Redacted JA - SPE7LX-20-R-0014.pdf

Justification for Other Than Full and Open Competition Solicitation: SPE7LX-20-R-0014

For Official Use Only Source Selection Sensitive Information See FAR 2.101 and 3.104 Page 2 of 9 removed from the project. To identify other manufacturers that may be available to produce these NSNs, the Buyer posted a Sources Sought Notice on the Federal Business Opportunities website;

however, no additional manufacturers were identified. The sole reply was received from Whitehand Global, LLC, a dealer, which is described below.

For this acquisition, each of the 10,189 NSNs was grouped into either an active or an inactive group predicated upon the NSN’s current technical, packaging, or supply data. While active NSNs meet the requirements listed above as being sole source to Cummins, these NSNs do not contain technical, packaging or supply issues. Inactive NSNs likewise meet the requirements listed above as being sole source to Cummins, but currently have technical, packaging or supply issue(s), such as missing or incorrect data to include Place of Inspection Codes, Quality Control Codes, Acquisition Method Code (AMC)/ Acquisition Method Suffix Code (AMSC), and superseded or obsolete part numbers.

As a result of these groupings, there are 8,378 NSNs in the active population, and 1,811 NSNs in the inactive population as shown in Attachment #1. An inactive NSN will not be awarded onto the resulting contract until the issue(s) have been resolved, which will result in phased awards, as once an inactive NSN is determined active, it is able to be added to the active NSN population.

4. Authority Cited: The statutory authority permitting other than full and open competition is 10 U.S.C.

2304(c)(1), implemented by FAR 6.302 1, as the supplies needed by the agency are available from only one responsible source and no other type of supplies will satisfy the needs of the agency.

5. Reason for Authority Cited: Cummins, as the OEM, has the technical data, data rights, and manufacturing knowledge necessary to manufacture these NSNs to support the weapon systems listed above and is the sole approved source for these NSNs. While secondary sources are listed for some NSNs in the Technical Data Spreadsheet, Attachment #2, per the MP02 Code “Display Approved Manufacturer Parts List” within the DLA Enterprise Business System, those secondary sources are, in fact, excluded due to being blocked, deleted, or no longer approved. A review of procurement history of these NSNs shows that these items have been procured through purchase orders or covered by other contracting means that were suitable for award to various authorized dealers of Cummins, which were small business concerns.

Each NSN within this requirement was grouped into the applicable AMC and AMSC per the definitions referenced below and the Technical Data Spreadsheet.

The 10,189 NSNs within this requirement contain the following AMCs:

AMC 1* - 7 NSNs. Suitable for competitive acquisition.

AMC 2* - 3 NSNs. Suitable for competitive acquisition for the first time.

AMC 3 - 9,498 NSNs. Acquire, for the second or subsequent time, directly from the actual manufacturer.

AMC 4 - 440 NSNs. Acquire, for the first time, directly from the actual manufacturer.

AMC 5 - 100 NSNs. Acquire directly from a sole source contractor, which is not the actual manufacturer.

AMC Blank* - 141 NSNs. Despite the absence of an AMC, the DLA Enterprise Business System database indicates these NSNs are sole source to Cummins. Accordingly, these NSNs will be synopsized and solicited; however, they will not be awarded onto the contract pursuant to this justification until the appropriate AMC codes are determined.

See FAR 2.101 and 3.104 Page 3 of 9

*NSNs identified by AMC 1, 2, or Blank, are inactive due to technical issues and/or inaccurate data and will not be awarded onto the resulting contract until the issue(s) have been resolved. Each NSN within this project has been verified as sole source to Cummins or an associated CAGE of Cummins, and as listed on the Cummins CPL. NSNs identified by AMC 1 or 2, indicating competitive acquisition, are coded as such due to the Enterprise Business System listing multiple Cummins CAGE codes and/or other CAGE codes that are annotated as blocked or deleted.

The 10,189 NSNs within this requirement contain the following AMSCs:

AMSC B - 18 NSNs. This part must be acquired from a manufacturing source(s) specified on a source control or selected item drawing as defined by the current version of DoD-STD-100. Suitable technical data, Government data rights, or manufacturing knowledge are not available to permit acquisition from other sources, nor qualification testing of another part, nor use of a second source part in the intended application. Although, by DoD-STD-100 definition, altered and selected items shall have an adequate technical data package, data review discloses that required data or data rights are not in Government possession and cannot be economically obtained. If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs 1 or 2 are valid. Due to the criticality of the NSN, procurement is restricted to source(s) specified on “Source Control” drawing. For NSNs coded AMSC B, Cummins, or an associated CAGE of Cummins, is the only manufacturer listed on the Source Control drawing.

AMSC C - 698 NSNs. This part requires engineering source approval by the design control activity in order to maintain the quality of the part. Existing unique design capability, engineering skills, and manufacturing knowledge by the qualified source(s) require acquisition of the part from the approved source(s). The approved source(s) retain data rights, manufacturing knowledge, or technical data that are not economically available to the Government, and the data or knowledge is essential to maintaining the quality of the part. An alternate source must qualify in accordance with the design control activity's procedures, as approved by the cognizant Government engineering activity. The qualification procedures must be approved by the Government engineering activity having jurisdiction over the part in the intended application. If one source is approved, AMCs 3, 4, or 5 are valid. If at least two sources are approved or if data is adequate for an alternate source to qualify in accordance with the design control activity's procedures, AMCs 1 or 2 are valid. For NSNs coded AMSC C, Cummins, or an associated CAGE of Cummins, is the only source that retains the data rights, manufacturing knowledge, or technical data that is essential to maintaining the quality of the parts, and is the only source currently approved by the design control activity.

AMSC D - 5,851 NSNs. The data needed to acquire this part competitively is not physically available, it cannot be obtained economically, nor is it possible to draft adequate specifications or any other adequate, economical description of the material for a competitive solicitation. AMCS 3, 4, or 5 are valid. For NSNs coded AMSC D, Cummins, or an associated CAGE of Cummins, is the only source known to own or possess the technical data necessary to manufacture these part numbers.

AMSC H* - 6 NSNs. The Government physically does not have in its possession sufficient, accurate, or legible data to purchase this part from other than the current source(s). This code is applicable only to parts under immediate buy requirements and only for as long thereafter as the deficiency is under review for resolution and appropriate recoding. This code is only assigned at the conclusion of limited screening, and it remains assigned until the full screening process resolves physical data questions and results in assignment of a different AMSC. If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs 1 or 2 are valid. For NSNs coded AMSC H, these NSNs will be synopsized and solicited; however, they will not be awarded until a permanent AMC/AMSC is assigned to each NSN. The Government does not physically have in its possession

See FAR 2.101 and 3.104 Page 4 of 9 sufficient, accurate, or legible data to purchase this item other than by reference to the part number of the identified source.

AMSC P - 138 NSNs. The rights to use the data needed to purchase this part from additional source(s) are not owned by the Government and cannot be purchased, developed, or otherwise obtained. It is uneconomical to reverse engineer this part. This code is used in situations where the Government has the data but does not own the rights to the data. If only one source has the rights or data to manufacture this NSN, AMCs 3, 4, or 5 are valid. If two or more sources have the rights or data to manufacture this NSN, AMCs 1 or 2 are valid. For NSNs coded AMSC P, Cummins, or an associated CAGE of Cummins, is the only source that possesses the rights or data to manufacture these parts.

AMSC Q - 309 NSNs. The Government does not have adequate data, lacks rights to data, or both needed to purchase this part from additional sources. The Government has been unable to economically buy the data or rights to the data, although the part has been undergoing full screening for 12 or more months. Breakout to competition has not been achieved, but current, continuing actions to obtain necessary rights to data or adequate, re-procurement technical data indicate breakout to competition is expected to be achieved. This part may be a candidate for reverse engineering or other techniques to obtain technical data. All AMSC Q NSNs are required to be reviewed within the timeframes cited in 2-203(b). If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs 1 or 2 are valid. For NSNs coded AMSC Q, Cummins, or an associated CAGE of Cummins, currently possesses the data or rights to the data for these NSNs and is the only company known to manufacture these parts.

AMSC R - 684 NSNs. The Government does not own the data or the rights to the data needed to purchase these parts from additional sources. It has been determined to be uneconomical to buy the data or rights to the data. It is uneconomical to reverse engineer the part. This code is used when the Government did not initially purchase the data and / or rights. If only one source has the rights or data to manufacture this NSN, AMCs 3, 4, or 5 are valid. If two or more sources have the rights or data to manufacture this NSN, AMCs 1 or 2 are valid. For NSNs coded AMSC R, Cummins, or an associated CAGE of Cummins, is the only source with the rights or data to manufacture these parts.

AMSC Z - 2,344 NSNs. This part is a commercial / non-developmental / off-the-shelf item.

Commercial item descriptions, commercial vendor catalog or price lists or commercial manuals assigned a technical manual number apply. If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources are available, AMCs 1 or 2 are valid. For NSNs coded AMSC Z, Cummins, or an associated CAGE of Cummins, is the only known source and the Cummins part numbers associated with those NSNs are listed on Cummins’ CPL. While these items are commercial, these are replacement parts for which Cummins, or an associated CAGE of Cummins is the active OEM.

Thus, in order to ensure configuration control over any higher-level military assembly to include part supersession and/or obsolescence, it is essential that only the Cummins’ code and part number item be acquired to the exclusion of other commercially available parts.

AMSC Blank - 141 NSNs. Despite the absence of an AMSC, the DLA Enterprise Business System database indicates these NSNs are sole sourced to Cummins. Accordingly, these NSNs will be synopsized and solicited; however, they will not be awarded onto the contract pursuant to this justification until the appropriate AMSC codes are determined.

*Applies to LTCs - NSNs identified by AMSC H have been subjected to limited screening. The Government does not physically have in its possession sufficient, accurate, or legible data to purchase this item from other than the identified source. NSNs identified by an AMSC of H on Long-Term Contracts are subject to annual review for possible assignment of a different or permanent AMSC. DLA

See FAR 2.101 and 3.104 Page 5 of 9

L&M agrees to maintain a continual review of these NSNs to ensure that an annual review is completed at a minimum, in part to determine if new technical data is available to allow for assignment of a more permanent AMSC. Any NSN determined to be competitively available during the solicitation/evaluation phase will be removed from the acquisition requirement. Any NSN determined after contract award to be competitively available may be deleted from the contract and resolicited.

6. The following efforts were taken to ensure that offers are solicited from as many sources as practicable:

A Sources Sought Notice was posted onto the Federal Business Opportunities website on

September 18, 2019, for 15 days with a closing date of October 3, 2019, along with the NSNs and applicable part numbers.

The Synopsis and Solicitation will be synopsized on the System for Award Management website in accordance with FAR 5.102 for a minimum of 30 days prior to the solicitation.

All NSNs will be synopsized prior to incorporation into the resulting contract, in order to investigate the possibility of competition. The Contracting Officer and DLA Competition Advocate will review all proposed additions to verify that all requirements are sole source. The procedures of DLAD 6.303 2 will be followed for NSNs identified by AMSC A or H.

7. The Contracting Officer hereby determines that the anticipated cost to the Government will be fair and reasonable. The Contracting Officer will use price analysis for this determination. These requirements will be procured off the Cummins CPL, which is available to the general public. Therefore, it is anticipated that the Government will pay a similar or lower price compared to the general public for these NSNs. If the proposed prices are not fair and reasonable, the buyer will ask the offeror(s) to submit other than cost and pricing information to support the pricing position. Because the items have been determined commercial and will be solicited in accordance with FAR Part 12, certified cost and pricing data is not required per FAR 15.403-1(b)(3).

8. Market Research and Efforts to Obtain / Increase Competition:

A Sources Sought Notice was posted on the Federal Business Opportunities website on September 18, 2019, for 15 days with a closing date of October 3, 2019. Whitehand Global, LLC (Whitehand), CAGE 7UW55, responded to the Sources Sought Notice via email on September 27, 2019, stating that it was working on pricing all of the items of this effort and would be able to provide a quote before the closing date. To alleviate any confusion, the Contracting Officer contacted Whitehand via email to explain that the project was in the development stage only and that the Sources Sought Notice was to seek information on whether there might be other manufacturers that could provide similar commercial items along with a market survey they could complete and submit. The Buyer reminded Whitehand regarding submission of a market survey on February 18, 2020; however, to date, Whitehand has not returned a market survey. No other vendors responded to the Sources Sought Notice.

Whitehand did not identify itself as an authorized dealer of Cummins; however, the Buyer confirmed it is not an authorized dealer per phone conversations with Cummins. Whitehand provided no information in response to the Sources Sought, other than to express an interest in all of the NSNs, and that it is keen to participate in bidding once the solicitation is issued. Independent research conducted by the Buyer revealed that Whitehand is a domestic small business dealer per the North American Industry Classification System (NAICS) code of 332722, and per the procurement history on file, has never been awarded any of these items. As mentioned above, procurement history shows these NSNs have been awarded to various authorized dealers of Cummins, which were small business concerns and procured through Procurement Automated Contract Evaluation (PACE), or awarded under the Simplified Acquisition Threshold (SAT).

See FAR 2.101 and 3.104 Page 6 of 9

Cummins was emailed a market survey on August 27, 2019, and replied on September 10, 2019. The Buyer used the telephone and email to conduct the survey. The decision to send a market survey to only the OEM was based on the product knowledge of the OEM and its ability to perform on all 10,189 NSNs. The market survey was broken into seven major sections: General Interest, Long-Term Contracting Specifics, Cost or Pricing Data, Commerciality, Free on Board (FOB) and Packaging, Delivery, and Other Miscellaneous Questions. The questions within these seven sections pertained to business size (large or small), business capabilities (manufacturer or dealer), LTC interest, base period and option year preference, production capacity, commerciality, quantity sensitivity, and FOB preferences. The response from Cummins is detailed below:

Cummins - CAGE 04MP1 Cummins is a large business manufacturer with no parent company and approximately 62,600 employees.

Cummins is interested in pursuing this successor LTC project with DLA for all of these items.

Cummins stated that the industry standard for contract term for long-term contracts for these items and/or the raw materials is 5-10 years.

Although Cummins has supplied items to authorized small business dealers in the past, Cummins prefers not to deal through its dealers, but rather to deal directly with the Government for this procurement.

Cummins stated these items are Commercial Items per the definition listed at FAR 2.101(b), are items that are Catalogue/Price Listed, and supplied the Buyer with a copy of the CPL for Cummins.

Cummins is able to provide commercial sales history, listing in catalogs or brochures, known established price list to commercial marketplace, and availability or announcement to the public.

Cummins is able and willing to provide invoices showing that these items have been sold commercially at like prices, for like quantities to verify price reasonableness.

See FAR 2.101 and 3.104 Page 7 of 9

The Buyer added Cummins, Inc., and Whitehand to the bidder’s list, and each will be notified once the solicitation is available on the DLA Internet Bid Board System (DIBBS). DLA administers the current CPL contract for Cummins, SPE7LX-16-D-0023, and the preceding J&A is Attachment #3. The items within the preceding J&A were previously determined to be commercial. As part of the market survey, Cummins stated that it considers these NSNs to be commercial and provided the Buyer with the 2019 CPL per Attachment #4, which demonstrates these items are offered for sale to the general public at the listed prices. Based on the preceding, the Contracting Officer has determined these NSNs to be commercial in accordance with subparagraph (1)(ii) of the commercial item definition in FAR 2.101, as these items have been offered for sale, lease, or license to the general public.

In an effort to obtain competition and satisfy FAR 10.001(a)(3), the solicitation will be synopsized and a copy will be furnished to any vendor expressing interest. The DD2579 sent to the DLA Land and Maritime - Office of Small Business Programs (DU) and the Small Business Administration - Procurement Center Representative (SBA-PCR) provided an opportunity to provide additional sources capable of manufacturing these NSNs; however, no additional sources were identified. Lastly, the technical review completed December 10, 2019, confirmed that the NSNs on this initiative are sole source to Cummins and that no additional sources were identified.

Also, in an effort to obtain competition for NSNs identified by AMSCs of C, D, P, Q, R, and Z, the Solicitation contains Procurement Note L04, Offers for Part Numbered Items, which increases competition by permitting the consideration of alternate offers. If alternate offers or capability statements are provided in response to the synopsis, DLA will consider either the offeror’s statement or proposal for award or, if specific to one or a few NSNs, DLA will consider whether those NSNs should be removed from the Solicitation to be solicited separately on another project. For NSNs identified by an AMSC of B, the solicitation contains Procurement Note L22, Restriction of Alternate Offers for Source Controlled Items, as alternate offers are not permitted.

9. Additional facts supporting Other Than Full and Open Competition:

Based upon the technical certification on file in DLA Land and Maritime - Value Engineering Proposal, technical data is not available and cannot be developed to permit full and open competition.

The data presently available reflects the minimum needs of the Government.

10. A listing of sources, if any, indicating an interest in this acquisition are: Cummins, CAGE 04MP1, and Whitehand, CAGE 7UW55.

11. In accordance with DFARS Procedures, Guidance, and Information (PGI) 206.304(a)(S 70)(i), the following planned actions to remove any barriers to competition cited on the previous justifications have been completed:

The Buyer continued to conduct market research to ascertain if changes have occurred in the marketplace that would enable items to become competitive.

A Sources Sought noticed has been posted for 15 days.

A Synopsis and Solicitation will be posted on the System for Award Management website for 30 days.

The Solicitation contains Procurement Notes L04, Offers for Part Numbered Items, and M06, Evaluation of Offers for Part Numbered Items, and the Solicitation will indicate which NSNs apply to Procurement Notes L04/M06, and which NSNs apply to Procurement Note L22, Restriction of Alternate Offers for Source Controlled Items, per the Technical Data Spreadsheet attached to the Solicitation.

See FAR 2.101 and 3.104 Page 9 of 9

Attachments:

1. Active & Inactive NSNs

2. Technical Data Spreadsheet

3. Preceding J&A

4. Cummins 2019 Commercial Parts List

5. DD2579