SPE4A617D0003_Redacted.pdf

FOR OFFICIAL USE ONLY

Source Selection Information -- SEE FAR 2.101-3.104

DEFENSE LOGISTICS AGENCY

Aviation 6090 strathmore rd

Richmond, virginia 23237

Justification and Approval (J&A) for Other Than Full and Open Competition, 10 U.S.C 2304(c)(1), and U.S.C. 2304(c)(2). Europe Industrial Gas and Cylinder, Contract

SPE4A6-17-D-0003.

I. CONTRACTING ACTIVITY

This Justification and Approval is to request authority for Other Than Full and Open Competition under the authority of 10 U.S.C.2304(c)(1), and under the authority of Federal Acquisition Regulation (FAR) 6.302-1(a)(2). The supplies and services required by the agency are available only from one responsible source and no other type of supplies and services will satisfy the agency requirements. As well as under 10 U.S.C. 2304(c)(2), and FAR 6.302- 2(a)(2). The agency’s need for the supplies and services is such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources. This J&A is to request authority for requirements generated for the Defense Logistics Agency (DLA), Aviation.

II. DESCRIPTION OF THE ACTION BEING PROCESSED

DLA Aviation currently acquires industrial compressed, non-medical, non-

Ozone Depleting Substances (ODS), gases and cylinders from International Gas and Services (IGS), through an Indefinite Delivery Indefinite Quantity (IDIQ) Contract. The contract supported 39 NSNs for delivery to European customers.

The contract was awarded 1 December 2016, with a one-year base period and four (4), one-year option periods. The contract expired 30 November 2021. A six-month extension with two (2) three-month options was granted on 15 November 2021. Final expiration was extended to 30 November 2022 with both options exercised. An additional one-year extension is requested. The one-year extension will only support 22 NSNs due to lack of available Government Furnished Property (GFP) cylinders utilized under the contract. Final expiration would be extended to 30 November 2023. The maximum dollar value of the contract at award was . The total value of the contract at the first extension was . The contract extension period of one year has an estimated dollar value of . The estimated total value of the full extended contract would be and is within the overall maximum contract value of .

DLA relies on IGS for the performance of supply, storage, and distribution functions for this commodity in Europe. The contract also requires the critical function of maintaining the GFP cylinder pool. Maintenance includes cylinder refurbishments and disposals as well as maintaining the stock level of empty cylinders. This is primarily accomplished through IGS retrieving the GFP cylinders from customers and refurbishing them to meet the EU requirements. A re-compete contract is not being considered because DLA does not have adequate, compliant (GFP) cylinders to support continued performance.

The European Agreement Concerning the International Carriage of

Dangerous Goods by Road (ADR), together with Directive 2010/35/EU of the European Parliament and of the Council of 16 June 2010 on Transportable Pressure Equipment, require any cylinders moving throughout the European region to undergo additional certification and application of the “Pi” marking on those cylinders at the time of manufacture. Initially the EU granted a waiver allowing non-compliant cylinders to be transported as usual. Upon expiration of that waiver, DLA was notified that if an adequate quantity of cylinders from the same manufacture lot/batch were identified that they would permit post-manufacture testing and certification to make that lot compliant. Through this process DLA was able to test and certify approximately 8000 cylinders. In 2010, the EU determined that this process was no longer acceptable and in order to be compliant cylinders must be certified at the time of manufacture. However, the UN Economic Commission for Europe (UNECE) has brokered Multilateral Agreement M318 to allow the import/export of US DOT (non-Pi) marked cylinders. This agreement expires on 1 June 2023. Currently, seventeen countries have signed this agreement, which allows carriage to or through the UK, France, Sweden, Germany, Ireland, Switzerland, Austria, Netherlands, Poland, Italy, Denmark, Lithuania, Latvia, Luxembourg, Finland, Slovenia, and Norway.

Over time, and due to the transient nature of the European customer base, the quantity of compliant GFP cylinders available to support this program has diminished. DLA does not currently have enough Pi-stamped cylinders in the cylinder pool for IGS to fully support European customers. To date six (6) NSNs have been removed from the contract due to a lack of GFP. Several attempts have been made to identify a supplier capable of manufacturing cylinders compliant with both US (DOT certification) and EU (pi-stamped) requirements.

One domestic manufacturer has recently been identified. The manufacturer has provided DLA Aviation with cylinder specifications to evaluate the feasibility of use of the cylinders. DLA Aviation is currently pursuing the approval of the Services to utilize these dual certificate cylinders. These cylinders would allow for use throughout Europe. IGS’s current contract expires 30 November 2022.

The contract extension will extend expiration date to 30 November 2023.

DLA Aviation has a contract (SPE4A6-16-D-0226) with Hudson Technologies to provide worldwide support of 324 industrial compressed gases and cylinder NSNs, including those items currently supported by IGS. It was anticipated that DLA Depots located in Europe (DLA Distribution Sigonella, Italy (DDSI) and DLA Distribution Germersheim, Germany (DDDE)) would support the return of GFP to the supply chain via the Stock Transfer Order (STO) process and Hudson would begin to provide support to European customers at the conclusion of the IGS contract, while DLA explores options for future support of customers in Europe. Hudson planned to provide customers located in countries that have signed the M318 with DOT cylinders. Hudson planned to provide Pi-stamped cylinders to non-M318 country customers once the GFP pool currently in the possession of IGS was transferred to Hudson. However, DDSI advised DLA Aviation that it does not have the space, expertise, equipment, and personnel to accept and manage cylinder returns. DDSI currently only has enough space for Aviator’s Breathing Oxygen (ABO) safety stock. In addition, DDDE has recently advised that it can no longer accept any hazmat material.

Thus, there currently is no viable option for Hudson to send material into Europe.

Without a vehicle to facilitate the shipment of material from Hudson to Europe and to facilitate customer returns of the cylinders to Hudson, European customers cannot be supported without the IGS contract.

This J&A authorizes the bilateral extension of the contract for one year, 1

December 2022 through 30 November 2023. IGS has held pricing since the beginning of the contract (1 December 2016) through the end of the first extension. IGS has proposed new pricing for material and services due to current market conditions. The estimated total value of the contract at extension is

. The contract extension period of one year has an estimated dollar value of . The estimated total value of the full extended contract is

, which is within the overall maximum contract value of

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED TO

MEET THE AGENCY’S NEEDS (10 U.S.C 2304(f)(3)(A)

DLA Aviation seeks to continue to provide uninterrupted support to its

European customers by extending the current contract with IGS. This temporary solution will allow DLA time to explore options and craft a solution for customer support in Europe. Currently, DLA Aviation has identified a viable manufacturer for compliant GFP cylinders and is in the process of validating use of the manufacturer with cognizant Engineering Support Activity (ESA) prior to initiating procurement of a new GFP pool to support European customers. In the current market, cylinder prices are exceeding the associated Economic Price Adjustment (EPA) due to increasing raw material costs and worldwide supply chain challenges. DLA Aviation has been advised that delivery estimates of new GFP would be between 12-18 months, thus jeopardizing supportability.

Failure to provide uninterrupted support to customers would adversely affect the performance of military components in accomplishing their mission and result in serious injury to the Government. A contract extension will allow DLA’s European customers to continue to receive the required support provided under this contract. DLA Aviation intends to extend Indefinite Delivery Indefinite Quantity Contract, SPE4A6-17-D-0003, for one year ending 30 November 2023.

There are currently no viable alternatives to a contract extension for these materials and services provided by IGS without a gap in coverage. It currently remains unclear how to overcome the hazmat issues at DDDE. Conversations with DDDE and DDSI personnel continue. DLA Aviation continues to work with DDSI to develop a long-term solution that would allow DDSI to accept customer returns and be a possible transshipment point. Possible solutions include creating additional storage space (constructions) and hiring additional personnel. DDSI has advised that both require time and money to put in place.

Recent discussions indicate a construction completion date of 2025 or later.

This extension is requested to ensure a continuation of operations while alternatives for support are developed.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL

AND OPEN COMPETITION

Authority for Other than Full and Open Competition (10 U.S.C.

2304(f)(3)(B)): Use of Other than Full and Open Competition is authorized by 10 U.S.C. 2304(c)(1) and FAR 6.302-1(a)(2), as only one or a limited number of responsible sources and no other supplies or services will satisfy agency requirements; and 10 U.S.C. 2304(c)(2) and FAR 6.302-2(a)(2), unusual and compelling urgency. This acquisition is restricted to IGS, the only known source of supply that currently has the capability to furnish the required supplies and services. Furthermore, the current contract is set to expire 30 November 2022 and there are currently no alternate contract vehicles in place that would completely meet the Governments needs to supply, retrieve and refurbish the GFP cylinders locally or from CONUS.

Extending this contract is the only way to ensure uninterrupted support for these items and no adverse impact on military components accomplishing their mission.

V. DEMONSTRATION OF THE CONTRACTOR’S UNIQUE

QUALIFICATION OR NATURE OF THE ACQUISITION REQUIRES THE

USE OF THE AUTHORITY CITED ABOVE

This J&A covers only 22 NSNs under FSC 6830 that are currently on contract.

IGS advised that they would not support the remaining 17 NSNs under the extension due to lack of cylinder availability. No other Contractor can perform this contract as the EU compliant government furnished property (GFP) cylinders that are associated with this contract are in the possession of IGS. Without an extension to the current contract with IGS, the Government would experience a lapse in support for these items, i.e., there would be unacceptable delays in fulfilling its requirements and result in serious injury to the Government. See FAR 6.302(a)(2)(iii).

VI. PRICE/COST CONSIDERATIONS (10 U.S.C. 2304(f)(3)(c)

The Contracting Officer has determined the prices for the one year extension are fair and reasonable in accordance with FAR 15.404-1(b)(2)(vi), Comparison of proposed prices with prices found through market research for the same or similar items.

VII. MARKET RESEARCH/EFFORTS TO OBTAIN COMPETITION (10 U.S.C.

2304(f)(3)(D) and (E))

Limited efforts were made to conduct market research regarding competition.

IGS was the only respondent to the solicitation for the current contract. There is no source other than IGS that has the capability of providing the required supplies and services. Courses of action discussions continue with DDSI and DDDE to develop a long-term solution. A synopsis and sources sought notice was posted on the FedBizOpps web portal during December 2015 in accordance with FAR 5.201(b)(1)(ii) for the current contract.

VIII. ACTIONS BEING TAKEN TO OVERCOME BARRIERS TO

COMPETITION (10 U.S.C. 2304(f)(3)(F)

A FedBizOps synopsis, as required by FAR 5.201, was posted 30 November

2015, advising industry of the pending procurement and soliciting inquiries from interested parties.

DLA COUNSEL AVIATION – DLAD 1.69(e)(ii)

DLA Counsel Aviation has reviewed the information contained in this justification and has concluded it is legally sufficient.

Joseph Copeland Office of Counsel

CONTRACTING OFFICER – FAR 6.303-2(B)(12)

I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief.

Marie Harrison Contracting Officer

COMPETITION ADVOCATE – FAR 6.304(a)(2)

The Competition Advocate for the procuring activity designated pursuant to FAR 6.501 has reviewed and approved this Justification for a proposed contract over $750,000 but not exceeding $15 million.

Yolanda C Maupin DLA Aviation Competition

COPELAND.JOSE

PH.DWIGHT.

Digitally signed by

COPELAND.JOSEPH.DWIGHT.

Date: 2022.09.16 08:11:12 -04'00'

HARRISON.MARIE

.MERHOUT

Digitally signed by

HARRISON.MARIE.MERHOUT.1

Date: 2022.09.16 09:07:43 -04'00'

MAUPIN.YOLA

NDA.C.

Digitally signed by

MAUPIN.YOLANDA.C

Date: 2022.09.19 06:33:12 -04'00'