Justification and Approval - NdPr Oxide_Redacted.pdf

DEFENSE LOGISTICS AGENCY

DLA CONTRACTING SERVICES OFFICE

700 ROBBINS AVENUE

PHILADELPHIA PENNSYLVANIA 19111-5092

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN

COMPETITION (FAR 6.303)

1. Identification of the agency and the contracting activity.

Requiring Activity:

Defense Logistics Agency (DLA) DLA J7 Strategic Materials 8725 John J. Kingman Road Fort Belvoir, VA 22020-6220 POC: Ms. Theresa Leland Telephone: (571) 767-6495

Contracting Activity:

DLA Contract Services Office – Columbus Division 3 3990 East Broad Street Columbus, OH 43213-1152 POC: Mr. Eric Heil Telephone: (614) 692-8634

2. Nature and/or description of the action being approved.

DLA Strategic Materials (DLA SM), by and through the DLA Contract Services Office – Columbus Division 3 (DCSO-C3), intends to solicit and award a firm-fixed price contract for a maximum of 172 metric tons (MT) of permanent rare earth magnet grade neodymium oxide (Nd2O3) and praseodymium oxide (Pr6O11), whether as separately packaged and stored or a didymium oxide mixture (75% Nd2O3/25% Pr6O11). This document will refer to this material requirement as “NdPr Oxide”. Such materials will be stored within the National Defense Stockpile (NDS). DLA SM and DCSO-C3 intends to solicit this requirement to only sources able to mine and process NdPr Oxide in the United States, the outlying areas of the United States, or Canada. DLA anticipates awarding the contract in early May 2024 and receiving deliveries throughout the twelve months after award.

3. A description of the supplies or services required to meet the agency’s needs (including the estimated value).

DLA intends to purchase up to 172 MT of powdered NdPr Oxide for the NDS. Such materials must be mined and processed in the United States, its outlying areas, or Canada.

The contractor must package the powdered NdPr Oxide in UN 1A2 “X” rated drums and deliver the drums to the Hawthorne Depot in Nevada. DLA estimates the value of this action at .

4. An identification of the statutory authority permitting other than full and open competition.

The statutory authority permitting acquisition of these supplies by other than full and open competition is 10 U.S.C. § 3204(a)(3) as implemented by FAR 6.302-3(a)(2)(i).

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.

DLA manages the National Defense Stockpile (NDS), as described in Title 50 of the United States Code, Chapter 5, Subchapter III, commonly referred to as the “Strategic and Critical Materials Stock Piling Act.” The statutory purpose of NDS is to “provide for the acquisition and retention of stocks of certain strategic and critical materials and to encourage the conservation and development of sources of such materials within the United States and thereby to decrease and to preclude, when possible, a dangerous and costly dependence by the United States upon foreign sources or a single point of failure for supplies of such materials in times of national emergency.” 50 U.S.C. § 98a(b). Interested parties may learn more about this program at https://www.dla.mil/Strategic-Materials/.

Neodymium and praseodymium deposits exist in the United States, its outlying areas, and Canada; however, they are few and remain in development. Pursuant to Executive Order 13817, the Secretary of Interior, in consultation with the Secretary of Defense, determined neodymium and praseodymium as critical minerals. 87 Fed Reg 10381 (24 Fed 22).

Additional executive orders, for example 13953 (85 Fed Reg 62539; 30 Sep 20) and 14017 (86 Fed Reg 11849; 24 Feb 24), further describe the necessity in addressing these challenges.

Indeed, the Department of Defense has allocated funding and attention to this issue through a variety of means, including specific investments made under the Defense Production Act.

For more information about these efforts, please see the Assistant Secretary of Defense of Industrial Base Policy’s website concerning the Defense Production Act at https://www.businessdefense.gov/ibr/mceip/dpai/dpat3/index.html.

DLA Strategic Materials announced the intent to purchase NdPr in its fiscal year 2024 “Annual Materials Plan”. By limiting this purchase in accordance with 10 U.S.C. § 3204(a)(3) and FAR 6.302-3(a)(2)(i), DLA is helping to “[c]reate or maintain the required domestic capability for production of critical supplies by limiting competition to items manufactured in the United States, its outlying areas, or Canada.” per FAR 6.302-3(b)(1)(iv).

6. A description of efforts made to ensure that offers are solicited from as many potential sources as is 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.

DLA will issue, in accordance FAR Subpart 5.2, a synopsis and, for at least 30 days, a solicitation on the government point of entry, SAM.gov. All interested parties capable of providing DLA powdered NdPr Oxide mined and processed in the United States, its outlying areas, or Canada, in UN 1A2 “X” rated drums to DLA’s Hawthorne Depot in Nevada will be invited to submit proposals. Additionally, DLA has purposefully chosen the less geographically restrictive authority, FAR 6.302(b)(1)(iv)(B) that includes Canada instead of FAR 6.302(b)(1)(iv)(A) that does not include Canada, to enable a greater field of competition.

7. A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The Contracting Officer anticipates the anticipated cost will be fair and reasonable. The Contracting Officer will evaluate the offerors’ proposed prices using the proposal analysis techniques described at FAR Subpart 15.404 and further supplemented at DFARS Subpart

215.4. The Contracting Officer anticipates requiring other than certified cost or pricing data.

However, the Contracting Officer may require certified cost or pricing data or not require other than certified cost or pricing data if deemed appropriate.

8. A description of the market research conducted and the results or a statement of the reason market research was not conducted.

The most relevant market research performed for this requirement was primarily based on responses from a recent request for proposal (RFP) SP8000-23-R-0008, which was issued on 16 May 2023 and solicited NdPr Oxide. Seven (7) companies submitted offers in response to that RFP and, combined with the Sources Sought issued on 13 December 2022 supporting the issuance of RFP SP8000-23-R-0008, market research demonstrates one or more sources could provide the NdPr as described above.

9. Any other facts supporting the use of other than full and open competition.

Supporting facts are described above in paragraph 5.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

The following sources expressed an interest in this acquisition:

MP MINE OPERATIONS, LLC (CAGE: 88VQ2)

G.E. CHAPLIN, INC (CAGE: 3CFY7)

BLUE LINE CORP (CAGE: 3Z0J8)

BEVERLY-WINSTON LLC (CAGE: 9DES8)

PREMIER TRADING COMPANY, LLC (CAGE: 4XVT4)

SMART NANOTECH, LLC (CAGE: 8QUG2)

TWOTECH, INC (CAGE: 69R41)

11. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required.

By encouraging mining and processing of NdPr Oxide as described above, DLA is joining with other instrumentalities of the federal government in creating a steady and actionable

Competition Advocate Certification:

I hereby certify and approve this justification.

MATTHEW S. RYAN Date Competition Advocate DLA Contracting Services Office

RYAN.MATTHEW.S.128

5260066

Digitally signed by

RYAN.MATTHEW.S.1285260066

Date: 2024.03.07 13:41:40 -05'00'