SPE7LX19R0058_-_reviewed_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LONG-TERM CONTRACT (LTC) PROJECT CM17290002

SOLICITATION SPE7LX-19-R-0058

February 8, 2019

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 NSN 4330-01-409-0092 with Other Than Full and Open competition basis.

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

Description NSN ADQ EST. Annual

Value

AMC AMSC

Filter Element 4330014090092 10,443 1 C

Producer Price Index for the subject solicitation is 333999333999, “All Other Miscellaneous General Purpose Manufacturing”.

The NAICS code for this item is 333999, “All Other Miscellaneous General Purpose Manufacturing”.

Weapon Systems:

The end item is a filter element supporting various Naval Costal Patrol ships. The filters purpose is to filter particles to allow the flow of fluid.

The scope of the solicitation and resulting contract is to issue an award to an approved manufacturer or dealer providing an approved part from an approved manufacturer.

The proposed action is for the solicitation and award of a five (5) year, Firm Fixed Price (FFP) long-term contract. The contract will consist of a three (3) year base with two one-year options. The estimated contract values are below:

o Annual Demand Value (ADV): $ o 3-Year Value (ADV * 3): $ o 5-Year Value (ADV * 5): $

The Federal Stock Group code for is 4330 (Centrifugals, Separators and Pressure and Vacuum Filters) which represents the supply class of the item.

FAR subpart 13.5 will be used in accordance with 41 U.S.C. 1901.

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

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

o (c) The head of an agency may use procedures other than competitive procedures only when – o 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-19-R-0058

February 8, 2019

The government requires spare parts that are form, fit and functionally interchangeable with those currently supporting Naval Costal Patrol ships. To meet this requirement parts must be obtainable from the approved sources stated in Section 5 of this document.

5. The subject item is restricted to the approved sources referenced in this Section. The authority for using other than full and open competition is FAR 6.302-1, “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements Qualifications.” Although these items are commercial, it is essential that the Government obtain this part only from approved sources because this product has been tested and verified to be used in the specific higher level assemblies.

Those higher assemblies include Naval Costal Patrol ships. To ensure operability of the stated higher assemblies, the spare parts must be the same form, fit, function as the parts currently used in these higher assemblies.

AMC/AMSC 1C coding and approved sources were verified with DLA Land and Maritime Product Specialist, on May 21, 2018. The approved sources for NSN 4330-01-409-0092 are:

Contractor Name CAGE Approved Part Number Filter Technology Incorporated 3KUY8 CWP20A40PEP Filpro Corporation 5V505 20P40PX United Filters Incorporated 77807 UPDN20R40PE Advanced Filtration Separation 9Z448 U20-AW40U-EC1U

The following are the AMSC descriptions.

AMC 1. Item is suitable for competitive acquisition for the second or subsequent time 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.

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

A Sources Sought notice, with a copy of the market survey attached, was posted on Federal

Business Opportunities website. The notice was open from 10/17/17 through 10/24/17.

, Product Specialist, coordination on February 28, 2019 occurred requesting if there are any known contractors interested in qualifying for the subject filter element. There are no known contractors interested in qualifying for this item.

This acquisition will be solicited using Federal Acquisition Regulation (FAR) Part 13.5 procedures. Posting of the synopsis to the Federal Business Opportunities website will occur on or about February 13, 2019. The solicitation will remain open for a period of 30 days. The solicitation will be posted on the internet, via the DLA Internet Bid Board System (DIBBS) on or

SOLICITATION SPE7LX-19-R-0058

February 8, 2019 about February 14, 2019.

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

A FAR Part 13.5 solicitation will be issued. A five year, firm fixed price Indefinite Delivery

Contract-Requirements will be established. The five year period is inclusive of a three (3) year base period, and two (2) separately priced, one (1) year option periods. The estimated value of the project is below the two million threshold requirement for Certified Cost or Pricing Data (Deviation per DAR Tracking Number: 2018-O0015, Effective 01 July 2018), however, the item is commercial and certified cost and pricing data is not required in accordance with FAR 15.403-1(b)(3). 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.

Prices will be compared with commercial price catalogs, when available, to verify pricing.

The NSN in this initiative is determined to be commercial as defined by FAR 2.101.

8. Market Research/Efforts to Obtain Competition:

Market research occurred 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 contract.

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.

o Distributor/dealer involvement.

Summary of Market Research:

o A Sources Sought notice was posted on Federal Business Opportunities website from

10/17/24 through 10/24/17. Phoenix Trading Incorporated (CAGE: 4LF36) and 3T Federal Solutions LLC responded to the Sources Sought notice with a market survey.

o Market research did not result in the potential of new manufacturing sources.

Correspondence was not received inquiring about the qualification process.

Summary of Phoenix Trading Incorporated responses to the market research survey:

o Contractor prefers a long-term contract.

o .

o o Contractor states the subject item is commercial.

SOLICITATION SPE7LX-19-R-0058

February 8, 2019 o Contractor is a dealer

Summary of 3T Federal Solutions LLC. responses to the market research survey:

o Contractor states the subject item is commercial.

o o Contractor is a dealer

Information received regarding the commerciality of the item:

Commerciality was investigated using several different techniques. The market survey responses state the item is commercial. Further, the item is available from a number of commercial sources.

The item meets the FAR 2.101 definition for commerciality.

9. 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.

Strategic Acquisition Programs Directorate, Product Specialist, reviewed the NSN with this solicitation during the project development phase. The review identified no additional sources.

Forecast information is available to all potential sources for both sole source and competitive items. DLA Supplier Requirements Visibility Application (SRVA) is a database available via the DLA Internet Bid Board System. SRVA provides potential sources the opportunity to search for information on DLA’s anticipated requirements based on updated monthly forecasts. Essentially, it provides twenty-four 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 reach the Value Management Unit to become approved for sole source, code and part number items. DLA Land & Maritime Value Management Unit continually seeks sole source, limited competition, over-priced, low reliability and hard to buy items to improve their value and support posture. DLA Land & Maritime internet website contains information for all potential sources to challenge prices, submit Value Engineering Change proposal, link to DoD’s Value Engineering program and the necessary references for both DLA Value Engineering program and DoD Value Engineering program.

10. A listing of sources indicating an interest in the acquisition are:

SOLICITATION SPE7LX-19-R-0058

February 8, 2019

Name CAGE Business Size Business Type Phoenix Trading Incorporated 0U8Z9 Small Dealer 3T Federal Solutions 74063 Small Dealer RM Government Services 6FN58 Small Dealer

A low risk level for this acquisition is considered to be probable. All known contractors expected to submit an offer are dealers. Dealers have no control concerning price, delivery schedule, or production. Therefore, they have no risk concerning these areas. In addition, all prices are firm fixed.

The one are of risk for a dealer is the contract price for long term requirements. One dealer in response to the Market Research survey

However, reviewing unit prices for this item from 2009 through 2018 the increase in price is only 1.3%. The stability of the unit price negates the risk assessment by the dealer.

11. In addition to the specific actions 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 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.

A Sources Sought notice was posted on the Federal Business Opportunities website on October 17, 2017. No new contractors expressing interest in qualification were received.

The solicitation will be posted on the DLA Internet Bid Board System (DIBBS) for 30 days, DFARS PGI 206.304 requires documentation for a non-competitive follow-on to a previous award for the same supply or service supported by a justification for other than full and open competition citing the authority at FAR 6.302-1. There are no previous awards that required a J & A. The most recent Long-Term-Contract was IDPO SPM7M1-11-D-5A48 which did not require a J &A.

CONTRACTING OFFICER CERTIFICATION/APPROVAL

I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief.

3/8/2019

Michael L Shirley Date Contracting Officer

APPROVAL REQUIREMENTS

Up to $700,000 Contracting Officer