JA Unusual and Compelling Urgency Extension High Purity Hydrazine_16 Dec 20 REDACTED.pdf

DEFENSE LOGISTICS AGENCY

ENERGY 8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6222

21-0005

Justification for Other than Full and Open Competition For High Purity Hydrazine (HPH)

UNDER AUTHORITY OF

10 U.S.C. §2304(c)(2) UNUSAL AND COMPELLING URGENCY

2 December 2020

1. Summary/Introduction:

The Defense Logistics Agency Energy (DLA Energy), as the Department of Defense (DOD) Integrated Materiel Manager (IMM) for Aerospace Energy products and related services required production and delivery of High Purity Hydrazine (HPH) fuel and related services to Kennedy Space Center (KSC), FL, and Vandenberg Air Force Base (VAFB), CA, for delivery to F.O.B. origin with a total value of $2,173,718.00, for contract SPE601-19-D-1526 with a period of performance of 28 November 2020 through 27 February 2021. This action was issued under the statutory authority of 10 U.S.C. §2304(c)(2) and 41 U.S.C. §3304(a)(2), unusual and compelling urgency, which precludes full and open competition, and delay in award of a contract would have resulted in serious injury to the Government.

This J&A has been approved and publicized after award, in accordance with Federal Acquisition Regulation (FAR) 6.303-1(e). Due to the unusual and compelling nature of this requirement, preparation and approval of this J&A prior to award would have unreasonably delayed the acquisition.

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

Contract SPE601-19-D-1526 was awarded with a period of performance of 28 May 2019 through 27 May 2020. The base contract included 50,000 pounds over the life of the contract. On 4 March 2020, the contract was extended by 6 months in accordance with the I0004 I209.09 EXTENSION PROVISIONS (DLA ENERGY JAN 2012) extending the contract performance end date to 27 November 2020.

During the extension period, the Arch Chemicals, Inc. production plant, located in Lake Charles, Louisiana was impacted by two major hurricanes that shutdown HPH production as well as nearly everything in Lake Charles. First, Hurricane Laura made landfill on 26 August 2020 directly impacting the City of Lake Charles and damaging Arch Chemicals Inc.’s facilities. Around mid-September, Arch Chemicals Inc. began re-energizing the plant and bringing parts of the plant back online with normal operations expected to resume early October 2020. However, on 8 October 2020, Arch Chemicals, Inc.

had to cease operations again due to a mandatory evacuation in response to Hurricane Delta that made landfall just east of Lake Charles. Arch Chemicals Inc. reported that normal operations and HPH production resumed on 14 October 2020. This nearly 2-month delay and the continued increase in demand has put the HPH supply at critical levels. The current supply of 5,000 pounds is forecasted to be exhausted within 30 days. Therefore, approval of this J&A will allow for a 3-month contract extension to http://uscode.house.gov/browse.xhtml;jsessionid=114A3287C7B3359E597506A31FC855B3

Justification for Other Than Full and Open Competition (Cont'd) (High Purity Hydrazine (HPH))

Arch Chemicals Inc. to meet an unusual and compellingly urgent need to extend the current contract to allow continued production until a long-term contract for the production of HPH can be awarded to support critical space launch activities, including thruster testing for the period of 28 November 2020 through 27 February 2021. The requirement was funded with Defense Working Capital funds.

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

This is a three (3) month requirement for the production and delivery of 15,000 pounds of High Purity Hydrazine (HPH) Propellant, NSN: 9135-01-232-1852, IAW MIL-PRF-26536G, dated 11 Jul 2017, for delivery to F.O.B origin into Government-owned containers and all related ancillary services. The contract was awarded in the amount of $2,173,718.00 with a period of performance extending through 27 February 2021.

Per FAR 2.101, High Purity Hydrazine was determined to be commercially available as it is generally offered to the public.

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

This J&A was based upon the authority of 10 U.S.C. 2304(c)(2) Unusual and Compelling Urgency, as implemented by FAR 6.302-2.

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)):

Arch Chemicals Inc. is the only vendor that produces HPH and was the only vendor who provided a response to RFP SPE601-18-R-0300 for High Purity Hydrazine. The unforeseen supply impact to HPH due to the hurricanes creating an inability to grow inventory directly threatened the ability to support space launch activities. A delay in contract award would have resulted in Aerospace Energy's failure to support space launch customers could have risked eliminating the industrial base for this critical product, for which Arch Chemicals, Inc. is the only United States supplier. This three (3) month contract award to Arch Chemicals, Inc. supports the HPH requirement and provides time to enter into a long-term contract.

Arch Chemicals, Inc. has been awarded previous contracts and has proven that they are capable of manufacturing High Purity Hydrazine. Their product has been tested several times, over the span of previous contracts, and they have always met specifications. Additionally, Arch Chemicals, Inc. has never been late on deliveries and has a satisfactory Contractor Performance Assessment Reporting System rating.

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)):

This contract action was not synopsized due to the unusual and compelling urgency in accordance with Federal Acquisition Regulation 5.202(a)(2). This requirement will be procured on an "other than full and open competition" basis to ensure the delivery of HPH from 28 November 2020 to 27 February 2021.

(High Purity Hydrazine (HPH))

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

DLA Energy-Aerospace Energy Contracting Officer ensured that the cost to the Government was fair and reasonable based on price analysis conducted in accordance with FAR 15.404-1(b)(2)(ii), comparison of proposed prices to historical prices paid, whether by the Government or other than the Government, for the same or similar items.

The Contracting Officer utilized the prior price and price analysis of the contract line items as a valid basis for comparison. The prior price was adjusted to account for materially differing terms and conditions, quantities and market and economic factors, and expert technical advice was obtained. This analysis resulted in a firm fixed price contract.

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)):

Market Research was conducted via a Request for Information (RFI), and Arch Chemicals was the only vendor to respond. Furthermore, the incumbent contractor provided the only practical means to meet the stated requirements.

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.

Not Applicable.

(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.

The effect of supply chain disruption or shutdown on future military and the National Aeronautics and Space Administration satellites and spacecraft would have been adverse and severe. All satellites and spacecraft systems unable to function without High Purity Hydrazine, to include classified assets of the National Reconnaissance Office and the mission of many other programs.

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

(High Purity Hydrazine (HPH))

Not Applicable.

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)):

As stated above, the Government has awarded this requirement to Arch Chemicals, Inc. previously before the award of this requirement. They are a critical industrial base that needs to be maintained, which will be addressed in the future.

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.

Patricia M. Dominguez Willard Ramseur II Contracting Specialist Contracting Officer

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.

Stephen B. Nichols Chief of Requirements Division

I have reviewed and concur with this Justification

Douglas G. Smith Director, Aerospace Energy

(High Purity Hydrazine (HPH))

Yev Malashenok Senior Counsel

Approved:

David Christy Advocate for Competition