J A_-_Redacted__Copy.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

INCREASE IN QUANTITY UNDER DLA ENERGY CONTRACTS SP0600-14-D-0487 AND

SP0600-14-D-0488 FOR KUWAIT SUPPLY

UNDER THE AUTHORITY OF 10 U.S.C. § 2304(c)(2)

- --- --1-:·-sunmra-rytfntroductl<rir~ --- ---------------- --------------- ------------~- -

A. 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 quantity for the period of performance 15 September 2014- 31 January 2015, under Kuwait Petroleum Corporation (KPC) contracts SP0600-14-D-0487 and SP0600-14- D-0488 using other than full and open competition. This J&A is prepared, after the fact, in accordance with FAR 6.303-l(e). Due to the unusual and compelling urgency of the requirement, preparation and a roval of this J&A rior to award would have unreasonabl dela ed the ac uisition.

On June 12, 2014, DLA Energy awarded contracts SP0600-14-D-0487 and SP0600-14-D-0488 to KPC to deliver FOB origin an estimated-USG of JAl, · SG of DF2, and ~SG of MUR. DLA Energy awarded the contract using other than full and open competition under the authority of 10 U.S.C. § 2304( c )(1 ).

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

A. This J&A is for the acquisition of additional quantity for the period of performance September 15, 2014 through January 31, 2015 under contracts SP0600-14-D-0487 and SP0600-14-D-0488.

B. Under contract SP0600-14-D-0487 the maximum daily lift quantity for JAl The total contract quantity of JAl was

FOR OFFICIAL USE ONLY [FOUO]

SOURCE SELECTION INFORMATION - SEE FAR 2.101 AND 3.104

WSTIFICATION AND APPROVAL

KUWAIT PETROLEUM CORPORATION

3. Authority for Other than Full and Open Competition (10 U.S.C. § 2304(f)(3)(B)):

PAGE2 of7

A. The statutory authority being used for this J &A for other than full and open competition is 10 -- - - -- ----- - --U-.S.C-§2J04Ec-)(2),a-s-implemented-by-FAR-6.-302-:2-whieh-states-'.'the-ageney'-s- need-fer-the-~------ -supplies or services is of such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals."

B. The use of the cited authority is based on the following:

i. The increases were needed to support

ii. Kuwait Ministerial Decree Number 6 (1980) specifies that KPC is solely authorized to produce, store, refine, and market refined petroleum products in Kuwait. Ministerial Decree Number 4 (1989) regulates import and export of all petroleum products and specifies that it is not permissible to import or export any petroleum products without the prior approval ofKPC. Agreements between the United States and Kuwait are consistent with these Decrees.

iii.

iv. lfKPC fuel and facilities are not used the fuel would have to be supplied either (1) by waterborne tanker deliveries into suitable terminals

However, as described in 3.B.i above, Kuwaiti Decree Number 4 (1989) restricts importation of fuel without the prior approval ofKPC.

Therefore, relying on waterborne tanker deliveries into terminals inside Kuwait are not viable options.

WSTIFICATION AND APPROVAL

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

PAGE 3 of7

KPC agreed to the same prices as negotiated in the original contracts (SP0600-14-D-0487 and _________ ___SP116_0_0_.-_L4_-:l1:·_Q4.8..8_)J The originaLpric.es_wer.e_determine_d_fair_and_reasnnable_bas.ed_on_EAR _____ -~--

15 .404-1 (b )(2)(ii), comparison to historical prices paid on competitively awarded prices for the same or similar products in the same region, adjusted for differences in the product specifications, additive content, and mode of delivery, as follows:

JAl:

Prices under KPC contract SP0600-14-D-0456, JP5 CLIN 0101, awarded under the Bulk Petroleum Western Pacific (WESTPAC) program were determined fair and reasonable on the b • • • •

To prepare a valid basis of comparison between the JAl Price and the JP5 Price, the Contracting Officer made adjustments to account for differing conditions:

- A cost factor of $0.008864/USG was subtracted from the JP5 price to account for Fuel System Icing Inhibitor (FSII), which is not present in the JAl Price.

DF2:

Prices under S-Oil contract SP0600-14-D-0454, F76 CLIN 0101, awarded under WESTPAC, were determined fair and reasonable on the basis of ade uate rice com etition in accordance with FAR 15.404-l(b)(2)(i).

To prepare a valid basis of comparison between the DF2 price and the F76 price, the Contracting Officer made adjustments to account for differing conditions:

JUSTIFICATION AND APPROVAL

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

PAGE4of7

. No other sources were contacted, or market research conducted, due to the urgency of the requirement and Kuwait Ministerial Decree Numbers 4 (1980) and 6 (1989) specifying that KPC is solely authorized to produce, store, refine, and market refined products in Kuwait and restricting the import of all petroleum products without the prior approval of KPC, and the recent confirmation that these restrictions remain in effect.

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

DLA Energy does not have the ability to overcome these barriers to competition due to the impact of the Kuwaiti laws discussed above.

SOURCE SELECTION INFORMATION - SEE FAR 2.101AND3.104

PAGE 5 of7

I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief.

Bruce E. Gunther Contract Specialist Overseas Bulk Petroleum Products FEBCA Date: September 16. 2014

Sandra S. Shepherd Deputy Director, Bulk Petroleum Products FEB Date: September 17. 2014

Candis H. Schiefer Contracting Officer Overseas Bulk Petroleum Products FEBC Date: -----------

I hereby certify that the supporting data which forms a basis for this justification is complete and accurate and that the purchase request covers only the minimum requirements to satisfy the needs of the Government.

Sean Lucas Chief, Inventory and Distribution· Management FENB Date:. _________ _

I have reviewed the justification and concur:

KevmM. em Director, Bulk Petroleum Products FEB Date:. __________ _

FOR

KUWAIT PETROLEUM CORPORATION

PAGE 6 of7

____ lhaye_r_exie:w_ed_and-.eoncur_with_this_justification:_~-----~ ________ ------~ ____________ _

Kathleen A. Murphy Chief Counsel Date: ___________ _

I have reviewed and hereby recommend approval of this justification:

Robert M. Celeste Competition Advocate ) /A Date: 'O/& ',g.ot-f

•J". :.. • • • • Director, Procurement Process Support Defense Logistics Azcy ~nergy Date: /..>/ -3: / '-f

I

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

p

Date: tu l \ { L,ol~

Approved:

Director, DLA Acquisition

Date: / i.:> /1f /-z-b I i I

Attachments:

Attachment 1 - Email from DLA Energy Middle East Attachment 2 - DLA Energy Memo to KPC Attachment 3 - KPC Memo to DLA Energy

FOR OFFICIAL USE ONLY [FOUO]

PAGE 7 of7