SPE7MX20R0013 - J A_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

LONG-TERM CONTRACT (LTC) PROJECT CM19011001

SOLICITATION SPE7MX-20-R-0013

December 3, 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 for the acquisition 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

(each) EST. Annual

Value

AMC AMSC

Reciprocating Compressor 4310-01-479-6014 145 1 P

The item functions as a 3 stage, 3 cylinder, Nitrogen booster assembly aka “Reciprocating compressor unit,” with a special high temperature shutdown switch safety device, used on generating and charging plant(s), F-15 Aircraft.”

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):

Maximum Value:

The Federal Stock Group codes is 4310 (compressors and vacuum pumps) which represents the supply class of the item.

Hydraulics International Incorporated (CAGE 56529) and Pacific Consolidated Industries (CAGE 75906) are the only approved sources for the subject NSN.

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 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.

5. The subject item is restricted to Hydraulics International Incorporated and Pacific Consolidated Industries. The government does not possess the data nor can purchase the technical data sufficient to allow for full and open competition. Hydraulic International Incorporated and Pacific Consolidated Industries are the only known sources that possess the necessary technical data or data rights to manufacture these non-commercial items for use on F-15 aircraft support equipment. The AMC/AMSC coding and approved source were verified with DLA Land and Maritime Product Specialist, SOLICITATION SPE7MX-20-R-0013

December 3, 2019

, on April 1, 2019.

The following is the Acquisition Method Code (AMC)/ Acquisition Method Suffix Code (AMSC) descriptions.

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

AMSC P: The rights to use the data needed to purchase this part from additional source(s) are not owned by the Government and cannot be purchased, developed, or otherwise obtained. It is uneconomical to reverse engineer this part. This code is used in situations where the Government has the data but does not own the rights to the data.

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 the Federal Business Opportunities website. The notice was open from January 11, 2019 through January 18, 2019. There were no responses received as a result of the notice.

This acquisition will be solicited using Federal Acquisition Regulation (FAR) Part 15 procedures.

Posting of the synopsis to the Federal Business Opportunities website occurred October 9, 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).

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

A FAR Part 15 solicitation will be issued and the estimated value of the project is above the two million threshold requirement for Certified Cost or Pricing Data (Deviation per DAR Tracking Number: 2018-O0015, Effective 01 July 2018). However, adequate price competition is expected;

therefore, certified cost and pricing data will not be required. Certified cost and pricing data clauses will be included in the solicitation should adequate price competition not occur. 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.

8. Market Research/Efforts to Obtain Competition:

Market research occurred to find the following:

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

Reviewing previous procurements of items and determining previous acquisition methods.

Determining vendor interest in long-term contract.

Researching/gathering information regarding commerciality of the items.

Vendor size and business status information.

Delivery estimates.

Possibility for Economic Price Adjustment Distributor/dealer involvement.

SOLICITATION SPE7MX-20-R-0013

December 3, 2019

Summary of market research:

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

January 11, 2019 through January 18, 2019. No responses were received from the notice. In addition to a copy of the market survey being made available with the Sources Sought posting on Federal Business Opportunities website, the market survey was e-mailed January 11, 2019 through February 3, 2019. The survey was sent to the following contractors based upon receipt of prior awards for the subject NSN.

Contractor CAGE Business Size-NAICS 332999

Statz Corporation 3WGD1 Small Business-Service Disabled Veteran Integrated Procurement Technologies 4K0V2 Small Business JBL System Solutions 5WRH4 Small Business FBC Enterprises LLC 5ZD19 Small Business All American Contractors LLC 6MK49 Small Business Hydraulics International Incorporated 56529 Small Business Pacific Consolidated Industries LLC 75906 Small Business

Summary of Hydraulics International Incorporated responses to the market research survey:

o Contractor prefers a long-term contract.

o Contractor is a manufacturer o Contractor agrees with a o Contractor states subject NSN is commercial o

Summary of Pacific Consolidated Industries LLC responses to the market survey:

o Contractor prefers o Contractor is a manufacturer o Contractor agrees with .

o Contractor states subject NSN is not commercial o

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

Correspondence was not received inquiring about the qualification process.

Information received regarding the commerciality of the item:

Commerciality was investigated using several different techniques. Acquisition Plan for solicitation SPM7MX-09-R-0054 included a determination the subject NSN is not commercial. Pacific Consolidated Industries LLC stated NSN 4310-01-479-6014 is not commercial, however Hydraulics International Incorporated stated the NSN is commercial in response to the government Market Research questionnaire.

However, Hydraulics International Incorporated failed to provide adequate documentation to support their viewpoint. The Contracting Officer solicited and awarded the previous requirements under FAR Part 15 procedures.

SOLICITATION SPE7MX-20-R-0013

December 3, 2019

Pacific Consolidated Industries is the original approved source for the subject NSN. Hydraulics International Incorporated became an approved source July 16, 2016. The following statement by Pacific Consolidated Industries is documented in the Acquisition Plan supporting solicitation SPE7MX-17-R-0054 and dated January 19, 2017:

This component is engineered and manufactured exclusively by PCI. There are no commercial or PCI approved replacements. PCI is the original equipment manufacturer (OEM) of this component in support of the PCI designed Self Generating Nitrogen Service Cart (SGNSC) NSNs-3655015721180; 1730015404116 and every variation of PCI part number 791600.” In addition, PCI stated “NSN 4310014796014 is only provided in support of a Government/Military product(s).” The contractor continues to support this position based upon the September 18, 2019 response to the DLA market survey.

The Contracting Officer reviewed the internet concerning approved part numbers 791820-001 and 810770-

100. AeroBase Group, WB Parts, PartTarget and other after-market companies providing Pacific Consolidated Industries and Hydraulics International part numbers were identified. The research did not identify these part numbers are sold to the general public or available through commercial catalogs.

The following information was obtained from an internet article from Mototok that supplies ground support equipment to commercial and military customers (https://www.mototok.com/blog/ground-support-equipment-for-military-aviation-operations). “While airliners certainly are not all the same, they are generally all designed to use common support equipment like power carts, oxygen carts, nitrogen carts, etc.

Major airlines tend to operate aircraft by more than one manufacturer and would rather not have to buy separate GSE for each make and model of aircraft.

Military aircraft are often tailor made for one or two specific functions and may have very specific ground support requirements to make that happen. Some aircraft which are even based on commercial designs, such as the venerable E-3 Sentry based on the Boeing 707, requires a massive auxiliary air conditioning unit to cool the enormous electronic packages when they are operating on the ground. Also, many military aircraft use fluids and coolants which are unique to that specific aircraft. These are the reasons why it is advantageous to the military unit to purchase truly universal GSE wherever it finds the opportunity because so many logistical resources will be expended in providing equipment unique to each aircraft mission.

On opposite extremes, tactical aircraft (fighters, attackers, bombers) share very little in common with civilian aircraft, if anything at all. They often have different power requirements to run their enormous electrical systems, and along with those are requirements for cooling system equipment. The extremely powerful offensive and defensive avionics systems can overheat in sometimes less than two minutes.

Towing tactical aircraft presents unique challenges. These jets often share no commonality with even comparably-sized civilian aircraft, and many examples weigh far more than a similarly dimensioned civilian aircraft. This demands sturdier, i.e., heavier, GSE for the tactical aircraft. Since tactical aircraft deploy in large squadrons, their GSE and logistics must all be carried as freight. It takes considerably more energy to transport dimensionally larger and heavier GSE items, particularly a tug“.

Although support equipment meets similar requirements for commercial and military, there is little in common concerning the technical requirements demanded by military support equipment compared with commercial equipment. This rationale from Mototok provides further justification concerning the determination NSN 4310-01-479-6014 is not a commercial item.

SOLICITATION SPE7MX-20-R-0013

December 3, 2019

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 NSNs 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:

Name CAGE Business Size Business Type Pacific Consolidated Industries 75906 Small Manufacturer

Hydraulics International Incorporated 56529 Small Manufacturer

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.

The contract for the most recent acquisition for subject item is stated below. These contracts expire July 20, 2020.

Contract Number / Solicitation Number

SPE7MX-17-D-0094/SPE7MX-17-R-0054

SPE7MX-17-D-0105/SPE7MX-17-R-0105

SOLICITATION SPE7MX-20-R-0013

December 3, 2019

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.

Michael L Shirley Date Contracting Officer

APPROVAL/CERTIFICATION

Competition Advocate Signature Date

Head of the Contracting Activity Date

APPROVAL REQUIREMENTS

Up to $13,500,000 to $93,000,000 Head of the Contracting Activity

Attach 1: Previous J & A –Solicitation SPE7MX-17-R-0054

12/3/2019

Michael L Shirley

12/3/2019SHEARER.MARY.E.1

250702449

Digitally signed by

SHEARER.MARY.E.1250702449

Date: 2019.12.03 15:22:03 -05'00'

BROWN.MARK.ALBE

RT.1041175032

Digitally signed by

BROWN.MARK.ALBERT.1041175032

Date: 2019.12.05 15:31:41 -05'00'