Justification for Other than Full and Open Competition (JOFOC) redacted 80JSC021P0024.pdf

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Johnson Space Center

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

(JOFOC)

For 80JSC021Q0006/Lithium-Ion High Power Cell Design

1. Federal Acquisition Regulation (FAR) 6.303-2(b)(1) – Identification of the agency and the contracting activity, and specific identification of the document as a “Justification for other than full and open competition.”

This document is a justification for other than full and open competition prepared by

National Aeronautics and Space Administration (NASA) Johnson Space Center:

The procuring agency is the National Aeronautics and Space Administration (NASA) and the contracting activity is Johnson Space Center.

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

This justification provides the rationale for contracting by other than full and open competition to award a sole-source contract to KULR Technology for a large lot of high power Li-ion cells, model # INR18650-30Q.

3. FAR 6.303-2(b)(3) – A description of the supplies or services required, to meet the

Agency’s needs (including the estimated value):

NASA seeks to purchase 60,000 Li-ion cells from a single day’s or two consecutive days’ production by Samsung SDI, in South Korea. The cell design is model INR18650-30Q in the industry standard format designated at 18650. The contractor is responsible for providing chain of custody evidence that cells were fabricated by Samsung SDI and from one or two consecutive date codes from calendar year 2021. Since cells are qualified as a lot through our lot acceptance testing process that costs about $1 million to complete, it’s critical that all cell be of the same lot. NASA’s definition of lot is all cell made within one or two consecutive days of production. Receiving 60,000 cells from more than two date codes or two date codes that are not consecutive is cost prohibitive and not compliant to NASA’s Crewed Battery Safety Requirements Document, JSC 20793.

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

The statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c)

(1), as implemented by FAR subpart 13.5 is 41 U.S.C. 1901.

5. FAR 6.303-2(b)(5) – A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

The rationale supporting the use of 10 U.S.C. 2304(c)(1) are described below.

a) NASA’s strategic reserve of commercial Li-ion cells sought 1 large lot of commercially available

Li-ion cell design. The lot require high power cell designs that exceed 2500 W/kg in specific power and 6300 W/L in power density, exceed 200 Wh/kg and 500 Wh/L and on average generate under 6% waste heat while discharging at 9.6A continuously. These are performance requirements for the Li-ion cell design for enabling the required high performance battery designs for NASA missions, such as the Human Lander Systems, Orion, and others. As determined by

NASA sponsored third party testing, only one cell design met all these requirements, the E-one

Moli Energy (Moli) INR18650-P28B. In Feb 2021, NASA awarded contract 80JSC021P0019 for a 60,000 cell lot to be delivered in July 2021. This contract is for the best performing high power cell lot.

b) The next best two performing cell designs are the Murata US18650-VTC6 and the Samsung

INR18650-30Q. They met the specific energy and energy density requirements (>200 Wh/kg, >500 Wh/L) but fell only a little bit short in the specific power, power density, and waste heat requirements relative to the P28B design but proved superior to 9 other designs evaluated by

NASA sponsored third party testing. This slight requirement relaxation impacts vehicle mass and volume to the least amount relative to the other 9 cell designs.

c) Unfortunately, record worldwide demand for 18650 cells have made Murata and Samsung unwilling to accept new customers, like NASA for infrequent small purchases like 60,000 cells.

These manufacturers produce around 1 million cells per day. Murata has specifically told the distributors we contacted that they are no longer accepting new customer orders for all of 2021.

d) It takes 6 months for Lot Acceptance Testing (LAT) by NASA to yield a passing verdict.

Therefore, NASA won’t know if the Moli P28B passes until Dec 2021. Artemis missions can’t take the schedule hit of starting over with another cell purchase in Dec 2021. NASA must have a back-up in July 2021 that will finish the LAT at the same time as the P28B in Dec 2021 to be a viable back-up. Furthermore, NASA needs to purchase an unlike, redundant lot as a back-up plan for our Strategic Cell Reserve since it quite possible that reasons for LAT failure could impugned multiple lots of the same design made in the same factory. This means we can’t consider buying another lot of P28B cells for this purpose.

e)

f) KULR has a unique relationship with Samsung SDI that gives access to distribute large, single date code lots of Samsung 18650 and 21700 Li-ion cells and provide to NASA chain of custody evidence to ensure cells are authentically made by Samsung production facilities in Korea.

g) KULR owns in its inventory a single date code lot made in 2021 of over 60,000 INR18650-

30Q Li-ion cells made by Samsung SDI.

h) The only alternative cell design on the worldwide market that will meet the NASA requirements

(>200 Wh/kg and > 500 Wh/L) while discharging all of its energy in 20-minutes (high power) is the US18650-VTC6 from Murata. Unfortunately, there are not willing to sell to new customers, like NASA in 2021.

i) We have contacted other trusted distributors and they don’t have a lot of these cells in their inventory and can’t get the requested allocation from Murata.

j) We have contacted these same distributors and only KULR has the Samsung SDI INR18650-30Q cell lot that NASA needs

k) Waiting until 2022 or until the next worldwide battery demand recession are not a viable solutions for NASA’s urgent missions (Commercial Crew Program, Orion, and Human Lander

System) and their critical battery needs.

l) Similarly, waiting until the completion of the cell lot certification in Dec 2021 of the E-one Moli

Energy high power P28B cell lot currently on order and then deciding to pursue the Samsung or

Murata alternative cell designs will set those missions back by 6 months present a cost impact of

> $2.5 million to regain that lost schedule. That’s why those programs are funding this purchase now.

6. FAR 6.303-2(b)(6) – A description of the efforts made to ensure that offers are solicited from as many potential sources as 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:

A notice to the Government Point of Entry (GPE) website (beta.sam.gov) was published on April 6, 2021, in accordance with FAR Subpart 5.2. This posting informed potential sources of http:beta.sam.gov

NASA’s intent to award this sole-source contract to KULR Technology Corporation. The results of this synopsis are summarized in Section 10 below.

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

The Contracting Officer’s signature on this document indicates that the Contracting Officer has determined that the anticipated cost to the government will be fair and reasonable. The

Contractor shall be required to submit a proposal to be evaluated and negotiated by the

Government. Prior to execution of the contractual instrument, a proposal analysis will be performed. The proposal analysis will ensure that the final agreed-to price for the contract action is fair and reasonable. KULR Technology Corporation’s proposed cost of $6.90 per cell is fair and reasonable for high performing cell design. Commercial 18650 Li-ion cell designs are commodity products whose cost fluctuate with market forces from $3 to $10 a cell. Past contracts for

18650 Li-ion cells include 80JSC021P0019 ($4.25/cell), NNJ16HD68P ($3.5/cell), NNJ17HD02P

($6.75/cell), 80NSSC19P2255 ($8.1/cell), 80NSSSC20P1624 ($7.8/cell), and 80NSSC20P0344

($6.98/cell).

8. FAR 6.303-2(b)(8) – Description of the market research conducted, and the results, or a statement of the reasons a market research was not conducted:

During quarter 4 of calendar year 2020, NASA contracted with Symmetry Resources to independently determine by tests which of 12 commercially available cell designs (all following the 18650 cylindrical formats (18mm diameter, 65mm tall)) meet the performance requirements stated herein. Twelve cell design models coming from LG Chem, Molicel, Murata, and Samsung were tested under contract 80NSSC21P0379. The E-One Molicel cell design INR18650P28B, Samsung INR18650-30Q cell design, and Murata US18650-VTC6 cell design were all determined to be the only cell designs that meets all NASA energy requirements. In particular, Samsung 30Q, and Murata VTC6 passed the specific energy > 200 Wh/kg, energy density > 500

Wh/L, and came closest to meeting the specific power > 2500 W/kg, and power density > 6300

W/L requirements.

Due to current market conditions (demand, shortages, and difference of manufacturer for redundancy purposes) there appears to be only one company who can provide the batteries. Currently, only one distributor, KULR, has the capacity to provide the 18650 li-ion cells. The customer’s need date is by July 1, 2021. The estimated delivery date from KULR is 8 weeks after receipt of the order (ARO).

Due to the last contract (80JSC021P0019) NASA cannot purchase Molicel again until testing is completed (testing will take until in December 2021 to complete), Murata is not accepting new customers due to demand and lack of supply. This requirement will be utilized as a backup cell lot in case that the E-One Moli li-ion cells do not pass the test process. NASA cannot purchase li-ion cells from E-One Moli due to this situation.

9. FAR 6.303-2(b)(9) – Any other facts supporting the use of other than full and open competition:

For NASA to invent and develop an equivalent cell design to the INR18650-30Q, it is estimated at costing over $10 million and taking at least 5 years to achieve.

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

A notice of NASA’s intent to award this sole-source action was synopsized on the GPE website (beta.sam.gov) per FAR Subpart 5.2 (See Section 6 above). There were one interested partiy who expressed interest in the lithium-ion cell design requirement. The results yielded no viable options other than those proposed by COR.

11. FAR 6.303-2(b)(11) – A statement of actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required:

JSC will repeat the independent third party testing with the latest commercially available Li-ion 18650 cell designs every 2 years to determine if new cell designs exist that meet or exceed the NASA performance and safety requirements. These tests will include designs http:beta.sam.gov