Tab_1_J__A_Hurricane_Maria_-_Final_for_Signature2_with_DG_Signature_6-13..__Redacted.pdf

DEFENSE LOGISTICS AGENCY

ENERGY

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6222

18-0023

Justification for Other than Full and Open Competition

1. Summary/Introduction:

The Defense Logistics Agency Energy (DLA Energy), a component of the Defense Logistics Agency, is the contracting activity. In accordance with 10 U.S.C § 2304(c)(2), this Justification and Approval (J&A) documents the use of other than full and open competition to award a contract using other than full and open competition. Due to the unusual and compelling nature of this requirement, preparation and approval of this J&A prior to award would have unreasonably delayed the acquisition.

DLA Energy has a contract, SP0600-14-D-4005, with Foster Fuels, Inc. (Foster Fuels) to facilitate ground fuel support for the disaster mobilization and/or emergency response and recovery efforts to support the Federal Emergency Management Agency (FEMA) covering only the 48 contiguous United States. As awarded, its scope did not include Alaska, Hawaii, or any U.S. outlying areas as defined by FAR 2.101, such as Puerto Rico. The contract provides fuel transportation and delivery of gasoline and diesel fuel. The performance period is from May 6, 2014, through June 30, 2019.

On September 20, 2017, Hurricane Maria made landfall along the southern coast of Puerto Rico. Hurricane Maria was the most violent storm to hit Puerto Rico in the last 80 years.

The hurricane decimated the entire island’s electrical grid leaving about 3.4 million residents without electrical power. The island also lost the vast majority (around 85%) of its communications ability (including cellular towers, internet service, and telephone lines). The following justification is presented to support the decision that was made to award Foster Fuels the additional location of Puerto Rico under contract SP0600-14-D-4005 to provide complete ground fuel support, inclusive of mobilization and contractor fuel delivery of diesel, gasoline, and propane for emergency support to Puerto Rico in response to Hurricane Maria.

DLA Energy has provided assistance to facilitate fuel deliveries across Puerto Rico for generators at critical facilities and in support of FEMA response efforts. On September 22, 2017, FEMA issued a Mission Assignment to DLA Energy to provide fuel support for emergency response and recovery in Puerto Rico.

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

The action being approved is the award of the complete ground fuel support, inclusive of mobilization and contractor fuel delivery of diesel, gasoline, and propane for emergency fuel support to Puerto Rico in response to Hurricane Maria. The award of this fuel support was performed on other than full and open competition basis by adding it to contract SP0600-14- D-4005 with Foster Fuels.

Justification for Other Than Full and Open Competition (Cont’d)

(SP0600-14-D-4005 – FOSTER FUELS, INC.)

In response to the catastrophic, widespread devastation caused by Hurricane Maria, on September 22, 2017, FEMA requested DLA Energy add the U.S. commonwealth island of Puerto Rico to contract SP0600-14-D-4005 with Foster Fuels (which already covers the contiguous United States). The requirement to add Puerto Rico was executed via modification P00005.

The estimated total value of the action for approval is $125,316,390.00. The total estimated value is broken down below.

Fuel Type Quantity

(USG)

Cost/USG Total Est. Cost

Reg. Unleaded Gasoline (MUR)

180,000

Ultra Low Sulfur Diesel (DS2)

780,000

Propane 15,000 Transportation (1) 120 (trucks) Transportation (2) 120 (trucks)

The ordering period is from September 22, 2017, through May 31, 2019, with a delivery period through June 30, 2019. Funding for this effort is from the DLA Defense Working Capital Fund.

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

The requirement is for transportation and supply of commercially available Ultra Low Sulfur Diesel (DS2), Regular Unleaded Gasoline (MUR), and Propane. The requirement has an estimated quantity of 180,000 USG of MUR, 780,000 USG of DS2, and 15,000 USG of Propane for the presidentially declared emergency support FEMA has provided and is providing to the island of Puerto Rico during the Hurricane Maria recovery effort. FEMA has advised DLA Energy emergency fuel support is needed to provide mobile refueling, staging areas and other points of distribution. The Contractor provides rapid deployment and delivery of fuel products 24 hours a day/7 days a week upon receipt of a delivery order.

In addition, DLA Energy is procuring staging and transportation services.

hese costs were set in the original contract award and determined fair and reasonable based on adequate price competition, since the original contract award was competitive. Due to the urgency of this requirement, additional trucks and crews were needed and travelled from various geographic regions to support the mission with short notice.

(SP0600-14-D-4005 – FOSTER FUELS, INC.)

The overall estimated total value is $125,316,390.00.

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

This J&A is based upon the authority of 10 U.S.C. §2304(c)(2), as implemented by Federal Acquisition Regulation 6.302-2 -- Unusual and Compelling Urgency; the Government will be seriously injured in its ability to provide support unless DLA Energy is permitted to limit the award to a vendor known to have the capability and resources to meet this requirement in the required time frame to the required destination. FAR 6.302-2(d)(4) and 6.303-1(e) unusual and compelling urgency provides the justification and approval may be prepared after award when approval prior to award would unreasonably delay the acquisition.

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)):

The sole-source award to Foster Fuels under urgent and compelling circumstances was required and was and is critical to current DoD and FEMA operations ongoing in Puerto Rico. Any interruption in fuel supply would present a serious risk to health, life, and safety of the public as well as FEMA and DoD personnel on the island. The turnaround timeline for this requirement was less than 72 hours. On September 20, 2017, Hurricane Maria hit Puerto Rico. On September 22, 2017, FEMA requested Puerto Rico be added to Foster Fuels’ contract to aid the support effort. Continued DoD and FEMA operations rely on a reliable and continuing source of fuel.

Based on the current Foster Fuels’ contract having the Emergency Readiness plan/contractual infrastructure in place, including a requirement to provide support pursuant to the DLA- FEMA Inter-Agency Agreement (IAA) to support disaster events, DLA Energy utilized the current vendor, Foster Fuels, to deliver the needed fuel to Puerto Rico in an expeditious manner. Foster Fuels has experience in working with the DoD and FEMA and understands the procedures for fuel deliveries during emergencies, and more importantly, had the assets necessary to immediately perform the new urgent requirements. Any contractor used to provide fuel support must be ready and knowledgeable to work within the guidelines, processes, roles, and responsibilities applicable to the provision of fuel support to FEMA by DLA Energy in accordance with the DLA-FEMA IAA. As noted above, the contract with Foster Fuels (SP0600-14-D-4005) includes this requirement. Hurricane Maria (Puerto Rico) was the third consecutive hurricane to hit the United States within a short period of time.

Foster Fuels was already providing emergency fuel support to FEMA during Hurricane Harvey (Texas) and Hurricane Irma (Florida). As Foster Fuels was already providing fuel support to FEMA from the previous two hurricanes, it was the only company readily available with assets on the ground to provide emergency fuel support to Puerto Rico immediately. In order to acquire emergency fuel support from other vendors, it would

(SP0600-14-D-4005 – FOSTER FUELS, INC.)

require a minimum lead time of two weeks to procure and award a new contract. For a new vendor who has not provided this unique support before, DLA Energy would have to request a preaward survey (PAS), which normally takes 30 days to complete. An expedited PAS request is a minimum of two weeks to complete. These emergency fuel services were needed immediately and a delay to award would have caused serious injury to the Government.

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)):

This J&A is based upon the authority of 10 U.S.C. §2304(c)(2), as implemented by Federal Acquisition Regulation 6.302-2. Unusual and compelling urgency precludes full and open competition, and delay in award of a contract would result in serious injury to the Government. A synopsis was not be required for this contract pursuant to FAR 5.202(a)(2) because the contract action was made under unusual and compelling urgency pursuant to FAR 6.302-2. More specifically, the Government would have been seriously injured if DLA Energy was forced to comply with the time periods set forth in FAR 5.203 because of the urgency of the delivery schedule and requirements described above.

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 performed market research for the same or similar items, in accordance with FAR 15.404-l(b)(2)(vi). The product being sought is a commercial item as defined under FAR 15.403-l(c)(3) and therefore, no certified cost or pricing data is required.

In accordance with FAR 15.404-1(b)(2)(ii), the contracting officer reviewed the Puerto Rico Department of Consumer Affairs publication containing average fuel prices. Between September and November 2017, the price for regular unleaded gasoline averaged $2.76.

Diesel fuel averaged $2.50. Foster Fuels award prices of effective September 22, 2017, are consistent with current unit prices under contract for Puerto Rico. As this is the first time DLA Energy has provided propane in bulk for a contract award, a comparison was performed against GSA contract GS-07F-5810R, with a period of performance of May 3, 2015, to May 2, 2020, and an award price of

PRODUCT COST:

LINE

ITEMS CONTRACT

CONTRACT

PRICE

PR Dep’t of Consumer

Affairs Average Fuel

Price

AWARD

PRICE MARGIN

0007 (MUR) - - $2.76

0014 (DS2) - - $2.50

*Propane GS-07F-

5810R $4.67 -

(SP0600-14-D-4005 – FOSTER FUELS, INC.)

The transportation is reasonable based on a comparison to the cost of local transportation cost for fuel deliveries, which ranged from . These deliveries did not provide rapid deployment and delivery of fuel products 24 hours a day/7 days a week. In addition, the local fuel deliveries were not mobile refueling support. Additionally, the original after the initial 30 days of activation. Finally, the transportation cost under the current contract was to cover the continental 48 states and did not consider outlying areas. This price includes cost for shipping via barge both Tank Wagon, Tank Truck, support vehicles, and a satellite communications trailer with two satellite phones, military tents, meals, a refrigerated trailer for food & supplies, 134 truck drivers and 12 managers, and travel, salary, and other miscellaneous transportation. In addition, this location is not currently under contract, so that the contractor did not have supply agreements in place to support these areas and this support required the vendor to stage and deliver fuel as needed. Based on this location not being under contract, the contractor needed to acquire resources from companies it normally did not do business with and the charge to receive this support was more costly for this reason

Per the above comparison and FAR 15.404-1(b)(2)(ii); the Contracting Officer determines that Foster Fuel's offer of after the initial 30 days of activation is fair and reasonable.

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)):

No other sources were solicited nor was additional market research performed due to the incredibly short deadline for performance.

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.

Not Applicable

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

(SP0600-14-D-4005 – FOSTER FUELS, INC.)

Per the above, executing this need without using “Urgent and Compelling” authority would have significantly harmed the DoD and FEMA missions. The impact is tangible but unmeasurable.

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

No sources expressed interest in writing.

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)):

Due to the compelling and urgent nature and the complex procedures already in place under the existing contract, competition was not feasible for this effort. As lessons are learned from the current contract period, DLA Energy will coordinate closely with FEMA to improve processes and procedures for the solicitation. We intend to solicit the follow-on FEMA support procurement on a full and open basis and to include Puerto Rico and potentially other U.S. outlying areas as requirements under the procurement.

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(SP0600-14-D-4005 – FOSTER FUELS, INC.)

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.

Contracting Specialist Contracting Officer

Division Chief

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.

Supply Planner

I have reviewed and concur with this justification.

Director

I have reviewed this Justification.

Senior Counsel

Chief Counsel

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(SP0600-14-D-4005 – FOSTER FUELS, INC.)

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

Advocate for Competition

Director, Procurement Process Support

Head of Contracting Activity

I have reviewed and concur with this Justification.

DLA Office of General Counsel

I have reviewed and hereby recommend this Justification be approved.

DLA Competition Advocate

DLA Senior Procurement Executive