Posted JA SPE7LX15D0065 Redacted.pdf

FOUO – Source Selection Information – See FAR 2.101 & 3.104

FOUO – Source Selection Information – See FAR 2.101 & 3.104

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

CONTRACTING ACTIVITY: DLA Land & Maritime, SAPD PROGRAM/PROJECT: Two Month Sole Source Contract Extension Using Terms and Conditions of

MTU AMERICA- LTC SPE7LX-15-D-0065

AUTHORITY: 10 U.S.C. 2304(c) (1), as implemented by FAR 6.302-1

CONTRACT COST:

TYPE DETERMINATION: Individual

I. CONTRACTING ACTIVITY

The contracting activity for this action is the Defense Logistics Agency (DLA), Land and Maritime, Strategic Acquisition Programs Directorate (SAPD), Basic Contract Administration Branch (ZDC) located in Columbus, Ohio. The Contracting Officer is Megan Saylor. This is a justification for other than full and open competition.

II. NATURE AND/OR DESCRIPTION OF THE ACTION BEING PROCESSED

The purpose of this acquisition is to award a two-month sole source contract extension against SPE7LX- 15-D-0065 to MTU America (CAGE: 72582) on an other than full and open basis for the items for which MTU America is the sole approved source. Period of performance is from April 1, 2020 to May 31, 2020.

The LTC was a five-year firm-fixed price contract, solicited using FAR Part 12 requirements, awarded on December 29, 2014, with MTU America (72582). The products on this contract support the Detroit Diesel 2-cycle engine across multiple weapon systems, including Heavy Mobility Tactical Vehicles. At time of award in December 2014, MTU America was the sole approved source for all the 2298 items on contract.

Ninety (90) items were removed with the execution of the first contract extension via SPE7LX15D0065P00037, which extended the period of performance from December 29, 2019 to March 31, 2020. Sixteen (16) additional items now have an approved source other than MTU, therefore these items will be removed from the NSN population drawing the total down to 2192 items (Competitive Items tab – Attachment #1 – MTU AMERICA (SPE7LX15D0065) STD Data Pull (26 Feb 20)).

MTU America agrees to the two-month sole source contract extension under the existing terms and conditions of SPE7LX-15-D-0065 (Attachment#2 - SPE7LX15D0065 Extension).

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED TO MEET THE

AGENCY’S NEEDS

A successor contract project (CL18109003) is underway and closed on December 6, 2019. Nearly 500 NSNs are in the initial pricing phase of the successor, with the remaining 1500+ included in the contract scope for follow-on pricing. Market research confirmed that MTU America is the sole approved source and only an offer from them is expected. The successor will not be awarded prior to the March 31, 2020 expiration of SPE7LX-15-D-0065, and it is in the Agency’s best interest to continue providing reliable coverage. The Contractor has agreed to extend existing coverage until May 31, 2020, for all of the 2192 items with orders expected for any or all of them. An out of scope bilateral modification will be issued to extend the period of performance from April 1, 2020 to May 31, 2020. All other terms and conditions of the contract remain unchanged and in full effect.

IV. STATUTORY AUTHORITY:

FOUO – Source Selection Information – See FAR 2.101 & 3.104

10 U.S.C. 2304(c) (1) authorizes, under certain conditions, contracting without providing for full and open competition. Execution of this contracting action requires use of the statutory authority at 6.302-1(a) (2), because only one responsible source will satisfy Agency requirements. All of the 2192 items which are included on the two-month contract extension have MTU America identified by the Government as the sole approved source and no other product is sufficient to meet the Government’s needs (Sole Source NSN DATA tab on Attachment #1).

V. CONTRACTOR UNIQUE QUALIFICATIONS:

MTU America is identified by the Government as the sole approved source for the 2192 parts in the two-month contract extension and these parts support the Detroit Diesel 2-cycle engine. As the parts provider to the OEM, MTU America is in a unique position in regards to having all the necessary in-house expertise to ensure that even years after the original engines were built that their replacement spare parts will seamlessly fit and operate as intended.

VI. SOURCES SOUGHT:

IAW FAR 5. 201(b) (1) (ii), both Sources Sought and Pre-Solicitation notices for the two-month sole source contract extension posted March 4, 2020 on BETA SAM. These notices requested additional interested sources and provided notification of the Governments intent to award a two-month sole source contract extension for support of the 2192 sole source items under the existing terms and conditions of SPE7LX-15-D-0065. Neither responses nor inquiries were received to date. (Attachments #3 & 4: BETA SAM Sources Sought and Pre-Solicitation Notices)

VII. PRICING DETERMINATION:

Unit pricing on SPE7LX-15-D-0065 was determined fair and reasonable IAW price analysis (FAR 15.404- 1(b)) by the pre-award Contracting Officer. These items are commercially price listed and the Government unit pricing is at discount from list. All MTU North America dealers receive the same recommended discount from list, which is so the Government is receiving more favored customer pricing. Successor project market research confirmed commercial applications on Disney World trams, fishing boats and Greyhound buses (Attachment #5 – 2020 DLA Market Research (CL18109003 SPE7LX15D0065 Successor Project NSN List)). A market basket approach using a representative population was used to confirm the commerciality and compare past and present Governmental pricing to the pricing on the commercial market (Attachment #6 - CL18109003 Mkt Basket NSNs Commercial Web Research). Commercial pricing was found for the 52 NSNs, which Annual Demand Value (ADV) on the successor and these 52 NSNs are presently on SPE7LX-15-D-0065. Government pricing is less than the commercial pricing for 47 of the 52 items; the price difference for the remaining 5 items ranges from Verification of the availability of the Contractors items on the commercial market and the pricing of those items, reinforces that the Government pricing, for the most part, is better than what is available to commercial customers.

The successor market research information used a market basket approach with a NSN group that represented for that project (Attachment #6 - CL18109003 Mkt Basket NSNs Commercial Web Research). The market basket group is also a part of the two-month NSN population so data findings are directly relatable. The items on this acquisition are considered commercial and accordingly, the exception to the requirement to obtain certified cost and pricing date in FAR 15.403-1(b) (3) applies.

Website searches found all of the items available on the commercial market which backs up the commerciality determination.

FOUO – Source Selection Information – See FAR 2.101 & 3.104

Commercial pricing was found for the 52 NSNs. IAW FAR 15.404-1 (c) (3), price analysis of current Government pricing on SPE7LX-15-D-0065 found that it is less than the commercial pricing for 47 of the 52 items, the price difference for the remaining 5 items ranges from 1.44-35.39% higher. Re-verification of the availability of the Contractors items on the commercial market and the pricing of those items, reinforces that the Government pricing, for the most part, is better than what is available to commercial customers. Pricing for final year of SPE7LX-15-D-0065 applies without change to the two-month contract therefore, the Contracting Officer determines that the anticipated cost to the Government will be fair and reasonable.

An uptick in obligations between December 2019 and February 2020 has nearly exhausted the contract maximum. The increased demands may have been planned, however some of them could have been due to the uncertainty of contract coverage as well as buying ahead for the 90 competitive items which lost coverage when they were removed via the bilateral modification SPE7LX15D0065P00037, which executed the three-month sole source award. The contract maximum value of s not sufficient to cover demands through March 31, 2020, let alone the additional two month period of performance. Obligations to date are leaving available for purchases. Two month annual demand value is approximately $1.8M (Summation of Column P in Sole Source NSN DATA tab – Attachment #1).

Increasing the contract maximum value by $3M will be sufficient to cover expected demands through May 31, 2020. Annual demand values are estimates of anticipated purchases and by adding an additional over the two month value the Government has leeway to continue usage of the contract should the estimate prove to be low.

VIII. MARKET RESEARCH:

Market research for the two-month contract consists of information from a February 2020 LTC data pull (Sole Source NSN DATA tab - Attachment #1). The LTC data pull confirmed that MTU America was still the sole approved source for the 2192 NSNs currently on SPE7LX-15-D-0065.

IX. OTHER THAN FULL AND OPEN COMPETITION:

These 2192 NSNs have Acquisition Method Suffix Codes of B, C, D, L, P, Q, R, V, and Z (Column AD of Sole Source NSN DATA tab – Attachment #1. The AMC/AMSC coding was verified by cognizant product specialists as of February 2020. Coding definitions are as follows (Attachment #7 – AMC-AMSC Codes):

B – Acquisition is restricted to source(s) specified on Source Control, Altered Item, or Selected Item drawings/document.

C – Engineering source approval by the design control activity required to maintain the quality of the part.

D - No technical data on item.

L - Annual buy value is below screening threshold of $10,000, however part has been screened for known sources.

P- Government doesn’t own data needed to purchase from additional sources.

Q – Government doesn’t have adequate data, lacks rights to data, or both, needed to purchase from additional sources.

R – Data or rights to use the data needed to purchase from additional sources are not owned by the Government and it has been determined that it is uneconomical to purchase them.

V- Item has been designated a high-reliability part under a formal reliability program. Probability of failure would be unacceptable from the standpoint of safety of personnel and /or equipment. The cognizant engineering activity has determined that data to define and control reliability limits cannot be obtained nor is it possible to draft adequate specifications for this purpose.

Z- This is a Commercial/non-developmental (off-the-shelf item). MTU America Inc. (CAGE code 72582) is the only approved source.

X. SOURCES:

No responses have been received to BETA SAM postings, leaving MTU America as the sole interested source in this two-month acquisition.

XI. ACTIONS TAKEN TO OVERCOME BARRIERS TO COMPETITION (10 U.S.C. 2304(f)

(3) (F)):

The Government will continue to conduct market research to ascertain if changes occur in the marketplace that would enable future actions for items under this acquisition to be competitive. Future acquisitions, such as the current successor project, contain a clause stating that the Government will consider alternate offers, and that alternate offerors should submit a source approval request (SAR) package which will be provided to the requisite Engineering Support Activity for review and evaluation.

XII. CONTRACTING OFFICER’S CERTIFICATION:

In accordance with FAR 6.303-2(b)(12), the Contracting Officer’s signature on the Coordination and Approval Document evidences that he/she has determined this document to be both accurate and complete to the best of his/her knowledge and belief.

CERTIFICATION/APPROVAL:

MEGAN M. SAYLOR/CONTRACTING OFFICER

DLA LAND & MARITIME, SAPD

DLA LAND & MARITIME COMPETITION ADVOCATE

MARK A. BROWN SES/HCA

Attachments:

MTU AMERICA (SPE7LX15D0065) STD Data Pull (26 Feb 20) SPE7LX15D0065 Extension

BETA SAM SOURCES SOUGHT NOTIFICATION

BETA SAM PRESOLICITATION NOTIFICATION

2020 DLA Market Research (CL18109003 SPE7LX15D0065 Successor Project NSN List)) CL18109003 Mkt Basket NSNs Commercial Web Research AMC-AMSC Codes

SAYLOR.MEGAN.M.13

64088848

Digitally signed by

SAYLOR.MEGAN.M.1364088848

Date: 2020.03.06 11:11:00 -05'00'

SHEARER.MARY.E.12

50702449

Digitally signed by

SHEARER.MARY.E.1250702449

Date: 2020.03.18 15:25:21 -04'00'

BROWN.MARK.ALBER

T.1041175032

Digitally signed by

BROWN.MARK.ALBERT.1041175032

Date: 2020.03.18 15:36:47 -04'00'