Wynnewood_JA_-_final_Redacted_-_JDC.pdf

J&A 15-0024

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

INLAND/EAST/GULF COAST (IEG) ANNUAL CONTRACT

SP0600-14-D-0469 UNDER AUTHORITY OF 10 U.S.C. 2304(c)(2)

1. Summary/Introduction:

Defense Logistics Agency (DLA) Energy is the contracting activity for petroleum products and services for the Department of Defense (DoD). This Justification and Approval (J&A) is for the acquisition of additional quantities of fuel on an other than full and open competition basis through additional requirements for existing contract SP0600-14-D-0469 (Wynnewood). This contract is an indefinite-delivery/indefinite-quantity type in support of critical, on-going fuel needs.

2. Description of Agency’s Need (10 U.S.C. 2304(f) (3) (A)):

DLA Energy purchases petroleum products, including jet fuel (JP8, JP5, and JAA) and marine diesel fuel (F-76) in the IEG geographic region. The IEG geographic region includes deliveries to 40 Defense Fuel Support Points and 253 activities that support the operational bulk petroleum requirements of all DoD units located within the geographical region.

An additional quantity of 5,600,000 USG is required for the contract.

Based on adjusted prices effective on February 24, 2015 the total cumulative value of the additional volume is The actual amount that will be obligated pursuant to this J&A may fluctuate due to economic price adjustments in the contract prices occurring after February 24, 2015.

3. Authority for other than Full and Open Competition (10 U.S.C. 2304(c)(2)):

The authority for using other than full and open competition is unusual and compelling urgency under 10 U.S.C. 2304(c)(2) as implemented in FAR 6.302-2.

In September 2014, DLA Energy determined there were insufficient remaining contract quantities on five out of eighteen IEG contracts (one of them being SP0600-14-D-0469) to cover estimated requirements from now until March 31, 2015. Because there would have been unmet requirements beginning in February 2015, DLA Energy must add quantity to existing contracts on an other than full and open competition basis to meet this urgent and compelling agency need.

Failure to obtain the additional quantities of fuel specified will impact operations at 27 installations.

Justification for Other Than Full and Open Competition (Cont’d) SP0600-14-D-0469 (Wynnewood)

In January 2013, the inventory management team solicited initial requirement estimates from the Service Control Points (SCPs) for a period covering twelve months, September 2013 through August 2014, for inclusion in the solicitation which was released in late February 2013. It was subsequently determined that a return to a more predictable award pattern in Bulk Petroleum Products with the four major programs awarded in separate calendar quarters was necessary.

This required a realignment of the IEG program to start in January. In May 2013, Amendment 0002 revised the delivery period from twelve months to fifteen months, and moved the start date so performance would be from January 2014 through March 2015. The estimates were not adjusted at that time because forecasts of reduced demand indicated that the estimates were adequate.

The estimates were again reviewed in November 2013. After careful review of the historical trends, the new 90% lift guarantee requirement, Demand Planning forecasts and the SCPs objective of decreasing consumption by 5% annually over the next five years, it was determined that the estimates would be sufficient for the 15 month performance period. There was also a recognition that the estimates were conservative and that DLA Energy would need to purchase all the fuel awarded under these contracts to meet military services actual fuel requirements.

After contract award, the DLA Energy inventory management team reviewed the contract commodities report monthly to ensure the contract award quantities were still matching the projected forecast for the time period. In June 2014, the inventory management team and the Americas East region evaluated the existing volumes on contract against the anticipated requirements for the remainder of the delivery period and confirmed them to be adequate and within acceptable levels based on a projected reduction in demand. Close monitoring of the remaining contract volumes continued and in September 2014, the inventory management team and the region concluded that there would be insufficient fuel on contract for the entire performance period because consumption did not decrease as expected.

The follow-on contracts under the 2014 solicitation were awarded in February 2015, with a performance start date of April 1, 2015, thus resulting in the need for interim coverage.

Short term “bridging” and “spot buy” contracts to provide fuel support until the April 1, 2015 delivery date are not possible due to time constraints. DLA Energy would not be able to successfully carry out the pre-award steps and source selection procedures that are necessary for this alternative of using short term contracts, which would require an estimated 190 days to complete. DLA Energy does have Basic Ordering Agreements (BOAs) in place with most of its major suppliers for Jet A. These have been successfully used for short term spot buys for single locations, however, they are not suitable for a systemic purchase of Jet A required throughout the IEG distribution system for multiple customers.

4. Price/Cost Considerations (10 U.S.C. 2304(f)(3)(C)):

The contracting officer determines that the anticipated cost to the Government of the additional quantity under the existing contract SP0600-14-D-0469 will be fair and reasonable based on adequate price competition and comparison of proposed prices with prices obtained through market research in accordance with FAR 15.404-1(b)(2)(i) and (vi). Specifically, Wynnewood will honor the price awarded under the original contract. Prices were determined fair and reasonable and within the market range at the time of initial award. All contract prices are adjusted using market assessments contained in the economic price adjustment clause specific to the geographic region of performance. Therefore, contract prices under SP0600-14-D-0469 continue to reflect the current market price of fuel.

5. Market Research/Efforts to Obtain Competition (10 U.S.C. 2304(f)(3)(D)):

This contract action will not be synopsized due to the unusual and compelling urgency in accordance with FAR 5.202(a)(2). These requirements are being acquired on an “other than full and open competition” basis to ensure the continuation of the delivery of fuel to the IEG region through March 31, 2015, with a 30-day carryover period. A market survey was not conducted.

Given the previously identified reasons in paragraph 3, the incumbent contractor provides the only practicable means to meet the stated requirements.

6. Actions Being Taken to Overcome Barriers to Competition (10 U.S.C. 2304(f)(3)(F)):

No action will be taken at this time to overcome barriers to competition. On an annual basis the IEG program receives approximately 19 to 27 offers; thus, robust competition exists. The follow-on contracts that will replace these contracts were competed on a full and open competition basis (with some partial small business set-asides) – as was the case for the current contracts.

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.

Domesti Date: Date:

JO

Di Domestic Bulk Fuels Contracting – FEBB Date:

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.

S Chief, Inventory and Distribution DFSP Management Date:

I have reviewed and concur with this Justification.

CANDIS H. SCHIEFER

Acting Director Bulk Petroleum Products Date:

DAVID NOLTE

Assistant Counsel Defense Logistics Agency Energy

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

PATRICIA A. LITTLEJOHN

Alternate Competition Advocate Defense Logistics Agency Energy