J&A_Sole_Source_SPE600-16-R-0529-_Final_Redacted.pdf

DEFENSE LOGISTICS AGENCY

ENERGY

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6222

October 17, 2016

<17-0005>

Justification for Other than Full and Open Competition

1. Summary/Introduction:

Defense Logistics Agency (DLA) Energy is the executive agent for Bulk Petroleum Supply Chain Services and the contracting activity for petroleum products and services for the Department of Defense (DoD). This Justification & Approval (J&A) is hereby submitted by DLA Energy- FESBC in accordance with FAR 6.302-1. It authorizes the use of other than full and open competition procedures for the acquisition of petroleum laboratory testing services under solicitation SPE600-16-R-0529.

The estimated value of this J&A is . The contract will be a Firm Fixed Price with a two-year base (January 1, 2017 through December 31, 2018) and a two-year option period (January 1, 2019 through December 31, 2020). The estimated total contract value is .

This amount includes the estimated value of a six-month extension. The contract will support a proficiency testing program for the DLA Energy and Military Service Petroleum Laboratories that will enable DLA Energy to improve and maintain a high level of performance in conducting routine test methods and comparing their results with other laboratories worldwide.

2. Nature and/or description of the action being approved (FAR 6.303-2(b)(2):

DLA Energy anticipates awarding a new Firm Fixed Price type contract to under FAR Part 13.5, as a follow-on for the uninterrupted continuity of services in support of the proficiency testing program for the DLA Energy and Military Service Petroleum Laboratories. The contract’s base year will be funded with FY 2017 working-capital funds and will be awarded as a Sole-Source under the authority of FAR 6.302-1, due to being the only available source that can satisfy the agency’s requirement. Market research was conducted by Finance and the Contract Specialist, with only one responsible source identified: . Sources were sought through Federal Business Opportunities (FBO) from June 30, 2016 to July 21, 2016; no responses were received. Two companies reached out to DLA after the Sources Sought notice closed, however, they were determined not capable of meeting the Government's requirement.

3. Description of supplies or services required to meet the agency’s need (including estimated value) (FAR 6.303-2(b)(3)):

DLA Energy and Military Services (U.S. Army, Navy, and Air Force) maintain petroleum product testing laboratories worldwide that support quality assurance testing of product

Justification for Other Than Full and Open Competition (Cont’d)

(SPE600-16-R-0529– )

purchased from the Defense Working Capital Fund (DWCF). The objective of this requirement is to establish a correlation program in support of a proficiency testing program for thirty-three laboratories. The correlation program includes responsibilities for the following commercial services: petroleum product quantity procurement

, sample preparation and packaging, CONUS and OCONUS distribution/shipping

, statistical analysis of test data, and distribution of statistical summary reports (within 90 days of sample distribution). The laboratory correlation program shall be conducted in accordance with the essential principles and intent detailed in the International Organization for Standardization (ISO/IEC) 17043:2010, Conformity Assessment - General Requirements for Proficiency Testing. The population statistics shall be compiled in accordance with ASTM D6300 and ISO 13528:2015.

The requirement is a follow-on for the current contract which expires on December 31, 2016 and was also awarded through other than full and open competition. The period of performance will be divided between a two-year base (January 1, 2017 through December 31, 2018) and a two-year option period (January 1, 2019 through December 31, 2020).

4. Identification of the statutory authority permitting other than full and open competition (FAR 6.303-2(b)(4)):

This J&A is based upon the authority of the program for commercial items at 41 U.S.C. §1901, and follows the requirements set out by Federal Acquisition Regulation 13.501(a)(1). The exception from the requirement to use competitive procedures is based upon the authority of 10 U.S.C. §2304(1), as implemented by Federal Acquisition Regulation 6.302-1. The services required by the agency are only available from one responsible source and no other type of services will satisfy agency requirements.

5. Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited (FAR 6.303-2(b)(5)):

is the only responsible source available to meet the agency’s requirement per FAR 6.302-

1. Sources were sought through Federal Business Opportunities (FBO) from June 30, 2016 to July 21, 2016 and no responses were received. Two companies, and reached out to DLA after the Sources Sought notice closed. However, they were determined not capable of meeting the Government's requirement. confirmed they do not provide the services being requested. did not provide enough information to determine their capability to meet the requirement. A synopsis including an intent of sole source notice was published in FBO from August 31, 2016 to September 14, 2016; no responses were received either.

(SPE600-16-R-0529– )

No other source currently runs a laboratory correlation program for petroleum laboratories.

Issues that are likely to arise with any source other than include insufficient or inconsistent sample procurement, improper packaging of samples, or improper shipping of samples. Additionally, a small participant pool size outside of DoD labs could result in few statistically significant results.

6. Description of the efforts made to ensure that offers are/were solicited from as many potential sources as is/was practicable, including whether a notice was or will be publicized as required by Subpart 5.2 and, if not, which exception under 5.202 applies (FAR 6.303- 2(b)(6)):

Sources were sought through Federal Business Opportunities (FBO) from June 30, 2016 to July 21, 2016 and no responses were received. Two companies reached out to DLA after the Sources Sought notice closed, however, after phone call discussions, they were determined not capable of meeting the Government's requirement.

confirmed they do not provide the services being requested. did not provide enough information to determine their capability to meet the requirement.

A synopsis of solicitation SPE600-16-R-0529 and intent of sole source notice was published in FEDBIZOPPS as required by FAR Subpart 5.2, from August 31, 2016 through September 14, 2016. The Government did not receive any capability statements from vendors interested in or available to satisfy the requirement.

7. Determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable (FAR 6.303-2(b)(7)):

The total estimated value of the contract is (2-year base, 2-year option with 6-month extension value included). The Contracting Officer determines that the anticipated cost to the Government will be fair and reasonable as the prices were: 1) obtained from a commercial catalogue available to the public and; 2) compared to the current contract’s prices per type of fuel. The estimated value includes the commercial rate charges for the lab correlation service, a shipping rate and a one percent (1%) inflation factor for every year from the second year on.

The prices were obtained from a catalogue available on their website:

The prices obtained for the proficiency test program are as follow: , for and for .

These prices are determined to be fair and reasonable as they are comparable to the prices incorporated into the current contract (awarded in 2011); there is only a minimal variance which is most likely due to five (5) years’ worth of inflation. The current contract’s prices are as follows: for , for and for

(SPE600-16-R-0529– )

The shipping rate is an average rate between three major carriers to ship hazardous materials based on the size of the sample for each program. These shipping rates were obtained from the websites.

If the offered prices differ considerably, the Contracting Officer will conduct further market research for the same or similar services in accordance with FAR 15.404-1 (b)(2)(vi) and will obtain other than certified cost or pricing data in accordance with FAR 15.402 (a). Other than certified cost and pricing data may include: price catalogues, copies of contracts with other customers for similar services, direct labor hours and wages.

8. Description of the market research conducted and the results or a statement of the reason market research was not conducted (FAR 6.303-2(b)(8)):

Sources were sought through Federal Business Opportunities (FBO) from June 30, 2016 to July 21, 2016. No responses were received. Market research was conducted by the Contract Specialist through a search by NAICS code #541380 in the following websites: System for Award Management (SAM) and the SBA Dynamic Small Business Search. A general search through the Internet for companies that provide petroleum laboratory testing was also conducted. DLA Market Research also provided a list of sources for NAICS code 541380, petroleum laboratory testing services. All the information obtained through market research was reviewed by the Program Manager for the requirement. The Program Manager concluded that is the only company capable of offering the statistical correlation study services as identified in the requirement.

After the closing date of the Sources Sought, two companies reached out to DLA after the Sources Sought notice closed, however, after a conference call between the parties, they were determined not capable of meeting the Government's requirement. A synopsis including an intent of sole source notice was published in FBO from August 31, 2016 to September 14, 2016; no responses were received either.

9. Any other facts supporting the use of other than full and open competition, such as (FAR 6.303-2(b)(9):

(i) Explanation of why technical data packages, specifications, engineering descriptions, statements of work, or purchase descriptions suitable for full and open competition have not been developed or are not available.

Not Applicable.

(ii) When 6.302-1 is cited for follow-on acquisitions as described in 6.302-1(a)(2)(ii), an estimate of the cost to the Government that would be duplicated and how the estimate was derived.

(SPE600-16-R-0529– )

Not Applicable.

(iii) When 6.302-2 is cited, estimated cost, or other rationale as to the extent and nature of the harm to the Government.

Not Applicable.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition (FAR 6.303-2(b)(10):

Only two sources expressed, in writing, an interest in the acquisition:

and .

On August 2, 2016, a conference call was conducted between DLA Energy and . After a brief discussion about the requirement, stated they only act as advisors and do not provide the services that are being requested.

On August 4, 2016, DLA Energy had a phone discussion with The conference call served to clarify the Government’s requirement as announced in the Sources Sought, and also to discuss the company’s capabilities. During the phone call, the company did not provide enough information in regards to their capabilities and how they would meet the Government’s requirement. The contract Specialist requested the company to submit a detailed capabilities statement by e-mail, but a proper response was never received. Given the lack of information, they were determined not capable of meeting the Government's requirement.

11. Actions that may be taken to remove or overcome barriers to competition before any subsequent acquisition for the supplies or services are required (FAR 6.303-2(b)(11)):

The is the only program sanctioned by the on petroleum products and lubricants. is the only source that can satisfy the Government’s need. No other source currently runs a laboratory correlation program for petroleum laboratories. DLA Energy will continue to monitor the market for other potential sources that have been sponsored by the .

(SPE600-16-R-0529– )

I hereby certify that the data which forms the basis for this justification is accurate and complete to the best of my knowledge and belief.

Contracting Specialist FESBC- CONUS COCO & Lab CONUS Labs

I hereby certify that the data which forms the basis for this justification is accurate and complete and that the purchase request covers only the minimum requirements to satisfy the needs of the Government.

Chief, Product Technical & Standard Division DLA DQT- Energy

I have reviewed and concur with this Justification.

Assistant Counsel DLA Counsel-Energy

Approved:

Contracting Officer FESBC- CONUS COCO & Lab CONUS Labs