JA - MSC Worldwide Lubrication Program - Redacted.pdf

ANNEX 1 – JUSTIFICATION AND APPROVAL

J&A NO. N10223R4033

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity:

Department of the Navy, Military Sealift Command (MSC) Ship Support and Services

Division (N102).

2. Description of the Action Being Approved:

The action is a Justification and Approval (J&A) to award a bridge contract on a sole source basis for MSC Worldwide Lubrication Program.

3. Description of the Supplies/Services:

MSC requires Lubricant and Engineering Support Services in support of MSC’s

Engineering Division (N7). The bridge contract would provide continuous lubricant products and services on a worldwide basis within specific time constraints defined by the contract. The Contractor provides products and services for MSC and USS Naval ships and any other Government owned or Government chartered vessels designated by MSC.

Services under the scope of this contract include engineering support services (e.g.

shipboard, technical, and training service calls). The total estimated value of the bridge is and will be funded at the task order level using FY23 Navy Working

Capital Funds (NWCF).

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

10 U.S.C § 3204(a)(1), Only One Responsible Source and No Other Supplies or Services

Will Satisfy Agency Requirements, as implemented by FAR 6.302-1(a)(2)(iii)(A) and (B).

5. Rationale Justifying Use of Cited Authority:

The above statutory authority permitting other than full and open competition applies to the subject bridge, contract action due to the fact that the current contract holder is the only responsible source able to fulfill the Command’s continuing need for the subject mission critical services beginning 27 April 2023. The incumbent contractor provides for MSC’s

Worldwide Lubrication Program that has acquired lubricants and associated services for decades under commodity contracts that provide required oils and greases. The current contract, Contract Number N3220519D7000, will expire on 26 April 2023. In order to mitigate the risk of a lapse in supply or schedule, which in turn would cause an unacceptable delay in fulfilling MSC’s mission, a sole source “bridge” contract is required to allow MSC adequate time to execute the longer-term follow-on contract action. The award of the follow-on contract action will exceed one year from the requirement generation to contract award with an anticipated award date of 26 June 2024.

The Government requires a bridge contract due to significant and unexpected delays experienced by the Government in finalizing the follow-on requirement’s statement of work, solicitation approach, and evaluation criteria for the re-compete procurement.

Substantial delays occurred due to the initial approach of transitioning the follow-on requirement to DLA. However, after twenty-four (24) months of discussions with all applicable stakeholders, a determination was made that transitioning the requirement to

DLA, was not a viable option. Other contributors to the delay in award included unprecedented personnel changes at MSC in both the Requirement’s Owner’s division

(N7), and the Contracting Office (N10), and an unforeseen and substantial increase in products required.

Furthermore, the contractual structure and periods of performance on the current contract changed expectantly when three of the four option periods were exercised early because the option ceilings were in jeopardy of being exceeded. This unanticipated and increased capacity use was caused by the increased needs of the U.S. Navy, which also orders from this contract. All of these events, absent a bridge contract, will cause an interruption in service starting 27 April 2023, and that interruption in service will, in turn, create an unacceptable delay in fulfilling the agency’s requirements.

Moreover and additionally, N7 did not forecast the systems change out while transitioning from one service provider to another. A systems change out involves substituting engine parts fleet-wide when a lubricant change occurs. This change out is required to prevent chemical incompatibility, maintain fluid integrity management, and optimize the integrity of the ship’s systems to prevent system contamination due to increased machinery wear. A system’s change out will cost which will also far exceed any savings recuperated by the Government through competition for the period of 27 April 2023 to 26 October 2024, the anticipated length of the bridge contract.

In order to mitigate the risk of an unacceptable delay in fulfilling the agency’s requirements, and in order to avoid duplicative costs that will not be recuperated by competition, the Government requires a bridge contract to allow MSC adequate time to compete and execute the follow-on contract action. Given the current circumstances, insufficient time exists to re-compete and award a new contract in sufficient time to allow for the required phase-in period to allow a new contractor to transition, obtain the required security clearances for a new contractor, and hire or transfer personnel in order to fulfill the required services. The inability to perform those functions would cause a lapse in services which, in turn, would cause an unacceptable delay in securing vital lubricant oils for both MSC’s and the Navy’s fleets, and the lack of lubricant oils will cause a failure to fulfill mission requirements. Additionally, having to potentially execute a systems change out by the end of the current contract would result in duplicative costs not recovered by competition during the anticipated duration of the bridge contract. Therefore, a bridge contract is required.

6. Description of Efforts Made to Solicit Offers from as Many Offerors as Practical:

The bridge contract, covered by this (J&A), is the result of insufficient time to award the re-compete of an existing contract prior to its expiration, due to multiple unforeseen revisions to the requirement and acquisition approach. Executing a stand-alone, sole source requirement for this bridge contract will ensure the Government does not incur unacceptable delays in executing its mission. In accordance with DFARS PGI 206.302-1, a Request for Information notice was posted to SAM.gov on 28 November 2022, and closed on 09 December 2022, with multiple responses received. However, making award prior to the expiration of the current contract is not a feasible course of action due to the anticipated need to enter discussions, the required start date of the contract, and the time needed for a phase-in period. This J&A is solely in support of a short-term bridge duration consisting of one a (1) year Base Period, and one (1) six (6) month Option Period, which is required to prevent a lapse in mission critical services, which would in turn cause an unacceptable delay in fulfilling MSC’s mission. Efforts were not made to solicit offers from multiple sources for this action due to the limited timeframe to get a bridge awarded, and the amount of time, costs, and physical engine part replacement efforts required to transition to a new contractor. However, the follow-on requirement will be available for competition as a result of the additional time afforded by this bridge action. The follow-on, Solicitation N3220523R4140 will be made available through SAM.gov.

7. Determination of Fair and Reasonable Cost:

The Contracting Officer has determined the anticipated costs to the Government for the supplies and services covered by this J&A, will be fair and reasonable.

8. Actions to Remove Barriers to Future Competition:

This J&A is solely in support of a short-term bridge action. It is anticipated that future requirements will be awarded on a competitive basis.

TECHNICAL AND REQUIREMENTS CERTIFICATION

I certify that the facts and representations under my cognizance, which are included in this justification and which form a basis for this justification are complete and accurate.

Name (Printed) Phone No. Date

LEGAL SUFFICIENCY REVIEW

I have reviewed this justification and it is deemed to be legally sufficient.

CONTRACTING OFFICER CERTIFICATION

I certify that this justification is accurate and complete to the best of my knowledge and belief.

HEAD OF THE CONTRACTING AGENCY APPROVAL

Upon the basis of the above justification, I hereby approve, as Head of the Contracting Agency, the solicitation of the proposed procurement(s) described herein using other than full and open competition, pursuant to the authority of 10 U.S.C. 2304(c)(1).