SPE7LX-19-R-0102 - redacted_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

SOLICITATION SPE7LX19R0102

DLA Land & Maritime Justification for Other Than Full & Open Competition

(FEB 2017)

[ X ] ORIGINAL

[ ] ADDENDUM (attach copy of original J&A for add-ons or revisions)

1. The Defense Logistics Agency, DLA Land and Maritime, proposes to enter into a firm-fixed price, long-term indefinite quantity contract. The solicitation will be for a total of five (5) years, which includes a three (3) -year base period and two (2) one (1)-year option periods, which will be extended one (1)-year increments at the discretion of the Government.

2. The action being approved is the acquisition of supplies on other than a full and open competition basis.

3. The supplies/services required to meet the using activity’s needs are described in NSN data pull in item 5.

Identify end item, weapon system, or class of item: See Weapon System Designator Code (WSDC) per item in Attachment 1. The parent WSDC of all 155 items on this procurement is MRA-Parent WSDC for all Army Missile Resistant Ambush Protected (MRAP) vehicles.

ESTIMATED BASE VALUE: $

ESTIMATED TOTAL VALUE (BASE + OPTIONS):

MAXIMUM CONTRACT VALUE:

MINIMUM CONTRACT VALUE:

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.

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

Critical Solutions (1N5S7) and Critical Solutions International (SZZ40).

The use of the authority cited below:

[ X ] AMC 3. Acquire, for the second or subsequent time, directly from the manufacturer.

[ X ] AMC 4. Acquire, for the first time, directly from the manufacturer.

[ X ] AMC 5. Acquire directly from the sole source contractor, who is not the manufacturer.

The use of the authority cited is based on:

[ X ] AMSC C. There are 21 NSNs. 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.

Critical Solutions (1N5S7) and Critical Solutions International (SZZ40) are the only approved source and they are the only known source to own or possess the technical data necessary to manufacture these items.

[ X ] AMSC D. There are 117 NSNs. The data needed to acquire this part competitively is not physically available, it cannot be obtained economically, nor is it possible to draft adequate specifications or any other adequate, economical description of the material for a competitive solicitation. AMCS 3, 4, or 5 are valid.

Critical Solutions (1N5S7) and Critical Solutions International (SZZ40) are the only approved source for this item because they are the only known source with the data necessary to manufacture these items. Both CAGE codes are the same company: 1N5S7 is in the United States and SZZ40 is in South Africa.

[ X ] AMSC L*. There are 5 NSNs. The annual buy value of this part falls below the screening threshold established by DoD components and field activities. However, this part has been screened for additional known sources, resulting in either confirmation that the initial source exists or that other sources may supply the part. No additional screening was performed to identify the competitive or noncompetitive conditions that would result in assignment of a different AMSC. This code shall not be used when screening parts entering the inventory. This code shall be used only to replace AMSC O for parts under the established screening threshold. If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs 1 or 2 are valid.

Critical Solutions (1N5S7) and Critical Solutions International (SZZ40) are the only approved source that has been evaluated by the military services’ Engineering Support Activity and is the only company known to have the capability to manufacture these items.

[ X ] AMSC P. There are 2 NSNs. The rights to use the data needed to purchase this part from additional source(s) are not owned by the Government and cannot be purchased, developed, or otherwise obtained. It is uneconomical to reverse engineer this part. This code is used in situations where the Government has the data but does not own the rights to the data. If only one source has the rights or data to manufacture this item, AMCs 3, 4, or 5 are valid. If two or more sources have the rights or data to manufacture this item, AMCs 1 or 2 are valid.

The Government does not have the rights to the data and it is not economical to obtain the rights to this data. Critical Solutions (1N5S7) and Critical Solutions International (SZZ40) are the only approved source for these items because they are the only source that owns the data rights to these items.

[ X ] AMSC Q. There are 4 NSNs. The Government does not have adequate data, lacks rights to data, or both needed to purchase this part from additional sources. The Government has been unable to economically buy the data or rights to the data, although the part has been undergoing full screening for 12 or more months. Breakout to competition has not been achieved, but current, continuing actions to obtain necessary rights to data or adequate, reprocurement technical data indicate breakout to competition is expected to be achieved. This part may be a candidate for reverse engineering or other techniques to obtain technical data. All AMSC Q items are required to be reviewed within the timeframes cited in 2-203(b). If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs 1 or 2 are valid.

7. I hereby determine that the anticipated cost to the Government will be fair and reasonable. Cost and Pricing Data is not required per FAR 15.402-1 (b) (3) for the items listed above. These items are solicited in accordance with FAR 12 - Acquisition of Commercial Items. In accordance with FAR Part 12.209, while the Contracting Officer must establish price reasonableness in accordance with 13.106-3, 14.408-2, or Subpart 15.4, as applicable, the Contracting Officer should be aware of customary commercial terms and conditions when pricing commercial items. Commercial item prices are affected by factors that include, but are not limited to, speed of delivery, length and extent of warranty, limitations of seller’s liability, quantities ordered, length of the performance period, and specific performance requirements. The Contracting Officer will ensure that contract terms, conditions, and prices are commensurate with the Government’s need. The Contracting Officer will determine that the contract award prices are fair and reasonable in accordance with FAR Subpart 15.4. The buyer may request information other than cost or price data to support price reasonableness if necessary.

8. Market Research/Efforts to Obtain Competition:

DLA Land and Maritime conducted various forms of market research including the following:

i) The publishing of a formal Sources Sought notice and market survey to www.fbo.gov from 10/30/2017 to 11/6/2017. No responses were received to this sources sought.

ii) A second sources sought was posted from 6/3/2019 to 6/5/2019. Three responses were received.

iii) A request to the DLA Pricing Office for a commercial analysis and recommendation, resulted on BPA

Report No. 19-025 Defense Contract Management Agency (DCMA), dated 2/26/2019, for a Commercial Item Group (CIG) evaluation on the commerciality of the items. This request included 4 items out of the 155 included in the procurement. All 155 items belong to the Husky Platform, and the 4 items in the CIG are the main drivers in the procurement.

iv) the Contract Specialist also researched the procurement history for the item on the proposed solicitation and emailed Critical Solutions to obtain their feedback on a market survey.

Sources sought:

The sources sought included a list of all the Husky items listed in the current procurement. The following vendors showed interest in becoming a source for them:

i. Sintel Inc. – Sintel is a specialty metal fabrication business. They manufacture for companies like Caterpillar, Siemens and Cummins, among many others. They are interested in manufacture items for the Husky.

ii. Plasan Carbon Composites – Plasan indicated they wanted to become a source as a manufacturer.

iii. EOS, Inc. (CAGE 85VY7) – EOS is a veteran owned small business interested on becoming a dealer for the

Husky parts made by Critical Solutions (CSI). They did not specified if they would quote for the current procurement.

Regarding the manufacturers Sintel and Plasan, the Contract Specialist explained to them how to submit a complete data package to be evaluated to become an approved source. Also, they were sent a market survey. Neither of Sintel and Plasan answered the survey. Emails documenting such communications are in the procurement’s file.

Regarding the dealer, the Contracting Specialist did send them a market survey as well. If a response is received, will be included in the procurement’s file. Letter of interest sent by EOS is in the procurement’s file.

DCMA CIG:

Critical Solutions provided an unpriced material catalog and receipts for order from other Countries as foreign military sales (FMS). Both the catalog and the receipts were redacted and did not provide sufficient/complete information as standalone documentation for a commerciality determination.

The documentation was rejected by the Buyer and the contracting officer for a commercial determination. The Buyer contacted the DLA Land and maritime Cost and Pricing Division for

Information received regarding the commerciality of the item(s): Critical Solutions indicated in the market survey that ALL 155 NSNs are commercial. They are related to the Husky Mine Resistant Ambush Protected (MRAP) vehicle. The MRAP has been deemed commercial previously, and they are sold to non-Governmental customers.

The buyer confirmed this information in a phone conversation with Cam Comire from Critical Solutions on 7/31/2018.

Final summary of the market research of the items:

All items in this procurement are spare parts of the Husky MRAP vehicle. The complete Husky MRAP platform has been deemed commercial for many years now. None of these items are coded as commercial in the Master File. To address these apparent antagonism, the Contract Specialist expanded the market research to document the commerciality determination and requested an opinion on commerciality from the Defense Logistics Agency Land and Maritime Pricing Office. The Pricing Office obtained an analysis from the Defense Contract Management Agency (DCMA) Commercial Item Group (CIG) to support the commerciality analysis. The conclusion of the analysis is that the NSNs are recommended to be “commercial of a type”. The CIG Engineer based the review on market research of like items openly available in America and in Other Approved Source Countries. The CIG made a direct comparison between similar parts from various manufacturing sources. Comparisons include: item structure, material used, and the commonality of the subcomponents such as screws, bolts, nuts, washers, steel tubs etc. that are available for anyone to purchase. The combination of these items changes from manufacturer to manufacturer, however the end functions remain similar and have a common usage among industry and private professionals. There are different combinations for both civilian and military applications. The military application is for the MI231

HUSKY.

The NSNs in the analysis are the four main drivers of this requirement, which represents 61% of the procurement.

The CIG made the caveat that the final commerciality determination will be at the contracting officer discretion.

However, it recommended using “commercial of a type” based on the market availability and end use for the different product variations.

In addition to the Pricing/CIG report, the 2018 National Defense Authorization Act (NDAA) states that USA Senate amended section 2380 of title 10, United States Code, to clarify that a contract or sub-contract relating to the prior acquisition of an item using commercial item acquisition procedures under part 12 of the Federal Acquisition Regulation (FAR) should serve as a prior commercial item determination. For the purpose of the Husky MRAP items, all contracts researched treated the items as commercial. Based on the Pricing/CIG report and the NDAA, the four items on the report are commercial. However, the concern on how that would alleviate the classification to the rest of the 151 items remained. The NDAA also helped to address that issue.

2018 NDAA clarified that non-developmental items are commercial items when the procuring agency determines, in accordance with conditions in the Federal Acquisition Regulation, that the item was developed exclusively at private expense and has been sold in substantial quantities on a competitive basis to multiple foreign governments.

Critical Solutions has stated multiple times they developed the items at their own expense. Neither DCMA nor ESA found evidence to dispute that statement during the research for the CIG report. The Government could corroborate, through documents CSI provided, they sell Husky items to foreign countries. And, an internet search at the CSI’s website shows versions of the Husky for sale in the internet. These outcomes support that the bill of materials or items inside the Husky, which are proprietary of CSI, are also privately developed and sold. Consequently, is logical to conclude that the bill of materials of the Husky is as commercial as the four items specifically researched for the DCMA/CIG report.

The Complete Pricing/CIG report is in the file.

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. The confirmation of sources listed above was completed by the Product Specialis during the technical evaluation of this project on 4/30/2018. Based on the limited data the Government possesses, only the approved sources can meet the Government’s minimum needs for these items. If new sources are approved prior to award, the solicitation will be reissued allowing for the new source(s) a chance to compete for this acquisition. Critical Solutions (1N5S7) and Critical Solutions International (SZZ40) is the only interested source who has expressed interest in participating in a LTC for items listed in this solicitation.

10. A listing of sources, if any, indicating an interest in the acquisition is: (If none, so state) Only Critical Solutions showed interest in this procurement.

11. The following actions are being taken to identify additional sources:

[X] Solicitation contains DLA Procurement Notes, M06 Evaluation of Offers for Part Numbered Items and L04 Offers for Part Numbered Items.

The NSNs included in this procurement have been consistently purchased using Simplified Acquisition Procedures (SAP), which does not require a separate justification for other than full and open competition (J&A). Those contracts whose value is higher than the Simplified Acquisition Threshold (SAT) were awarded under Special Emergency Procurement Authority (SEPA), which raises the SAT over the regular SAP. The Contracting Specialist reviewed the contracts with higher than SAT value. In Attachment 2 Contract history, the column next to the contract number identifies the contracts reviewed and the circumstances that explains why the value is higher than SAT.

None of these contracts were required nor have a J&A. No previous large purchases or long-term contracts were found in contract history.

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.

__ ______ __05/09/2019_______________ Contracting Officer Date

APPROVAL/CERTIFICATION

I have reviewed and approve this justification:

Competition Advocate Signature Date

SHEARER.MAR

Y.E.1250702449

Digitally signed by

SHEARER.MARY.E.1250702449

Date: 2019.06.20 10:46:04 -04'00'

Head of the Contracting Activity (HCA) Date Signature

APPROVAL REQUIREMENTS

[ X ] $13,500,000 to $93,000,000 Head of Contracting Activity (HCA)

Attachments:

1) Attachment 1 – List of Weapon System Designator Code per NSN

2) Attachment 2 - Contract history

3) Attachment 3 – DCMA CIG Report February 2019

BROWN.MARK.AL

BERT.1041175032

Digitally signed by

BROWN.MARK.ALBERT.104117

Date: 2019.06.20 11:01:23 -04'00'