JA_SPRDL1-20-R-0078_Redacted.pdf

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Agency: The Defense Logistics Agency (DLA) is the contracting activity for this action.

2. Description of Action: This action will result in a new five (5) year, firm-fixed price Indefinite Delivery Indefinite Quantity (IDIQ) contract, for the Water Quality Assessment Set – Purification (WQAS-P), used with the Army Lightweight Water Purifier (LWP) National Stock Number. Competition will be limited to Highland Engineering, Inc.

(CAGE: 0AK83). Army Working Capital Funds (AWCF) will be used for this procurement.

3. Description of Supplies/Services: The Water Quality Assessment Set – Purification IDIQ will have a Minimum Guaranteed Quantity of 9 each, and an Estimated Maximum Quantity of 150 each. The estimated maximum value of the 5 year IDIQ is $660,750.00.

NOUN: Water Quality Assessment Set – Purification (WQAS-P)

a. NSN: 6630-01-477-2395

b. P/N: 701-WQAS-P

c. Min Quantity: 9 Each

d. Max Quantity: 150 Each

e. Estimated Unit Price: $4,405.00

f. Estimated Min Value: $39,645.00

g. Estimated Max Value: $660,750.00

h. PRON: EH9L0510EH

The WQAS-P is a one person portable suitcase-set containing equipment for testing and monitoring water quality. The set is self-contained in a watertight, airtight, dustproof, crush resistant case containing Commercial-Off-The-Shelf (COTS) components capable of measuring the temperature, chlorine, pH, turbidity, and total dissolved solids (TDS), concentration of the water being tested and monitored. The WAQS-P is used to verify the water produced from the LWP meets the Tri-Service Standards listed in the Technical Bulletin Medical 577 (TBMED 577).

The Acquisition Method Code (AMC) for this part is 3: Acquire, for the second or subsequent time, directly from the actual manufacturer.

The Acquisition Method Suffix Code (AMSC) is H: The Government physically does not have in its possession sufficient, accurate, or legible data to purchase this part from other than the current source(s).

4. Authority Cited: The statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1, "Only One Responsible Source and no other supplies or services will satisfy requirements.

Substantial duplication of cost to the Government that is not expected to be recovered through competition”

5. Reason for Authority Cited: A Commercial Item Description (CID) is being used in lieu of a TDP. The TDP of the individual materials and components selected for use in the set are the responsibility of the respective manufacturers, with the exception of Water Testing Kit, Chemical Agent, M272, to be provided by the Government. The packaging configuration was designed by the contractor to meet unique military environmental and human factors requirements.

a. Limitations to developing a Competitive Package (R&D Effort) or Procuring Proprietary Data or Qualifying Additional Sources: Cost

Feasibility in Acquiring Data Rights:

If the Government bought the rights to all items and packaging drawings for each commercially available product in the WQAS-P and competitively procured components, packaging, and packaging services, there is no confidence that it would reduce the unit cost since the previous price under contract SPRDL1-12-P- 0147 is based on older equipment and subject to market prices. In addition, the Government would incur a yearly maintenance of the TDP for obsolescence issues concerning COTS items and consumables. Purchasing the technical design from the current contractor would also add to costs, which upon product improvements would require technical maintenance and updates at added costs.

Limitations to reverse engineering:

Reverse engineering of components and packaging drawings would still be specific to three commercial meters that could not be substituted without incurring the same issues with qualifying new sources. The Government would incur a yearly maintenance of the TDP for obsolescence issues concerning COTS items and consumables. As an assemblage of COTS components, the current unit price would not significantly decrease enough to recover the costs with the low quantity needed.

Since this is fielded equipment, OMA-D funds would be required for these efforts and these types of funds are currently insufficient for this level of effort.

Due to the limited number of items for this procurement, it would be unlikely to reach a breakeven point or an ROI based on reverse engineering. Recent, closely related reverse engineering project involving both hardware and electronics were used to estimate that the cost for the Ultrameter, Turbidity Meter, and Chlorine Meter would be from $1,275,000 to $1,950,000 in order to reach a level 3 TDP. The most conservative estimate based on the lower cost and full amount of purchase on this contract, the ROI would not be reached, as the cost for 150 units is significantly less than the reverse engineering effort ($441,954.00 v. $1,275,000). To reach an ROI, it would require static costs and ordering 50 units a year for the next 14 years. The technology is expected to be undated every 7-10 years preventing a payback.

Additionally, once the COTS items are no longer supported, additional costs will be incurred to reverse engineer the replacement items and to maintain a TDP with current technologies.

6. Efforts to Obtain Competition:

a. The present WQAS-P set was procured from Highland Engineering Inc. The initial Request for Proposal (RFP) for this action, issued by DLA Land Warren closed on October 31, 2018 without any bids being submitted. The RFP was amended to include Highland Engineering Inc.’s WQAS-P part number. This resulted in the submission of a single bid, from Highland Engineering, and the Government awarded the contract to Highland on May 10th, 2019.

In support of the current procurement, the Water Equipment Branch performed a search to identify previous contractors that provided the WQAS-P to the Government prior to Highland. The results showed the previous supplier, Integrated Information Technology Corp (IITC) was bought out by PEC Solutions Inc. Efforts to reach both IITC and PEC Solutions resulted in finding the same web address (www.pec.com).

The web address did not provide additional contact information for either company.

The PEC Solutions Inc. phone information listed was disconnected.

Per Section 8, the Government posted a sources sought notice. In an attempt to increase the number of suppliers, the Water Equipment Branch sent the announcement information to Atlantic Diver’s Supply (ADS) and Atlas Scientific on January 17th, 2020 and January 21, 2020 respectively. ADS is a coordinator of purchases and Atlas Scientific is a sensor company, both of which would have the prerequisite knowledge and ability to become a qualified vendor, however, neither vendor responded to the sources sought notice.

No vendors are in the process of being qualified at this time, nor will be prior to the contract award due to funding, time constraints and the lack of responses to the sources sought posting. Based on the detailed rationale provided in paragraph 5, the Government has no plans to obtain additional competition for this proposed contractual action.

b. Subcontracting Competition: As the proposed contract does not exceed the required threshold, it will not contain FAR clause 52.244-5, Competition in Subcontracting, to ensure the prime contractor competitively subcontracts efforts to the maximum extent practicable.

http://www.pec.com/

7. Actions to Increase Competition: As stated in Section 5, there is no complete TDP available to support a competitive procurement. Due to the costs associated with developing a competitive TDP that cannot be recovered, the Government is not actively pursuing the development of a competitive TDP for future procurements.

8. Market Research: Online internet market research was conducted by Combat Capabilities Development Command’s Ground Vehicle Systems Center between August 5, 2019 and September 16, 2019. No other company, other than Highland Engineering Inc., was found to provide a WQAS-P set that meets the exact form, fit and function of the previously procured WQAS-P sets. Additionally, a search by the NSN 6630-01-477- 2395 and part numbers 02524-001, 701-WQAS-P, and IITC-WQAS/P-401 failed to identify any additional sources of supply for the WQAS-P. Commercial and military searches returned vendors Watec, Inc, Highland Engineering Inc, and Integrated Information Technology Corporation (IITC). Both Watec and IITC were unreachable via web search or by phone contact, and no email contact information was available. All previous part numbers were used in efforts to gain additional completion.

Between August 8, 2019 and September 19, 2019 the Water Equipment Branch conducted phone calls to contact the listed “possible sources of products” from the

COMMERCIAL ITEM DESCRIPTION WATER QUALITY ANALYSIS SET:

PURIFICATION (WQAS - P) A-A-59338A which yielded no potential sources. Vendors expressed interest in supplying individual components of the WQAS-P, but no responses were received relating to providing the fully assembled kit. In addition to a sources sought notice being posted to Beta.Sam.Gov, ADS, Inc. and Atlas Scientific, LLC were informed of the solicitation in efforts to obtain additional competition, however, neither company provided a response to the sources sought request.

A sources sought synopsis was posted to Beta.Sam.Gov on 13 January 2020.

Item Name: Water Quality Analysis Set

NSN: 6630-01-477-2395

Part Number: 701-WQAS-P Quantity: 40 MIN/ 150 MAX End Item: Reverse Osmosis Water Purification Unit

No vendors responded to the beta.SAM.gov listing as interested in becoming a source.

Note: Embed Sources Sought notification

Sources Sough Notice 2020 077

9. Interested Sources: To date, no additional sources have replied to the Sources Sought Notice above, expressed interest in this item, or to become qualified source(s) to produce this item. Interested contractors may seek qualification through the Source Approval Program with the Competition Management Office.

10. Other Facts:

Procurement History:

Purchase Order, SPRDL1-19-P-0197, was awarded on 10 May 2019 to Highland Engineering, Inc. for the procurement of 42 each Water Quality Analysis Set. The solicitation was solicited as Other Than Full and Open Competition as this procurement contained restricted part numbers and competitive technical data was not available. The total value of the purchase order did not exceed the simplified acquisition threshold, therefore a J&A was not required.

Purchase Order, SPRDL1-12-P-0147, was awarded on 22 June 2012 to Avaya Government Solutions Inc. for the procurement of 50 each Water Quality Analysis Set. The solicitation was solicited as Other Than Full and Open Competition as this procurement was an urgent buy and contained an urgency statement. The total value of the purchase order did not exceed the simplified acquisition threshold, therefore a J&A was not provided.

Five Year Long Term Contract, W56HZV-07-D-0109 was awarded on 07 March 2007 to Nortel Government Solutions Inc. for the procurement of Water Quality Analysis Sets. No additional information was obtained pertaining to the method of soliciting or the J&A as this procurement was made through another command.

11. Technical Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

Name: Bobby Shalewitz Date: 13 Feb 2020 Title: Branch Chief, Water Equipment Branch Signature: //signed//

Bobby Shalewitz

12. Requirement Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

Name: Jenalyn Hilson Date: 13 Feb 2020

Title: Item Manager Signature: //s// Jenalyn Hilson

Name: Darcy S Bell Date: 13 Feb 2020 Title: Water Team Chief Signature: //s//Darcy Bell

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost for this contract action will be fair and reasonable. This determination will be based on appropriate forms of cost and/or price analysis. Negotiations will be conducted as necessary. The Contractor will not be required to submit certified cost and pricing data based on the estimated dollar value and because this is a commercial item.

Name: Timothy A. Nichols Date: 2/20/2020 Title: Contracting Officer Signature: //TAN//

14. Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Name: Timothy A. Nichols Date: 2/20/2020 Title: Contracting Officer Signature: //TAN//

15. Legal Concurrence:

Concur: // Darin R. Morency // Date: 02/27/2020