Alaska_J A_-_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION UNDER AUTHORITY

OF 10 U.S.C. 2304(c)(1) FOR FULL FOODSERVICE PRIME VENDOR FOR CUSTOMERS IN

ALASKA

1. Defense Logistics Agency (DLA) Troop Support, Subsistence Supply Chain, is the contracting activity.

2. The action being approved is the ability to solicit for DLA requirements on an other than full and open competition basis.

3. The proposed acquisition will be an indefinite-delivery, indefinite quantity, fixed price with Economic Price Adjustment (EPA) bridge contract for Prime Vendor suppo1t for a period of one hundred sixty eight (168) days, which allows for the sixty ( 60) day negotiated implementation period for the Subsistence Total Order and Receipt System (STORES) by the awardee of the follow-on competitive procurement. (STORES Catalogs begin on a Sunday and end on a Saturday.) The proposed bridge contract (SPE300-16-D-3161) encompasses Subsistence Prime Vendor (SPY) support for all authorized DLA customers located in Alaska for a full-line of food and beverage items.

Based on current annual usage/sales, the estimated total dollar value for the proposed contract is $5,409,925.78. The guaranteed minimum dollar value is 10% of the estimated total dollar value or $540,992.58. The maximum total dollar value including surge of200% is $10,819,851.56. This proposed action will result in the award ofa bridge contract effective October 25, 2015 through April 9, 2016.

4. The applicable statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c)(l), as implemented by FAR Part 6.302-1-0nly One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. The use of this authority is necessary to provide continuous, uninterrupted food supplies to DLA customers in Alaska. The original Prime .Vendor Contract, SPM300-05-D-3160, was awarded to Sysco Seattle on August 28, 2005 and consisted of a base ordering period of one (1) year with four (4) one-year options. The four (4) options were invoked and the foutih and final option expired on August 26, 2010. Since the contract expiration, five

(5) bridge contracts for this region were awarded to Sysco Seattle on a sole source basis.

The effective period of the first bridge contract for 548 days was August 27, 2010 through February 25, 2012. The effective period of the second bridge contract for 362 days was February 26, 2012 through February 23, 2013. The effective period of the third bridge contract for 364 days was February 24, 2013 through February 22, 2014. The effective period of the fourth bridge contract for 363 days was February 23, 2014 through February 21, 2015. The effective period of the current 245 day bridge contract is February 22, 2015 with an expiration date of October 24, 2015. The follow-on competitive procurement has not yet been awarded. The proposed action will result in the award of a sixth bridge contract with Sysco Seattle effective October 25, 2015 through April 9, 2016. These bridge contracts are necessary due to a number of unforeseen delays in the award of the follow on contract as described in further detail in the following paragraphs.

I

OF 10 U.S.C. 2304(c)(1) FOR FULL FOODSERVICE PRIME VENDOR FOR CUSTOMERS IN

ALASKA

This proposed bridge contract is necessary to provide uninteTI"upted food service for Alaska through the implementation of the follow-on contract.

The original solicitation, SPM300-13-R-0065, was canceled on October 29, 2013 due to ongoing discussions involving the Statement of Work (SOW). The CONUS SPV program decided the best action to take was to cancel the solicitation to resolve several substantial issues including customer alignment based on the nature of their requirements, handling of freight charges, and storage· and transpmtation of Government Furnished Material (GFM).

When Alaska was placed under the CONUS SPV program, the costs of totes, labels and freight for barges, etc. were not normally required under the CONUS program and were added by DLA Troop Support to orders as a separate line item. These additional costs were submitted along with invoices and delivery receipts to the Contracting Officer for reconciliation and payment. This process essentially created a premium transportation charge for an extended period of time, constituting an audit readiness vulnerability.

The CONUS SPV program finalized the SOW to incorporate customer alignment changes, premium transpmiation language, weighting factor and market basket revisions and issued the new solicitation, SPM300-14-R-0002, on June 13, 2014.

CONUS SPV initially contacted the United States Transportation Command (TRANSCOM) in October 2014 to gain information about inbound and outbound freight to Alaska and possibly establish rates to specific remote locations in Alaska. CO NUS SPV was concerned that Distribution Prices would increase significantly due to the fact that all aspects of inbound and outbound freight would have to be captured in this component of price. By December 2014, CONUS SPY had gathered the necessary data for Alaska routes and usage (including third party can'ier invoices) and provided it to TRANSCOM. In late February 2015, the DLA liaison with TRANSCOM was contacted to escalate the issue of establishing freight rates. TRANS COM responded on April 28, 2015 and stated that it is not cost effective or efficient to use TRANSCOM for deliveries to the remote locations.

A total of thirteen (13) amendments were issued under this solicitation to include various changes to the Government's terms/conditions and to address questions posed by industry. On January 9, 2015, the new solicitation closed and non-price proposal evaluations began. Simultaneously, delivered prices were reviewed

Also, the over-ocean transportation cost (i.e. barge cost) was analyzed for these zones.

additional research was done with other DLA Troop Suppm1 Supply

Chains and TRANSCOM. This research with other supply chains was completed in March 2015 and revealed that, generally, supplies are consolidated by TRANSCOM (the U.S. Air Force pays for this consolidator) which, then, utilizes a freight forwarder to ship

JUSTIFICATION FOR OTHER THAN FULL AND 0 PEN COMPETITI 0 N UNDER AUTH 0 RITY

ALASKA

the products to remote customers. However, since food has a shelf life and requires specialized storage and handling, food must be shipped directly to the customers in remote locations, rather than being stored at consolidation points for extended periods of time. Consequently, Subsistence cannot use TRANSCOM to ship food to remote customers in Alaska. Therefore, Subsistence is the only supply chain in DLA that has to directly ship its supplies to the remote customers.

As a result ofTRANSCOM not being able to establish routes to these remote locations, throughout May and June 2015, CONUS SPV worked with OCONUS SPV and DLA Headqumters to develop procedures that allow for direct reimbursement of these transportation costs as a separate line item to reduce distribution prices for these zones.

On June 25, 2015, Amendment 0012 was issued making the changes to the group distribution price definitions and the statement of work requirements that explain the detailed procedures for separating the remote transpo1iation costs.

As a result of these major changes, the solicitation closing date was extended to

July 27, 2015.

In response to vendor request, amendment 0013, dated July 24, 2015, was issued to extend the closing date to August 10, 2015 to allow offerors time to submit revised proposals.

, which added additional time to the evaluation process. Negotiation objectives are being finalized and will be forwarded for review/approval on or before October 23, 2015.

This proposed bridge contract is necessary to provide uninte1rupted food service for Alaska requirements until the solicitation is awarded and implemented. This process includes evaluation, negotiation, and transition of the follow-on contract, including a sixty (60) day implementation period. In order to assure customers uninterrupted, continued foodservice support after October 24, 2015 (expiration date of the current bridge contract), the effective period of this bridge contract will be from October 25, 2015 through April 9, 2016 for a period of one hundred sixty eight (168) days.

The required foodservice supplies are deemed to be available only from the current contractor in the timeframe required, and award to any other source would result in unacceptable delays in fulfilling the agency's requirements. Sysco Seattle is able to meet DLA requirements starting on October 25, 2015. They are the only food supplier in Alaska that has a fully implemented STORES electronic catalog. The implementation phase of a STORES electronic catalog requires a sixty (60) day period. Award to any other potential food supplier would cause an unacceptable break in supply.

Failure to make award to Sysco Seattle will result in a break in Prime Vendor support.

The military customers rely on the DLA Prime Vendor contract for all of their

ALASKA

foodservice needs. The absence ofthis contract for any time will result in the inability of our military customers to order food and associated supplies. Failure to feed our military servicemen and women would constitute mission failure for DLA and our military customers. Should implementation occur ahead of the projected timeframe and the guaranteed minimum has been met under this bridge contract, no further orders will be placed against the bridge contract.

6. As required by FAR 5.2, a notice will be published in FedBizOpps. All information pertinent to the special notice will be available to the general public at website www.troopsupport.dla.mil. In addition, this justification will be made available for public inspection, after award, in accordance with FAR 6.305.

7. As the Contracting Officer, I hereby determine that the anticipated cost to the Government will be fair and reasonable based on price analysis which will include an overall assessment of market conditions and a comparison of the offered distribution fee and product prices with recently awarded CONUS Prime Vendor contracts.

8. The information suppo1ting this action is based primarily on the Government's knowledge of the foodservice market in the region. With the exception of synopsizing this requirement, no additional market research will be conducted and no other firms will be solicited since the Government is unaware of any other firm in the region with the existing capability, including electronic STORES cataloging, to perform in the timeframe required.

9. In the Alaska prime vendor region, only Sysco Seattle has a fully implemented STORES electronic catalog. The required foodservice supplies are available only from the cmTent contractor in the timeframe required, and award to any other source would result in unacceptable delays in fulfilling the agency's requirements.

10. Sysco Seattle is the only source expected to express an interest in the proposed bridge contract.

11. The follow-on acquisition was solicited on a full and open competition basis on June 13, 2014; the estimated award date of the follow-on contract is February 10, 2016. It is anticipated that all future acquisitions for these requirements will be competed on a full and open competition basis.

12. As the Contracting Officer, I hereby certify that this justification is accurate and complete to the best of my knowledge and belief.

DATE

Contracting Officer

Page4

ALASKA

I hereby certify that the requirements which form the basis of this justification are accurate, that these supplies meet the Government's needs in accordance with applicable specifications and that this justification is accurate and complete to the best of my knowledge and belief.

{Dt~t/i;

DTE

Chief Division, CONUS Prime Vendor Directorate of Subsistence

I have reviewed this justification and recommend approval.

DATE

DLA Tro p Support Competition Advocate

I have reviewed this justification for legal sufficiency.

DATE

Sup Chain Counsel DLA Counsel - Troop Support

I have reviewed and hereby approve this justification.

Executive Director DLA Troop Support Contract and Acquisition Management