Redacted JandA.pdf

DEFENSE THREAT REDUCTION AGENCY

8725 JOHN J. KINGMAN ROAD, STOP 6201

FORT BELVOIR, VA 22060-6201

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Contract HDTRA1-21-C-0047 Equipment Modification Amendment #0002

1. Nature and/or Description of Action

The Defense Threat Reduction Agency (DTRA) contracting activity intends to execute a sole source contract modification on behalf of the Biological Threat Reduction Program (BTRP) of the Cooperative Threat Reduction (CTR) Program, with the Mahidol Oxford Tropical Medicine Research Unit (MORU) in Thailand without using full and open competition. MORU is a non-profit collaboration between Oxford University acting in Trust with Mahidol University in

National Institute for Animal Health (NIAH) Equipment Provision

Contract HDTRA1-21-C-0047 was awarded on 23 June 2021 valued at $8,994,500.45 under Amendment 0001. This contract was awarded on a sole source basis based on FAR 6.302-1, Only One Responsible Source. Under this contra biosurveillance capabilities at the national and regional levels. BTRP is providing training and mentoring of relevant staff at several laboratories in multiple areas such as biosafety, sample collection, sample packaging and transport. BTRP has also provided equipment to multiple laboratories within Thailand veterinary lab network. The purpose of this Justification and Approval (J&A) is to authorize a modification which will allow MORU to purchase additional equipment for the NIAH veterinary lab network. The ceiling for Ammendment 0001 was valued at $9,594,520. The proposed ceiling increase for this Amendment (0002) is $255,860.53, increasing the full amended ceiling to $9,850,380.53.

2. Description of the Supplies/Services Required

This requirement is within the current scope of Contract HDTRA1-21-C-0047. The equipment to be purchased was included in the original proposal for this contract. However, the equipment was removed during pre-award negotiations for reasons unrelated to the merit of the requirement. The intent was to add this equipment to the contract post-award via modification at a later date when funds were available.

The equipment to be provided consists of autoclaves, biosafety cabinets, a fume hood, freezers, a closed circuit television system, incinerators, a temperature data logger, and ten emergency shower/eyewash systems. This equipment will enhance biorisk management capabilities within

3. Statutory Authority

The statutory authority for this non-competitive action is the same as that which authorized sole source award of the base contract; 10 United States Code (U.S.C.) 2304(c)(l), as implemented by FAR 6.302-1, Only One Responsible Source. Pursuant to FAR 6.302-1, it has been determined there is only one responsible source for this requirement.

4. Applicability of Authority

MORU was established in 1979 and is a collaboration between Mahidol University, in Thailand, the University of Oxford, in England, and the UK Welcome Trust. MORU's primary mission is to fight infectious tropical diseases affecting rural communities in Asia and elsewhere in the developing world. MORU is the only known performer with the following attributes: Existing, and proven, exemption for payment of Value Added Tax (VAT), and other taxes. A long-standing relationship with the NIAH and the veterinary lab network and buy-in from the host nation government. Proven expertise in biosecurity and biosurveillance activities as they relate to Thailand, accompanied by long-standing credibility in that country.

A. As the BTRP program expands in Southeast Asia one of the biggest hurdles has been lack of exemptions for paying VAT and other foreign taxes. The Office of the Secretary Defense (OSD) and CTR have a strict policy to avoid payment of foreign taxes. This has adversely impacted the ability to further the BTRP mission in countries where it has proven problematic, or impossible, to obtain tax exemptions. Without a performer who has proven tax exemption in Thailand, BTRP would face extreme difficulty in meeting this requirement. Importation of the equipment from outside Thailand would be extremely expensive and would still require payment of import duties and customs charges for which BTRP has no exemption mechanism. As an approved educational institution within Thailand, MORU has a unique ability to avoid paying taxes or import-related duties. MORU has this exemption through their agreement with the Southeast Asian Ministers of Education Organization (SEAMEO). MORU has successfully demonstrated the ability to operate exempt from taxes on multiple previous DTRA contracts including HDTRA1-21-C-0047. Given the policy to pay no foreign taxes on assistance provided to partner nations, MORU provides the optimal solution to comply with this OSD mandate for this requirement. An attempt by any other performer to obtain tax exempt status would be a lengthy process with a high risk of failure. This risk assessment is performer to obtain tax privileges would only become apparent after substantial US Government investment up front and result in a complete loss of that investment.

B. MORU is an established organization which has long-standing relationships with the NIAH and the host nation government. No known performer could leverage such relationships immediately to fulfill this requirement. This effort will require extensive coordination with the laboratories in question to ensure continuity of critical operations. This continuity is all the more critical in the midst of the ongoing pandemic and is essential to success of the overall effort. Successfully deconflicting contractor performance with ongoing lab operations requires both close communication with the lab operators and an established, trusting relationship. Given the sensitivities, inserting a new and unproven performer into this situation presents an unacceptable risk. Contracting with an organization other than MORU for this effort would significantly raise cost, schedule, and performance risk. There is a risk that any other organization would not be able to achieve the same level of trust and familiarity with the labs which would jeopardize the entire effort.

C. MORU has extensive experience and expertise in biosecurity and biosurveillance as it relates specifically to Thailand. As a collaboration between two esteemed universities, MORU has credibility and prestige which the average performer (and in particular a commercial performer) partners with whom MORU engages. MORU personnel include not only local national Doctorate-level employees, for whom the local languages are native, but Western subject matter experts who ensures the full attention and cooperation of the laboratories where this equipment will be provided. There is a high risk that an unknown performer with no established relationship would be unable to obtain the same level of interest and participation. MORU has been a performing contractor under multiple DTRA contracts since 2014. Throughout all of the previous work for DTRA, MORU has proven to be a cost-efficient, non-profit performer for DTRA with minimal overhead and operating costs.

5. Effort to Solicit Potential Sources authorization for award of Contract HDTRA1-21-C-0047 was published to the SAM.gov on 10 November 2020. The notice remained open for 15 days and invited any interested parties, capable of performing this requirement, to provide information regarding their capabilities. No responses were received to this notice. Based on the lack of responses to the original Notice of Intent, there was no posting required for this action. Post-award, no performers have come to light which impact the sole source rationale detailed above and there is no reasonable expectation that a viable response would be received if this requirement were posted.

6. Fair and Reasonable Costs

The final price of this contract action to the Government will be determined to be fair and reasonable based on the IGCE and cost and/or price analysis. MORU has been a performing contractor under multiple DTRA contracts since 2014 and multiple contracts have been negotiated with them These negotiations have demonstrated that MORU is able to effectively leverage relatively low price levels in the region resulting in good value to the USG. This value is compounded by the fact that MORU is non-profit and applies minimal overhead charges to their direct charges. The Contracting Officer has preliminarily concluded that contract negotiations are expected to lead to a fair and reasonable price and their signature on the resultant document will constitute the determination required by FAR 6.303- 2( a)(7).

7. Market Research

In accordance with FAR Part 10, market research has been conducted for this acquisition. The research sources consisted of prior acquisition information, a review of internet resources, and interviews with experts in the field. This research found no sources capable of meeting this requirement other than MORU. While commercial entities exist which are fully capable of performing laboratory equipment provision, none are known to have demonstrated tax exempt status.

No entity, other than MORU, is known to have long-standing relationships with the specific host nation stake holders and support from the host nation government. These attributes are critical to successful performance and using a performer which lacks them presents an unacceptable level of pursue this sole source authorization for the base contract was published to the SAM.gov on 10 November 2020. The notice remained open for 15 days and invited any interested parties, capable of performing this requirement, to provide information regarding their capabilities. No responses were received to this notice.

8. Other Facts

None.

9. Interested Sources pursue a sole source authorization for the base contract was published to the SAM.gov on 10 November 2020. The notice remained open for 15 days. No responses were received which confirmed the conclusion reached by market research that no other sources are available. Post-award, no performers have come to light which impact the sole source rationale detailed above and there is no reasonable expectation that a viable response would be received if this requirement were posted.

10. Subsequent Actions

Follow-on activities are not currently contemplated by DTRA. In the event that additional requirements of this type do arise after award of the subject modification, BTRP will independently evaluate them at that time.