JD_119_Day_Bridge_SPM7LX11D9037_Redacted_J A.pdf

DEFENSE LOGISTICS AGENCY

LAND AND MARITIME

PO 80X3990

COLUMBUS, OHIO 43216-5000

MEMORANDUM FOR RECORD

SUBJECT: Justification for Acquisition by Means Other than Full and Open Competition under

Authority of 10 U.S.C. 2304 (c)(l) and Federal Acquisition Regulation (FAR) 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

Title: Justification and Approval (J&A) for Other than Full and Open Competition for items available from only one or a limited number of sources under 10 !-3.S.C. 2304 ( c)(1) and FAR 6.302-1.

Summary I Introduction 110 U.S.C. 2304 (c)(l)l: 'Indefinite Quantity Contract (]QC), SPM?LX-l 1-D-9037, was originally awarded at Defense Logistics Agency (DLA) Land and Maritime to Westside Tractor Sales Co. on September 30, 2011, with a one-year base period and four, one-year option periods. Westside Tractor Sales Co. is an authorized dealer of John Deere Corporation [Commercial and Government Entity (CAGE) codes 75755, 75160 and 11955]. The estimated annual demand value (ADV) of the contract including the four, one-year option periods i The maximum value of the contract i The items covered under the contract were solicited and awarded under the requirement of FAR Part 12.

The contract provides coverage for Direct/Direct Vendor Delivery (DVD), DLA Direct/Stock for

CONUS and OCONUS and Foreign Military Sales (FMS).

There are 8,083 National Stock Numbers (NSNs) on the current Long Term Contract (LTC) which will be on the separate, 119-day bridge award. These items are John Deere CAGE and part numbered NSNs. Items managed by DLA Aviation and DLA Troop Support are also on this contract and are included in the 8,083 NSN count. The NSNs are used to prevent disruption in the Government's support of the cargo which carry aircraft and combat support vehicles up to 50 tons and enable utilization of Material Handling Equipment (MHE) that handles ammunition and cargo and provides the Operating Forces with economical all weather material handling capability while successfully bridging gaps that exist between light and heavy lifting operations.

The Government has a need for continued contract support for all of the single sourced items supplied under Westside Tractor Sales Co. contract SPM7LX-11-D-9037, which is otherwise set to expire on September 29, 2016. A 119-day bridge award is necessary to prevent lack of coverage for 8,083 NSNs if the successor LTC is not awarded by September 30, 2016. The items to be on the 119-day bridge award are coded with Acquisition Method Codes (AMCs) of 1, 3, 4, and 5 and Acquisition Method Suffix Codes (AMSCs) of C, D, H, L, P, Q, R, Y, and Z.

Attachment I includes a listing of NSNs, AM Cs, and AMSCs for the items on the I 19-day bridge award. The current contract provides, and the 119-day bridge award will provide, a comprehensive supply chain solution, which includes maintaining an updated list of approved

SPM7LX-1 l-D-9037

Justification and Approval (J&A) Page 12 items to be purchased, maintaining sources of supply, performing demand planning, purchasing/investing in inventory, inspection/quality control of supplies purchased, operation of storage/warehousing, requisition processing, distribution and transportation, direct delivery to the customer, and customer service responsibilities. These various functions are integral to one another. The 119-day bridge source award would permit time for the Government to adequately evaluate the offer(s) received, negotiate contractual terms, perform price/cost analysis, select a vendor and allow for award of the successor contract. The estimated value and contract maximum for the I I 9-day bridge award which was derived from the annual demand quantities (ADQ)s for each individual item times the estimated unit price of each individual item provided for in the data pull executed by the DLA Land and Maritime's Strategic Acquisition Programs Directorate (SAPD) Strategic Sourcing Specialist (SSS) team (Attachment 2). The estimated unit price already includes the percentage fee for logistics support. Westside Tractor Sales Co. has provided their concurrence (Attachment 3) to the I I 9-day bridge award utilizing the same terms and conditions currently under contract SPM7LX-1 1-D-9037 for this I 19-day bridge award. The timeframe of the 119-day bridge award is September 30, 2016 through January 26, 20 I 7. Accordingly, this I I 9-day bridge award is a separate contract action awarded to Westside Tractor Sales Co. however it will be achieved through bilateral agreement via modification to the existing contract SPM7LX-l 1-D-9037, utilizing the same terms and conditions for the convenience of the Government.

Description of Agency's Need (10 U.S.C. 2304 (0(3)(A)I: In an effort to continue support and coverage for the 8,083 single source NSNs under contract SPM7LX-1 l-D-903 7 while the pre award team continues to work towards a completed successor award, the leadership of DLA Land and Maritime's SAPD made the decision to proceed with a separate 119-day bridge award.

Contract SPM7LX-l l-D-9037 is the Government's only long term arrangement for these NSNs.

If the bridge contract cannot be awarded, there will be a disruption in the required high level of support currently being provided, thereby reducing mission effectiveness by delaying support to the warfighter. Failure to execute the I I 9-day bridge award would force all requisitions issued after Septem~er 29, 2016 to revert to the buy floor for manual processing, thereby assuredly increasing administrative lead time (ALT) which is currently one day via Electronic Data Interchange (EDI) transmission under the existing contract. In addition, there are not enough Full Time Equivalent (FTE) resources available to manually award all of the requirements that are issued against this high volume/high demand contract for items that are not stocked.

Furthermore, manual processing may result in the price increasing on all items based on a contractor(s) winning individual items. Therefore, we may lose any reduced pricing received on the existing contract. Demands are expected to continue to fluctuate with the potential to increase due to ongoing operations in theater and reset work on damaged vehicles. The existing L TC currently provides flexibility in meeting changing requirements and it is in the Government's best interest to award a 119-day bridge award to Westside Tractor Sales Co., from September 30, 20 I 6 through January 26, 2017, using the same terms and conditions that currently exist under contract SPM7LX-11-D-9037.

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Justification and Approval (J&A) Page I 3

The Government has a need for this one-hundred-nineteen-day ( 119-day) bridge award for continued contract support for all 8,083 NSNs supplied under Westside Tractor Sales Co.

contract SPM7LX- I 1-D-903 7 because the current contract is set to expire on September 29, 2016 (less than 30 days) and the successor contract will not be awarded for at least another 119 days after September 29, 2016. Typically, successor contracts are assigned to a pre-award team eighteen months prior to the expiration of the current contract; however, in this situation the pre award team was only given six months to solicit the successor contract. At the beginning of market research, John Deere would not respond to the pre-award team's market survey research questions. After speaking with over ten points of contacts within John Deere, the pre-award team finally received a response. John Deere identified ten new Original Equipment Manufacturer (OEM) CAGE codes that were added to the solicitation. Adding the additional OEM CAGE codes resulted in an additional 5,883 NSNs, not on the current contract, that qualified for the scope of the successor. This addition delayed the solicitation an additional sixty days because of the technical and packaging reviews, demand forecasting and coordination amongst customers required to evaluate the NSNs. In addition, to these delays, the synopsis of the successor contract was extended for a thirty-day period in accordance with FAR I 0.001 ( c )(2)(i) that states an agency must notify any affected incumbent small business concerns of the Government's intention to bundle the requirement at least thirty days before release of the solicitation.

Therefore, the synopsis of the successor contract was extended for a thirty-day period and the small businesses were notified of the bundled requirement. This further delayed the issuance of the solicitation. Once the solicitation was issued, a potential offer requested additional time to talk with the OEM in order to propose. Therefore, the solicitation was extended an additional 14 days. In addition, upon solicitation closing, the proposals received on the successor will require a considerable amount of clarification. A 119-day bridge award is necessary to prevent lack of coverage for 8,083 NSNs if the successor Long Term Contract (L TC) is not awarded by September 30, 2016. This 119-day bridge award will be issued under the authority of DLAD J 6. I 9l(b)(4) and the timeframe of the 119-day bridge award contract will be from September 30, 2016 through January 26, 2017.

Authority for Other than Full and Open Competition [U.S.C. 2304 Cfl{J)(B)l: The 119-day bridge award will be issued under Other than Full and Open Competition authority for items available from only one source, 10 U.S.C. 2304 (c )(I), as implemented by FAR 6.302-1.

Pursuant to statutory authority 10 U.S.C. 2304 (c)(I) and FAR 6.302-1, Other than Full and Open Competition is permitted as these items are available from only one source, as confirmed through a technical review of the items. The items supported on the Jong term contract have the following applicable AMC codes in accordance with Title 48 CFR 217 .7506: I, 3, 4, and 5. The definitions for the different AMC codes are as follows:

AMC 1 - (4 NSNs). Suitable for competitive acquisition for the second or subsequent time.

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Justification and Approval (J&A) Page 14

AMC 3 - (7,945 NSNs). Acquire, for the second or subsequent time, directly from the actual manufacturer.

AMC 4 - (21 NSNs). Acquire, for the first time, directly from the actual manufacturer.

AMC 5-(113 NSNs). Acquire directly from a sole source contractor which is not the actual manufacturer.

For the items coded with AM Cs of I, these are code and part numbered items and are restricted to buying from the approved source(s) (John Deere). Although the definitions of AMC I state

"suitable for competitive acquisition" this merely means that the Government has more than one approved CAGE code and part numbered item for the subject NSN, per the definitions of the AMSCs below (all CAGE codes belonging to John Deere). For the subject NSNs with an AMC of I, the Government does not have the data necessary to permit full and open competition;

rather, the Government is procuring the items in accordance with more than one approved code and part number. Westside Tractor Sales Co. will be required to buy from the approved source(s) (John Deere).

The items supported on the L TC have the following applicable AMSC codes in accordance with

Title 48 CFR 217.7506: C, D, L, P, Q, R, Y, and Z. The definitions for the different AMSC codes are as follows:

AMSC C - (19 NSNs). 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 da~a 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, AM Cs 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, AM Cs I or 2 are valid.

AMSC D - (332 NSNs). 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.

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AMSC L-(7 NSNs). The annual buy value of this pai:t falls below the screening threshold established by DoD components and field activities. However, this part has been screened for additional known sources, resulting in either confirmation that the initial source exists or that other sources may supply the part. No additional screening was performed to identify the competitive or noncompetitive conditions that would result in assignment of a different AMSC. This code shall not be used when screening parts entering the inventory. This code shall be used only to replace AMSC O for parts under the established screening threshold. If one source is available, AM Cs 3, 4, or 5 are valid.

If at least two sources exist, AM Cs I or 2 are valid.

AMSC P- ( I NSN). 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. If only one source has the rights or data to manufacture this item, AM Cs 3, 4, or 5 are valid. If two or more sources have the rights or data to manufacture this item, AMCs I or 2 are valid.

AMSC Q-(5 NSNs). 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, AM Cs 3, 4, or 5 are valid. If at least two sources exist, AMCs I or 2 are valid.

AMSC R - ( I NSN). The Government does not own the data or the rights to the data needed to purchase this part from additional sources. It has been determined to be uneconomical to buy the data or rights to the data. It is uneconomical to reverse engineer the part. This code is used when the Government did not initially purchase the data and/or rights. If only one source has the rights or data to manufacture this item, AM Cs 3, 4, or 5 are valid. If two or more sources have the rights or data to manufacture this item, AM Cs 1 or 2 are valid.

AMSC Y -(1 NSN). The design of this part is unstable. Engineering, manufacturing, or performance characteristics indicate that the required design objectives have not been achieved. Major changes are contemplated because the part has a low process yield or has demonstrated marginal performance during tests or service use. These changes will

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Justification and Approval (J&A) Page I 6 render the present part obsolete and unusable in its present configuration. Limited acquisition from the present source is anticipated pending configuration changes. If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs I or 2 are valid.

AMSC Z-(7,717 NSNs). 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, AM Cs 3, 4, or 5 are valid. If at least two sources are available, AM Cs I or 2 are valid.

For NSNs with an AMSC code of C, D, P, Q or R the Government lacks rights to the technical data, cannot obtain it economically or otherwise, and John Deere is the only known entity to possess technical data necessary to manufacture the parts.

For NSNs with an AMSC code of L, the Government has completed an initial screening of the item and will review for resolution and appropriate recoding. For the items with an AMSC code of L, the limited screening is applied because the items on the long term contract support customer direct requirements and the items are not entering DLA inventory. AMSC L coded items with an annual demand value greater than $ I 0,000.00 have been updated in accordance with policy. Items with an AMSC code of L, which is a code that indicates a temporary AMSC status, will be reviewed.

For the one NSN with an AMSC code of Y, management has made the determination to leave this item on contract for convenience.

For NSNs with an AMSC code of Z, the item is a commercial, non-developmental item available for sale on a John Deere price I ist.

There are no AMSC G coded items included in the 119-day bridge award.

Westside Tractor Sales Co. is an authorized dealer of John Deere Corporation CAGE codes 75755, 75160 and 1 J955 and has the production capacity to perform on all 8,083 items on the proposed 119-day bridge award. All of the items are commercial items and are on the John Deere

Commercial Price List (CPL).

Price/Cost Considerations [10 U.S.C. 2304(Q(3){C)I: The 119-day bridge award will be executed using the same pricing structure as the original contract. The Governments price is the

John Deere price list price with dealer markup applied. The items included are determined to be fair and reasonable based on the fact that they are commercial items sold in substantial quantities in the commercial marketplace, are available to the general public, and the Government's pricing

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Justification and Approval (J&A) Page 17 is lower than what other commercial customers are paying. The estimated value and contract maximum for the 119-day bridge award ~ hich was derived from the ADQs for each individual item times the estimated unit price of each individual item provided for in the data pull executed by the SAPD Strategic Sourcing Specialist (SSS) team (Attachment 2). There will be one quarterly price adjustment around the November 2016 timeframe in accordance with the Economic Price Adjustment (EPA) Clause 52.216-9033 that was included in contract

SPM7LX-11-D-9037.

Market Research/ Efforts to Obtain Competition (10 U.S.C. 2304{0{3)(0) and 10 U.S.C.

2304 (fl(3)(E)J: No formal market research was conducted specific to the 119-day bridge award in view of the recent market research that was conducted for the successor solicitation initiative.

In July 2015, DLA Land and Maritime sent a market survey to John Deere and their dealers based on the sole OEM for all requirements on the successor solicitation initiative. The market survey was broken into seven major sections: General Interest Questions, Commercial

Questions, Free on Board (F.O.B.) Point Questions, Zone Questions, Delivery Questions, Other

Miscellaneous Questions and Final Comments from the contractor. Within these seven sections are questions pertaining to item commerciality, commercial clauses, availability of price lists, zone preferences (one or more), F.O.B. preferences (origin or destination), Electronic Data

Interchange (EDI) or Email, Business size (Large or Small), capabilities (Manufacturer or Dealer), production capacity, interest in a L TC, preference for base period ( I year or 3 years), quantity sensitive items, do they carry the items in their inventory and quantity breaks. John

Deere did not respond to the market survey however CK Power and Westside Tractor Sales Co., both approved dealers of John Deere, both responded. Westside Tractor Sales Co. currently holds the existing LTC John Deere CPL, SPM7LX-11-D-9037. Westside Tractor Sales Co. and CK

Efforts to obtain competition were completed for the successor contract by posting a Sources

Sought Notice on Federal Business Opportunities (FedBizOpps) (for 15 days) on July 16, 2015.

No additional source(s) were identified due to the Sources Sought Notice.

No additional sources were identified as a result of Small Business reviews. A technical review was completed to ensure all items on the proposed 1 19-day bridge award are sole source. No additional sources were identified during the technical review.

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Justification and Approval (J&A) Pagl! I 8

Information received regarding the commerciality of the item(s): DLA currently procures from the John Deere CPL. Westside Tractor Sales Co. and CK Power stated in their market survey responses that items they sell to DLA are considered to be commercial items. The Contracting Officer deems that the items targeted for the 119-day bridge award are commercial items.

Action Being Taken to Overcome Barriers to Competition JlO U.S.C. 2304 (0(3)(F)l: A

Justification and Approval for Other than Full and Open Competition was completed, and DLA Land and Maritime waived the synopsis of the 119-day bridge award in accordance with FAR 5.202(a)(l l ). The successor solicitation initiative was issued on July 21.2016 and closed on August 22, 2016. The pre-award team is in the process of evaluating the offer(s) received.

Negotiations have not yet begun as the pre-award team had to write the 119-Day bridge award documents. Once the bridge is completed, the pre-award team will focus solely on the successor project. The pre-award team is currently in the process of clarifying items with both offerors - to include clauses that were not filled out in the contractor's proposals. In addition, one offeror requires pricing clarifications that will be discussed during negotiations. The clarifications will require more processing time than typically anticipated due to the amount of clarifications required. The required clarifications are the driving factor creating the necessity for a bridge contract to be put into place. The pre-award team is preparing to enter into negotiations, performing price/cost analysis, commercial cost realism analysis, and will be preparing the final stages for award with an anticipated award date of January 27, 2017. Typically, negotiations take two weeks however it can vary based on the contractor. Negotiations are anticipated to open around October 17, 2016 and close on November 4, 2016. The pre-negotiation memorandum (PNM) and award documents typically take about four weeks to create and process for signatures. The pre-award team does not anticipate any delays with these documents. The pre award team is planning to issue the successor contract with an effective date of January 27, 2016.

Any additional bridge contracts will not be necessary as the successor contract will be awarded before the new expiration date of January 26, 2016. The 119-day bridge award will allow time for completion of evaluations, clarifications, negotiating contractual terms, performing price/cost analysis and commercial cost realism analysis, preparing the final award, coordinating and setting up the outline agreements for the successor award with over 13,000 items and to ensure that requirements flow through the system successfully.

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APPROVAL

Based upon the foregoing justification, I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief.

p~~-

WILLIAMWI~

Contracting Officer Signature

Competition Advocate Signature

APPROVAL REQUIREMENTS

9/26/2016

Date

[X] Up to $700,000 Contracting Officer

[X] $700,000 to $13,500,000 Competition Advocate

Attachments (See CD)

I. Listing of NSNs

2. Data Pull

3. Westside Tractor Email Concurrence

4. Previous J&As

SPM7LX-t t-D-9037