SPE7LX-18-R-X011_REDACTED_J&A_2_13_18.pdf

SPE7LX-18-R-X011

For Official Use Only See FAR 2.101 & 3.104 Page 1

MEMORANDUM FOR RECORD

SUBJECT: Justification for Other than Full and Open Competition for acquisition of two

NSNs under authority of 10 U.S.C. 2304(c) (1)

SOLICITATION: SPE7LX-18-R-X011

1. Summary/introduction:

a. Field activity/agency: The purchasing activity for this acquisition is the Defense Logistics

Agency (DLA), Land andMaritime.

b. Items being purchased: This requirement is for the acquisition of twenty seven (27) NSNs which are small arms, used in military and weapons, such as the Carbine 5.56 mm and 7.62 mm rifles. The sources and part number information is listed below and includes the Acquisition Method Code (AMC) and Acquisition Method Suffix Code (AMSC). The AMC code describes to the contracting officer and other Government personnel the results of a technical review of a part and its suitability for breakout, and the AMSC code provides the contracting officer and other Government personnel with engineering, manufacturing, and technical information.

CLIN NSN ITEM U/I AMC AMSC CAGE PRT NUM

0001 1005014603249 COMPENSATOR,SMALL A EA 3 D 1S002 93048

0002 1005014731403 MAGAZINE,CARTRIDGE EA 3 D 1S002 98036-1

0003 1005014731405 MAGAZINE,CARTRIDGE EA 3 D 1S002 98037-1

0004 1005014731410 FRONT FLIP SIGHT LO EA 3 D 1S002 99051

0005 1005014996868 SIGHT,REAR EA 3 D 1S002 98474

0006 1005015029977 BOLT ASSEMBLY,RIFLE EA 3 D 1S002 20051

0007 1005015029986 CATCH,BOLT EA 3 D 1S002 95209

0008 1005015029999 PIN,FIRING EA 3 D 1S002 99077

0009 1005015030023 BORE,BRUSH EA 3 D 1S002 21301

0010 1005015418966 SUPPRESSOR,FLASH EA 3 D 1S002 24596

0011 1005015418974 STOCK EXTENSION,GUN EA 3 D 1S002 24766

0012 1005015428093 ACTUATOR,GUN SAFETY EA 3 D 1S002 20386

0013 1005015430157 COVER,SCOPE AND CRO EA 3 D 1S002 20298

1S002 20298BLK

1S002 20298BLCK

0014 1005015430990 ADAPTER,METRIC TO S EA 3 D 1S002 GA1008

0015 1005015436860 WRENCH EA 3 D 1S002 GA1009

0016 1005015447450 DUST COVER,FRONT EA 3 D 1S002 21078-1

0017 1005015450711 DUST COVER,REAR EA 3 D 1S002 21078-2

0018 1005015460070 GAS PORT,BOLT EA 3 D 1S002 25190

0019 1005015556131 RELEASE,SMALL ARMS EA 3 D 1S002 25272

0020 1005015557277 LEVER,RELEASE,SMALL EA 3 D 1S002 20451

0021 1005015623826 BRUSH,CLEANING,SMAL EA 3 D 1S002 99319

0022 1005015624159 BRUSH,CLEANING,SMAL EA 3 D 1S002 GA1015

0023 1005015624782 ROD SECTION,CLEANIN EA 3 D 1S002 24383

0024 1005015728023 SWIVEL,SLING,SMALL EA 3 D 1S002 20312

0025 1005015920663 TRIGGER ASSEMBLY EA 3 D 1S002 25362

0026 1005015920674 BUTTSTOCK,SUBASSEMB EA 3 D 1S002 24122

0027 1240015425215 MOUNT,SIGHT EA 3 D 1S002 24755

For Official Use Only See FAR 2.101 & 3.104 Page 2

AMC Code: 3 - Acquire, for the second or subsequent time, directly from the actual manufacturer.

AMSC Code:

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. AMCS 3, 4, or 5 are valid.

c. Estimated value and purchase order duration: The proposed action is for the solicitation and award of a three-year base period plus two (2) option years, Firm-Fixed-Price, Indefinite Delivery Purchase Order (IDPO). The three-year period is inclusive of one three-year base period. The procurement values are listed below.

National Stock Numbers on

Solicitation (NSN) ADV (MILTON) Contract

Minimum Value Est. 3-Year Base Value

Est. Base Value including

2-Year Option Contract

Maximum Value

2. Description of agency’s need (10 U.S.C. 2304(f)(3)(A))

a. Origin of the procurement: The proposed solicitation will provide small arms, used in military and commercial weapons, such as the Carbine 5.56 mm and 7.62 mm rifles. The annual demand is listed below.

CLIN NSN ITEM

PROJECTED

ANNUAL DEMAND

QUANTITY (ADQ)

0001 1005014603249 COMPENSATOR,SMALL A 1,744

0002 1005014731403 MAGAZINE,CARTRIDGE 1,402

0003 1005014731405 MAGAZINE,CARTRIDGE 569

0004 1005014731410 FRONT FLIP SIGHT LO 3,753

0005 1005014996868 SIGHT,REAR 426

0006 1005015029977 BOLT ASSEMBLY,RIFLE 25

0007 1005015029986 CATCH,BOLT 45

0008 1005015029999 PIN,FIRING 124

0009 1005015030023 BORE,BRUSH 366

0010 1005015418966 SUPPRESSOR,FLASH 24

0011 1005015418974 STOCK EXTENSION,GUN 35

0012 1005015428093 ACTUATOR,GUN SAFETY 73

0013 1005015430157 COVER,SCOPE AND CRO 101

0014 1005015430990 ADAPTER,METRIC TO S 124

0015 1005015436860 WRENCH 141

0016 1005015447450 DUST COVER,FRONT 170

0017 1005015450711 DUST COVER,REAR 38

0018 1005015460070 GAS PORT,BOLT 6

0019 1005015556131 RELEASE,SMALL ARMS 34

0020 1005015557277 LEVER,RELEASE,SMALL 22

0021 1005015623826 BRUSH,CLEANING,SMAL 120

0022 1005015624159 BRUSH,CLEANING,SMAL 153

0023 1005015624782 ROD SECTION,CLEANIN 133

0024 1005015728023 SWIVEL,SLING,SMALL 362

0025 1005015920663 TRIGGER ASSEMBLY 121

0026 1005015920674 BUTTSTOCK,SUBASSEMB 4

0027 1240015425215 MOUNT,SIGHT 65

For Official Use Only See FAR 2.101 & 3.104 Page 3

b. Description of the supplies needed: All the NSNs being procured are small arms, used in military and commercial weapons. Each of the NSNs being procured are sole source, Knights Armament Company (CAGE 1S002). A description of the Federal Supply Group (FSG) and the Federal Supply Class (FSC) is listed below. The FSG is represented by the first two digits of the NSN and identifies, by title, the commodity area covered by classes within the group. The FSC is represented by the first four digits of the NSN and the code covers a relatively homogeneous area of commodities, in respect to their physical or performance characteristics, or in the respect that the items included therein are such as are usually requisitioned or issued together, or constitute a related grouping forsupply management purposes.

CLIN 0001 to 0026 belong to FSG 10: Weapons FSC 1005: Guns, through 30mm

Includes Machine Guns; Brushes, Machine Gun and Pistol.

Excludes Turrets, Aircraft.

CLIN 0027 is linked to FSG 12: Fire Control Equipment FSC 1240: Optical Sighting and Ranging Equipment

Includes Periscopes for Submarines; Range and Height Finders; Telescopic Sights; Optical Instruments Integrated with Fire Control Equipment.

c. Specific need of use for the items: As previously stated, the twenty-seven NSNs being procured are small arms, used in various military and commercial weapons. The referenced pull includes three Core Items which support various high priority weapon systems (WSDC) as follows –

CLIN 0001; NSN 1005-01-460-3249; Compensator, Small Arms

WSDC End Item Description Service C7N NAVY EXPEDITIONARY PROGRAMS Navy EZN TICONDEROGA CLASS CG (47) Navy JDN ARLEIGH BURKE CLASS DDG Navy JSN WHIDBEY ISLAND CLASS LSD Navy JXN CLASS MCM Navy ZNM CARBINE, 5.56 MILLIM (TAMCN: E01907) Marines

CLIN 0002; NSN 1005-01-473-1403; Magazine Cartridge, Small Arms

WSDC End Item Description Service 1RA RIFLE, SNIPER-NSN: 1005-01-534-2841 Army TAM RIFLE,7.62 MILLIMET Marines

CLIN 0004; NSN 1005-01-473-1410; Front Flip Sight, Small Arms

WSDC End Item Description Service 8OM RIFLE, 5.56 MILLIMET Marines C7N NAVY EXPEDITIONARY PROGRAMS Navy

For Official Use Only See FAR 2.101 & 3.104 Page 4

3. Statutory Requirement - (10 U.S.C. 2304(f)(3)(B)):

The statutory authority permitting other than full and open competition is 10 U.S.C 2304(c)(1), the property or services needed by the agency are available from only 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 the parts currently being used on the supported weapon systems. The only manufacturing source approved by the military customer’s design control activity with the comprehensive knowledge and expertise necessary to manufacture these items is Knights Armament Company (CAGE 1S002). The Government does not currently possess detailed technical data sufficient to provide a description of all required form, fit, and function characteristics of these parts.

4. Price/cost considerations (10 U.S.C.2304(f)(3)(C))

a. Relevant pricing issues: This solicitation will be conducted under the policies of FAR Subpart

13.5 “Simplified Procedures for Certain Commercial Items”. As this is a commercial solicitation, Certified Cost or Pricing Data is not required. 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 quotes. Price analysis will also be conducted on comparison of the offer received with the past acquisition history, movement of the producer price index, and comparisons to similar items. If needed, other than cost and pricing data may be requested to provide additional pricing support to the contracting officer.

b. Length of procurement, quantity, and other procurement particulars bearing on the price/cost: As previously mentioned, the solicitation will be for a total of five years, which will consist of a three (3) year base period and two (2) one-year option periods, which will be extended in one-year increments.

Further, this procurement will be a five-year, Firm-Fixed Price, Indefinite Delivery Purchase Order (IDPO). As such, the price analysis for future years will be based on the Global Insights Producer Price Index (PPI) forecasts. The Global Insights PPI forecast provides timely, accurate price and cost analysis, and historical records for thousands of commodity prices and wages around the globe allowing procurement professionals to understand supplier cost structure and better negotiate supplier quotes.

c. The Contracting Officer determines that the anticipated cost to the Government will be fair and reasonable.

5. Market research/efforts to obtain competition (10 U.S.C. 2304(f)(3)(D)&(E).

DLA Land and Maritime conducted various forms of market research including the publishing of a formal sources sought notice and market survey to the Government Point of Entry, www.fbo.gov. In addition to the publishing of a sources sought notice, the Contract Specialist also researched the procurement history and approved source of supply for each NSN on the proposed solicitation. The Strategic Sourcing Specialist and the Contract Specialist emailed the approved source of supply, requesting market survey information. The results of the market research are listed below.

Sources Sought Notice:

The Strategic Sourcing Specialist published a formal sources sought notice, referenced Project CL15287002, and market survey to the Government Point of Entry (GPE), www.fbo.gov on October 15, 2015 with a response date of October 22, 2015, and no responses were noted. The Contract Specialist posted a formal sources sought notice, referenced Project CL16285001, on March 1, 2017 with a response date of March 10, 2017, and no responses were received. Even though responses are not expected, the Contract Specialist posted a final formal sources sought notice on January 9, 2018 with a response date of January 19, 2018, and will continue to monitor it prior to soliciting these items.

For Official Use Only See FAR 2.101 & 3.104 Page 5

Procurement History and Approved Sources:

The contract specialist researched the procurement history and the approved source of supply for the NSNs on the proposed solicitation; the acquisition history indicates that the approved source of supply, Knights Armament Company (CAGE 1S002), have provided these items for almost a decade. The Contract Specialist contacted Knights Armament in March 2017, requesting a market survey, which Knights Armament returned.

The Contract Specialist contacted the approved source and several dealers in January 2018, emailing market surveys and requesting updated information. A summary of the most recent responses received are listed below and a recap of the market research conducted by the Strategic Sourcing Specialist and the Contract Specialist is included as an attachment to this document.

Knights Armament Company (CAGE 1S002): On January 11, 2018, , Marketing and Sales, provided the following response to the Market Survey:

• Knights Armament is a Small Business manufacturer.

• They prefer to deal directly with the Government versus through a network of dealers.

• They have approximately 276 employees.

• They do not have a parent company.

• They are interested in pursuing a Long Term Contract.

• They validated the commercially of these items and indicated these items are on a published catalog/price list.

Lawmen’s & Shooters’ Supply, Inc. (0B2A23): On January 9, 2018, , Bid Manager, stated they will not be able to supply these items.

Wright Source Inc. (2J472): On January 9, 2018, stated they are not able to quote a blanket requisition. “We do not handle these items”.

Market Surveys were sent to the supplier below with no response received.

T&L Sales, LLC. (1XLG2) Parts Quarry, LLC (4XWV0)

Information received regarding the commerciality of the item(s): Based on the market research, the Contracting Officer has also determined that all of the items are commercial and available to the general public.

For Official Use Only See FAR 2.101 & 3.104 Page 6

In accordance with DAG 12.103, a review of the tech data information in DLA Land & Maritime EBS system shows the Commercial-Off-The-Shelf(COTS) field as blank.

Information obtained through market research and market survey indicate that based on FAR 2.101(b) items proposed for this procurement are determined commercial and meet the definition of a commercial item and that exact/similar products are available in the commercial marketplace.

Knights Armament is the only known and approved manufacturer for the parts being procured. These items have been sold to the Government only by Knights and their associated dealers. The items to be procured for the small arms are made up of commercial items which are sold individually in the commercial market place.

These items are all found online, for sale on the Knight’s website, invoiced to commercial entities, and/or determined commercial previously on various contracts.

The items or similar items proposed for procurement meet FAR 2.101(1)(ii) definition of a commercial item which states that the items must have been “offered for sale, lease or license to the general public.” For the reasons stated above the Contracting Officer has determined the items covered by this initiative will be Commercial and will be procured under FAR Part 13.5.

Based on the information received and presented in the above market research and the market research attachment, the bidders list will include all interested companies responding with a market survey.

Synopsis, and other efforts made to publicize the requirement and generate competition: In accordance with FAR 5.204 and 5.203(a), a pre-solicitation notice will be published to the Government Point of Entry at least 15 days, and will run concurrently with the solicitation.

6. Actions Being Taken to Overcome Barriers to Competition (10 U.S.C. 2304(f) (3) (F)).

The Government will continue to conduct market research to ascertain 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 technical and requirements personnel have reviewed and certified as accurate and complete all necessary data to support their recommendation for other than full and open competition.

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.

In addition to the specific actions being taken by Technical Support personnel to overcome barriers to competition before any subsequent acquisitions or recertification of class determination are made, these items are subject to the following methods of locating additional sources:

Per PGI 206.304, the requirement states that “the justification shall include a copy of the previous justification to assist the approval authority in determining whether the planned actions to remove any barriers to competition cited on the previous justification were completed.” Based on a review of the contract history of the twenty-seven project NSNs, only two NSNs, 1005-01-473-1410 and 1005-01-499-6868, have prior awards over the Simplified Acquisition Threshold of $150,000.00.

For Official Use Only See FAR 2.101 & 3.104 Page 7

J & As could not be located for the acquisitions below –

NSN: 1005-01-473-1410

SPM7L4-14-C-0001, Awarded: 10/10/13, Awardee: Knights Armament Company (CAGE 1S002), Value: $239,921.74 SPM7L4-12-C-0008, Awarded: 10/25/11, Awardee: Knights Armament Company (CAGE 1S002), Value: $263,918.80

NSN: 1005-01-499-6868

SPM7L4-11-M-0626, Awarded: 12/03/10, Awardee: Knights Armament Company (CAGE 1S002), Value: $213,971.94

All other NSNs have been awarded under SAT and did not require a J & A.

J & A for Solicitation SPE7LX-18-R-X011, Project CL17285004 I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief.

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.

CAROLINE R. WATSON Date Contracting Officer

Approval / Certification

I have reviewed and approve this justification. The estimated total value of the J&A is $

MARY E. COUTURE Date Competition Advocate

APPROVAL REQUIREMENTS

( ) Up to $700,000 Contracting Officer

(X) $700,000 - $13,500,000 Competition Advocate ( ) $13,500,000 - $93,000,000 Head of the Contracting Activity (HCA) ( ) over $93,000,000 Senior Procurement Executive (AQ)

Attachments:

1. NSN Data Pull

2. Market Research

8 Feb 2018WATSON.CAROLI

NE.R.1299372142

Digitally signed by

WATSON.CAROLINE.R.1299372

Date: 2018.02.08 13:20:49 -05'00'

COUTURE.MAR

Y.E.1230253613

Digitally signed by

COUTURE.MARY.E.1230253613

Date: 2018.02.12 18:01:13 -05'00'