limited surgical masks available.

The requested $3.5M J&A ceiling is based on an 8 July 2020 Not-To-Exceed (NTE) quote submitted by Crosstex in response to a Request for Proposal (RFP) and Statement of Objectives (SOO) released by the ACS Directorate on 6 July

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2020. The Department of Health and Human Services (DHHS) is providing Coronavirus Aid, Relief, and Economic Security (CARES) Act funds through the Economy Act to fund this effort.

IV. Statutory authority permitting other than full and open competition.

The contracting actions covered by this Individual J&A falls within the authority found under 10 U.S.C. 2304(c)(2), as implemented by Federal Acquisition Regulation (FAR) 6.302-2(a)(2) - Unusual and Compelling Urgency.

V. Demonstration that the contractor's unique qualifications or the nature of the acquisition requires use of the authority cited above (applicability of authority).

On 13 March 2020, the President declared a national emergency, under section 501(b) of the Stafford Disaster Relief and Emergency Assistance Act 42 USC 5121-5207 (the “Stafford Act”), recognizing the threat that the novel (new) coronavirus known as SARS-CoV-2 poses to national security. On 25 March 2020, Under Secretary of Defense for Acquisition and Sustainment Ms. Ellen Lord established the COVID-19 Joint Acquisition Task Force (JATF). Led by the Principal Deputy Assistant Secretary of Defense, Acquisition Enablers, Ms. Stacy Cummings, the JATF team includes acquisition professionals from the Military Departments and DoD Agencies, and is synchronizing and supporting the acquisition execution of DoD's COVID-19 response to the inter-agency (Federal Emergency Management Agency (FEMA) and DHHS) for medical resources. On 27 April 2020, the Head of the Contracting Agency for DHHS, Assistant Secretary for Preparedness Response (ASPR), signed a Determination and Findings in accordance with the authority of the Economy Act (31 U.S.C. 1535), as implemented in subpart 17.5 of the Federal Acquisition Regulation (FAR), on behalf of the requesting agency, DHHS, to enter into an inter-agency agreement for acquisition assistance with the servicing agency, the Department of Defense (DoD), United States Air Force (USAF). In accordance with the Economy Act, DHHS is in need of urgent acquisition assistance from USAF that only USAF can provide within the time-frame required. The global pandemic drives the need for DHHS to rapidly support, maintain, and expand critical US industrial capacity for medical supplies and services. The DoD, through the Joint Acquisition Task Force, has significant expertise, robust capability, and extensive processes in place to acquire supplies and services necessary to expand US industrial production in response to the COVID-19 pandemic.

Public health requires the immediate increase of production capability to meet critical inventory and production gaps for cleared surgical masks, and any delay in award of a contract would result in serious injury to the Government. Current U.S. production capacity of surgical masks and other PPE is so inadequate that on 23 Mar 2020, the President issued Executive Order 13910 on Preventing Hoarding of Health and Medical Resources to Respond to the Spread of COVID-19, delegating to DHHS the authority to enforce. Failure to immediately increase production capability will deplete surgical mask inventories, leaving the government and the nation critically unprepared for this and the next pandemic emergency. The US Government is pursuing contracts with several domestic manufacturers of surgical masks, but does not have time to formally compete the requirement due to the emergency circumstances. In the case of the National Response to the Spread of COVID-19, the Contracting Officer has determined that Crosstex is a responsible domestic source for producing the required health and medical resources, specifically U.S. FDA 510(k) cleared surgical masks, suitable to provide the needed response to the spread of COVID-19.

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was or will be publicized as required by subpart 5.2 and, if not, which exception under

FAR 5.202 applies.

In accordance with FAR 5.202 (a)(2), the contracting officer did not submit the notice required by 5.201 because the contracting officer has determined that the proposed contract action is made under the conditions described in 6.302-2 (or, for purchases conducted using simplified acquisition procedures, if unusual and compelling urgency precludes competition to the maximum extent practicable) and the Government would have been seriously injured if the agency complies with the time periods specified in 5.203.

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VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

Crosstex has estimated the effort to expand the capacity of U.S. FDA 510(k) cleared surgical masks production can be accomplished under a USG investment of $ based on a contractor-provided spend plan comprised largely of machinery and equipment purchases. Although the commercial exemption to requesting certified cost or pricing data applies to this effort, the Contracting Officer will utilize various price analysis techniques to determine the definitized contract price is fair and reasonable. Since there are multiple domestic manufacturers of surgical masks using similar machinery and production equipment, the Contracting Officer anticipates having the ability to make comparisons to published price lists for the equipment being purchased by Crosstex under this contract. Because the effort will be issued as a UCA and will require definitization, the Contracting Officer will require actual incurred costs in the submittal of the qualifying proposal. The Government will conduct a technical evaluation/analysis of the proposal to assess the materials and labor hours proposed. Further, if more information is necessary to make a fair and reasonable determination, the Contracting Officer will request other than certified cost or pricing data from the contractor in accordance with FAR 15.403-3.

VIII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

The Air Force Research Laboratory (AFRL) issued a Hybrid Open Funding Opportunity Announcement (FOA) to allow industry to self-identify to the Government a short-fall in various critical industrial bases, to include U.S. FDA 510(k) cleared surgical mask production. In addition, through employment of the Economy Act, DHHS requested the USAF award a contract to Crosstex to expand the production capacity of U.S. FDA 510(k) cleared surgical masks.

DHHS has awarded a number of supply contracts for surgical masks, but has concluded that the domestic supply of these masks is insufficient to meet the needs of the nation to combat COVID 19. Through the Economy Act, DHHS seeks to "rapidly support, maintain, and expand critical US industrial capacity for medical supplies and services."

Acting on DHHS's behalf, the Air Force has awarded several FAR Part 12 commercial contracts for equipment purchases and equipment conversions to expand the surgical masks manufacturing capability of domestic suppliers.

DHHS will continue to purchase surgical masks through existing contracts; the Economy Act transactions are intended to accelerate respirator deliveries under these existing DHHS contracts, not replace them.

IX. Any other facts supporting the use of Other Than Full and Open Competition.

None.

X. List of any sources that expressed, in writing, an interest in the acquisition.

See Section VIII above.

XI. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before making subsequent acquisitions for the supplies or services required.

In the absence of an emergency situation, such as the COVID-19 pandemic, the Air Force will publicize similar contract actions to increase competition, broaden industry participants, and assist small business concerns.

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

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XIII. Certification by the technical/requirements personnel.

As evidenced by my (our) signature(s) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.