Consolidation Memo 0068.pdf

Consolidation Determination CL22307107/ SPE7LX-23-R-0068 P a g e | 2 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. If one source is approved, AMCs 3, 4, or 5 are valid.

CLIN 0002 and 0005 have and AMSC code of D and is defined as 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. AMCS 3, 4, or 5 are valid. (CLINs 0001 through 0008).

CLIN 0003 and 0004 have and AMSC code of Q and is defined as the Government does not have adequate data, lacks rights to data, or both needed to purchase this part from additional sources. The Government has been unable to economically buy the data or rights to the data, although the part has been undergoing full screening for 12 or more months. Breakout to competition has not been achieved, but current, continuing actions to obtain necessary rights to data or adequate, reprocurement technical data indicate breakout to competition is expected to be achieved. This part may be a candidate for reverse engineering or other techniques to obtain technical data. All AMSC Q items are required to be reviewed within the timeframes cited in 2- 203(b). If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs 1 or 2 are valid.

Based on the procurement history and a technical review, it was determined to be in the best interest of the warfighter and Agency to initiate the development of a LTC that supports acquisition of the injector assembly spare parts under Other Than Full and Open competition.

This solicitation will provide repair and replacement parts for military customers in the Continental United States through DLA-Direct requirements.

All NSNs on this project were determined commercial by the Contracting Officer.

The solicitation will be issued on an “all or none” basis by NSN, which means each CLIN will be evaluated separately to determine the best value offeror. The award may be split where one or more CLINs are awarded to one offeror and one or more CLINs are awarded to another offeror(s).

The proposed acquisition constitutes a consolidation of contract requirements as defined in FAR 2.101 and 7.107-2 because the proposed procurement will result in a single contract for items that DLA Land and Maritime previously procured under separate acquisitions, each of which was lower in cost than the total cost of the contract for which offers are solicited. Three of the NSNs were previously procured through Indefinite Delivery Contracts using small purchase

Consolidation Determination CL22307107/ SPE7LX-23-R-0068 P a g e | 5 over five years in comparison to spot buys. The proposed procurement is estimated at per year and the estimated Cost Simulation savings are approximately % per year, primarily resulting from cost reductions in the following cost drivers: depot throughput, transportation, asset management, and storage. Since the proposed vendor materiel prices are unknown at this time, this savings assumes the vendor's materiel prices will be the same as the average DLA acquisition prices for each NSN. The actual savings will depend on the final negotiated materiel prices. The BCA Simulator does not account for all potential cost savings related to the proposed acquisition strategy, including the benefits discussed above, which are not readily quantifiable.

The advantages of this project include cost avoidance for the Government, workload reduction, opportunity for continued participation in a supplier partnership, little disruption of the current flow of items to the customer, and minimal level of maintenance. These benefits are interrelated and largely result from elimination of the numerous separate contract actions (with associated lead-time and contracting resource requirements) now required to support Land based weapon systems on a worldwide basis.

The benefits of this consolidation are critical to the Agency’s mission success. DLA is the military’s premier logistics provider, and it is imperative that DLA structures its contract actions to maximize benefits while minimizing costs. The consolidation does this by reducing administrative costs which, in turn, helps to keep DLA’s cost recovery rate low. Critical benefits include increased material availability, reduction in lead time, and increased warfighter equipment operational readiness.

Small Businesses Impact:

There is no expected negative impact to small businesses. All items are being procured code and part numbered items and are sole sourced to a large foreign-owned business manufacturer, Isotta Fraschini Motori S.p.A. (A0106). Their authorized dealer in the U.S. is Fincnatieri Marine Systems North America (FMSNA), CAGE 0VP52. FMSNA is a large foreign-owned business that is incorporated in the U.S. NSNs are being solicited on an “all or none” basis by CLIN, so small businesses will have the opportunity to provide an offer for one, a few, or all of the items. The solicitation will be issued as Unrestricted, as offers are not expected from two or more domestic small businesses. Steps have been taken to maximize small business participation such as requiring a Subcontracting Plan from large businesses and by including small business participation as an evaluation factor for award.

As required by FAR 7.107-2(a)(3), the Consolidation Determination was coordinated with the DLA Land and Maritime Small Business Office and Small Business Administration.

The Consolidation Determination was attached to the DD2579, Small Business Coordination Record, when it was submitted for review and approval. The DLA Land and Maritime Small Business Office approved the DD2579 on August 16, 2023, and did not provide any feedback on the Consolidation Determination or the DD2579. The Small Business Administration (SBA) concurred on the DD2579 on August 18, 2023.

Consolidation Determination CL22307107/ SPE7LX-23-R-0068 P a g e | 6

Alternative Contracting Approaches:

The Contracting Officer considered the less consolidated alternatives in developing the acquisition strategy for this project. The least consolidated, but also least beneficial, approach would be to procure the items via individual purchase orders and contracts (spot buys). As described and quantified above, this approach would not achieve the efficiencies, cost avoidance, and other benefits when compared to the acquisition strategy proposed.

Another less consolidated contracting strategy would be to procure these items using

Automated Indefinite Delivery Contracts (IDCs). This would result in shorter-term production planning, which would result in buying less raw materials or finished materials in bulk, resulting in quantity discounts that are less advantageous to the Government. The automated ordering process time would also be an additional days longer than the proposed approach.

A third approach that is only slightly less consolidated than that proposed is to separately solicit for and award individual LTCs for each NSN. While this approach seeks to leverage the contract administration advantages of long-term delivery order contracts, it provides very little practical difference from the first alternative above. This approach would require greater resources both to award and administer (even if the contracts were awarded to the same vendor) and would take substantially longer to award than the proposed approach. Therefore, this alternative contracting strategy is substantially less beneficial than the proposed approach because it significantly decreases efficiencies during the pre-award cycle and provides no better benefits associated with competition than the proposed approach, as both approaches allow for the individual evaluation and award of each NSN.

Determination:

For the reasons stated above, I hereby determine:

a. This proposed acquisition constitutes a consolidation of contract requirements.

b. The contract requirements being consolidated exceed $2 million.

c. There are benefits of consolidating the contract requirements, which include both quantifiable and non-quantifiable benefits.

d. The expected benefits do not meet the thresholds for a substantial benefit at FAR

7.107-2(d)(1) but are critical to the Agency’s mission success.

e. The procurement strategy provides for maximum practicable participation by small business.

f. The consolidation of contract requirements is necessary and justified.

Consolidation Determination CL22307107/ SPE7LX-23-R-0068 P a g e | 7

COLEEN D. MCCORMICK Date Chief Contracting Office (CCO) Strategic Acquisition Programs Directorate (Z) DLA Land and Maritime

ATTACHMENTS:

1. NSN Data

2. Procurement History

3. BCA Simulator

MCCORMICK.CO

LEEN.DIANE.1300

100330

Digitally signed by

MCCORMICK.COLEEN.DIANE.

1300100330 Date: 2024.03.08 09:15:07 -05'00'