Attachment_5_Redacted_JA.pdf

DEFENSE LOGISTICS AGENCY

HEADQUARTERS

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6221

Justification for Other than Full and Open Competition

SP8000-26-R-0003

Aerospace-Grade Rayon Fiber

1) Identification of the agency and contracting activity:

Requiring Activity: Defense Logistics Agency (DLA), DLA Strategic Materials, 8725 John J.

Kingman Road, Fort Belvoir, VA 22020-6220, Point of Contact: Sarah MacLean, Contracting Activity: DLA Contracting Services Office – Columbus Division 3, 3990 East Broad Street, Columbus, OH 43218, Point of Contact: Christine Boyer, Christine.Boyer@dla.mil

2) Nature and/or description of the action being approved:

DLA Strategic Materials (DLA SM), by and through the DLA Contracting Services Office – Columbus Division 3 (DCSO-C3), intends to solicit and award an Indefinite-Delivery Indefinite- Quantity (IDIQ) contract for aerospace-grade rayon fiber. This IDIQ will have a five-year ordering period utilizing fixed-price delivery orders. DCSO-C3 seeks the authority to solicit and award the requirement on an other-than-full-and-open competition basis. DLA anticipates awarding the contract in This intended acquisition is for critical material to be placed in the National Defense Stockpile (NDS). This was last purchased by DLA Strategic Materials Contracting Office in August 2025.

3) Description of the supplies or services required to meet the agency’s needs (including the estimated value):

DLA SM intends to issue a sole source IDIQ contract to obtain aerospace-grade rayon fiber over a five-year period from ICF Mercantile, LLC (ICF Mercantile) (7CZM0). Aerospace-grade rayon is used in applications such as

DLA

SM intends to purchase the only aerospace-grade rayon that meets current and future Department of Defense (DoD) requirements: foreign-sourced ENKA 300/60 denier AS Select.

These fibers are only produced by the company ENKA in Germany and solely distributed in North America by ICF Mercantile. ENKA rayon is a critical constituent for use in advanced composite materials.

Based on the market research report (MRR) and the Independent Government Cost Estimate (IGCE), the maximum contract value for all years is . Initially, SM estimated a maximum contract value of however, based on the drastic demand from the August 2025 award, the contract maximum of allows for future and unknown demand. A contract will be awarded to ICF Mercantile of Warren, NJ. ENKA will produce aerospace-grade 300/60 denier AS Select in Germany and send to ICF Mercantile for distribution to DLA SM.

4) Identification of statutory authority permitting other than full and open competition:

The statutory authority for permitting acquisition of these supplies by other than competitive procedures is 10 U.S.C. 3204(a)(1), as implemented in the Federal Acquisition Regulation (FAR) 6.302-1(a)(2), which states that “[w]hen the supplies or services required by the agency are available from only…one or a limited number of responsible sources, and no other type of supplies or services will satisfy agency requirements, full and open competition need not be provided for.”

5) Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

Establishing a new rayon supplier for defense and aerospace use is a complex and costly undertaking, often requiring multi-million-dollar investments and conducted on a program-by-program basis. The process is led by the prime contractor, who is responsible for executing the full testing campaign in accordance with the requirements set by the program office. This includes extensive material characterization, process validation, and performance testing, such as thermal analysis, mechanical and chemical property verification, and full-scale motor testing to ensure the rayon meets the stringent standards for .

Following the departure of North American Rayon Corporation (NARC) from the market in 2005, Government programs needed to look at alternatives. As part of this effort, ENKA rayon underwent extensive testing to ensure it could meet the demanding requirements of defense applications. Prime contractors, under the direction of their respective program offices, spent significant money and executed full testing campaigns to validate ENKA rayon for use in mission-critical systems. These campaigns included rigorous thermal, mechanical, and chemical testing, as well as full-scale motor firings and flight hardware evaluations. As a result, ENKA rayon was successfully utilized across a broad spectrum of strategic and tactical programs, including but not limited to

These programs rely on rayon-based materials for .

Today, ENKA rayon is produced at a single facility in Germany and is distributed in North America exclusively by ICF Mercantile, serving as the sole source for DoD and NASA applications.

6) 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:

This proposed action will be executed as a Request for Proposal (RFP) under FAR Part 12 and Part 15 procedures utilizing the combined synopsis and solicitation procedures under FAR 12.603, and it will be synopsized / solicited on SAM.gov for a reasonable amount of time to allow the sole source to submit an offer.

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

The Contracting Officer anticipates that the final price for the aerospace-grade rayon outlined in this justification for other than full and open competition will be determined fair and reasonable based on either a comparison of proposed prices with the independent government cost estimate (IGCE) or other means outlined in FAR 15.404-1(b)(2). An IGCE was provided that sufficiently demonstrates the market research that was conducted, the basis of estimates, cost calculations, and the appropriate validations. In addition, the material being purchased provided by ENKA / ICF Mercantile is considered “commercial” and the terms and conditions found at FAR 52.212-4 contain the same and/or similar language found in most commercial agreements used within the industry and defined as “commercial” in accordance with FAR 2.101. The Contracting Officer will only proceed with the planned action after evaluating and confirming that the resulting price is fair and reasonable.

8) Description of market research conducted and results or a statement of the reason market research was not conducted:

DLA SM conducted extensive market research by way of independent internet and academic research, interviews with material users, interviews with the sole distributor of aerospace-grade rayon, interviews with US Government Program Offices, and interviews with prime contractors such as Lockheed Martin. This Huntington Ingalls Industries (HII) study occurred in 2021 when DLA-SM first acquired rayon. Additionally, Alion Science and Technology performed a deep dive assessment on the aerospace-grade supply chain in 2021. This study found that there have been ten different rayon suppliers to DoD programs over the past 53 years (shutdown dates in parentheses): IRC – US (12/72), American ENKA – US (3/75), FMC – US (7/76, acquired by AVTEX), AVTEX – US (11/88), AVTEX restart – US (2/90), NARC – US (5/97), Grupo Cydsa

– Mexico (7/01), and C2 – Austria (1/08). Since its first acquisition in 2021, the Government has continued to collect and update its market research with respect to this material, which has occurred most recently in 2025.

Discussions with NASA took place regarding its storage best practices for its stockpiled rayon.

If stored properly, shelf-life does not pose a major risk. Optimal storage temperature is 70°F ±7- 8°, and humidity is 50% ± 5%.

Based on the market research collected through the Strategic and Critical Materials Reports on Stockpile Requirements spanning years 2015, 2017, 2019, 2021, 2023 and 2025, ENKA in Germany remains the sole source for this material. Currently, the only aerospace-grade product for is 300/60 denier AS Select manufactured by ENKA in Germany and

The US Government intends to place a bulk order so future rayon requirements can be fulfilled.