Kuwait Class JA Redacted_Final1.pdf

DDEFENSE LOGISTICS AGENCY

HEADQUARTERS

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6221

20-0030

Class Justification for Other than Full and Open Competition

1. Summary/Introduction:

Defense Logistics Agency (DLA) Energy is the Executive Agent for Bulk Petroleum and the contracting activity for petroleum products and services for the Department of Defense (DoD).

This class Justification and Approval (J&A) is for the acquisition of designated petroleum products on an other than full and open competition basis to the State of Kuwait’s state-owned corporation, Kuwait Petroleum Corporation (KPC). All fuel products are being procured for use by . This J&A will authorize procurements for five years, and covers total procurements of approximately of Turbine Fuel, Aviation (JA1), Diesel Fuel (DF2), and Unleaded Regular Motor Gasoline (MUR) with an estimated value of based on current market value.

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

The action being approved is a class J&A authorizing other than full and open competition for the award of annual petroleum contracts to KPC, to be awarded and administered by DLA Energy. The resulting contracts will be one-year, fixed-price with economic price adjustment (EPA), requirements type contracts with a 30-day carryover delivery period for fuel ordered during the contractual ordering period. The five anticipated contracts, beginning July 1, 2020 – June 30, 2021, are to supply JA1, DF2, and MUR to within Kuwait via . Defense Working Capital Funds will be utilized for this effort.

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

The estimated requirements to be acquired over the five-year period covered by this J&A are as follows:

JA1, NSN: 9130-007535026, conforming to QAP C16.64-1

DF2, NSN: 9130-001487103, conforming to QAP C16.18-2 MUR, NSN: 9140-002865294, conforming to QAP C16.69-1

Requirements are subject to change based on

The estimated quantities required for the first year, July 1, 2020 through June 30, 2021, plus a 30-day carryover period (RFP: SPE602-20-R-0711) are of JA1, Class Justification for Other than Full and Open Competition (Cont’d) (SPE602-20-R-0711) Page 2 of DF2, and of MUR. The estimated dollar value of the supplies for the first year total based on the base reference price, effective March 1, 2020, subject to adjustment by an economic price adjustment (EPA) clause in the resulting contract.

subject to EPA adjustment.

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

This class J&A is based upon the authority of 10 U.S.C. § 2304(c)(1), as implemented by Federal Acquisition Regulation 6.302-1. The supplies required by the agency are available from only one responsible source and no other type of supplies will satisfy the agency requirements.

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)):

Kuwait is the

The fuel under these contracts is essential to sustain

Kuwait Ministerial Decree Number 6 (1980) specifies that KPC is solely authorized to produce, refine, store, and market refined petroleum products in Kuwait. Further, Kuwait Ministerial Decree Number 4 (1989) regulates import and export of all petroleum products into Kuwait and specifies that it is not permissible to import or export any petroleum products without the prior approval of KPC.

Therefore, KPC is the only available source for procuring DF2, JA1, and MUR in Kuwait for use by .

KPC is a competitive oil refiner and supplier to DLA Energy customers on other Middle East procurements. KPC has demonstrated its ability to provide fuel meeting specifications by performing contracts in the Middle East for many years, including its most recent contract, SPE602-19-D-0487 (Kuwait Supply).

If KPC fuel and facilities are not used KPC would have to

(SPE602-20-R-0711) Page 3 approve the purchase and import of fuel by either ecause there are no viable alternatives to awarding a sole-source contract to KPC.

would be jeopardized unless DLA Energy is permitted to process contracting actions on an other than full and open competition basis for the supply of fuel to the region. No other commercial firms have been granted permission or authority by the Kuwaiti Government or KPC to furnish the required fuel supplies to the

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)):

On April 15, 2020, DLA Energy posted a combined sources sought/synopsis on BETA.SAM.gov under solicitation SPE602-20-R-0711 to allow any responsible sources to express interest and demonstrate their capability for supplying the requirement. companie expressed an interest in the requirement; however, none of the companies provided authorization documents from the Kuwait government or KPC to demonstrate that they were approved to sell fuel in Kuwait that meets or exceeds the requirements set forth in this acquisition. Therefore, these companies cannot be considered as responsible and viable sources of fuel for

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

The Contracting Officer determines that the anticipated cost to the Government will be fair and reasonable based on prices received for comparable products in the region and historical pricing data.

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)):

As explained above in section 6, in connection with the planned contracts, a combined sources sought/synopsis was posted and led to firms expressing interest in the fuel requirements.

However, none of the firms demonstrated an ability to perform. That result, combined with Kuwait statutory prohibitions on importing fuel from sources other than KPC, demonstrate that receiving offers from viable alternative responsible and capable sources is improbable; thus, providing no viable alternatives to awarding a sole-source contract to KPC. Thus, no additional market research was conducted.

(SPE602-20-R-0711) Page 4

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.

(iii) When 6.302-2 is cited, estimated cost, or other rationale as to the extent and nature of the harm to the Government.

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

See section 6 above.

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)):

DLA Energy is unable to overcome these barriers to competition that result from the Kuwaiti laws discussed above. This J&A will remain in effect as long as the Government of Kuwait continues to impose this restriction, but no longer than five (5) years. Before awarding the second and each subsequent contract using the authority of this J&A, DLA Energy will submit inquiries to appropriate sources, , to confirm that the basis for this J&A remains in effect. If DLA Energy determines that the basis for this J&A is no longer in effect, it will consider whether a competitive procurement can be conducted.

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.

(SPE602-20-R-0711) Page 5

Contract Specialist, Bulk Petroleum Products Contracting Officer, Bulk Petroleum Products

Division Chief, Bulk Petroleum Products

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.

Chief, Inventory and Distribution Management

I have reviewed and concur with this Justification

Director, Bulk Petroleum Products

(SPE602-20-R-0711) Page 6

I have reviewed this justification.

Senior Counsel

Chief Counsel

I have reviewed and hereby recommend that this Justification be approved:

Advocate for Competition

Director, Procurement Process Support

Director, Supplier Operations

(SPE602-20-R-0711) Page 7

I have reviewed this Justification for legal sufficiency:

DLA Office of General Counsel

I have reviewed and hereby recommend that this Justification be approved:

DLA Advocate for Competition

Approved:

DLA Senior Procurement Executive