CM17363002 J&A - Redacted.pdf

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

IDC PROJECT CM17363002; SOLICITATION SPE7MX-19-R-0121

SEPTEMBER 19, 2019

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

FOR OFFICIAL USE ONLY

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 non-commercial and will be procured under Federal Acquisition Regulations (FAR) Part 15 – Contracting by Negotiation 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 Navy Critical Safety Item (CSI), for which a parts failure has the potential to cause serious injury or loss of life:

Explanation of Chart Column Header Names and Descriptions:

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

EA = Each AMC: Acquisition Method Code AMSC: Acquisition Method Suffix Code PIC: Place of Inspection Code

C= Critical Item Inspect/Accept- Source QCC: Quality Control Code - EBA

First Position: E = Higher level Quality Contract ISO 9000 Second Position: B = Product Verification Testing (PVT) Third Position: A = No specific requirements

ADQ: Annual Demand Quantity ADV: Annual Demand Value PLT: Production Lead Time

The Weapon System Designator Code (WSDC) for this item is Z9N – Aircraft, F/A-18, A-D, E/F, G (Growler).

The Federal Supply Group (FSG) for this item is 48 - Valves.

The Federal Supply Class (FSC) for this item is 4820 - Valves, Non-Powered.

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:

CLINs NSN Item Name U/I AMC AMSC PIC QCC ADQ ADV PLT 0001 4820-01-374-4732 Valve, Regulating, System Pressure EA 3 C C EBA 24 191

NSN

Estimated Total

Base Year 1

(ADV)

Estimated 3 Year Contract Value

(ADV * 3)

Estimated 5 Year Contract Value

(ADV * 5)

Contract Maximum

(ADV * 6)

Contract Minimum

(ADV * 0.01)

4820-01-374-4732

The Annual Demand Value (ADV) for this acquisition is with a three-year total value of , and a five-year total value of The ADV is taken from the KT Maxout page of the project data pull, which was provided on 06/11/19 by Randy Roach, the Sourcing Strategy Specialist at DLA L&M-BAEC.

Contract minimum and maximum values will be used within the solicitation, and are for the life of the contract. The contract maximum amount is which is calculated by multiplying the ADV of the acquisition by 6, to account for any unexpected surges in demand. 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 Critical Safety Item, and that is approved by the Engineering Source Activity (ESA), is Carleton Life Support Systems (CAGE 99251), a large manufacturer.

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

This is a Critical Safety Item (CSI), and in accordance with DFARS 209.2, this item may only be procured from a source approved by the head of the design control activity.

Carleton Life Support Systems is the only source approved by the head of the design control activity.

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

Carleton Life Support Systems, CAGE 99251, P/N 1647701-1

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) 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. If one source is approved, AMCs 3, 4, or 5 are valid. If at least two sources are approved or if data is adequate for an alternate source to qualify in accordance with the design control activity's procedures, 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 15 – Contracting by Negotiation guidelines.

A synopsis will be posted for 15 days on the Federal Business Opportunities (FedBizOps) web site. When the synopsis has closed, the solicitation will be posted on the internet, via the DLA Internet Bid Board System (DIBBS), for a period of 30 days.

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

The OEM/approved source for this NSN, Carleton Life Support Systems (CAGE 99251) will be sent a copy of the solicitation by e-mail, at the time of its posting on DIBBS, as will prior awardees Transaero, Inc. (CAGE 27541), Dimo Corp. (CAGE 1HUX5), Aero International, LLC (CAGE 0SML3) and Derco Aerospace, Inc. (CAGE 8X044).

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 acquisition falls below the $2,000,000.00 threshold, Certified Cost or Pricing Data is not required. The price analysis of offeror’s quoted pricing, 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.

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:

Market research is conducted to find the following:

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

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

o Determining vendor interest in long-term contracting for this item.

o Researching/gathering information regarding commerciality of the item.

o Vendor size and business status information.

o Delivery estimates.

o Distributor/dealer involvement.

DLA L&M conducted various forms of market research. A Sources Sought notice, which included a market survey, was published on the Federal Business Opportunities (FedBizOps) web site, running from 06/14/19 through 06/24/19. The market survey requested information regarding company size/status, if cost/pricing information could be provided, commerciality, FOB point, packing requirements, and estimated delivery information.

One response was received as a result of the Sources Sought notice, from Skleder-Greene (CAGE 7LQ79). They were e-mailed a copy of the market survey and asked to complete and return it. However, the e-mail was deleted by Skleder-Greene, without being read, on 06/28/19. A link to information on the Source Approval Request (SAR) process was e-mailed to Skleder-Greene on 09/19/19.

In addition to the Sources Sought notice, an e-mail request to complete and return a market survey was sent to five suppliers on 06/14/19, each of which had received a prior contract for this item. The companies contacted include:

Carleton Life Support Systems (CAGE 99251; the sole approved source for this item)

Transaero, Inc (CAGE 27541) Aero International (CAGE 0SML3) Dimo Corporation (CAGE 1HUX5) Derco Aerospace (CAGE 8X044)

Of the 5 suppliers contacted, only Transaero, Inc. returned a completed market survey, and has indicated an interest in the solicitation. Key points of the Transaero market survey include:

Transaero is a small dealer, with 25 employees.

It is not a commercial 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 manufacture this item. The DD2579 was reviewed, approved and signed by the Contracting Officer on 07/15/19, DLA Land and Maritime Small Business

(DU) on 07/17/19, and the Small Business Administration (SBA) Procurement Center Representative, , on 07/22/19.

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. A technical review of this item was completed by the DLA L&M Product Specialist Danny Carroll, on 6/25/19, stating that “I have reviewed subject NSN and determined it to be acceptable for LTC. The Material Master is up to date”.

Based on the limited data the Government possesses, only the approved source can meet the Government’s minimum needs for this Critical Safety 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:

Transaero, Inc. (CAGE 27541) Skleder-Greene (CAGE 7LQ79)

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

The Procurement History for this NSN, as of 9/16/19, is shown in the chart below:

There are no prior long term contracts for this item.

A review of the previous contracts was conducted in Records Management, but none of contract records included a J&A.

The Government will continue to conduct market research, to see if changes occur in the marketplace that would enable future actions for this Critical Safety Item to be competitive. The Government will also include DLAD Procurement Notes L04 - Offers for Part Numbered Items and M06 - Evaluation of Offers for Part Numbered Items in this

Smart Number (PIIN) Source Type

Vendor

CAGE

Code

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

SPE7MC18P5507 B 27541 TRANSAERO, INC. 15.000 EA 2511.20000 7/19/2018 E BB 8505698898 SPE7MC18P4412 B 27541 TRANSAERO, INC. 21.000 EA 2511.20000 6/14/2018 E BG 8505529659 SPE7MC18P3249 A 99251 Carleton Life Support Systems Inc. 15.000 EA 2685.97000 3/23/2018 E BG 8505326307 SPE7MC17P0395 B 1HUX5 Dimo Corp. 46.000 EA 2058.60000 10/24/2016 E BB 8503770974 SPE7MC16M7732 B 1HUX5 Dimo Corp. 39.000 EA 2385.50000 8/17/2016 E BG 8503542472 SPE7MC16M4779 B 27541 TRANSAERO, INC. 13.000 EA 2753.14000 3/29/2016 E BB 8503082834 SPE7MC16M0237P0000 B 27541 TRANSAERO, INC. 24.000 EA 2451.10000 10/8/2015 E BG 8502586123 SPE7MC15M3257P0000 B 0SML3 Aero International, LLC 19.000 EA 2227.50000 2/5/2015 E BG 8501781891 SPE7MC14MA591 B 0SML3 Aero International, LLC 33.000 EA 2069.15000 9/25/2014 E BB 8501399132 SPE7MC14M9195 B 0SML3 Aero International, LLC 4.000 EA 2851.50000 8/11/2014 E BG 8501237651 SPE7MC14M0615 B 0SML3 Aero International, LLC 13.000 EA 2301.15000 10/23/2013 2 BB 8500432614 SPE7MC13M1890 B 0SML3 Aero International, LLC 20.000 EA 2208.90000 9/27/2013 2 BB 8500391084 SPM7MC13M6389 M 1HUX5 Dimo Corp. 15.000 EA 2465.80000 4/23/2013 2 BB 4524299142 SPM7MC13M3539 B 1HUX5 Dimo Corp. 15.000 EA 2485.80000 2/19/2013 2 BB 4523736979 SP040006G00050313 A 8X044 Derco Aerospace, Inc. DBA Derco, A 16.000 EA 2650.00000 10/25/2011 2 BG 4519455566 SP040006G00050251 A 8X044 Derco Aerospace, Inc. DBA Derco, A 14.000 EA 2764.30000 4/19/2011 2 BG 4517592890 SPM7M211M0314 A 8X044 Derco Aerospace, Inc. DBA Derco, A 14.000 EA 2764.30000 10/18/2010 2 BG 4515873959 SPM40006G0005WU9P0A 8X044 Derco Aerospace, Inc. DBA Derco, A 28.000 EA 2549.89000 9/30/2010 E BG 4515731123 SPM40006G0005YMF1 A 8X044 Derco Aerospace, Inc. DBA Derco, A 26.000 EA 2549.89000 4/23/2010 2 BG 4514092572 solicitation. These clauses 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

Robert Varcho 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)

VARCHO.ROBER

T.J.1365197896

Digitally signed by

VARCHO.ROBERT.J.136519789

Date: 2019.09.19 08:07:00 -04'00'

HOPSON.LILLI.

A.1230127324

Digitally signed by

HOPSON.LILLI.A.1230127324

Date: 2019.09.23 14:42:26 -04'00'