SPE7LX-18-R-X027_-_reviewed_Redacted.pdf

SPE7LX18RX027

For Official Use Only See FAR 2.101 & 3.104 Page 1

MEMORANDUM FOR RECORD

SUBJECT: Justification for Other than Full and Open Competition for acquisition of one

NSN under authority of 10 U.S.C. 2304(c) (1)

SOLICITATION: SPE7LX18RX027

1. Summary/introduction:

a. Field activity/agency: The purchasing activity for this acquisition is the Defense

Logistics Agency (DLA), Land andMaritime.

b. Item being purchased: This requirement is for the acquisition of one NSN, a “Filter

Element, Intake Air Cleaner”, used in Army MRAP vehicles. The sources and part number information is listed below and includes the Reference Number Category Code (RNCC), a code that designates the relationship of the part number to an item of supply, as well as the Reference Number Variation Code (RNVC) which indicates that a cited part number is or is not item identifying, or is for information only. The Acquisition Method Code (AMC) and Acquisition Method Suffix Code (AMSC) is also listed below. The AMC code describes to the contracting officer and other Government personnel the results of a technical review of a part and its suitability for breakout, and the AMSC code provides the contracting officer and other Government personnel with engineering, manufacturing, and technical information. Donaldson Company, Inc.

(CAGE 18265) is the only manufacturing source specified on the source control or selected item drawing.

NSN Part Number RNCC RNVC AMC AMSC CAGE NAME 2940-01-205-6038 P15-8487 3 2 3 B 18265 Donaldson Company, Inc.

RNCC

Code:

3 – Design control reference.

RNVC

Code:

2 – A design control reference or other reference number that is an item-identifying number for an item of production, or is either a source control reference, a specification or a standard part, type, or similar reference number that is an item-identifying number for an item of supply.

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

AMSC

Code

B - This part must be acquired from a manufacturing source(s) specified on a source control or selected item drawing as defined by the current version of DoD-STD-100. Suitable technical data, Government data rights, or manufacturing knowledge are not available to permit acquisition from other sources, nor qualification testing of another part, nor use of a second source part in the intended application. Although, by DoD-STD-100 definition, altered and selected items shall have an adequate technical data package, data review discloses that required data or data rights are not in Government possession and cannot be economically obtained. If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs 1 or 2 are valid.

c. Estimated value and purchase order duration: The proposed action is for the solicitation and award of a three-year, Firm-Fixed-Price, Indefinite Delivery Purchase Order (IDPO). The three-year period is inclusive of one one-year base period and two one-year option periods. The procurement values are listed below.

National Stock Numbers on

Solicitation (NSN) Estimated Annual

Demand Value (ADV) Purchase Order

Maximum (ADV x 8 ) Purchase Order

Minimum (ADV x 1% )

For Official Use Only See FAR 2.101 & 3.104 Page 2

2. Description of agency’s need (10 U.S.C. 2304(f)(3)(A))

a. Origin of the procurement: The proposed solicitation will provide “filter element, intake air cleaners” used in assorted Army MRAP vehicles. The annual demand quantity is listed below.

NSN ITEM

ANNUAL

PROJECTED

DEMAND (ADQ)

2940-01-205-6038 Filter Element, Intake Air Cleaner 2125

b. Description of the supplies needed: The one NSN being procured is a filter element, used in various Army MRAP vehicles. The NSN being procured has one approved source, Donaldson Company, Inc.

(CAGE 18265). A description of the Federal Supply Group (FSG) and the Federal Supply Class (FSC) is listed below. The FSG is represented by the first two digits of the NSN and identifies, by title, the commodity area covered by classes within the group. The FSC is represented by the first four digits of the NSN and the code covers a relatively homogeneous area of commodities, in respect to their physical or performance characteristics, or in the respect that the items included therein are such as are usually requisitioned or issued together, or constitute a related grouping forsupply management purposes.

FSG 29: Engine Accessories

FSC 2940: Engine Air and Oil Filters, Strainers, and Cleaners, Non-aircraft

c. Specific need of use for the items: As previously stated, the NSN being procured is a “Filter Element, Intake Air Cleaner”, used in various Army MRAP vehicles.

2940-01-205-6038 (p/n – P15-8487) – On 2/21/18, product specialist, Mr. Danny Carroll stated, “Donaldson CAGE-18265 is the only source for this NSN” and Mr. Carroll certified the AMSC designation of “B” as “acquisition of this part is restricted to sources specified. . . “Mr. Carroll further stated on 3/8/18, that the item is “commercial of a type”.

3. Statutory Requirement - (10 U.S.C. 2304(f)(3)(B)):

The statutory authority permitting other than full and open competition is 10 U.S.C 2304(c)(1), the property or services needed by the agency are available from only a limited number of responsible sources and no other type of property or services will satisfy the needs of the agency.

The Government requires spare parts that are form, fit, and functionally interchangeable with the parts currently being used on the supported weapon systems. The Product Specialist, , has determined that “this part must be acquired from the manufacturing source specified on a source control or selected item drawing as defined by the current version of DoD-STD-100. Suitable technical data, Government data rights, or manufacturing knowledge are not available to permit acquisition from other sources, nor qualification testing of another part, nor use of a second source part in the intended application”. submitted and signed a Tech Cert MFR on 2/21/18, stating “Acquisition of this part is restricted to source(s) specified on A Source Control @, Altered Item @ or A Selected Item @ drawings/documents.” (See Attachment 4 Tech Cert.) also confirmed that “Donaldson CAGE-18265 is the only source for this NSN” and that “All means to obtain a technical data package adequate for manufacture of the item have been exhausted”. The Government does not currently possess detailed technical data sufficient to provide a description of all required form, fit, and function

For Official Use Only See FAR 2.101 & 3.104 Page 3 characteristics of this part.

4. Price/cost considerations (10 U.S.C.2304(f)(3)(C))

a. Relevant pricing issues: This solicitation will be conducted under the policies of FAR Subpart

13.5 “Simplified Procedures for Certain Commercial Items”. 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 quotes.

b. Length of procurement, quantity, and other procurement particulars bearing on the price/cost: As previously mentioned, this is a three-year, Firm-Fixed-Price, Indefinite Delivery Purchase Order (IDPO). The three-year period is inclusive of one one-year base period and two one-year option periods. As such, the price analysis for future years will be based on the Global Insights Producer Price Index (PPI) forecasts. The Global Insights PPI forecast provides timely, accurate price and cost analysis, and historical records for thousands of commodity prices and wages around the globe allowing procurement professionals to understand supplier cost structure and better negotiate supplier quotes.

c. The Contracting Officer determines that the anticipated cost to the Government will be fair and reasonable.

5. Market research/efforts to obtain competition (10 U.S.C. 2304(f) (3) (D) & (E).

a. DLA Land and Maritime conducted various forms of market research including the publishing of a formal sources sought notice and market survey to the Government Point of Entry, www.fbo.gov. In addition to the publishing of a sources sought notice, the Contract Specialist also researched the procurement history and approved source of supply for the subject NSN on the proposed solicitation. The Contract Specialist emailed the approved source of supply and any dealers who were prior awardees and bidders, requesting market survey information.

Furthermore, the contract specialist researched Reference Number Category Code (RNCC), the Reference Number Variation Code (RNVC), the Acquisition Method Code (AMC) and the Acquisition Method Suffix Code (AMSC) for the item on the proposed solicitation. The results of the market research are listed below.

Sources Sought Notice:

The Contract Specialist published a formal sources sought notice and market survey to the Government Point of Entry (GPE), www.fbo.gov on 2/23/18 with a response date of 3/2/18, and no responses were noted.

Procurement History and Approved Sources:

The contract specialist researched the procurement history and the approved source of supply for the NSN on the proposed solicitation; the procurement history indicates that the approved source of supply, Donaldson Company, Inc. (CAGE 18265), has provided this item, along with several of their large and small dealers. The Contract Specialist contacted the approved source and several dealers in February and March, 2018, emailing market surveys and requesting information. A summary of the responses received are listed below and a recap of the market research conducted by the Contract Specialist is included as an attachment to this document. (See Attachment 2 – Market Survey Recap.)

Cavanaugh Government Group, LLC - (CAGE 5UY76): Cavanaugh stated that they are a small business distributor and that they prefer to deal directly with the Government. Cavanaugh stated that they independent for the OEM they deal with, Donaldson Company, Inc. CAGE 18265. Cavanaugh stated they were interested in pursuing a Long Term Contract, For Official Use Only See FAR 2.101 & 3.104 Page 4

Cavanaugh stated the item was not commercial.

J.G.B. Enterprises, Inc. - (CAGE 61125): J.B.G. stated they were a small business distributor and they were independent from the OEM, Donaldson Company, Inc. (18265). J.G.B. stated they were interested in a Long Term Contract and

J.B.G. stated that it was “unknown” if the item was commercial.

Donaldson Company, Inc. – (CAGE 18265): Sole source and OEM, Donaldson, stated they were a large manufacturer and preferred to deal through dealers, instead of the Government. Donaldson stated they have a commercial distribution network, their dealers are not exclusive and are not electronically linked to each other. Donaldson stated they would

Donaldson stated that this particular item was not commercial.

Lockheed Martin Corp. – (CAGE 02769): Lockheed Martin, a large dealer and prior awardee for the subject NSN, did not return a market survey and was unresponsive to requests for information.

Kampi Components Co., LLC - (CAGE 7Z016): Kampi, a small business dealer and prior bidder for the subject NSN, did not return a market survey.

Lynn Electronics Corp. – (CAGE 19151): Lynn Electronics, a small business dealer and prior bidder for the subject NSN, did not return a market survey.

Longhorn Regional Service Center – (CAGE 4GK47): Longhorn Regional Service Center, a small business dealer and prior bidder for the subject NSN, did not return a market survey.

Brighton Cromwell – (CAGE 3NNX8): Brighton Cromwell, a small business dealer and prior bidder for the subject NSN, did not return a market survey.

Market Research Conclusion:

Based on the information received and presented in the above market research and the market research attachment, the bidders list will include the interested companies who responded with a market survey or any companies contacted who did not state directly that they were not interested.

As required per FAR 6.303-1(b) (10), a listing of sources that expressed an interest in the acquisition. See below:

- Cavanaugh Government Group, LLC (CAGE 5UY76)

- J.G.B. Enterprises, Inc. (CAGE 61125)

b. Synopsis, and other efforts made to publicize the requirement and generate competition:

In accordance with FAR 5.204 and 5.203(a), a pre-solicitation notice will be published to the Government Point of Entry at least 15 days, and will run concurrently with the solicitation.

6. Actions Being Taken to Overcome Barriers to Competition (10 U.S.C. 2304(f) (3) (F)).

For Official Use Only See FAR 2.101 & 3.104 Page 5

The Government will continue to conduct market research to ascertain if changes occur in the marketplace that would enable future actions for this item 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. (See Procurement Note L04, pg. 12 of the solicitation.) 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.

The technical and requirements personnel have reviewed and certified as accurate and complete all necessary data to support their recommendation for other than full and open competition.

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.

In addition, this item is subject to the following requirement, regarding methods of locating additional sources:

Per PGI 206.304, the requirement states that “the justification shall include a copy of the previous justification to assist the approval authority in determining whether the planned actions to remove any barriers to competition cited on the previous justification were completed.” Based on a review of the contract history of NSN 2940-01-205-6038, the current LTC, SPE7M118D0001, expires in September 2018, and a J&A for the base contract was located. The J & A (Attachment 3), for this contract was reviewed to determine whether the planned actions to remove any barriers to competition were completed. This previous J&A indicates that the item was to be synopsized as required by FAR 5.201. Sources Sought notices were posted in December 2004 and again in January 2006. In addition, DSCC held an Industry Day in June 2006 and met with numerous small businesses to discuss the FASI requirement;

nine market surveys were completed at this time. In February 2007 a pre-solicitation conference was held with approximately 70 vendors in attendance and additional market surveys were issued. Based on this information from the previous J & A, it is determined that the planned actions to remove any barriers to competition were completed. This NSN, 2940- 01-205-6038, has an AMC/AMSC of 3B, which means that this part “must be acquired from a manufacturing source(s) specified on a source control or selected item drawing as defined by the current version of DoD-STD-100. Suitable technical data, Government data rights, or manufacturing knowledge are not available to permit acquisition from other sources, nor qualification testing of another part, nor use of a second source part in the intended application. Although, by DoD-STD-100 definition, altered and selected items shall have an adequate technical data package, data review discloses that required data or data rights are not in Government possession and cannot be economically obtained. If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs 1 or 2 are valid.” At this time, the requirement/guidance in PGI 206.304 has been fulfilled.

For Official Use Only See FAR 2.101 & 3.104 Page 6

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.

Carrie Krafft Spayde Date Contracting Officer

Approval / Certification

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

MARY E. COUTURE Date Competition Advocate

APPROVAL REQUIREMENTS

( ) Up to $700,000 Contracting Officer

(X) $700,000 - $13,500,000 Competition Advocate ( ) $13,500,000 - $93,000,000 Head of the Contracting Activity (HCA) ( ) over $93,000,000 Senior Procurement Executive (AQ)

Attachments:

1. Sources Sought Notice

2. Market Research Recap

3. J&A for prior FASI GLOBAL contract SPE7M118D0001 (original contract SPM7LX08D9021)

4. Tech Cert

04/04/18

KRAFFT

SPAYDE.CARRIE.L

.1299372029

Digitally signed by KRAFFT

SPAYDE.CARRIE.L.1299372029

Date: 2018.04.04 09:36:14 -04'00'

COUTURE.MAR

Y.E.1230253613

Digitally signed by

COUTURE.MARY.E.1230253613

Date: 2018.04.11 15:49:09 -04'00'