CL17255004_J&A_-_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LONG-TERM CONTRACT (LTC) PROJECT CL17255004

SOLICITATION SPE7LX-18-R-0113

April 23, 2018

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:

This project will allow for continued support to the Tire Successor Initiative (TSI), if needed, and to the successor Global Tire Program (GTP). The scope of this solicitation and resulting contract(s) is TSI/GTP Contractor and Government supply support for Michelin North America (CAGE code 12195) part-numbered ground-vehicle tires.

This solicitation is being issued under the authority of 10 U.S.C. §2304 (c)(1) and FAR

6.302 -1(a)(2) and contemplates the award of a contract 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 twenty-nine (29) National Stock Numbers (NSN), with the nomenclature of either “Tire, Pneumatic, Vehicular” or “Tire, Pneumatic, Vehicle” (See Attachment 1).

A contract 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 (FSG) code for these NSNs is 26 (Tires and Tubes), which represents the commodity class of the item.

The Acquisition Method Code/Acquisition Method Suffix Code (AMC/AMSC) code for these NSNs is either 1C (1 CLIN), 3C (10 CLINs), or 3D (18 CLINs).

The proposed action is for the solicitation and award of a three (3) year, Firm Fixed Price (FFP) Long Term Contract (LTC). The contract 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.

SOLICITATION SPE7LX-18-R-0113

April 23, 2018

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

FOR OFFICIAL USE ONLY

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.

The tires can only be purchased from the sole OEM/approved source, Michelin North America (CAGE 12195). Michelin is the only known source with the data or data rights necessary to manufacture these tires to meet the military customer requirements, and ensure form, fit and function interchange with the tires currently on the supported vehicles.

AMC 1. Suitable for competitive acquisition for the second or subsequent time.

AMC 3. Acquire, for the second or subsequent 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.

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.

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 04/27/18, 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

SOLICITATION SPE7LX-18-R-0113

April 23, 2018

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

FOR OFFICIAL USE ONLY

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. Each year of the contract 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 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 29 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.

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:

SOLICITATION SPE7LX-18-R-0113

April 23, 2018

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

FOR OFFICIAL USE ONLY

September, 2017, to the suppliers listed below:

Supplier responses to the key market survey questions are summarized in the chart below (also included as Attachment 2):

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-0113

April 23, 2018

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

FOR OFFICIAL USE ONLY

Based upon the information received on the completed market surveys, along with the purchase history of these NSNs from the past 3 years, the following is a listing of the sources showing a probable interest in submitting a proposal in response to the solicitation for Michelin tires:

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 as 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-

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?

Interested in quoting for 3-Year base contract?

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 to favored commercial customers?

Able to provide traceability documentation?

Completed spreadsheet for tires capable of supplying?

Company Name CAGE Business Size Business Type B&S Transport 1BS99 Small Disadvantaged Dealer Bridgestone Americas 073A9 Large Dealer Colony Tire Corporation 7W3F5 Small Dealer Goodyear Ground 04NP3 Large Manufacturer Michelin North America Ground 12195 Large Manufacturer Pomp's Tire Service 1T1Z4 Large Dealer Southern Tire Mart 3RRT3 Small Dealer TDG Resources 548G2 8(a); Service Disabled Veteran Owned Dealer

SOLICITATION SPE7LX-18-R-0113

April 23, 2018

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

FOR OFFICIAL USE ONLY

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. In their market survey responses, all of the vendors indicated that all of the 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 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.

SOLICITATION SPE7LX-18-R-0113

April 23, 2018

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

FOR OFFICIAL USE ONLY

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

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 solicitation is subject to the following methods of locating additional sources:

Procurement History: For 28 of these NSNs, the Contract History showing in E- Procurement for these items consists only of delivery orders to Science Applications International Corporation (SAIC), awarded against one of the following long-term base contracts: SPE7L1-16-D-0006 or SPE7L1-17-D-0013. (Note: SPE7L1-17-D-0013 was issued for administrative purposes to facilitate continued contract performance, due to system errors with contract SPE7L1-16-D-0006 and 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 original all terms and conditions.

These 28 NSNs were last purchased on one of the following LTCs or IDPOs:

Solicitation Number Contract Number Awardee SPE7LX-14-R-0181 SPE7M1-15-D-0018 Michelin North America (CAGE 12195) SPE7L1-14-R-0005 SPE7L1-15-D-0007 Michelin North America (CAGE 12195) SPE7L1-17-X-0012 SPE7L1-17-D-5011 Pomp’s Tire Service (CAGE 1T1Z4)

Multiple PACE (auto) awards have been awarded for the 29th NSN (2610-01-603-9820), with the most recent being SPE7L7-18-V-1083, dated 3/15/18. This NSN has not previously been on a long term contract.

A review of the J&A (See Attachment 3) for solicitation SPE7LX-14-R-0181 reveals that a Request for Information (RFI) ran from 12/16/13 to 01/10/14. Market research had been conducted in 2014 for 113 tire NSNs. At that time, market surveys were sent to 35 manufacturers and dealers. Solicitation SPE7L1-15-R-0004 was synopsized on FedBizOps and posted to DIBBS concurrently, running from 06/06/14 to 7/02/14. The solicitation was later amended, with the closing date changed to 07/16/14. This

SOLICITATION SPE7LX-18-R-0113

April 23, 2018

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

FOR OFFICIAL USE ONLY

solicitation was generated in support of the TSI award SPM7LX-11-D-0157. As a result of the solicitation, a total of 11 contracts were subsequently awarded, including SPE7M1- 15-D-0018.

A review of the J&A (See Attachment 4) for solicitation SPE7L1-14-R-0005 reveals that a Request for Information (RFI) ran from 12/16/13 to 01/10/14. Market research had been conducted in 2014 for 52 tire NSNs. At that time, market surveys were sent to 36 manufacturers and dealers. Solicitation SPE7L1-14-R-000 was synopsized on FedBizOps and posted to DIBBS concurrently, running from 05/15/14 to 06/10/14. The solicitation was later amended, to extend the closing date to 06/30/14. This solicitation was generated in support of the TSI award SPM7LX-11-D-0157. As a result of the solicitation, a total of 4 contracts were subsequently awarded, including SPE7L1-15-D-0007.

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

A sources sought notice was run on FedBizOps from 09/01/17 to 09/29/17, and included a market survey.

A market survey was also e-mailed to 31 known tire manufacturers and dealers, in September of 2017.

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. Listing of NSNs

2. Summary of Market Survey Responses

3. J&A for Solicitation SPE7LX-14-R-0181

4. J&A for Solicitation SPE7LX-14-R-0005

SOLICITATION SPE7LX-18-R-0113

April 23, 2018

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

FOR OFFICIAL USE ONLY

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.

Contracting Officer

Kenneth A. Cotton ____ Typed name of Contracting Officer

APPROVAL/CERTIFICATION

I have reviewed and approve this justification:

Competition Advocate

Head of the Contracting Activity

APPROVAL REQUIREMENTS

(X) Up to $700,000 Contracting Officer

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

(X) $13,500,000 to $93,000,000 Head of the Contracting Activity (HCA) ( ) Over $93,000,000 Senior Procurement Executive (AQ)

COTTON.KENNETH

.A.1230151268

Digitally signed by

COTTON.KENNETH.A.1230151268

Date: 2018.04.23 15:47:33 -04'00'

COUTURE.MARY.E.

1230253613

Digitally signed by

COUTURE.MARY.E.1230253613

Date: 2018.05.02 14:15:58 -04'00'

BROWN.MARK.ALB

ERT.1041175032

Digitally signed by

BROWN.MARK.ALBERT.1041175032

Date: 2018.05.07 13:35:30 -04'00'

Project CL17255004 JCL17255004 Attachment 1

Solicitation SPE7LX-18-X-0113

For Official Use Only Source Selection Information See FAR 2.101 and 3.104 Printed 4/22/2018 @ 6:03 PM

CLIN NSN Approved Source CAGE P/N(s) AMSC QCC NAICS FOB I/A PLT Last TSI Contract Last LTC Unit Price ADQ ADV ADV *3 ADV*5 ADV *.01 0001 2610-01-220-6413 Michelin NA 12195 62159; 72157 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0002 2610-01-388-6679 Michelin NA 12195 56389 3D DAF 326211 D D 12 SPE7L116D0006 SPE7M115D0018 0003 2610-01-397-1385 Michelin NA 12195 01889 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0004 2610-01-434-8732 Michelin NA 12195 37840; 51278 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0005 2610-01-436-3332 Michelin NA 12195 96706 3C DAF 326211 D D 12 SPE7L117D0013 SPE7L115D0007 0006 2610-01-436-3334 Michelin NA 12195 40200 3C DAF 326211 D D 12 SPE7L117D0013 SPE7L115D0007 0007 2610-01-443-7040 Michelin NA 12195 76025 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0008 2610-01-479-4200 Michelin NA 12195 32452; 97265 3C DAF 326211 D D 12 SPE7L117D0013 SPE7L115D0007 0009 2610-01-481-5378 Michelin NA 12195 51053: 78390 3C DAF 326211 D D 12 SPE7L117D0013 SPE7L115D0007 0010 2610-01-501-7373 Michelin NA 12195 63997 3C DAF 326211 D D 12 SPE7L116D0006 SPE7L115D0007 0011 2610-01-506-0388 Michelin NA 12195 15701; 80927 3C DAF 326211 D D 12 SPE7L117D0013 SPE7L115D0007 0012 2610-01-506-0391 Michelin NA 12195 03424 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0013 2610-01-512-1944 Michelin NA 12195 99141 3D DAF 326211 D D 12 SPE7L117D0013 SPE7L115D0007 0014 2610-01-514-3999 Michelin NA 12195 55576 3C DAF 326211 D D 12 SPE7L117D0013 SPE7L115D0007 0015 2610-01-517-1881 Michelin NA 12195 81758* 3D DAF 326211 D D 12 SPE7L116D0006 SPE7L115D0007 0016 2610-01-518-5292 Michelin NA 12195 01658; 42407 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0017 2610-01-519-0940 Michelin NA 12195 98774; MSPN 61737 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0018 2610-01-526-1619 Michelin NA 12195 67113 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0019 2610-01-552-6448 Michelin NA 12195 40321 3C DAF 326211 D D 12 SPE7L117D0013 SPE7L115D0007 0020 2610-01-559-2516 Michelin NA 12195 44852 3C DAF 326211 D D 12 SPE7L117D0013 SPE7L115D0007 0021 2610-01-561-7314 Michelin NA 12195 16341 1C DAF 326211 D D 12 SPE7L117D0013 SPE7L115D0007 0022 2610-01-563-6178 Michelin NA 12195 09122 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0023 2610-01-569-2153 Michelin NA 12195 67042; 95283 3C DAF 326211 D D 12 SPE7L117D0013 SPE7L115D0007 0024 2610-01-570-7227 Michelin NA 12195 86785 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0025 2610-01-583-8803 Michelin NA 12195 15924 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0026 2610-01-587-5039 Michelin NA 12195 275/80R 22.5 LR-G; 61310; 76747 3D DAF 326211 D D 12 SPE7L117D0013 SPE7M115D0018 0027 2610-01-599-7416 Michelin NA 12195 00819: 48785 3D DAF 326211 D D 12 SPE7L117D0013 SPE7L117D5011 0028 2610-01-602-7361 Michelin NA 12195 33502; 73493 3D DAF 326211 D D 90 SPE7L117D0013 SPE7M115D0018 0029 2610-01-603-9820 Michelin NA 12195 77510 3D DAF 326211 D D 90 N/A SPE7L718V1083

0023 Goodyear Tire 04NP3 750-110-215 SPE7L116D0006

CLIN 0023 (2610-01-563-8328) removed from project on 11/17/17; it will be included on one of Ken Cotton's projects, as it is not sole sourced to Michelin

CLIN 0029 (2610-01-603-9820) added to project on 1/8/18; it has not been on an earlier LTC

TSI Contract Numbers updated 4/6/18, per new data pull of 4/5/18