Consolidation Determination Redacted (25R0012).pdf

MEMORANDUM FOR FILE

SUBJECT: Consolidation Determination Competitive Solicitation SPRDL1-25-R-0012

INTRODUCTION:

reducing costs and improving efficiencies. DLA uses Long-Term Contracting (LTC) methods to ensure a steady, uninterrupted flow of parts and services to our Military personnel and to reduce internal administrative lead-time and costs. This acquisition will provide continued or improved supply availability to preclude backorders, reduce administrative and production lead-times (ALT and PLT, respectively), decrease potential contract administration actions, and obtain reduced and stable pricing.

Solicitation SPRDL1-25-R-0012 will establish one Indefinite Quantity/Indefinite Delivery Contract for two (2) National Stock Numbers (NSNs). These NSNs support multiple weapons systems programs to include any variant of 14-20-ton Vehicle, M915A2, M916A1, M1062. The contract will be awarded on a full and open competition basis.

NSN Part Number Nomenclature Min QTY Max QTY Estimated Value

2530-01-506-4129 (19207)

12512438

Wheel Assembly, Pneumatic Tire

87 2,175 $

2530-01-584-7917 (19207)

12550643-1

Wheel Assembly, Pneumatic Tire

44 1088 $

The estimated annual contract value is shows in the table below.

Total: $

Prior to this acquisition, NSN 2530-01-506-4129 was procured on contract SPRDL1-22-D-0046 and NSN 2530-01-584-7917 was procured on contract SPRDL1-22-D-0037. Accordingly, this acquisition constitutes a consolidation as defined by FAR 2.101, because it is a solicitation for one contract that will satisfy two or more requirements of DLA for supplies that have been provided to DLA under two or more separate contracts that were lower in cost than the total cost of the contract for which offers are solicited.

RESULTS OF MARKET RESEARCH AND BENEFITS OF CONSOLIDATION:

Market Research

Year Estimated Annual Value 1 $ 2 $ 3 $ 4 $ 5 $

CUI

Contract Specialist conducted market research for NSN 2530-01-584-7917 part number 12550643-1 (CAGE 19207 US Army Tank Automotive Command) and NSN 2530-01-506-4129 part number 12512438 (CAGE 19207 US Army Tank Automotive Command) on the Internet including Google, Paperless Contract Files, WebFlis and the Dynamic Small Business Search 9 Oct 2024. Research confirmed that these items/parts are commercial items. Prior history also shows these items were purchased using commercial procedures with contracts SPRDL1-22-D-0037 and SPRDL1-22-D-0046.

on 17 Oct 2024 and stated they expect to submit an offer. Research showed that all historical Government Tire Service, Inc. (1T1Z4 / Large Business).

-01-584- 7917 in 2022 (SPRDL1-22-D-0037), while only one small business submitted an offer on the historical procurement for NSN 2530-01-506-4129 (SPRDL1-22-D-0046). It is expected that only one offer will be received for this procurement. Previous contracts, SPRDL1-22-D-0037 and SPRDL1-22-D-0046 were both solicited as "Other Than Full and Open" procurements. Research did not identify two or more SBs that can provide these items to the Government.

Benefits of Consolidation

Benefits under the proposed approach include:

1. Reliable and consistent source of supply throughout the life of the contract. By awarding this consolidated requirement using an LTC, the selected contractor will be able to develop the most efficient inventory levels and design a supply chain and production process that reduces lead-time and maximizes supply and availability. The contractor can reduce duplicate efforts and thereby lower administrative costs associated with quoting on multiple solicitations over the same period.

The contractor is also able to reduce material costs for items on a LTC by using long-term production planning, which allows buying raw material or finished materials in bulk, resulting in quantity discounts. These efficiencies can result in reduction of Government costs.

2. Improved Administrative Lead Time. The purchase request process typically includes assembling a technical data package (if applicable), developing an acquisition strategy, soliciting proposals from industry, negotiating (if applicable), reviewing, and finally awarding the contract or purchase order. The administrative processing is called administrative lead time (ALT). ALT will be reduced because items will not be individually solicited, competed, evaluated, and awarded each time a requirement arises. Reduced ALT is important because it ultimately reduces the time it takes to have parts delivered to the military customer, which in turn supports military readiness.

The time to award delivery orders against a Long-Term Vehicle is substantially less than recurring one-time buys, as each one-time buy would require synopsis, solicitation, evaluation and negotiation.

3. Workload reduction. This benefit largely results from elimination of numerous separate contract actions (with associated lead-time and contracting resource requirements) that would happen if these items were not consolidated. After award issuance, the contract will be assigned to a Basic Contract Administrator (BCA). The BCA will be responsible for ensuring Purchase Requests are sourced properly to this contract and tracking delivery. The BCA will also be responsible for exercising the option annually until operational costs to initiate and manage multiple solicitations, evaluations, award decisions, and contracts is significantly reduced since ordering is automated and the automated ordering process time is almost instantaneous. Having a primary contact within the administration area will ensure that potential quality and delivery issues will be resolved more efficiently and quickly than with the individual spot buys. Also, the contractor is more likely to be proactive in seeking avenues to resolve quality/delivery discrepancies since the items are on contract for an extended period of time.

4. Customer support. Another advantage of the proposed contract is the opportunity to participate in a supplier partnership for broader-based customer support. DLA would be proactive in meeting customer delivery requirements by establishing a single integrated contract instead of relying on individual LTCs or spot buys for each NSN. In addition, vendors reduce duplicate efforts and thereby lower administrative costs associated with quoting on multiple solicitations over the same period. Vendors are also able to reduce material costs for items on a LTC by using long-term production planning, which allows buying raw material or finished materials in bulk, resulting in quantity discounts. These efficiencies can result in reduction of Government costs. The Governme solicitations, evaluations, award decisions, and contracts is significantly reduced since ordering is automated and the automated ordering process time is almost instantaneous.

These benefits are interrelated and largely result from elimination of the two separate contract actions (with associated lead-time and contracting resource requirements) now required to support land-based weapon systems on a worldwide basis.

Impact on Small Business and Measures to maximize Small Business Participation

A technical review was completed to identify any potential small business offerors for this solicitation.

Previous procurement history does not include contracts awarded to small business, as Service, Inc. has been the sole awardee for the last 3 contracts for each of these NSNs. As a result, it is determined that there will be no adverse impact on small business as a result of this contracting action.

Additionally, because this contract is expected to exceed $700,000.00 and will be performed within the United States and its outlying areas, a Small Business Sub-Contracting Plan will be required in accordance with FAR 19.702.

Alternative Contracting Approaches:

The Contract Specialist has identified the following less consolidated alternatives in developing the acquisition strategy for this project:

The least beneficial approach would be to procure the items via individual contracts (spot buys). This approach would not achieve the efficiencies, cost avoidance, and other benefits when compared to the acquisition strategy proposed.

Another 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 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. In addition, since the contracts would be with the same source, in practice there would be no significant advantage in using this theoretically less-consolidated approach.

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. The benefits of consolidating the contract requirements substantially exceed the benefits of the possible alternative contracting approaches.

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

NAME DATE

Chief of the Contracting Office