JA for Pepsi Guam SPE302-25-R-0004 Signed.pdf

Controlled Unclassified Information (CUI)

Controlled Unclassified Information (CUI) Source Selection Information – See FAR 2.101 and 3.104

Controlled by: DLA Troop Support Indo-Pacific Controlled by: Procurement Office Hawaii CUI Category: PROCUREMENT Distribution/Dissemination Controls: FED ONLY POC: Bradley Ah Nee / bradley.ahnee@dla.mil

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Brand-Name Beverage Products for OCONUS Support

1. Defense Logistics Agency (DLA) Troop Support, Indo-Pacific Subsistance 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 supplies to be acquired under this requirement consist exclusively of brand-name PepsiCo bottled and canned nonalcoholic beverage products to support U.S. military and authorized federal customers located throughout the territory of Guam. This includes fixed military installations, dining facilities, exchange stores, vending machines, and U.S. Navy ships operating in or transiting through Guam. These beverages are essential to supporting troop readiness, hydration, and morale, especially in Guam’s tropical climate and operational environment.

The required products include, but are not limited to, the following PepsiCo beverage lines: Pepsi, Diet Pepsi, Mountain Dew, Mist Twist (formerly Sierra Mist), Mug Root Beer, Gatorade (various flavors and sizes), Lipton Iced Tea, and Aquafina bottled water. Additional PepsiCo beverages available in the regional catalog—such as seasonal flavors, energy drinks, and zero-sugar variations—may also be included, provided they are available for distribution within Guam. Products will be packaged in formats suitable for both individual resale and bulk use, such as 12 ounce (oz) cans, 20 oz bottles, and multi-pack options.

CUI

All items to be procured under this contract will be listed in the Schedule of Items and catalog provided by PepsiCo, which will be incorporated into the resulting Simplified Indefinite Delivery Contract as the official reference for pricing and availability. The applicable Product Service Code (PSC) is 8960 – Beverages, Nonalcoholic.

This requirement will be fulfilled through a Firm-Fixed Price, Simplified Indefinite Delivery Contract (SIDC) utilizing Simplified Acquisition Procedures under FAR Part 13. The proposed contract will have a five (5) year ordering period, consisting of one base year and four one-year tier periods. Based on historical ordering data from DLA Troop Support Indo-Pacific customer demand and prior Blanket Purchase Agreement (BPA) usage (SPE302-20-A-0008), the estimated total dollar value for this requirement is approximately $162,025.70 per year, for a total estimated value of $810,128.50 over the life of the contract. The maximum ceiling value will not exceed $825,000.00 over five years

All ordering will be conducted via delivery orders issued under the awarded SIDC, and pricing will be in accordance with the contractor's approved product catalog and Schedule of Items.

4. . The applicable statutory authority permitting other than full and open competition is 41 U.S.C. § 1901, as implemented by FAR 13.501(a), Sole Source Acquisition.

5. This acquisition requires the use of brand-name specifications for PepsiCo beverages to ensure consistency, product recognition, and compliance with approved standards across U.S. military and federal customer locations throughout Guam—including Navy shore installations and ships. All PepsiCo products must be sourced through licensed distributors authorized to sell and deliver within the designated territory, in accordance with PepsiCo’s proprietary manufacturing, quality control, and territorial licensing agreements.

Only authorized PepsiCo distributors can legally and logistically fulfill this requirement. Accordingly, offers will only be considered responsive if they originate from licensed PepsiCo distributors with the ability to supply brand-name beverages in full compliance with corporate standards and territorial rights.

These products are essential to support mission readiness, hydration, and morale through their use in resale outlets, dining facilities, vending machines, and operational support activities. PepsiCo beverages are widely recognized and preferred by end users, and their availability directly contributes to quality of life, particularly in remote and austere environments such as Navy ships or forward-operating locations.

Beverage bottling and distribution rights are highly controlled and geographically limited. Unlike generic food items, brand-name beverages must be bottled, warehoused, and distributed within specific corporate territories to ensure freshness, shelf life, and quality. Attempting to source these products from outside the authorized Guam distributor would not only violate corporate agreements, but also introduce significant logistical challenges and degrade product integrity.

Furthermore, this requirement is not merely for generic “soda” or “bottled water.” The specific PepsiCo brands are already integrated into automated vending systems, dining facility menus, resale operations, and inventory tracking. Substituting other brands would create logistical disruptions, require costly reconfiguration, and negatively affect customer satisfaction.

6. A pre-solicitation notice for this requirement was published on June 6, 2025, in the Contract Opportunities section at www.SAM.gov to notify potential sources of the Government’s intent to solicit PepsiCo nonalcoholic beverages. In addition, this justification for other than full and open competition will be made available for public inspection, with the solicitation, redacted as necessary, in accordance with FAR 5.102(a)(6).

7. As the Contracting Officer, I hereby determine that the anticipated prices will be fair and reasonable based on current comparisons to commercial pricing and historical prices paid by the Government.

Negotiations will be conducted as necessary to obtain fair and reasonable pricing and favorable discounts.

8. Market research was conducted with DLA Troop Support Indo-Pacific stakeholders and the incumbent vendor, Pepsi Bottling of Guam, to confirm the authorized distribution rights and availability of brand-name PepsiCo beverages in Guam. Research confirmed that only licensed PepsiCo distributors are authorized to sell and distribute PepsiCo beverages in Guam. On August 11, 2025, Pepsi Bottling of Guam confirmed that they are the only licensed distributor authorized to provide PepsiCo products to within the territory of Guam.

To further promote competition, a sources sought notice (SPE302-25-SS-0006) was posted June 6, 2025, and closed July 7, 2025. Three contractors responded. However, none held licensing agreements with PepsiCo. Two respondents advised that they would procure through Pepsi Bottling of Guam to meet the requirement, confirming that only licensed PepsiCo distributors can fulfill the requirement.

9. Specifications suitable for full and open competition have not been developed because the Government’s requirement is for specific brand-name PepsiCo beverages, which are proprietary and exclusively distributed within Guam by licensed PepsiCo distributors. Developing a generic specification would not satisfy the requirement and would result in technically unacceptable offers.

10. BTS Global Supply, H2P LLC, and Oahu Alkaline expressed interest in the requirement during market research. Two technically acceptable offers were received: one from Pepsi Bottling of Guam and one from Oahu Alkaline.

11. Barriers to competition are not agency-imposed. They stem from PepsiCo’s proprietary licensing and distribution rights. No measures can be implemented to overcome this limitation without violating the brand’s distribution agreements. Until PepsiCo expands its distribution in Guam, only Pepsi Bottling of Guam or distributors operating through them may fulfill this requirement.

Source Selection Information – See FAR 2.101 and 3.104

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

Date ALLISON HIGASHI

Contracting Officer

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.

Date

I have reviewed and hereby approve this justification.

Date MACIEJ OKULICZ-KOZARYN

DLA Troop Support Competition Advocate