SPE4A517R1072_Redacted.pdf

Source Selection Info-See FAR 2.101 & 3.104

DEFENSE LOGISTICS AGENCY

AVIATION

8000 JEFFERSON DAVIS HIGHWAY

RICHMOND, VIRGINIA 23297-5002

CLASS JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Solicitation SPE4A5-17-R-1072

I. CONTRACTING ACTIVITY

This Class Justification and Approval (J&A) to request authority for Other Than Full and Open Competition supports requirements generated for Defense Logistics Agency (DLA) and the Military Services. The contracting authority for this requirement is DLA Aviation, Richmond, VA, OEM Division, Profit Center 1011307.

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 described in this document using 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. This action will result in the award of a new contract, which will be a Fixed Price, Indefinite Quantity Contract (IQC) for DLA Direct Support. The contract will include a one-year base period and four, one-year option periods for a total of five years.

This sole source requirement will be purchased from the following company:

Eaton Corporation Eaton Aeroquip, LLC 24 E. Glenolden Avenue Glendolden, PA 19036-2107

CAGE: 97484

Large Business

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

NEEDS

DLA Aviation, OEM Division (Eaton), seeks to establish a follow-on corporate contract with Eaton Corporation for items managed and procured by any DLA activity and the Military Services. This Class J&A covers NSNs identified solely to Eaton Corporation, CAGEs 97484. The items support various weapons systems including, but not limited to the CH-47 Chinook, E-3A AWACS, F-16 Aircraft, H-46 Sea Knight. The estimated annual quantities vary for each NSN. The Working Capital Fund will be used for the appropriation of orders resulting from this contract. Funding will be made available when a delivery order is issued against the contract.

This Class J&A will cover all sole source Eaton Corporation consumable and depot-level reparable spare parts for multiple Federal Supply Classes (FSCs). The NSN candidate population may be expanded to include other weapon systems and service managed items if/when additional sole source items are identified. The dollar value of the contract is not anticipated to exceed the J&A threshold.

Solicitation Number: SPE4A5-17-R-1072

Source Selection Info-See FAR 2.101 & 3.102 2

This justification also covers the addition of items that become sole source after award, replacements for obsolete items, items that are newly developed by the contractor and coded sole source to include support for new platforms, and any other items for which the contractor is the sole source supplier. All NSNs included in the initial candidate population have been reviewed and confirmed as sole source to Eaton Corporation as detailed in Section V.

A class population of NSNs with an estimated maximum five-year value of has been identified for this acquisition. A group of 25 NSNs with an estimated maximum five-year value of has been identified from the class population as the initial items to be solicited. The estimated values were calculated by totaling the value of the maximum projected awards for the next five years.

Contract Base Period Option Periods Total Length 1 Year 4 Years 5 Years Estimated Maximum Contract Value

This initiative involves identifying demand patterns for sole source NSNs in various FSCs and placing those NSNs on contract as demands warrant. Continuous spare parts support is required to avoid impacting the mission requirements of the various weapons systems that utilize these parts. The primary goals are to improve Production Lead Time (PLT), reduce Administrative Lead Times (ALT) and set-up costs, and reduce and stabilize unit pricing.

The Acquisition Method Code (AMC) and Acquisition Method Suffix Code (AMSC) for each item is identified in Attachment 1. All items have an AMC of 3, 4, or 5 which specifies that the parts are to be directly acquired from the actual manufacturer or the sole source contractor, which is Eaton Corporation.

The items are sole source for a variety of reasons, including that the technical data is proprietary or is not otherwise available to the Government, the parts require engineering source control approval by the design control activity, and/or the parts must be acquired from a manufacturing source specified on a source control drawing.

Items in the class population may currently carry a temporary AMSC of A or H or not have any assigned AMSC yet. In accordance with DLAD 6.303-2(a)(S-90)(i), items identified by AMSC A or H are subject to review for possible assignment of a different or permanent AMSC. These items shall be continually reviewed, not less than annually, in part to determine if technical data is available to allow for assignment of a more permanent AMSC. Any item determined to be competitively available before contract award will be removed from the acquisition. Any item determined to be competitively available after contract award may be deleted from the contract and competitively re-solicited. The results of the reviews and reclassification actions for AMSC A and H items will be reported by the contracting officer to the local competition advocate, and may be reported to DLA Competition Advocate in accordance with DLA Acquisition requirements. If the review of an item classified as AMSC H does not result in the assignment of a more permanent AMSC within the later of one year of approval of this justification or one year of the item’s placement on a contract covered by this justification, the contracting officer shall remove the item from the contract.

Source Selection Info-See FAR 2.101 & 3.102 3

The delivery and surge and sustainment requirements for each NSN will be established using the Industrial Base Management System (IBMS). There are 21 NSNs in the initial population with surge and sustainment requirements. The estimated one year value of these surge items 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 Section IV above applies because Eaton Corporation is the only know source of supply for the items. Eaton Corporation is the sole source manufacturer and is the only responsible source which possesses the full capability to satisfy the agency’s requirements. Eaton Corporation possesses the data, tooling, machining, and assembly capability to produce the items in accordance with the drawing requirements.

Technical certifications for the initial candidate population are included as Attachment 1. Based on the technical certifications, the acquisition is restricted to the only source of supply known to have the capability of furnishing the required items/spares.

Some of the items identified in the initial candidate population are currently supported by the existing long term contract, SPE4AX-13-D-9410, which expires on June 12, 2018. A copy of the prior J&A is provided as Attachment 2. This acquisition will be a follow-on contract for the continued production of highly specialized equipment.

Accordingly, Eaton Corporation is the only firm capable of providing the supplies described in Section III above without the warfighter experiencing substantial duplication of costs that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirements.

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

FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

A Sources Sought Notice was posted in FedBizOpps on September 6, 2017. The notice indicated the intent to award a sole source contract in accordance with FAR 6.302-1 to Eaton Corporation for the identified NSNs. Interested parties were requested to identify their interest and capability to respond to the requirement. No responses were received from other manufacturers or dealers.

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 items 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.

Source Selection Info-See FAR 2.101 & 3.102 4

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED

COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

For military-unique items, the overall cost of this acquisition will be fair and reasonable to the Government. In accordance with FAR 15.403-4, the contractor will be required to provide certified cost and pricing data to be used in supporting the Government’s evaluation of the proposed cost. The proposed skill mix of labor, labor hours, types and quantities of material, other direct costs, and direct and indirect rates will be negotiated by the Government based on recommendations from the Defense Contract Audit Agency (DCAA) and expert technical personnel supporting the program. The contract price will be negotiated in accordance with the procedures in FAR Part 15. Based on the foregoing, the Contracting Officer hereby determines the anticipated cost to the Government will be fair and reasonable.

For commercial items, the overall cost of this acquisition will be considered fair and reasonable based upon FAR 12 negotiation procedures using price and 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. 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

Efforts were made to conduct market research since the Government has internal information that demonstrates the items are not competitive. Methods used for research included internet searches (System for Award Management (SAM), USA Spending, North American Industry Classification System (NAICS) Code References) and direct contact with potential sources. A technical review certified the initial items to be solicited are coded as sole source to Eaton Corporation. Coordination with the DLA Aviation Competition Advocate reveals that there is extensive history to support that these items have been and will continue to be sole source to Eaton Corporation. As previously indicated, a Sources Sought Notice will be posted to FedBizOpps to request responses from industry concerning their interest and capability in supplying the parts. A FedBizOpps synopsis will also be issued to advise industry of the pending procurement and solicit inquiries from interested parties. It is anticipated that no other source other than Eaton Corporation, the only known manufacturer capable of meeting this requirement, and Jamaica Bearings Company, a small business dealer, may indicate interest in this procurement.

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

COMPETITION

Eaton Corporation 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

Source Selection Info-See FAR 2.101 & 3.102 5

See Section VI above.

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

As previously stated, Eaton Corporation is the only source with the capability of manufacturing the required supplies; therefore, the Government does not intend to compete this procurement. For any groups of NSNs to be potentially added to the contract under the authority of this J&A, a technical review, sole source certification, and synopsis will be performed prior to items being priced and added to the contract via modification. Procurement Note M06, Evaluation of Offers for Part Numbered Items will be included in the solicitation which provides guidance for potential suppliers. The Competition Advocate will review the solicitation and all potential add-on items to locate additional sources of supply. Any items which become competitive after award will be removed from the contract in accordance with Procurement Note L27, Addition and 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/her 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. Initial Population List

2. Sole Source Technical Certification

3. Prior J&A for SPE4AX-13-D-9410