JOFOC Currency Inks FINAL signed (003) - redacted.pdf

Version 11/01/21

BEP-OCPOFORM-FY22-01

Source Selection Information - See FAR 2.101 and 3.104

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. CONTRACTING ACTIVITY:

U.S. Department of the Treasury Bureau of Engraving and Printing (BEP) Office of the Chief Procurement Officer (OCPO) 14th and C Streets, SW Washington, DC 20228 Policy Tracking No. BEP-OCPO-FY22 JOFOC-0001

2. THE DESCRIPTION OF ACTION:

The purpose of this sole source justification is to obtain approval to award a Firm Fixed Price Indefinite Delivery, Indefinite-Quantity (IDIQ) contract to SICPA Securink, Inc. (SICPA) for the purchase of the items described in section 3 below. The need date for these items is July 23, 2022. The period of performance will be for five years, consisting of five (5) one year ordering periods. The estimated contract ceiling is $566,257,002.00.

3. DESCRIPTION OF SUPPLIES/SERVICES:

The BEP has a need to acquire specialized currency and other security inks (herein inks) that are manufactured to meet BEP specifications for use in the manufacture of U.S. currency banknotes and other U.S. security products at the BEP’s District Currency Facility (DCF) and Western Currency Facilities (WCF). BEP will also procure test inks for use in test printing related to supplier change management requests and continuous improvement efforts of the U.S. Currency Program.

The inks to be purchased under this effort include but are not limited to: Offset Flexographic Inks, IR- Opaque Green Intaglio Ink, IR-Transparent Green Intaglio Ink, Magnetic Black Intaglio Ink, Non-magnetic Black Intaglio Ink, Type I (Non-NXG $100) Color Shifting Intaglio Inks, Metallic Intaglio Inks, Passport Offset Inks, Passport Color Shifting Intaglio ink, and Passport Non-color Shifting Intaglio Inks.

4. AUTHORITY CITED:

41 U.S.C. § 3304(a)(1) as implemented by FAR 6.302-1, "Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements."

DEPARTMENT OF THE TREASURY

BUREAU OF ENGRAVING AND PRINTING

WASHINGTON, D.C. 20228

5. APPLICABILITY OF AUTHORITY CITED:

As provided by 41 U.S.C. 3304 (a)(1), and as implemented by FAR 6.302-1(a)(2), the proposed Contractor is the “Only one responsible source and no other supplies or services will satisfy the agency requirements.” This requirement can only be met by SICPA.

6. EFFORTS TO OBTAIN COMPETITION:

Sources sought notice 2031ZA20N00024 titled “Production Development of Currency Production Materials,” was posted to beta.SAM.gov from February 03, 2020 through February 24, 2021. Sun Luminescence LSCS (Sun) was the only supplier who responded. Testing of Sun samples, submitted in response to the sources sought notice, demonstrated that they did not meet the color and spectra requirements for all Offset and Intaglio inks required for use.

A sources sought notice was posted in beta.SAM.gov under 2031ZA21B00008 “Currency and Other Security Inks” on April 12, 2021 with responses due April 23, 2021. Sun Luminescence LSCS (Sun) was the only supplier who responded. Although the supplier indicated that they are capable to supply all inks, the Offset and Intaglio ink samples tested under 2031ZA20N00024 did not meet the requirements and also the supplier does not have the current capability to produce the materials in the United States.

Further details on market research efforts made to obtain competition are included in section 8 below.

7. FAIR AND REASONABLE COSTS:

As directed in FAR Part 12.209, Determination of Price Reasonableness for Commercial items, the BEP Contracting Officer will determine the price to be fair and reasonable in accordance with FAR Part 15.404-1(b), Price analysis techniques. Proposed prices will be compared against historical prices paid which were found fair and reasonable on previous purchases for similar requirements as well as a comparison of proposed prices with the Independent Government Cost Estimate.

8. MARKET RESEARCH:

The BEP currently uses more than 34 different inks in the manufacture of US Currency, including 22 different colors of offset ink. The BEP requires specific ink types and colors for printing currency and other security documents to meet customer requirements. Among the several properties that have been specified for each of these inks in an effort to ensure their fitness for use in currency manufacture, the most significant of these are the ink color (in order to ensure a consistent visual appearance) and the spectral response (used to enable automated validation and acceptance in commerce). A change in the spectral response of any ink could lead to currency being rejected in commerce by automated validation and acceptance machines, which could cost the industry several hundred million dollars in updating and reprogramming to address. While matching the color of over 30 inks would be very challenging even for an experienced ink manufacturer; matching spectral response requires a level of technology and experience that very few ink manufacturers have demonstrated.

The incumbent on the current ink contract (2031ZA17D00001), SICPA, has almost exclusively provided inks to the BEP for more than a decade. In that time, the BEP has maintained an open sources sought notice in order to obtain market research on the availability of currency production materials, including inks, from other providers. In 2019, the BEP was approached by Sun as a potential provider for currency inks under the sources sought notices. Market research data was obtained under sources sought notices 2031ZA18N00024, 2031ZA20N00024 (Production Development of Currency Production Materials) and 2031ZA21B00008 (Currency and Other Security Inks). As part of the market research initiative, Sun submitted over 60 ink samples of all ink types, including a small subset of offset inks. Sun was able to achieve acceptable spectral matches on three of the four letterpress inks and two of the four intaglio inks, after several iterations. Sun was only able to achieve acceptable spectral matches for two of eight offset inks during this program, and was unable to match spectra for metallic and color-shifting inks, although the visual appearance and color shift of the color-shifting ink was quite similar to that currently used in production.

A print trial was then conducted using 4 offset and 4 intaglio inks from Sun. The study demonstrated that the Sun inks were able to print on BEP presses; however, the intaglio color and print quality was deemed unsatisfactory in meeting BEP requirements. The study resulted in visual differences between some of the Sun offset inks and BEP Ink requirement standards. The study results and differences were documented by the BEP.

Ultimately, the conclusion of the market research was that Sun is currently unable to meet the color, spectra, and print quality required for all Offset and Intaglio inks used in currency production. As the materials provided do not meet laboratory specifications, an extended operational test and evaluation of the supplier's inks would be superfluous with a significant cost to the Government. Additionally, the supplier did not demonstrate the capability to produce materials within the United States. The market research indicates only the incumbent supplier (SICPA) currently has the capability to meet all specifications for the materials listed in this requirement; thus, a Sole-source Award under Other Than Full and Open Competition is appropriate.

9. OTHER FACTS:

Examples of other facts include, but are not limited to: (i) the previous solicitation was offered competitively but had only one offeror, SICPA, the incumbent; (ii) for over 20 years SICPA has provided the majority of currency inks to the BEP; (iii) extrapolating the results of the print trial conducted as part of market research it has been concluded that extended evaluation and testing would support the conclusion that SICPA is the only viable source for these supplies. The cost of conducting such additional testing would be in excess of $5 million dollars and would negatively impact the BEP’s ability to utilize press time to meet its mission.

10. INTERESTED SOURCES:

SICPA is the only known source available and qualified to fill this Government requirement. Sun was interested in competing for this requirement, however their product samples were tested and are unable to meet the BEP’s requirements.

11. STEPS TO FOSTER COMPETITION:

The Government continues to seek viable alternate suppliers to fulfill this requirement. To this end, the Government intends to provide one or more awards to another supplier for testing and development of security inks. After collaborative development with a capable manufacturer, it is likely they would be able to meet the Government's specifications, potentially allowing competition in the future.

REVIEW AND APPROVAL (ALL JUSTIFICATIONS, ALL LEVELS)

TECHNICAL/REQUIREMENTS PERSONNEL CERTIFICATION (ALL LEVELS):

I certify that the supporting data under my cognizance which is included in this justification is accurate and complete to the best of my knowledge and belief.

SIGNATURE: Signed by: f486bbf6-8841-4ff1-973c-3fc8c8a84960 DATE: 23/NOV/2021 NAME: _Joseph Piekarski _ TITLE: _COR/Materials Program Manager

CONTRACTING OFFICER APPROVAL

Based on the foregoing, I approve this justification and provided that the services and supplies herein described have otherwise been authorized for acquisition. I certify that the supporting data under my cognizance which is included in this justification is accurate and complete to the best of my knowledge and belief.

SIGNATURE:

NAME:

TITLE:

DATE:

REVIEWER (JUSTIFICATIONS >750K>)

ADVOCATE FOR COMPETITION (if >$750,000 and <=$15 million) (Contracting Activity).

I have reviewed this justification for other than full and open competition and find it to be accurate and complete to the best of my knowledge and belief.

SIGNATURE:

NAME: Steven A. Fisher TITLE: Chief Financial Officer

HEAD OF THE PROCURING ACTIVITY OR AUTHORIZED DESIGNEE (if >$15 million and <=$75 million) (Contracting Activity).

I have reviewed this justification for other than full and open competition and find it to be accurate and complete to the best of my knowledge and belief.

Digitally signed by Patricia M. Patricia M. Greiner Greiner

SIGNATURE: Date: 2021.11.24 14:44:09 -05'00' DATE:

NAME: Patricia M. Greiner TITLE: Deputy Director, Chief Administrative Officer

Joseph S.

Pishioneri

Digitally signed by Joseph S. Pishioneri Date: 2021.11.23 14:25:30 -05'00'

Steven A. Fisher Digitally signed by Steven A. Fisher Date: 2021.11.24 14:38:20 -05'00'

APPROVER:

SENIOR PROCUREMENT EXECUTIVE (if $75 million and above) (Contracting Activity).

I have reviewed this justification for other than full and open competition and find it to be accurate and complete to the best of my knowledge and belief. I hereby approve this justification based on the authority specified in para 4.

SIGNATURE: _

NAME: Nicole Evans TITLE: Senior Procurement Executive (SPE)

Digitally signed by Nicole Evans Date: 2021.12.07 09:23:36 -05'00'