Tab 04 JA signed_redacted_11DEC2024.pdf

DEFENSE LOGISTICS AGENCY

HEADQUARTERS

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6221

Source Selection Information -See FAR 2.101 and FAR 3.104

Controlled by: DLA Energy FEBB CUI Category: SSEL

Distribution/Dissemination Controls: FED ONLY POC: Stephanie Koessel (Stephanie.koessel@dla.mil)

J&A Tracking Number: 24-0006

CUI

Justification for Other than Full and Open Competition

1. Summary/Introduction:

Defense Logistics Agency (DLA) Energy is the integrated materiel manager for energy commodities and the contracting activity for petroleum products and services for the Department of Defense (DoD). This Justification and Approval (J&A) is for the procurement of approximately 23,961,000 U.S. Gallons (USG) Turbine Fuel, Aviation Grade Jet A (JAA) to McChord Air Force Base (AFB), WA (McChord) via a supplier-owned pipeline. This location is solicited annually under the Rocky Mountain/West Coast/Offshore (RMW) Program for Bulk Petroleum Products. Request for proposals (RFP) SPE602-24-R-0701 was publicly solicited on March 8, 2024.

Ninety percent (90%) of the JAA requirement at McChord is being solicited on an �other than full and open� basis via pipeline; the remaining ten percent (10%) is being solicited via pipeline and/or truck. Offers for delivery via truck will be competed with the pipeline offer from US Oil to determine the overall best value to the Government. This J&A covers 90% of the requirement at McChord for a total of 23,961,000 USG.

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

An approved J&A will result in award of a one-year, fixed-price with economic price adjustment (EPA), Indefinite Delivery Indefinite Quantity (IDIQ) contract to US Oil to supply McChord AFB. The contract period of performance is October 1, 2024 � September 30, 2025, and a 30-day carryover delivery period for fuel ordered during the contractual ordering period. Defense Working Capital Funds will be used for this effort.

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

Requirements are subject to change based on mission needs to support operations throughout the region. The estimated quantity and value of the contract the Government shall award under this J&A is set forth in the table below:

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

(SP0602-24-0701 � US OIL)

Source Selection Information -See FAR 2.101 and FAR 3.104

Controlled by: DLA Energy FEBB CUI Category: SSEL

Distribution/Dissemination Controls: FED ONLY POC: Stephanie Koessel (Stephanie.koessel@dla.mil)

Est. Qty

(USG)

Product Program Location

FOB

& Mode Supplier

Est.

Price/USG

Total Estimated Value

23,961,000 JAA RMW

McChord, AFB

Destination

Pipeline US Oil $ 3.500300 $83,870,688.30

The estimated value of the proposed action was derived by multiplying the estimated unit price by the total estimated quantity. The unit price was estimated by escalating the lowest laid down unit price from SPE602-23-R-0702 at this location for JAA to the base reference date of October 31, 2023. The total estimated value for this action is $83,870,688.30.

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 10 U.S.C. § 3204(a)(1), as implemented by Federal Acquisition Regulation 6.302-1. Portions of the supply required by the agency are only available from one responsible source for this location via pipeline delivery mode, and no other type of supplies will satisfy agency requirement.

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)):

McChord AFB can receive fuel via pipeline and truck; however, McChord�s truck receipts are limited to an average of 221,867 USG per month with an overall maximum truck award of 2,662,400 USG of the total 26,624,000 USG required. McChord lacks the infrastructure, throughput, and manpower to receive more than a small percentage of the annual requirement via truck. There are insufficient truck racks at the location and a national truck driver shortage as detailed in section 8 further diminishes the quantity McChord may receive via truck delivery mode.

US Oil owns a proprietary pipeline that originates at U.S. Oil�s refinery and connects directly to McChord. There are no other connections to this pipeline, and it is the only commercial pipeline that services this requirement. No other suppliers can connect to this pipeline. Consequently, there is no opportunity for acquiring fuel at this location via pipeline unless delivery is made by US Oil. In an effort to promote and potentially develop competition at the location, up to 10% of the requirement is subject to competition between pipeline delivery mode and proposals for delivery by truck. The remaining 90% will be awarded to US Oil for delivery via pipeline.

For the reasons detailed above, the US Oil-owned (McChord) pipeline is the only responsible source to meet 90% of the fuel requirement at McChord. DLA Energy will compete the maximum quantity that the site has capability to receive via truck by allowing both FOB Destination truck and FOB Destination pipeline offers for 10% of the requirement. (see section 6 below for details of the solicitation).

limited to an average of 221,867 USG per month with an overall maximum truck award of 2,662,400 USG of the total 26,624,000 USG required. McChord lacks the infrastructure, 2,662,400 USG of the total 26,624,000 USG required. McChord lacks the infrastructure, throughput, and manpower to receive more than a small percentage of the annual requirement via throughput, and manpower to receive more than a small percentage of the annual requirement via truck. There are insufficient truck racks at the location and a national truck driver shortage as truck. There are insufficient truck racks at the location and a national truck driver shortage as detailed in section 8 further diminishes the quantity McChord may receive via truck delivery mode.

(SP0602-24-0701 � US OIL)

Source Selection Information -See FAR 2.101 and FAR 3.104

Controlled by: DLA Energy FEBB CUI Category: SSEL

Distribution/Dissemination Controls: FED ONLY POC: Stephanie Koessel (Stephanie.koessel@dla.mil)

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)):

On November 30, 2023, DLA Energy posted a combined Sources Sought Notice (SSN) on SAM.gov under solicitation SPE602-24-RFI-1001, stating that the Government intended to procure 582,649,000 USG of JAA to support the annual RMW purchase program (including McChord).

A total of 15 companies responded to the SSN, expressing a general interest in the procurement, and providing their general capabilities. None of the respondents expressed interest in the line item at McChord within the schedule.

DLA Energy issued solicitation SPE602-24-R-0701 on March 8, 2024. McChord will be solicited as at least 90% (and up to 100%) FOB Destination pipeline delivery and up to 10% FOB Origin or Destination truck.

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 anticipated cost to the Government for these contracts is $83,870,688.30, which represents the sole source quantity multiplied by the anticipated prices per gallon. The anticipated price per gallon for the RMW requirement is determined by using the winning unit prices at McChord AFB under prior RMW solicitation SPE602-23-R-0702, escalated to the base reference date of October 31, 2023. Additionally, it is expected that the anticipated cost to the Government will be fair and reasonable based on a comparison of the proposed prices to historical prices paid in accordance with FAR 15.404-1(b)(2)(ii) and market research for the same or similar items in accordance with FAR 15.404-1(b)(2)(vi).

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)):

DLA Energy�s Inventory Management Division (IMD), the Agency�s experts on the RMW supply chains, conduct ongoing market research concerning fuel supply, transportation, and logistics. Based on their research, IMD concluded that McChord is a marketplace where no commercial pipeline(s) other than the one owned by US Oil can service McChord.

The only other mode of delivery to McChord is truck, but this mode of delivery is limited. As discussed in Sections 5 and 11, this is primarily due to base manpower and infrastructure limitations, as well as weather restrictions. However, research also included a review of market availability of truck delivery. Currently, the United States is experiencing a nationwide shortage

The only other mode of delivery to McChord is truck, but this mode of delivery is limited. As The only other mode of delivery to McChord is truck, but this mode of delivery is limited. As discussed in Sections 5 and 11, this is primarily due to base manpower and infrastructure discussed in Sections 5 and 11, this is primarily due to base manpower and infrastructure limitations, as well as weather restrictions. Howeve

(SP0602-24-0701 � US OIL)

Source Selection Information -See FAR 2.101 and FAR 3.104

Controlled by: DLA Energy FEBB CUI Category: SSEL

Distribution/Dissemination Controls: FED ONLY POC: Stephanie Koessel (Stephanie.koessel@dla.mil) of qualified HAZMAT certified truck drivers. The American Trucking Association (ATA), the nation�s largest group representing the industry, explained in a September 13, 2023, letter to members of Congress that the pandemic has, �exacerbated the truck driver shortage, and the temporary closures of state motor vehicle departments and truck driver training schools dried up the already fragile pipeline of new drivers entering the trucking industry.� Further per the ATA, there is a shortfall of 78,000 truck drivers as of 2022. The COVID-19 pandemic brought on a surge of early retirements for many of these drivers, and the trucking industry is struggling to make up for the shortfall. Finally, market research was conducted via an SSN, discussed in Section 6 above.

.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.

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)):

No responses to the SSN indicated that any vendor has interest in the pipeline requirements for McChord AFB.

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)):

DLA Energy is presently unable to overcome the barriers to competition at this location. The primary barrier to competition is the lack of resources at McChord to handle large scale trucking operations for delivery of fuel by truck. To overcome this obstacle, the Government has to consider significant investment into labor at the location through service contracts/Full Time

DLA Energy is presently unable to overcome the barriers to competition at this location. The primary barrier to competition is the lack of resources at McChord to handle large scale trucking primary barrier to competition is the lack of resources at McChord to handle large scale trucking operations for delivery of fuel by truck. To overcome this obstacle, the Government has to

(SP0602-24-0701 � US OIL)

Source Selection Information -See FAR 2.101 and FAR 3.104

Controlled by: DLA Energy FEBB CUI Category: SSEL

Distribution/Dissemination Controls: FED ONLY POC: Stephanie Koessel (Stephanie.koessel@dla.mil)

Equivalents and/or spend Sustainment, Restoration and Modernization funds for facilities, plants, and equipment. Another barrier is nationwide driver shortage discussed in Section 8.

Unless the transportation market rebounds and the government makes strategic long-term investments, it is unlikely that levels of competition will change for the requirements at McChord.

BLACK.DONNA

.A.1229663085

Digitally signed by

BLACK.DONNA.A.1229663085

Date: 2024.03.15 10:39:28 -04'00'

BARNETT.CHRIST

OPHER.T.1229474

Digitally signed by

BARNETT.CHRISTOPHER.T.122

9474304 Date: 2024.03.15 11:23:13 -04'00'

EARHARDT.GABRI

ELLA.M.122972141

Digitally signed by

EARHARDT.GABRIELLA.M.1229

721417 Date: 2024.03.20 18:36:43 -04'00'

(SP0602-24-0701 � US OIL)

Source Selection Information -See FAR 2.101 and FAR 3.104

Controlled by: DLA Energy FEBB CUI Category: SSEL

Distribution/Dissemination Controls: FED ONLY POC: Stephanie Koessel (Stephanie.koessel@dla.mil)

I have reviewed and

DEBORAH L. MULDOON

DLA Office of General Counsel

I have reviewed and hereby recommend that this Justification be approved:

GEORGE W. ATWOOD III

DLA Competition Advocate

Approved:

MATTHEW R. BEEBE

Head of the Contracting Activity