Hawaii_JA_-_S-Oil.REDACTED.pdf

Justification for Other Than Full and Open Competition

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

JET FUEL REQUIREMENT � DFSP PEARL HARBOR

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 10,080,000 USG of commercial jet fuel with additives (JA1) on an other than full and open competition basis valued at $28,807,198.56.

Offers were solicited from 10 vendors; three offers were received, two of which were technically acceptable, resulting in one award to S-Oil Corporation (S-Oil). A purchase order was issued under an existing Basic Ordering Agreement (BOA) previously established with S-Oil. . In accordance with Federal Acquisition Regulation (FAR) 6.302-2 (c)(1), this J&A is prepared after the fact.

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

DLA Energy purchases petroleum products, including jet fuel (JP8, JP5, JP4, JAA and JA1) and marine diesel fuel (F-76) in the Rocky Mountain West Coast (RMW) geographic region. The RMW geographic region includes deliveries to 22 Defense Fuel Support Points, including DFSP Joint Base Pearl Harbor-Hickam (DFSP JBPHH), that support the operational bulk petroleum requirements of all authorized DoD customers within the geographical region.

Due to depleted inventory levels, there was an unusual and compelling requirement for 25,200,000 USG of JA1 with additives at DFSP JBPHH in order to mitigate adverse impact to ongoing operations. This requirement was amended to 12,600,000 USG after one cargo was obtained on separate order.

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), and in accordance with FAR 6.302-2 Unusual and Compelling Urgency.

The transition from MILSPEC JP8 to commercial fuel has created a new requirement in the additive process for the DFSPs to inject CI into the fuel prior to delivery to the customers. DFSP Selby and DFSP Puget Sound inject additives for product delivered to DFSP JBPHH. The installation of CI injection capability at DFSPs Selby and Puget Sound was delayed, resulting in depleted inventory at DFSP JBPHH and generating an urgent requirement to procure JA1 with

Justification for Other Than Full and Open Competition (Cont�d) additives. Further, there was a higher than normal demand for fuel at DFSP JBPHH resulting from a multi-national military exercise.

Historically, with the exception of DFSP JBPHH, JP8 requirements within the RMW program are solicited with corrosion inhibitor (CI) added during the manufacturing process, and with both Fuel System Icing Inhibitor (FSII) and Static Dissipater Additive (SDA) injected by DoD prior to delivery to customers. DFSP JBPHH lacks capability to introduce FSII, therefore it is necessary that volume intended for delivery to DFSP JBPHH contain additives mixed in by the vendor, or that the volume is first delivered to one of two U.S. West Coast gathering terminals (DFSP Selby and DFSP Puget Sound) to introduce FSII into the product prior to forward distribution to DFSP

JBPHH.

As part of a cross-service initiative, the majority of U.S. West Coast DFSPs and associated customer bases were programmed to transition from MILSPEC JP8 to commercial, fungible product (JAA/JA1) commencing 01 Aug 2014. Consistent with industry practice, fungible product is free of all additives necessitating the installation of CI injection at select DFSPs, including DFSP Selby and DFSP Puget Sound, prior to delivery to the customer. Unanticipated delay in the installation of CI injection capability at both DFSPs servicing DFSP JBPHH disrupted the supply chain, which has resulted in inability to resupply DFSP JBPHH.

Compounded by higher than normal demand attributed to a multi-national military exercise

(RIMPAC)

This had the potential to adversely impact operations, and thus emergency resupply was required.

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

The contracting officer determined that the cost to the Government of the award to S-Oil was fair and reasonable based on adequate price competition in accordance with FAR 15.404-(1)(b)(2)(i).

Offers were received from three potential suppliers, two of which were technically acceptable.

Purchase order 0001 was issued against S-Oil�s existing BOA SP0600-14-G-0621 at an evaluated price of $ per USG for 10,080,000 USG.

An award was made for the partial quantity of 10,080,000 USG at the lowest overall cost to the Government.

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

These requirements were acquired on an other than full and open competition basis to ensure the continuation of the delivery of fuel to DFSP JBPHH region until performance begins on October 1, 2014 for the next RMW performance period. This requirement was not synopsized in accordance with FAR 5.202(a)(2), which contains an exception for proposed contract actions made under the conditions described in FAR 6.302-2 and for which the Government would be seriously injured if the agency complies with the time periods specified in FAR 5.203. The

Justification for Other Than Full and Open Competition (Cont�d) contracting officer solicited offers from as many potential sources as was practicable under the circumstances, in this case 10. Three offers were received, two of which were technically acceptable. A full market survey was not conducted.

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 RMW program receives approximately 10 to 20 offers; thus, competition exists. The follow-on solicitation for the delivery period that begins October 1, 2014, and includes the DFSP JBPHH requirement was competed on a full and open competition basis (with some partial small business set-asides) � as was the case for the current contracts. Competition was received for the requirement.

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

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.

ADAM H. BUTLER

Contract Specialist/Contracting Officer Bulk Fuels Contracting FEBCA

CANDIS H. SCHIEFER

Division Chief Bulk Fuels Contracting FEBC

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.

SEAN W. LUCAS

Chief, Inventory and Distribution DFSP Management

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

I have reviewed and concur with this Justification.

KEVIN M. AHERN

Director Bulk Petroleum Products

HOWARD M. KAUFER

Supply Chain Counsel, Petroleum Defense Logistics Agency Energy

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

ROBERT M. CELESTE

Competition Advocate Defense Logistics Agency Energy

GEORGE W. ATWOOD III

Director, Procurement Process Support Defense Logistics Agency Energy

Approved:

MARK M. MCLEOD

Brigadier General, USAF Commander Defense Logistics Agency Energy