CL19121001_J&A_-_Redacted.pdf

FOR OFFICIAL USE ONLY

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION (J&A)

IDC PROJECT CL19121001; SOLICITATION SPE7LX-19-R-X096

SEPTEMBER 9, 2019

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

ORIGINAL

1. Defense Logistics Agency Land and Maritime (DLA L&M) is the contracting activity.

2. The action being approved is the acquisition of supplies on an Other than Full and Open competition basis. The part in this initiative has been determined commercial and will be procured under FAR Subpart 13.5 - Simplified Procedures for Certain Commercial Items procedures.

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

This solicitation is for one (1) National Stock Number (NSN), which is classified as a SuperKid item:

Explanation of Chart Column Header Names and Descriptions:

CLIN: Contract Line Item Number U/I: Unit of Issue

EA = Each AMC: Acquisition Method Code

3 = Acquire, for the second or subsequent time, directly from the actual manufacturer.

AMSC: Acquisition Method Suffix Code

Z = This part is a commercial/non-developmental/off-the-shelf item. Commercial item descriptions, commercial vendor catalog or price lists or commercial manuals assigned a technical manual number apply. If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources are available, AMCs 1 or 2 are valid.

PIC: Place of Inspection 2 = Inspect/Accept at Destination

QCC: Quality Control Code First Position: D = Standard Inspection Second Position: A= No Quality Subsystem Requirements Third Position: A = No specific requirements

ADQ: Annual Demand Quantity ADV: Annual Demand Value

PLT: Production Lead Time 90 days; this will be used in the solicitation as the Government’s Requested Delivery

(in days)

The Weapon System Designator Code (WSDC) for this item is ZNM – Carbine, 5.56 Millimeter.

The Federal Supply Group (FSG) for this item is 10 - Weapons.

The Federal Supply Class (FSC) for this item is 1005 - Guns, through 30mm.

CLINs NSN Item Name U/I AMC AMSC PIC QCC ADQ ADV PLT 0001 1005-01-576-5164 Magazine, Cartridge EA 3 Z 2 DAA 38,491 1 90

The proposed action is for the solicitation and award of a five (5) year, firm fixed price, Indefinite Delivery Contract (IDC), to include three (3) base years, and two (2) option years. The option years may be exercised at the discretion of the Government. The solicitation values for this NSN are shown in the chart below:

The Annual Demand Value (ADV) for this acquisition project is with a three-year base total value of , and a five-year value of The ADV is based upon the value found in the REC-_ MAX_VALUE_1YR field from the KT MAX tab of the project data pull, which was supplied by the Sourcing Strategy Specialist on 8/29/19.

Contract minimum and maximum values will be used within the solicitation, and are for the life of the contract. The prior LTC for this item, SPE7MX-17-D-0095 is scheduled to expire in June of 2022. However, the Sourcing Strategy Specialist has indicated that the contract may max out early, due to heavier than expected demand for this SuperKid item.

Therefore, the contract maximum amount for this project is being set at a higher level than normal. The contract maximum is , which is calculated by multiplying the ADV of the acquisition by 8, to account for any unexpected surges in demand, and to attempt to prevent the contract from maxing out ahead of schedule.

The total guaranteed minimum for this acquisition is which is calculated as 1% of the ADV. The contract minimum will be held in reserve by the Government.

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 spare parts that are form, fit and functionally interchangeable with those currently used on the supported weapon system. The only manufacturing source which has the technical data to manufacturer this item, and that is approved by the Engineering Source Activity (ESA), is Magpul Industries Corporation (CAGE 1LX50, a small manufacturer.

There are no known pending source approval requests with Engineering Support Activities (ESA).

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

Magpul Industries Corporation, CAGE 1LX50, P/N MAG570-BLK

NSN

Estimated Total

Base Year 1

(ADV)

Estimated 3 Year Contract Value

(ADV * 3)

Estimated 5 Year Contract Value

(ADV * 5)

Contract Maximum

(ADV * 8)

Contract Minimum

(ADV * 0.01)

1005-01-576-5164

6. The use of the authority cited is based on:

Acquisition Method Code (AMC) 3: Acquire, for the second or subsequent time, directly from the actual manufacturer.

Acquisition Method Suffix Code (AMSC) Z: This part is a commercial/nondevelopmental/off-the-shelf item. Commercial item descriptions, commercial vendor catalog or price lists or commercial manuals assigned a technical manual number apply. If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources are available, AMCs 1 or 2 are valid.

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

This acquisition will be solicited under FAR Part 13.5 - Simplified Procedures for Certain Commercial Items guidelines. Per FAR 13.501(a)(1): Acquisitions conducted under simplified acquisition procedures are exempt from the requirements in part 6. Also, per DLAD 13.500(4), “A Justification and Approval (J&A) is required only for sole source acquisitions.”

The solicitation will be posted on the internet, via the DLA Internet Bid Board System (DIBBS), and a synopsis will be posted on FedBizOps. The solicitation and synopsis will run concurrently, for a period of 15 days.

This item will be acquired through a negotiated solicitation format, as discussions may be required.

The OEM/approved source for this NSN, Magpul Industries Corporation (CAGE 1LX50) will be sent a copy of the solicitation by e-mail, at the time of its posting on DIBBS, as will dealers Kampi Components (CAGE 7Z016) and Arms Unlimited (CAGE 6T0S4), each of which submitted completed market surveys.

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

This will be a five (5) year, firm fixed price, Indefinite Delivery Contract (IDC). The five-year time frame consists of three (3) base years, and two (2) option years. The option years may be exercised at the discretion of the Government.

As this is a commercial item being acquired, cost or pricing data is not required, per FAR 15.403-1 Prohibition on obtaining certified cost or pricing data. 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.

During the evaluation, quoted pricing will also be compared to commercial pricing found online for this item, as well as the pricing on GSA Advantage. This will be an additional evaluation method used in determining whether or not the quoted pricing is fair and reasonable.

IDC PROJECT CL19121001; SOLICITATION SPE7LX-19-R-X096

SEPTEMBER 9, 2019

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

Based upon the above techniques to be used, the Contracting Officer hereby anticipates costs to the Government will be fair and reasonable.

9. Market Research/Efforts to Obtain Competition:

Various forms of market research were performed, in advance of a solicitation. Market research was conducted to find the following:

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

Reviewing previous procurements of this item and determining previous acquisition methods.

Determining vendor interest in long-term contracting for this NSN.

Researching/gathering information regarding commerciality of the item.

Vendor size and business status information.

Delivery estimates.

Distributor/dealer involvement.

A Sources Sought notice was posted on FedBizOps from 6/12/19 through 6/20/19. Two responses were received, from Kampi Components (7Z016) and Arms Unlimited (6T0S4), each of which is a small dealer.

Requests for a market survey were sent in May, 2019, to the following companies, all of whom are shown to be prior awardees for this item in the procurement history:

As a results of the Sources Sought notice, and the e-mailed requests for market research, completed market surveys have been received from Magpul Industries Corporation, Kampi Components, and Arms Unlimited. Kampi Components and Arms Unlimited are both dealers, and their market survey indicates that they would be quoting the product of the OEM, Magpul. No responses were received from Defense Solutions Group, Phoenix Trading or Atlantic Diving Supply.

Below is a summary of the information received on the market surveys:

Magpul Industries Corporation (CAGE 1LX50), response from o Small manufacturing business, with 129 employees.

o Interested in a long term contract o Indicates that item is commercial.

o

Kampi Components (CAGE 7Z016), response from o Small dealer, with 70 employees.

o Would be quoting product of Magpul Industries Corporation.

o Indicates that item is not commercial.

Arms Unlimited (CAGE 6T0S4); response o Small dealer with 4 employees o Would be quoting product of Magpul Industries Corporation.

o Indicates that item is commercial.

After receipt of their market survey, Magpul Industries, the OEM/approved source for this item, was contacted for additional information in regards to the commerciality of this item. A response was received on 8/21/19 from , the Government/Military and Law Enforcement Manager for Magpul, with the following commerciality information:

• Government Question: Does Magpul own the technical drawings for this item?

Do you make it exclusively, or are the drawings available, to allow other manufacturers to make their own version?

(A)

• Government Question: Do you magazine cartridges have to be reviewed, tested and authorized by the Engineering Source Activity (ESA)?

• Government Question: You’ve indicated on your survey that this item is commercial. Is it commercial in the sense that online and brick & mortar retailers can sell your magazine cartridge, or that others can make and sell their own? The reason I ask is that we have this item designated as Commercial Off-the Shelf, and I’m trying to determine exactly what this means.

This NSN has an Acquisition Method Suffix Code of Z: This part is a commercial, nondevelopmental, off-the-shelf item. Commercial item descriptions, commercial vendor catalog or price lists or commercial manuals assigned a technical manual number apply.

The Product Specialist, , was contacted, to determine if this classification is correct. replied on 8/22/19, saying “After reading Magpuls response on commerciality, the AMSC of Z is correct. This item is a COTS item that can be bought by the general public”.

of the SBA, who had initial suggested that this item might qualify for Brand Name or Equal (BNOE) status, was also sent the information provided by Magpul.

responded on 8/22/19 as follows: “I know they won’t provide their drawings to others (I wouldn’t either), but I didn’t know if the government had enough specifications on hand or easily obtainable to allow a brand name or equal (full and open) type purchase.

If you believe that it is more “commercial of a type” as opposed to “very commercial,” then you would be the best judge of that. If you find out that there is adequate technical data (specs), please let me know and I can provide you with potential SB firms. I can sign the DD Form 2579 if you resend it to me”.

Based upon the information received from of Magpul, it is the assessment of the Acquisition Specialist that this item is commercial of a type, rather than BNOE, as only Magpul has received the authorization from ESA to manufacture this item.

The basis for an UNRESTRICTED procurement is that there is no reasonable expectation that offers will be obtained from at least two responsible small business concerns offering the product of at least two different small business concerns. There are no known 8a, HUBZone, Service Disabled Veteran Owned (SDVO) or Women Owned (WO) small businesses that can supply these tires. The DD2579 was reviewed, approved and signed by the Contracting Officer on 7/16/19, DLA Land and Maritime Small Business on

7/17/19, and the Small Business Administration (SBA) Procurement Center Representative, Philip MacLean, on 8/23/19.

10. 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 to the Government, and cannot be developed to permit full and open competition. The data presently available reflects the minimum needs of the Government.

11. The confirmation of sources listed above was completed by the DLA L&M Product Specialist , during the technical evaluation of this item on 8/1/19. Mr.

states that “It is a 3/Z with the only approved source is (1LX50) Magpul Industries Corp. The reason Magpul is the only approved source is because this is the only approved source from the ESA. This item cannot be coded as a AMSC of G because there is no tech data. There is not adequate data listed on the TIR/Haystack/Magpul website for anyone to just make this item. These magazines have to pass certain testing criteria required by ESA.

Based on the limited data the Government possesses, only the approved source can meet the Government’s minimum needs for this item. 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.

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

Magpul Industries Corporation (CAGE 1LX50) Kampi Components (CAGE 7Z016) Arms Unlimited (CAGE 6T0S4)

13. This item is subject to the following methods of locating additional sources:

The Procurement History for this NSN, as of 8/29/19, is shown in the chart below:

The prior Long Term Contract (LTC), SPE7MX-17-D-0095 was reviewed in Records Management. A J&A, dated 3/15/17, was completed by the Contracting Officer, Brandy Warner (See Attachment 1). Key information found in the J&A includes:

o The AMSC at the time of this J&A was 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).

o The acquisition was to be synopsized on FedBizOps on or about March 1, 2017.

o The only completed market survey returned was from Atlantic Diving Supply

(CAGE 1CAY9).

Smart Number (PIIN) Source Type

Vendor

CAGE

Code

Vendor Name Quantity Unit Net Price Award Date Incoterms Prc Reas SAP PO No.

SPE7LX19F4015 B 7Z016 KAMPI COMPONENTS CO., INC. 6,021.000 EA 11.10000 6/24/2019 1 BB 8506623020 SPE7LX19F2958 B 7Z016 KAMPI COMPONENTS CO., INC. 6,854.000 EA 11.10000 3/28/2019 1 BB 8506406866 SPE7LX19F2659 B 7Z016 KAMPI COMPONENTS CO., INC. 4,975.000 EA 11.10000 3/7/2019 1 BB 8506348210 SPE7LX19F2308 B 7Z016 KAMPI COMPONENTS CO., INC. 4,707.000 EA 11.10000 2/14/2019 1 BB 8506292027 SPE7LX19F2040 B 7Z016 KAMPI COMPONENTS CO., INC. 4,241.000 EA 11.10000 1/31/2019 1 BB 8506247565 SPE7M119F119Z B 7Z016 KAMPI COMPONENTS CO., INC. 4,287.000 EA 11.10000 12/27/2018 1 BB 8506162189 SPE7M119F7996 B 7Z016 KAMPI COMPONENTS CO., INC. 3,494.000 EA 11.10000 11/28/2018 1 BB 8506092333 SPE7M119F3664 B 7Z016 KAMPI COMPONENTS CO., INC. 2,436.000 EA 11.10000 10/25/2018 1 BB 8506003098 SPE7M119F1714 B 7Z016 KAMPI COMPONENTS CO., INC. 2,686.000 EA 11.10000 10/10/2018 1 BB 8505963695 SPE7M118F6G38 B 7Z016 KAMPI COMPONENTS CO., INC. 3,094.000 EA 11.10000 8/16/2018 1 BB 8505782739 SPE7M118F85JM B 7Z016 KAMPI COMPONENTS CO., INC. 2,786.000 EA 11.10000 5/31/2018 1 BB 8505551066 SPE7M118F69DD B 7Z016 KAMPI COMPONENTS CO., INC. 3,787.000 EA 11.10000 5/4/2018 1 BB 8505464555 SPE7M118F00HX B 7Z016 KAMPI COMPONENTS CO., INC. 2,479.000 EA 11.10000 2/2/2018 1 BB 8505160111 SPE7M118F74Q8 B 7Z016 KAMPI COMPONENTS CO., INC. 3,740.000 EA 11.10000 1/23/2018 1 BB 8505122877 SPE7M118F765E B 7Z016 KAMPI COMPONENTS CO., INC. 9,736.000 EA 11.10000 12/1/2017 1 BB 8504985027 SPE7M118F154A B 7Z016 KAMPI COMPONENTS CO., INC. 5,985.000 EA 11.10000 11/2/2017 1 BB 8504901221 SPE7M118F8462 B 7Z016 KAMPI COMPONENTS CO., INC. 1,416.000 EA 11.10000 10/24/2017 1 BB 8504871072 SPE7M118F3024 B 7Z016 KAMPI COMPONENTS CO., INC. 1,564.000 EA 11.10000 10/11/2017 1 BB 8504833855 SPE7MX17D00950010 B 7Z016 KAMPI COMPONENTS CO., INC. 5,178.000 EA 11.10000 9/28/2017 1 BB 8504797396 SPE7MX17D00950009 B 7Z016 KAMPI COMPONENTS CO., INC. 1,115.000 EA 11.10000 9/15/2017 1 BB 8504754932 SPE7MX17D00950008 B 7Z016 KAMPI COMPONENTS CO., INC. 1,440.000 EA 11.10000 9/6/2017 1 BB 8504722278 SPE7MX17D00950007 B 7Z016 KAMPI COMPONENTS CO., INC. 2,003.000 EA 11.10000 9/1/2017 1 BB 8504712594 SPE7MX17D00950006 B 7Z016 KAMPI COMPONENTS CO., INC. 3,245.000 EA 11.10000 8/31/2017 1 BB 8504707011 SPE7MX17D00950005 B 7Z016 KAMPI COMPONENTS CO., INC. 1,186.000 EA 11.10000 8/24/2017 1 BB 8504687369 SPE7MX17D00950004 B 7Z016 KAMPI COMPONENTS CO., INC. 1,342.000 EA 11.10000 8/9/2017 1 BB 8504644935 SPE7MX17D00950003 B 7Z016 KAMPI COMPONENTS CO., INC. 3,858.000 EA 11.10000 8/3/2017 1 BB 8504628266 SPE7MX17D00950002 B 7Z016 KAMPI COMPONENTS CO., INC. 969.000 EA 11.10000 7/25/2017 1 BB 8504599702 SPE7MX17D00950001 B 7Z016 KAMPI COMPONENTS CO., INC. 2,347.000 EA 11.10000 7/12/2017 1 BB 8504562823 SPM7LX12D0080000801 B 1L0J5 Defense Solutions Group, 541.000 EA 11.59000 6/26/2017 D BI 8504522335 SPM7LX12D0080000702 B 1L0J5 Defense Solutions Group, 1,210.000 EA 11.59000 6/26/2017 D BI 8504522334 SPM7LX12D00800006 B 1L0J5 Defense Solutions Group, 10,498.000 EA 11.59000 2/6/2017 D BI 8504080565 SPE7L117P0899 B 4LF36 Phoenix Trading Inc. 4,630.000 EA 10.47000 12/7/2016 1 BB 8503890702 SPE7L416M2892 B 4LF36 Phoenix Trading Inc. 10,400.000 EA 10.49000 7/19/2016 1 BB 8503434514 SPM7LX12D00800005 B 1L0J5 Defense Solutions Group, 10,498.000 EA 11.59000 1/22/2016 D BI 8502859120 SPE7L315VD042P00001 B 1CAY9 Atlantic Diving Supply, Inc. DBA 250.000 EA 14.00000 9/11/2015 1 XG 8502501370 SPE7L415V2932P00001 B 1CAY9 Atlantic Diving Supply, Inc. DBA 858.000 EA 11.70000 8/25/2015 1 XG 8502437166 SPM7LX12D00800004 B 1L0J5 Defense Solutions Group, 10,500.000 EA 11.59000 9/18/2013 D BI 8500374368 SPM7LX12D00800003 B 1L0J5 Defense Solutions Group, 10,500.000 EA 11.59000 6/27/2013 D XX 4524857869 SPM7LX12D00800002 B 1L0J5 Defense Solutions Group, 12,500.000 EA 11.59000 6/6/2013 D XX 4524684936 SPM7L412C0004 B 1L0J5 Defense Solutions Group, 55,000.000 EA 11.38000 10/18/2011 D BG 4519393276 SPM7L411M1670 B 1L0J5 Defense Solutions Group, 8,400.000 EA 11.76000 3/9/2011 D BG 4517172541 SPM7L411M0708 B 1L0J5 Defense Solutions Group, 12,700.000 EA 11.75000 11/29/2010 D BG 4516266779 SPM7LX11V0126 B 1L0J5 Defense Solutions Group, 6,950.000 EA 11.75000 10/27/2010 D XB 4515970217 SPM7L110VB690 B 1L0J5 Defense Solutions Group, 8,483.000 EA 11.75000 8/27/2010 D XB 4515360262 SPM7L110V8981 B 1L0J5 Defense Solutions Group, 7,000.000 EA 11.73000 6/23/2010 D XB 4514705639 SPM7L410M1839 B 1L0J5 Defense Solutions Group, 9,000.000 EA 10.99000 6/10/2010 D BB 4514582901 o As a result of the solicitation, a long term contract (SPE7MX-17-D-0095) was awarded to Kampi Components (CAGE 7Z016).

The Government will continue to conduct market research, to see if changes occur in the marketplace that would enable future actions for this item to be competitive. The Government will also include DLAD Procurement Note L04 - Offers for Part Numbered Items in this solicitation. This clause indicates that the Government will consider alternate offers, and that alternate offerors should submit a Source Approval Request (SAR) package, which will be referred to the engineering activity for review. 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.

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

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

Heidi Treadway Typed name of Contracting Officer

COMPETITION ADVOCATE APPROVAL/CERTIFICATION

I have reviewed and approve this justification:

Competition Advocate

APPROVAL REQUIREMENTS

( ) Up to $700,000 Contracting Officer ( X ) $700,000 to $13,500,000 Competition Advocate ( ) $13,500,000 to $93,000,000 Head of the Contracting Activity (HCA) ( ) Over $93,000,000 Senior Procurement Executive (AQ)

Attachments:

1. J&A for solicitation SPE7MX-17-R-0070, contract SPE7MX17-D-0095

TREADWAY.HEI

DI.E.1299371855

Digitally signed by

TREADWAY.HEIDI.E.1299371855

Date: 2019.09.13 09:05:05 -04'00'

HOPSON.LILLI.

A.1230127324

Digitally signed by

HOPSON.LILLI.A.1230127324

Date: 2019.09.23 14:33:06 -04'00'