SPE7L118RX034_-_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

SOLICITATION – SPE7L118RX034

X ORIGINAL

ADDENDUM

1. The Defense Logistics Agency, DLA Land and Maritime, is the contracting activity.

2. The action approved is for the acquisition of supplies using other than a full and open competition. This DLA Land and Maritime acquisition is for an Indefinite Delivery Firm- Fixed Price type contract for ground vehicle tires. The contract awarded because of this solicitation will provide the Tires Successor Initiative (TSI) Contractor (selected by award SPE7L1-17-D-0013,) with government-mandated sources of supply for the subject tires. The acquisition is for National Stock Number (NSN) 2610-01-541-4090. This NSN belongs to Federal Supply Class 2610 –Tires/ Tubes Pneumatic. Solicitation will utilize FAR 13.5 procedures.

3. The supplies required to meet the using activity's needs are described in Attachment 1 titled, STD Data Pull.

There is one (1) NSN on solicitation SPE7L1-18-R-X034. There is only one approved source for this NSN. Attachment 1 also lists the approved source and part number for NSN 2610-01-541-4090. Per FAR 13.5, FAR Part 6 procedures are exempt except for a sole source situation. Also per DLAD 13.5, "A Justification and Approval (J&A) is required only for sole source acquisitions".

Identify end item, weapon system, or class of item. Item is used on the following weapon systems:

This item is used on the HMMWV Tactical Vehicle.

This solicitation is necessary in order for DLA to continue to support the above mentioned weapon system which is specifically designed to counter the battle field tactics of the enemy, to save lives and to increase the mission effectiveness of combat troops.

ESTIMATED ANNUAL DEMAND VALUE:

The estimated annual demand value (ADV) is The ADV is calculated by adding the estimated annual demand quantity (ADQ) of 7,097 each to the number of tires needed for replacement which was identified by TACOM as 28,733 and multiplying the total by the most recent past buy price ( to create a total Annual Demand Value (ADV).

MAXIMUM CONTRACT VALUE:

The contract maximum is calculated in order to provide adequate coverage of these items until long term contracts are in place. The value of the maximum allowed under the FAR 13.5 acquisition procedures.

PERIOD OF PERFORMANCE: 365 days

4. The statutory authority permitting other than full and open competition is:

(X) 10 U.S.C. 2304(c)(1) - Available from only one or a limited number of sources.

This item is available from one responsible source and no other type of property or services will satisfy the needs of the agency.

5. If restricted to the only source(s) of supply, include source(s) and CAGE code:

Approved source Michelin North America, CAGE Code is 12195 and the part number is 08973.

NSN 2610-01-541-4090 is a tire for use on the HMMWV vehicle system and is sole source to Michelin CAGE 12195 P/N 08973. This NSN 2610-01-541-4090 is specified to the SAE J2014 Military Tire standard for qualification. Michelin tire part number 08973 was tested on the HMMWV vehicle to the SAE J2014 standard and successfully completed qualification. No other tires are qualified for this NSN 2610-091-541-4090. Additional manufacturers must be prequalified to the selected requirements of the SAE J2014. Using components from a contractor that has not been tested specific to the vehicle could result in loss of air pressure of the tire, affecting the performance of the vehicle. Air loss would cause undesirable braking, handling characteristics of the vehicle which could cause driver to lose control causing damage to vehicle and serious injury or death to the soldier.

The use of the authority cited is based on the DLA Alert Notification dated May 24, 2018 (Attachment 2) and the AMC & AMSC codes. The following are the AMC & AMSC descriptions.

AMC 3. Acquire, for the second time directly from the actual manufacturer.

AMSC C. This part requires engineering source approval by the design control activity in order to maintain the quality of the part; Existing unique design capability, engineering skills, and manufacturing knowledge by the qualified source(s) require acquisition of the part from the approved source(s). The approved source(s) retain data rights, manufacturing knowledge, or technical data that are not economically available to the Government, and the data or knowledge is essential to maintaining the quality of the part. An alternate source must qualify in accordance with the design control activity's procedures, as approved by the cognizant Government engineering activity. The qualification procedures must be approved by the Government engineering activity having jurisdiction over the part in the intended application. If one source is approved, AMCs 3, 4, or 5 are valid. If at least two sources are approved or if data is adequate for an alternate source to qualify in accordance with the design control activity's procedures, AMCs 1 or 2 are valid.

The process of developing a long-term contracting (LTC) project requires a review and determination by the Product Specialist that the technical data is correct, including the AMC and AMSC codes, and that the technical data reflects the minimum requirements for the item.

6. Efforts to ensure that offers are solicited from as many sources as practicable are:

(X) The acquisition will be synopsized consecutively with the solicitation opening date.

(X) A synopsis will be posted on FedBizOps for 7 days.

(X) The solicitation will be posted to DIBBS for 7 days.

7. I hereby determine that the anticipated cost to the Government will be fair and reasonable.

Prices will be determined fair and reasonable through price analysis based upon the application of the Producers’ Price Index (PPI) to the past acquisition. Also, this is a commercial tire, therefore prior sales history and commercial price lists will be requested from the offeror. Because items are commercial, proposed prices will be compared to prices of similar commercial items available to the public.

8. Market Research/Efforts to Obtain Competition:

Market research was conducted using the following methods:

Sources Sought published on September 15, 2017 Researching items on-line via the internet for availability and features.

Reviewing previous procurements of items and determining previous acquisition methods.

Determining vendor interest in long-term contracting for the NSN.

Researching/gathering information regarding commerciality of the items.

Vendor size and business status information.

Summary of market research:

A Sources Sought was published and Market Surveys were e-mailed to the following suppliers in September, 2017 for all of the 375 NSNs on the Global Tires Program (GTP) solicitation, including NSN 2610-01-541-4090:

Company CAGE Business Size/Status Anthony Balser 5CAZ4 Small Dealer B and S Transport 1BS99 Small Dealer Brackett Aircraft 56833 Small MFG Bridgestone America - GCR Tire 073A9 Large Dealer Bridgestone Americas Tire 22337 Large MFG Camso USA Inc. 0YGF3 Small MFG CAP 360 6PTPO Small Dealer Carlisle Tire and Rubber Co 71496 Large MFG Clark Equipment 1QK63 Large MFG CNH Industrial Amrica LLC 10988 Large MFG Colony Tire Corporation 3JME8 Small Dealer Continental Tire 73808 Large MFG Critical Solutions International 1N5S7 Large MFG Deval 11201 Small MFG Fast Global Solutions, Inc. 5T389 Small MFG Goodyear Tire and Rubber Co. - Air 04NP4 Large MFG Goodyear Tire and Rubber Co.- Ground 04NP3 Large MFG Hankook Tire America Corp. 5FAD7 Large MFG Hutchinson Industries, Inc. 62161 Large MFG Hydraulics International, Inc. 56529 Small MFG Kampi Components 7Z016 Small Dealer Michelin North America 0A1K8 Large MFG Michelin North America 12195 Large MFG Pioneer Industries, Inc. 66200 Small Dealer Pomp's Tire Service 1T1Z4 Large Dealer Sigma Technologies 6VFM4 Small Dealer Southern Tire Mart 3RRT3 Small Dealer Specialty Tires of America, Inc. 66798 Small MFG Titan Tire Corp 08SN2 Large MFG Tug Technologies, Corp. 4TVG2 Large MFG Wheeler Brothers 55683 Small Dealer

The only supplier to express an interest in providing an offer for NSN 2610-01-541- 4090 was Goodyear Tire & Rubber Co. Goodyear was an approved source for this NSN during the time market research was being performed for the GTP solicitation.

Due to these safety issues the US Army removed Goodyear’s tire as an approved source of supply for this NSN. In an MFR (Attachment 3) dated June 15, 2018 the Army states when referring to the Goodyear tire “PD LTV requests that all systems used for procurement be updated to reflect removal as an approved source for any further procurements.”

Goodyear is currently taking actions to become an approved source for this NSN again. Goodyear has identified the feature of their tire that causes the sidewall cracking and they have ordered new tire molds that do not have this feature.

Goodyear produced tires using the new molds and those tires are in the process of being tested by TACOM for certification. It will be several months before the test results are completed and a determination is made by TARDEC if Goodyear will be recertified as a tire supplier for this NSN.

The Contracting Officer also reviewed recent procurement history in an effort to find alternative sources to provide this NSN. The three most recent awards of this NSN were in June 2018 and all three contracts were awarded to Michelin North America.

Based on the market research conducted for this procurement, including the approved source list and technical information provided by the Product Specialist, Michelin North America (12195) is the only source capable of satisfying the Agency’s requirements for this NSN and the only source likely to submit a proposal in response to the solicitation.

Information received regarding the commerciality of the item:

Commerciality was investigated using several different techniques. Items on this solicitation are tires used on HMMWV land tactical vehicles. While commercial tires may be manufactured to different specifications, there is no evidence that those specification differences are so substantial to render the military version unsuitable and unavailable for commercial purposes. The definition of Commercial, as found in FAR Subpart 2.101, states "Any item, other than real property, that is of a type customarily used by the general public or by non-governmental entities for purposes other than governmental purpose." Clearly, a tire used by the military is "of a type" as a tire used commercially. The difference may simply be the size or perhaps a more stringent specification, but nevertheless, this NSN meets the definition of commercial.

In addition to independent research, the Contracting Officer relied on market research analysis conducted for the solicitation of NSNs for LTCs to support the GTP contract. This was done I/A/W FAR 12.1 by submitting a market survey to industry (tire manufacturers and distributors). Industry was asked whether each NSN constituted a commercial item, as defined in FAR 2.101.

All of the vendors indicated, in their market survey responses, that all of products listed for the proposed solicitation are commercial. The manufacturers make both commercial and non-commercial tires, thus further solidifying the “of a type” application herein. Accordingly, the acquisition specialist is able to conclude that the tires subject to this requirement fall under the FAR commerciality definition “of a type” language, referenced above. Therefore, this acquisition will proceed in accordance with FAR Part 12-Acquisition of Commercial Items procedures.

9. Additional facts supporting other than full and open competition are:

( X ) Based upon the technical certification on file in DLA Land and Maritime-VEP technical data is not available and cannot be developed to permit full and open competition. The data presently available reflects the minimum needs of the Government.

( X ) Forecast information is available to all potential sources for both sole source and competitive items. The DLA Supplier Requirements Visibility Application (SRVA) is a database that is available via the DLA internet Bid Board System (DIBBS.) SRVA provides potential sources the opportunity to search for information on DLA’s anticipated requirements based on updated monthly forecasts. Essentially, it provides 24 months of sole source and competitive projected purchase order quantities. Potential alternate sources for current sole source items can easily see DLA’s forecasted procurements and can contact the Value Management Unit to become approved sources for sole source and code and part number items. The DLA Land & Maritime Value Management Unit continually seeks out sole source, limited competition, over-priced, low reliability and hard to buy items to improve their value and support posture. The DLA Land & Maritime internet website contains information for all potential sources on how to challenge prices, how to submit a Value Engineering Change proposal, a link to DoD’s Value Engineering program and the necessary contact info for both the DLA Value Engineering program and the DoD Value Engineering program.

10. A listing of sources, if any, indicating an interest in the acquisition is:

Goodyear Tire & Rubber Co. (04NP3)

11. In addition to the specific actions being taken by Technical Support personnel to overcome barriers to competition before any subsequent acquisitions or recertification of class determination are made, this item is subject to the following methods of locating additional sources:

(X) Solicitation contains DLA Procurement Note, L04 Offers for Part Numbered Items

(X) Solicitation contains DLA Procurement Note, M06 Evaluation of Offers for Part Numbered Items

(X) The Government will continue to conduct market research, to see if changes occur in the marketplace that would enable future actions for these items to be competitive. The Government will include a DLA Land and Maritime procurement note that the Government will consider alternate offers, and that alternate offers should submit a source approval request (SAR) package that will be referred to the engineering activity. If the current procurement cannot be delayed, due to mission requirements and to allow sufficient time for the engineering activity to determine whether to approve the alternate offer, the SAR package will be considered for future awards.

CONTRACTING OFFICER CERTIFICATION

I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief. If not exceeding $700,000, this signature serves as the approval.

THOMAS DRAGOLICH 2-3428

Contracting Officer Phone Date

Approval/Certification

I have reviewed and approve this justification. The estimated total value of the J&A is

Competition Advocate Phone Date Signature

APPROVAL REQUIREMENTS

(X) $700,000 to $13,500,000 Competition Advocate

Attachments:

1. STD Data Pull

2. Alert Notification

3. MFR HMMWV Goodyear Wrangler MTR

8/6/2018DRAGOLICH.THOMAS.

WILLIAM.1079889608

Digitally signed by

DRAGOLICH.THOMAS.WILLIAM.107

9889608 Date: 2018.08.06 10:34:24 -04'00'

HOPSON.LILLI.A.1230

127324

Digitally signed by

HOPSON.LILLI.A.1230127324

Date: 2018.08.06 14:43:01 -04'00'