JA ESAI FY21 redacted.pdf

DEFENSE LOGISTICS AGENCY

ENERGY

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6222

Feb 19, 2021 J&A Tracking Number: 21-0011

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 ESAI Energy, LLC (ESAI) under solicitation number SP0604-21-Q-0412. This contract will support DLA Energy-Market Research. The subscription covers a 12-month period starting 04/01/2021 through 03/31/2022. The estimated value for the yearly subscription is $7,000. Authority for other than full and open competition is provided in 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 awarded is a contract to ESAI for detailed energy market analysis. ESAI provides proprietary information that DLA Energy-Market Research requires in order to assist in budgetary planning and development. This action will use FY21 funding.

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

The ESAI publication provides market research and strategic advisory services including detailed analysis of the energy market and explanation of future market trends. Over the last 30 years, ESAI’s publication has developed a unique framework that helps interpret and prioritize empirical market data and industry information using a broad database. DLA Energy Market Research uses this information to provide written analysis for various energy programs, particularly the bulk fuels program, to maintain best procurement practices and to ensure DLA Energy’s business practices are consistent with industry standards. In addition, the indices from the publication are used in a number of fixed priced contracts with economic price adjustments. Currently, ESAI is the only source available who can provide the comprehensive analysis and articles that meets DLA Energy Market Research’s needs.

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. In accordance with FAR 6.302-1(a)(2), ESAI is the only source that can satisfy agency requirements. “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 supplies or services will satisfy agency requirements, full and open competition need not be provided for.” FAR 6.302-1(a)(2).

Justification for Other Than Full and Open Competition (Cont’d) ( SP0604-21-Q-0412-ESAI)

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)):

The publication is exclusive to ESAI therefore they are the only source able to provide the information DLA Energy requires. Subscription to the publication also includes website access and access to ESAI analysts for clarification. This publication provides articles, Intelligence Briefing, and Occasional Memos that are not available elsewhere. ESAI provides unique analysis for world crude and refined product markets that includes specific forecasted trends that DLA Energy needs in order to assist DLA Energy- Finance in budgetary planning. DLA Energy Market Research uses the ESAI publication to evaluate trends in fuels markets that affect the Global Fuels Outlook, Global Refining Outlook, Global Crude Oil Outlook, CIS Watch, and China Watch. This analysis is included in the forecasts DLA Energy-Finance submits to DLA Finance Headquarters and, in turn, to the Office of the Secretary of Defense. Department of Defense then allocates resources based, in part, on these forecasts. Additionally, DLA Energy uses the ESAI analysis to assist in determining standard prices DLA Energy charges its customers, the Army, Navy and Air Force.

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 February 19, 2021, DLA Energy-Installation Energy posted an Intent-to-Sole-Source notice on FedBizOpps that closed on March 6, 2021. 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 finds that the proposed price is fair and reasonable using the techniques in FAR 15.404-1. 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.”

The price was determined fair and reasonable when compared to competitive published pricing. ESAI provided DLA Energy with published pricing information on the special pricing offered to DLA Energy. The standard pricing for the same subscription package costs $31,000.00. The discounted price for DLA Energy for the same 12-month subscription is $7,000.00. This results in an overall savings of $24,000.00 and equates to approximately 77.4% less than what a standard user would pay for the same 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 and determined that ESAI was the only source that provides the forecast and trending data that encompasses all of the fuel markets that DLA Energy services in one subscription. While there are other sources that provide forecast information on fuel markets, it would require multiple subscriptions and result in a higher cost to the government. Additionally, an Intent-to- Sole-Source notice was posted on Beta.Sam.Gov; however, since ESAI is the exclusive provider of the required publications, there were no expectations that the notice would yield any additional sources.

(Cont’d) ( SP0604-21-Q-0412-ESAI)

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 competition have not been developed or are not available.

ESAI’s information is proprietary. Therefore, a specific purchase description suitable for full and open competition is not available 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.

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

No sources replied to the Intent-to-Sole-Source Notice posted to Beta.Sam.Gov. Additionally, to date, no potential sources have expressed an interest in writing.

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)):

DLA Energy contracts with many main stream energy market publications like ESAI to enable the use of various indices for fixed price contracts with economic price adjustment purposes as governed by FAR

16.203. ESAI is the only producer of the publication. There are no known actions that will allow DLA Energy to overcome the competition barriers for this requirement.

(Cont’d) ( SP0604-21-Q-0412-ESAI)

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.

ALECIA WEST

Contracting Specialist

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.

PAUL TRAMPE

Economist

Approved:

MARK WARNO

Contracting Officer