SPE7LX-18-R-0078_-_reviewed_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LONG-TERM CONTRACT (LTC) PROJECT CL17341004

SOLICITATION SPE7LX-18-R-0078

Source Selection Information – See Far 2.101 And 3.104 For Official Use Only

ORIGINAL

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

2. The action being approved is the acquisition of supplies on an Other than Full and Open competition basis.

3. The supplies required to meet the using activity's needs are described as follows:

The scope of this solicitation and resulting contract(s) is support for the Global Tires Program (GTP) and, if needed, the Tire Successor Initiative (TSI). This solicitation is being issued under the authority of 10 U.S.C. §2304(c)(1) and FAR 6.302-1 and contemplates award of a contract(s) for items of supply that are available from only one or a limited number of responsible sources. The Government will pursue a long-term, Indefinite Quantity Contract (IQC) for seven (7) National Stock Numbers (NSN), six (6) with the nomenclature “Tire, Pneumatic, Vehicular” and one (1) with the nomenclature “Tire,Solid.”

A contract(s) resulting from this solicitation will provide supply support to the GTP/TSI Contractor pursuant to FAR Part 51, and may provide direct supply support to the Government.

The Federal Stock Group code for these NSNs is 26 (Tires and Tubes), which represents the commodity class of the item.

The AMC/AMSC codes for these NSNs are 3/C and 3/D.

The proposed action is for the solicitation and award of a three (3) year, Firm Fixed Price (FFP) Long Term Contract. The contract(s) would consist of three (3) base years, with no options. The estimated contract values are below:

o Annual Demand Value (ADV):

o 3-Year Value (ADV * 3):

o Maximum Contract Value (ADV * 5):

o Minimum Contract Value (ADV * 0.01)

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

10 U.S.C. 2304(c)(1) o (c) The head of an agency may use procedures other than competitive procedures only when— o (1) The property or services needed by the agency are available from only one responsible source or only from a limited number of responsible sources and no other type of property or services will satisfy the needs of the agency.

The Government requires tires that are form, fit and functionally interchangeable with those currently used on the supported vehicles. These tires require engineering source approval by the design control activity in order to maintain the quality of the part.

Specialty Tires of America is the only known source with the data or data rights necessary to manufacture these tires to meet the military customers’ requirement and ensure form, fit and function interchange with the tires currently on the supported vehicles.

SOLICITATION SPE7LX-18-R-0078

Source Selection Information – See Far 2.101 And 3.104 For Official Use Only

AMC 3: Acquire, for the second or subsequent time, directly from the manufacturer.

AMSC D: 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.

AMC 3 - Acquire, for the second or subsequent time, directly from the 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.

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

A Sources Sought notice, which included a market survey, was posted on FedBizOpps from 09/01/17 through 09/29/17, and was also posted on the GTP web site. During the same time frame, the market survey was e-mailed to 31 suppliers, including known tire manufacturers & dealers, prior awardees for tire contracts, and suppliers who have submitted proposals for previous tire solicitations. The market survey included a listing of all 375 tire NSNs from the GTP solicitation.

These 375 NSN are expected to be solicited in smaller groups, by tire program type, on multiple LTCs. Interested parties were asked to return a completed copy of the survey to the Contracting Officer, Kenneth A. Cotton.

This acquisition will be solicited using Federal Acquisition Regulation (FAR) Part 12 procedures.The synopsis will be posted on FedBizOps on or about April 2018, and will run for a period of 30 days. The solicitation will be posted concurrently on the internet, via the DLA Internet Bid Board System (DIBBS).

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 also include a clause in this solicitation that provides that the Government will consider alternate offers, and that alternate offerors 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.

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

This will be a three (3) year, Firm Fixed Price, long-term, Indefinite Quantity Contract (IQC). The time frame consists of three (3) base years, with no options. The contract(s) awarded from this solicitation will be Firm Fixed Price. Each year of the contract(s) will be priced out.

As this is a commercial solicitation, Certified Cost or Pricing Data is not required.

The price analysis of historical contracts, as well as current and future years will be based on the Global Insights Producer Price Index (PPI) forecasts. The Global Insights PPI forecast data is

SOLICITATION SPE7LX-18-R-0078

Source Selection Information – See Far 2.101 And 3.104 For Official Use Only provided by the DLA Land and Maritime Pricing Support group, and provides timely, accurate price & cost analysis, allowing procurement professionals to understand supplier cost structure and better negotiate supplier proposals.

7. Market Research/Efforts to Obtain Competition:

Market research was conducted to find the following:

o Researching items on-line via the internet for availability and features.

o Reviewing previous procurements of items and determining previous acquisition methods.

o Determining vendor interest in long-term contracting for the some portion of, or all of, the 8 tire NSNs.

o Researching/gathering information regarding commerciality of the items.

o Vendor size and business status information.

o Delivery estimates.

o Possibility for Economic Price Adjustment of the 2nd and 3rd years of a contract(s).

o Distributor/dealer involvement.

Summary of market research:

o In addition to a copy of the market survey being made available with the Sources Sought posting on FedBizOps and the GTP web site, the market survey was e-mailed in September, 2017, to the suppliers listed below:

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

SOLICITATION SPE7LX-18-R-0078

Source Selection Information – See Far 2.101 And 3.104 For Official Use Only

Supplier responses to the key market survey questions are summarized in the chart below (also included as Attachment #1):

Based upon the sources sought notice, responses to the market survey, and purchase history from the most recent LTC for each NSN, the following is a listing of the sources which could have an interest in submitting a proposal in response to the solicitation:

B&S Transport

Bridgestone Americas

CAP 360 Colony Tire Goodyear Air Goodyear Ground

Jamison Trans.

Michelin NA Ground

Pomp's Tire Service

Southern Tire Mart

TDG

Resources

CAGE Number 1BS99 073A9 6PTP0 7W3F5 04NP4 04NP3 04NP3 12195 1T1Z4 3RRT3 548G2

Business Size

Small Disadvantaged Large WOSB Small Large Large

Small Disadvantaged Large Large

Small (NAICS 326211 only)

Service Disabled

Veteran Owned Business Type (MFG or Dealer) Dealer Dealer Dealer Dealer MFG MFG Dealer MFG Dealer Dealer Dealer

Number of employees 8 500 1 480 66,000 66,000 5 20,000 1,800 2,500 5 to 10 If MFG, quote direct to Government or through dealer?

N/A N/A N/A N/A Direct Both N/A No Response N/A N/A N/A

Interested in quoting for 3-Year base contract? Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

Able to provide Certified Cost & Pricing Data, if applicable?

Percentage of tires sales/commercial vs.

Government?

Where is inventory stocked?

Where are manufacturing facilities located?

What discounts offered t favored commercial customers?

Able to provide traceability documentation?

Completed spreadsheet for tires capable of supplying?

SOLICITATION SPE7LX-18-R-0078

Source Selection Information – See Far 2.101 And 3.104 For Official Use Only

Specialty Tires of America (66798) is the only approve source for these items.

Information received regarding the commerciality of the item:

o Commerciality was investigated using several different techniques. Items on this solicitation are tires used on various land 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, these NSNs meet the definition of commercial.

In addition to independent research, the Contracting Officer conducted market research analysis 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 this 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.

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

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 NSNs included on this solicitation were reviewed by the Strategic Acquisition Programs Directorate (SAPD) Product Specialist during the project development phase. No additional sources were identified during that review.

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

SOLICITATION SPE7LX-18-R-0078

Source Selection Information – See Far 2.101 And 3.104 For Official Use Only 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.

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

SPECIALTY TIRES OF AMERICA, INC. (66798)

Pomp’s Tire Service (1T1Z4)

10. 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:

The Contract History showing in E-Procurement for these items consists only of delivery orders to Science Applications International Corporation (SAIC), awarded against long-term contracts SPE7L1-17-D-0013, SPE7L1-16-D-0006, SPE7L1-14-D-0005 and SPM7LX-11-D-0157. SPE7L1- 16-D-0006 was issued for administrative purposes to facilitate continued contract performance due to system errors with contract SPE7L1-14-D-0005, which was issued due to depletion of DO numbers for contract SPM7LX-11-D-0157 (original). Contract number SPM7LX-11-D-0157 contains all terms and conditions.

Past procurements show that the 7 NSNs have previously been procured on 2 long-term contracts (LTCs) and 1 Purchase Order, including: SPE7M1-15-D-0017, SPE7L1-15-D-0009 and SPE7L7- 16-V-1657. (See attachment #3 for specific NSN contract numbers and unit price).

This solicitation contains the DLAD Procurement Note entitled Offers for Part Numbered Items (L04).

A sources sought notice on FedBizOps was run from 09/01/17 to 09/29/17, with no responses received.

A synopsis will be posted on FedBizOps for 30 days The solicitation will be posted on the DLA Internet Bid Board System (DIBBS) for 30 days, and will run concurrently with the synopsis.

At this time, the requirement/guidance in DFARS PGI 206.304 has been fulfilled.

Attachments:

1. Summary of Market Survey Responses

2. NSN Description

3. Procurement History

4. J&A for Solicitation SPE7LX-14-R-0181, Award SPE7M1-15-D-0017

SOLICITATION SPE7LX-18-R-0078

Source Selection Information – See Far 2.101 And 3.104 For Official Use Only

5. J&A for Solicitation SPE7L1-14-R-0005, Award SPE7L1-15-D-0009

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.

Kenneth A. Cotton Phone Date Contracting Officer

APPROVAL/CERTIFICATION

I have reviewed and approve this justification:

Competition Advocate Phone Date

APPROVAL REQUIREMENTS

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

614-692-3218 04/23/18COTTON.KENNE

TH.A.1230151268

Digitally signed by

COTTON.KENNETH.A.12301512

Date: 2018.04.23 15:16:03 -04'00'

HOPSON.LILLI.A.123

0127324

Digitally signed by

HOPSON.LILLI.A.1230127324

Date: 2018.05.05 14:40:06 -04'00'