3M_Redacted_JA_(combined).pdf

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DEFENSE LOGISTICS AGENCY

AVIATION

8000 JEFFERSON DAVIS HIGHWAY

RICHMOND, VIRGINIA 23297-5002

Solicitation Number: SPE4A2-16-R-0010

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This Justification and Approval to request authority for Other Than Full and Open Competition supports requirements generated for any Department of Defense (DoD) activity. The contracting authority for this requirement is DLA Aviation, Strategic Acquisition and Programs Directorate, Richmond, VA. The purchase request number supporting this contracting action is 1000046654.

II. NATURE AND/OR DESCRIPTION OF THE ACTION BEING PROCESSED

Due to the circumstances described herein, this activity requests authority to use Other Than Full and Open Competition as prescribed by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency

Requirements. The only approved manufacturing source capable of providing the items included in this initiative, is 3M

Company. Although 3M Company is the only approved manufacturing source for these items, market research revealed that 3M Company has an extensive distribution network that is comprised primarily of small businesses as detailed in section VIII of this document. Because some of the small business distributors are capable of meeting this requirement, the solicitation will be issued as a Total Small Business Set Aside and will result in the award of two contracts, which will be fixed price with Economic Price Adjustment (EPA), Indefinite Delivery Indefinite Quantity (IDIQ) Contract(s) with 3-year base period(s) and single 2-year option(s) for a potential 5-year contract term. The items will be awarded on a line-by-line basis to the two best value offerors.

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED TO MEET THE AGENCY’S NEEDS

DLA Aviation, Strategic Acquisition and Programs Directorate, Richmond, VA, is pursuing a Long Term Contract (LTC) with 3M for items managed and procured by DLA. This J & A covers two groupings of items 1) initial solicitation population of sole source items that have been reviewed, screened and certified as sole source to 3M 2) a population of sole-source 3M items that may potentially be added to the contracts in the future. Any items added in the future will undergo the technical review, screening, certification process, and will be added to one of the two awarded contracts after a limited competition.

The initial solicitation population includes 134 NSNs that are sole source to 3M and were determined to be appropriate for inclusion in the initial award. These items were initially identified as sole source to 3M by their assigned Acquisition

Method Codes (AMCs) and subsequently certified as sole source. The solicitation population has been provided in

Attachment 1 and accompanying certifications have been provided in Attachment 2. The total estimated value of the solicitation population over a 5-year contract term is

The add population includes items which were identified by an AMC of 3 and cite 3M as the only approved manufacturing source and although they are not immediately required, they have demand patterns that indicate they can be most efficiently be obtained by adding them to one of the contracts resulting from this solicitation in the future.

The add population has been included in Attachment 3 and the total estimated dollar value of the add population based on projected requirements over the anticipated 5-year term is

The combined total value of the solicitation and add populations is

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN COMPETITION

10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services

Will Satisfy Agency Requirements.

V. DEMONSTRATION THAT THE CONTRACTOR’S UNIQUE QUALIFICATIONS OR NATURE OF THE

ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED ABOVE

The authority in paragraph IV above applies because 3M Company is the only approved manufacturing source for the items identified in Attachment 1. All items have been assigned an Acquisition Method Code (AMC) of 3 or 4 indicating that the parts must be obtained from the Original Equipment Manufacturer (OEM) or Sole Source Contractor, which is

3M. However, these items may be provided by a distributor that offers material manufactured by 3M.

The solicitation population was also reviewed by technical personnel and certified as sole source to 3M. Any item being considered for addition to the contract in the future will also be reviewed and certified as sole source to 3M.

Items identified in the add population may currently be assigned a temporary AMSC of A or H. Prior to adding these items to the contract, they will undergo a technical review and either be assigned a permanent AMSC or be removed from the population. The results of these technical reviews will be reported by the Contracting Officer to the DLA Aviation

Competition Advocate and may be reported to the DLA Competition Advocate in accordance with DLA Acquisition requirements.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOLICITED FROM AS MANY

POTENTIAL SOURCES AS DEEMED PRACTICABLE

A sources sought was issued on 25 MAR 16 under solicitation number SPE4A2-16-R-0010 with the intent of identifying potential interested sources. All of the 134 items to be solicited were included in this sources sought. Two small businesses responded to the sources sought and stated that that they are authorized distributors for 3M and are interested in participating in this procurement. In addition, the DLA Aviation Small Business Office provided the sources sought to three additional small businesses that have provided 3M items to the Government in the past. All three sources, expressed an interest in the current requirement. A review of recent contract history revealed 29 small business sources were awarded contracts and/or delivery for the solicited items in the past. Based on the ability of small businesses being able to fulfill this requirement, the solicitation will be issued as a Total Small Business Set Aside with the potential to award two contracts.

As the original sources sought did not include the items in the add population, a subsequent sources sought was issued on

1 JUL 16 to publicize the Government’s intent to add items to the contract in the future. The purpose of the sources sought is to identify alternate sources and respondents were afforded the opportunity to submit Source Approval Requests.

Sources identified through the sources sought will also be provided a copy of the solicitation in the event that they are interested in any subcontracting opportunities. As the response date for the sources sought does not occur until

18 JUL 16, sources sought responses will be summarized and provided to the reviewers of this J &A with a copy retained in the official contract file.

This requirement will be synopsized on Federal Business Opportunities (FedBizOpps) as required by FAR 5.201. It is anticipated that additional sources may be identified through the synopsis and that these sources may be able to participate as distributors for 3M.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST TO THE

GOVERNMENT WILL BE FAIR AND REASONABLE

The overall cost of this acquisition will be considered fair and reasonable based upon FAR 12 negotiation procedures using price analysis and if necessary, cost analysis. Methodologies to assure this will be commercial pricing techniques utilizing publicly offered catalogs, comparison to historical contractor sales and/or analysis of limited cost and pricing information which could be made available by the contractor. In the event that limited cost and pricing information is made available, the Government’s negotiation objective will be developed using local technical analysis applied to direct and indirect rate factors recommended by the DCAA and/or DCMA.

Through market research, all items to be solicited were found to be available from a commercial catalog. In addition, 3M offers discounts to many of their distributors and the Government intends to leverage these discounts by purchasing from these distributors. A tailored version of FAR 52.216-2, Economic Price Adjustment – Standard Supplies, will be used to adjust prices annually and will require distributors that receive 3M discounts to pass on the discounts to the Government.

Based on the foregoing, the Contracting Officer hereby determines the anticipated cost to the Government will be fair and reasonable.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE RESULTS, OR STATEMENT

OF THE REASONS MARKET RESEARCH WAS NOT CONDUCTED

Limited efforts were made to conduct market research since the Government has internal information that demonstrates the items to be solicited are not fully competitive. The items in the solicitation population were first identified as sole source to 3M by their assigned AMCs and later certified as sole source to 3M by technical personnel. The AMC assignment is established by the cognizant Engineering Support Activities (ESAs) and indicates the OEM, 3M, is not willing to sell data rights to the Government or is unwilling to sell the data at an economic price. The result is that the technical data package, specification and engineering description necessary for Full and Open Competition cannot be developed without reverse engineering which would be cost prohibitive. Market research confirms that the items to be included in the solicitation population are only available from a single manufacturing source which is 3M.

In addition, through correspondence with 3M and the other potential sources, 3M was found to fulfill the majority of requirements through their extensive distribution network which is comprised primarily of small businesses. The

Contracting Officer also learned that many of these distributors are eligible for discounts in exchange for various activities that they perform for 3M. 3M is unwilling to offer these same discounts to the Government and, as a result, the

Government can obtain better pricing by purchasing through a 3M distributor than could be obtained by purchasing directly from 3M.

IX. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND OPEN COMPETITION

This OEM is not willing to sell data rights to the Government, which means the technical data package, specification, and engineering description suitable for Full and Open Competition cannot be developed without reverse engineering. The

Government has determined that reverse engineering is cost prohibitive.

X. LIST OF SOURCES, IF ANY, THAT EXPRESSED INTEREST IN THE ACQUISITION

The following sources expressed an interest in this requirement:

Arbill Industries Inc.

CAGE 6F088

10450 Drummond Road

Philadelphia, PA 19154-3806

Fulton Supply Company

CAGE 9C042

1428 Kelton Drive

Stone Mountain, GA 30083-1916

Integrity Corporation Inc.

CAGE 7HQ69

801 Elkton Blvd. Ste 2

Elkton, MD 21921-5323

Mallory Safety and Supply

CAGE 686B3

1040 Industrial Way

Longview, WA 98632-1039

Stag Enterprises

CAGE 79S37

3259 S Dayton Ct

Denver, CO 80231-4742

XI. A STATEMENT OF THE ACTIONS, IF ANY, THE AGENCY MAY TAKE TO REMOVE OR

OVERCOME ANY BARRIERS TO COMPETITION BEFORE MAKING SUBSEQUENT ACQUISITIONS FOR

THE SUPPLIES

The current requirement will be synopsized on FedBizOpps to allow potential sources to identify themselves. As the solicitation will result in two awards, and any items added to the contract will be competed amongst the awardees. This

J & A will be routed to the Competition Advocate (COMPAD) for review and recommendations from COMPAD will be considered. The solicitation will include DLAD 52.217-9002 Condition for Evaluation and Acceptance of Offers for Part

Numbered Items, which provides guidance to potential suppliers. The solicitation will also include 52.217-9023

Restriction of Alternate Offers for Source Controlled Items to address items which are assigned an AMSC of B.

Any items found to be available from manufacturing sources other than 3M will be removed from the solicitation or resulting award, in accordance with DLAD 52.216-9006, Addition/Deletion of Items.

XII. CONTRACTING OFFICER’S CERTIFICATION

The contracting officer’s signature on the Coordination and Approval Document evidences that he/she has determined this document to be both accurate and complete to the best of his knowledge and belief.

XIII. TECHNICAL/REQUIREMENTS PERSONNEL’S CERTIFICATION

As evidenced by their signatures on the Coordination and Approval Document, the technical and/or requirements personnel have certified that any supporting data contained herein, which is their responsibility, is both accurate and complete.

Attachments:

1. Solicitation Population

2. Technical Certifications

3. Add Population

JUSTIFICATION AND APPROVAL (J&A)

FOR OTHER THAN FULL & OPEN COMPETITION

AMENDMENT

Solicitation: SPE4A2-16-R-0010

PR: 1000046654

Program: 3M Strategic Initiative Total Estimated Dollar Value (inclusive of adds):

Type J&A: Individual

Statutory Authority: 10 USC 2304(c)(1). Regulatory Authority: FAR 6.302-1. This amendment relies upon the statutory and regulatory authority cited in the original J&A and the purchase is sole source for the reasons cited therein. However, new information has resulted in a change in the acquisition strategy as summarized below:

On 1 AUG 16, a synopsis was posted to FedBizOpps to publicize this requirement. On 8 AUG 16, the Contracting Officer received an email from 3M Company which expressed concern over the government’s intent to set aside the procurement for small business. In response to 3M’s email, the government conducted a review of the acquisition regulations and discovered that the conditions of FAR 19.502-2 were not fully met. FAR 19.502-2(b)(1) requires a reasonable expectation that 1) offers will be obtained from at least two responsible small business concerns 2) offering the products of different small business concerns. Although the government anticipates receiving two valid offers from small businesses and has obtained a waiver of the non-manufacturer rule, there is not a realistic expectation that proposals will include products of different business concerns. Therefore, the government has determined that a Small Business Set Aside (SBSA) is inappropriate and intends to issue an unrestricted solicitation.

Attachments:

1. J&A