SPE4A219R0001_J&A_REDACTED.pdf

Solicitation Number SPE4A2-18-R-0041 - Source Selection Information – See FAR 2.101 & 3.104 For Official Use Only

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This is a Class Justification and Approval (J&A) to request authority for Other Than Full and Open Competition to support the requirements generated for any Department of Defense (DoD) activity. The contracting authority for this requirement is Defense Logistics Agency (DLA) Aviation, Richmond, Virginia, Strategic Acquisition Programs Directorate (AD). The purchase request number supporting this contracting action is 1000066474.

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

Due to the circumstances described herein, this activity requests authority to acquire the items/spares listed in this document using Other Than Full and Open Competition as prescribed by FAR 6.302-1, only one or a limited number of responsible sources and no other supplies or services will satisfy agency requirements. For this DoD requirement, 2 responsible sources exist. The contract will be a firm-fixed price, Indefinite Delivery, Indefinite Quantity (IDIQ) contract with a three-year base period and a two-year option period in which additional quantities may be ordered. This source control, Acquisition Method Code (AMC) 1 with Acquisition Method Suffix Code (AMSC) B, requirement is limited to the following 2 companies that are approved to manufacturer these items:

Parker Hannifin Corporation Firstmark Aerospace Corporation 14300 Alton Pkwy 1176 Telecom Drive Irvine, CA 92618 Creedmoor, NC 27522 Cage 59211 3BMV1 Large Business Small Business

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

NEEDS

DLA Aviation, Strategic Acquisition, Richmond, VA, seeks to establish an IDIQ contract with Parker Hannifin Corporation and Firstmark Aerospace Corporation for these items managed by DLA, to be procured by any DoD activity, including, but not limited to, DLA and the Military services. The contract will be a fixed price contract and the contract period will be for a three-year base period and a two-year option period. The estimated annual quantities for the applicable NSNs vary with each NSN. The Working Capital Fund is the type of appropriation that will be used to fund each DLA requirement.

The J&A will cover seventeen source controlled Parker Hannifan/Firstmark Aerospace Corporation spare parts that are within Federal Supply Class (FSC) 6680 (Liquid, Gas Flow, Liquid Level, and Mechanical Motion Measuring Instruments). The items being procured are compensator, liquid quantity gauges that are designed to be installed in a tank to reduce the adverse effects of liquid variations such as: density, temperature, and composition. These items can be found on the NSN list for this procurement (Attachment 1). This class justification has an estimated five-year value of $ , with a maximum value of

. The estimated and max spend values are derived from the LTC candidate analysis report. The report is based upon historical quantity levels as well as future forecasts applied to the most recent available pricing applicable to the initial NSN population. Only the items solicited as part of NSN list will be eligible for the initial award. However, additional items may be eligible for addition to this contract if discovered within the same supply class and meeting the limited competition parameters of this acquisition including the 2 above sources. The estimated values are calculated by multiplying the cost basis unit price by the Estimated Annual Demand Quantity (EAD) for five-year contract duration.

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

This Class J&A covers the current group of items, 17 initial NSNs with sources of Parker Hannifin and Firstmark Aerospace Corp, as well as additional items found after award which may be added only after reviewing, screening, and verifying the items are source control AMC / AMSC 1 / B and with sources of Parker Hannifin and Firstmark Aerospace. The AMC / AMSC of 1 / B requires acquisition directly from the 2 approved sources of supply.

Items within the population are source control for a variety of reasons, including, in part, that the technical data is proprietary or is not otherwise available to the Government. These parts must be acquired from a manufacturing source(s) specified on the source control drawing.

All items, initial and additions will have to be certified as source control to Parker Hannifin/Firstmark Aerospace by the cognizant technical authority before being incorporated in this contract. The Product Specialist has provided the initial NSN population technical certifications completed for the 17 NSNs. The spare parts covered under this proposed contract, have been procured from Parker Hannifin on Long Term Contract SPE4AX14D9413 until August of 2017, when the Air Force (AF) added a new source control drawing, including Firstmark Aerospace as an additional source. The AF requested that these items be removed from the Parker Hannifin OEM IST, which removed the NSNs from the existing LTC, for competition. Thus, only Parker Hannifin/Firstmark Aerospace have the requisite engineering expertise, data, tooling, qualification testing capability, and knowledge required to ensure that performance specifications conform to the proper form, fit, and function and the ability to resolve technical issues associated with performance.

Any item determined to have additional sources of supply before contract award will be removed from the acquisition. Any item determined to have additional sources of supply after contract award may be deleted from the contract and competitively re-solicited.

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

MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

This requirement will be synopsized on Federal Business Opportunities (FedBizOpps) as required by FAR

5.201. It is anticipated that sources having an interest in subcontracting may be identified through synopsis.

Although the Government does not own data to support acquisition of these NSNs from any other source, any source who responds to the Government as a result of this synopsis will be identified to the prime contractor as a potential for subcontracting possibilities.

Surplus dealers, small business dealers and distributors having existing stocks of surplus or newly manufactured material will be invited to respond to the synopsis and/or solicitation and will be evaluated and awarded on a line-by-line basis. The respondents will be required to include a completed surplus certificate, Procurement Note C04, Government Surplus Material, or adequate traceability documentation to show product is acceptable.

In addition, respondents will be required to identify quantity available and price. DLA Aviation will consider all such responses and may alter the acquisition strategy if purchase of existing surplus or newly-manufactured inventory is in the best interests of the Government.

A sources sought was issued on May 17, 2018 to determine if companies other than Parker Hannifin or Firstmark Aerospace were capable of manufacturing, or legitimately obtaining the items proposed for solicitation. No other vendors, except Parker Hannifin and Firstmark Aerospace, expressed interest in bidding as a result of the sources sought synopsis. A copy of the sources sought synopsis is attached (Attachment 2).

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 negotiation and will utilize competition, price analysis, and if necessary, cost analysis. This includes 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. 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

Market Research was conducted with the two approved sources, and both sources indicated they will provide a proposal for the requirement. No other responses were received other than the responses of the 2 current sources. The 17 items are compensator liquid gauges that are installed in a tank to reduce any adverse affects of liquid variations. These items are not Critical Safety Items, and do not have requirements for Surge, First Article, or Special Testing. These items are not currently on a Long Term Contract, and are currently supported through transactional procurements. The Engineering Authority for each NSN lies with the DoD Services that manage these items. As the Engineering Authority, the Services conduct continuous Market Research and Market Awareness relative to the specific items under their control. Their findings are documented and a record is created and regularly updated for each NSN. This documentation includes the item’s procurement history, the AMC assigned, and the rationale for procuring the item through any means Other Than Full and Open Competition. For the items to be acquired here, the responsible Engineering Authority has determined that no source other than Parker Hannifin or Firstmark Aerospace can satisfy the Government’s requirement. History supports that these items have been source controlled to Parker Hannifin and in August 2017, the Air Force added Firstmark Aerospace and removed the NSN off the Parker Hannifin OEM IST.

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

COMPETITION

The items to be procured are complex and have an AMC/AMSC code of 1B. The sources are 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 due to the critical operational and reliability requirements for these items and cannot be met by any other sources than Parker Hannifin and Firstmark Aerospace.

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

At present no additional sources have expressed an interest as previously stated in section VI above. The Contracting Officer will synopsize the requirement before issuing the solicitation, which will provide interested parties the opportunity to review and express interest in the requirement.

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

These items currently have 2 sources of supply. No other sources are currently known that can manufacture these items, and no additional sources responded to the sources sought. Parker Hannifin and Firstmark are the only sources with the capability of furnishing the required supplies. DLA Aviation will continue to synopsize future requirements to allow industry the opportunity to identify additional sources.

Small business dealers and distributors having existing stocks of surplus or newly manufactured material will be invited to respond to the synopsis and/or solicitation and will be evaluated and awarded on a line-by-line basis.

The respondents will be required to include a completed surplus certificate and provide adequate traceability documentation to show product is acceptable. In addition, respondents will be required to identify the quantity available and unit price. DLA will consider all such responses and may alter the acquisition strategy if purchase of existing surplus or newly-manufactured inventory is in the best interests of the Government.

The cognizant Competition Advocate will review the initial requirements. Any items that subsequently have additional sources approved after award may be removed from the contract.

XII. CONTRACTING OFFICER’S CERTIFICATION

The contracting officer’s signature on the Coordination and Approval Document evidences that he 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.