ACC1941.pdf

CMO Control No.: 14-149 Fuels, Lubricants, and Automotive-Fluids

R&D Services

JUSTIFICATION AND APPROVAL FOR

OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: Army Contracting Command–Warren (ACC-WRN) is the procuring activity responsible for this action.

2. Description of Action: This action proposes to award a follow-on Cost-Plus- Fixed-Fee (CPFF), Level-of-Effort (LOE) type contract with Southwest Research Institute (SwRI), located at 6220 Culebra Road, San Antonio, Texas 78238-5166.

SwRI is an independent, non-profit applied research and development (R&D) organization. The total period of performance of this effort is 72 months, which includes a base year and four option years with performance extending 12 months beyond the final option exercise period. This contract will be driven by issuing individual work directives (WDs) and will be funded primarily with Research, Development, Test, and Evaluation (RDT&E) funds; Operation and Maintenance and Procurement funding may be applied as necessary for systems in development or fielded systems.

3. Description of Supplies/Services: The LOE is for basic and applied research, exploratory and advanced development, and investigations and evaluations related to homogeneous and integrated fuels, lubricants, and related automotive-fluids and materials supporting the US Army’s ground vehicle and ground support equipment fleet. The base award is estimated to be 7,835 man-hours at an estimated cost of $1.3M. The options are planned to total 292,165 man-hours at an estimated cost of $44.7M. It is estimated that 300,000 hours at an estimated value of $46M will be required over the life of the contract.

The WDs issued under this contract support the Army’s need for an adequate supply of fuels, lubricants, and related automotive-type fluids with the performance qualities to meet stringent operational requirements of military equipment. This contract is used to support the Army, other military services, and other U.S. Government agencies in the following areas:

a. Basic Research, Exploratory Development, Advanced Development and Engineering in the Fields of:

(1) Fuels and fuel combustion, fuel handling, fuel distribution, and fuel storage,

(2) The performance of associated equipment with conventional and alternate military fuels, lubricants for engines, transmissions, and other vehicular systems,

(3) Functional fluids, fluid fire resistance, fire protection, fire suppression, and fire vulnerability, and

(4) The control, mitigation, and remediation of environment pollution from the use and disposal of fuels, lubricants and functional fluids

b. Investigation and/or development of fuels, lubricants and related materials to reduce total operating costs and improve RAM-D factors for Military vehicles and equipment.

c. Conduct field tests and technology demonstrations on prototype fuels, lubricants, functional fluids, corrosion preventative compounds, and associated equipment; and conduct field evaluations of the performance and quality of existing products.

4. Authority Cited: The statutory authority permitting this procurement on an other than full and open competition basis is 10 U.S.C 2304(c)(1) as implemented by FAR 6.302-1(a)(2)(iii), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.” Specifically, FAR 6.302-1(a)(2)(iii) provides that services may be deemed to be available from the original source in the case of a follow-on contract for the continued provision of highly specialized services, when it is likely that award to any other source would result in –

(A) Substantial duplication of cost to the Government that is not expected to be recovered through competition, or

(B) Unacceptable delays in fulfilling the agency’s requirements.

5. Reason for Authority Cited: Only the proposed contractor, SwRI, possesses the unique qualifications and facilities needed to fulfill the contract requirements without substantial duplication of costs and unacceptable delays.

Background Information:

a. SwRI is the only known source that possesses a fully integrated R&D program and fully instrumented facilities that covers fuels, lubricants, fluids, and energy conversion systems research. SwRI is uniquely outfitted with the combination of its 11 technical divisions and the TARDEC Fuels and Lubricants Research Facilities (TFLRF) situated on its grounds. The TFLRF is constructed on land that is leased by the United States Government from SwRI; the current lease is active until 30 June 2025. The R&D efforts under this contract will be performed at the TFLRF. The contractor is a Section 501(c)(3) non-profit research institution and has been providing essential fuels and lubricants research for the U.S Army since July 1955. The TFLRF was established by the Army in May 1957 as Government-owned Contractor-operated facility built specially to assist with military fuels, lubricants, and other fluids research and testing. The TFLRF is outfitted with the equipment needed to conduct standardized tests and also includes several unique Army-owned items including:

(1) Turbine combustor facility used to diagnose fuel spray/evaporation problems, study fuel compositional/property effects on combustion, injection system characteristics and fuel deposition,

(2) Seven, low vibration, engine test cells and single-cylinder and multi-cylinder test engines for testing fuel and lubricant interaction, wear studies, and diesel combustion and emissions data,

(3) Fluids flammability test facility used to evaluate fuel and hydraulic fluids spray, pool and hot-surface ignition and flame-spread characteristics,

(4) Several custom designed fuel and oil filter test rigs for both bulk fluid and mobile equipment filter analysis,

(5) Special environmentally controlled rooms/containers for high and low temperature studies, and

(6) Several large dynamometers and the entire data acquisition system, as well as other large pieces of laboratory equipment.

b. SwRI has been successful performing R&D programs of this nature for the

Army for over 50 years. This breadth of unique historical knowledge in this area of research gives SwRI the in-depth understanding of the requirements required for successful completion of WD tasks. Additionally, SwRI maintains a staff of qualified personnel consisting of scientists, researchers, engineers, and technicians specifically dedicated to the TFLRF projects. As a result of SwRI’s long-term involvement in conducting a fully integrated R&D program, the unique on-site laboratory and component testing facilities are fully developed and represent a capability for fuels, lubricants, and related materials research that is unmatched.

Cost:

a. The estimated current value of the real property and Government

Furnished Equipment (GFE) in the TFLRF is approximately $3.5M. These costs are based on the real property value of the Government buildings as shown in the real property log as well as the GFE accountability listing maintained by SwRI for all equipment purchased under the current contract and transferred from previous contracts. SwRI also houses many pieces of its own equipment in the TFLRF laboratories, which the Government benefits from its use.

b. Previous procurements for the program have attempted to find additional responsible sources capable of performing the various facets of research under one roof. A market survey was issued on the Federal Business Opportunities (FedBizOpps) website. SwRI was the only responding company to possess the combination of expert personnel, engine testing facilities, chemical testing facilities, fuel blending facilities, vehicle testing capabilities, and the corporate experience in Army-related vehicle fluid R&D. Due to the close collaborative relationship required between the many different technical areas when conducting fuels and lubricants research, a fully integrated facility or location is necessary to avoid delays and duplication of costs. Many of the responding companies lack the infrastructure to receive, store, and blend fuel, which is a major and critical function of this program. To provide a contractor with the infrastructure necessary to receive store, and blend fuels would require the Government to invest up to $10M. A breakdown of the estimated duplication of costs is listed below. These costs are not expected to be recovered through competition.

1. Fuel Offloading Facilities $2.5M

2. Waste Treatment Facilities $2.0M

3. Bay Tanks for Fuel Storage (4 Bay Tanks at $500K ea.) $2.0M

4. Fuel Blending Tank $1.5M

5. Storage Tank for Blended Fuel $1.5M

6. Concrete Dyke for Fuel Storage and Handling Area $500K

Total $10M

Delays:

SwRI’s unique knowledge base and the fully instrumented Government-owned facilities located on its grounds enable it to begin performing the WDs and accommodate testing surges with little or no ramp up time required. In order for another source to obtain a similar level of performance that SwRI currently possesses with the necessary infrastructure to receive, store, and blend fuel would result in a delay in the program of at least 24 months. The 24 month delay is based on the requirements office estimate to complete the design, site preparation, and build time. This delay would result in disruption of planned testing efforts for Alcohol-to-Jet (ATJ) fuel blends. TARDEC has ATJ fuel blends in testing under the current contract W56HZV-09-C-0100; the contract is nearing its funding limitations. The US Navy is currently testing ATJ fuel blended with Jet Propellant 8 (JP-8) fuel. The Navy plans to have testing completed by 2016 and this fuel blend adopted by 2017. If the ATJ/JP-8 blend is adopted, the Army will be required to purchase it as well. In order to ensure compatibility with Army vehicles and ground equipment, the Army needs to continue testing ATJ fuel blends prior to it being adopted into the supply system. TARDEC plans to issue additional WDs under this follow-on contract in 2015 to continue testing this fuel to understand the effects on, and ensure compatibility with, Army vehicles and ground equipment. A delay of 24 months to provide another source the necessary infrastructure would jeopardize the follow-on testing efforts resulting in Army vehicles and ground equipment being subjected to fuel that has not been fully validated through Army testing.

6. Efforts to Obtain Competition: A Sources Sought notice was posted on FedBizOpps on 30 December 2013 (solicitation number W56HZV-FLTT-12-30- 2013). A total of eight companies responded to the announcement as detailed in paragraph 8 below. This action will also be synopsized in FedBizOpps in accordance with FAR 5.201.

7. Actions to Increase Competition: Due to the significant costs involved in developing an alternate source, no actions to increase competition are planned at this time. The Government will investigate future requirements on a case-by-case basis.

8. Market Research: The TARDEC Fuels and Lubricants Technology Team (FLTT) investigate, explore, and stay current in the field of fuels and lubricants technology trends and sources by conducting weekly reviews on www.greencarscongress.com and www.biofuelsjournal.com which has provided insight into sources for purchasing fuel and additional methods of future fuel testing, but has not revealed any additional sources capable of storing, handling, or testing fuels as required by the Statement of Work (SOW). A sources sought notice was posted on FedBizOpps on 30 December 2013 in order to determine if there are interested parties that would be able to perform all required FLTT services and to understand their in-house capabilities and facilities. Responses were received through 31 January 2014. The listing required responders to answer a series of questions regarding their recent history in contracting with the Government and their capabilities regarding certain specific testing requirements.

The following eight companies responded to the sources sought notice: SwRI, Link Engineering Co., Jacobs Technology Inc., Nano Materials and Processes, Inc., IAV Automotive Engineering, Intertek USA Inc., Horiba Instruments, and EngineTec. All responses were thoroughly reviewed and evaluated against key requirements identified in the announcement.

Of the respondents, SwRI is the only source to possess the complete set of capabilities required to successfully perform the efforts in-house. Its facilities include a tank farm for fuel receipt, blending, and storage; a chemical testing laboratory for characterization of fuels, oils, and other fluids to Army and other standard and specifications; engine testing cells for durability evaluation testing on dynamometers; and other labs for customized testing of automotive components on fabricated test rigs. External to the TFLRF, SwRI has a number of other laboratories and test rigs suitable for conducting evaluations of larger http://www.greencarscongress.com/ http://www.biofuelsjournal.com/ scope or longer duration, such as the fuel bladder storage facility and a fuel filtration / water separation facility.

The other seven respondents lacked pertinent capabilities, i.e. critical in-house test capabilities, experience in many of the required testing capabilities, and fuel blending and storage capabilities. In order to have the same level of capability as SwRI, the other responding companies would need to partner with additional external resources or establish internal capabilities. A fully integrated facility capable of handling all critical testing as well as fuel blending and storage capabilities is necessary for successful and timely performance of the WDs due to the close collaborative relationship required between the many different technical areas when conducting fuels and lubricants research. Having one company perform a portion of tests and another company attempt to build upon the results creates delays due to increased logistical activities and ramp up time to understand the results of outsourced testing. Outsourcing critical testing also requires the subcontractor(s) to build and program/calibrate suitable test rigs to perform the required testing creating additional costs and delays. Partnering with external sources or building internal capabilities add significantly to the costs and delays in contract performance jeopardizing planned ATJ fuel testing in 2015. As a result, Army vehicles and ground equipment may be subjected to fuel that has not been fully validated through Army testing.

SwRI is the only source possessing all the necessary facilities and the complete set of capabilities to fully cover all the work required under the program. Based on the review of the responses received and the TARDEC engineers’ current knowledge and expertise in the commercial and Government marketplace, TARDEC has determined that award to any organization other than SwRI would result in unacceptable delays and a substantial duplication of cost to the Government in conducting the R&D efforts necessary under this contract as many of the results from the individual WD tasks feed into a follow-on WD task.

9. Interested Sources: To date, the following eight companies responded to the sources sought notice: SwRI, Link Engineering Co., Jacobs Technology Inc., Nano Materials and Processes, Inc., IAV Automotive Engineering, Intertek USA Inc., Horiba Instruments, and EngineTec. The contracting office will publish the notices required by FAR 5.201 in FedBizOpps. All proposals received will be considered.

10. Other Facts:

a. Procurement History: The current contract W56HZV-09-C-0100 was awarded to SwRI on 06 February 2009 under the authority of 10 U.S.C 2304(c)

(1) as implemented by FAR 6.302-1, “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.” This contract is a seven-year CPFF LOE contract for 250,000 man-hours and is valued at $36.5M.

Below are the seven previous contracts with SwRI in support of this research.

Contract Number Date Type Authority

DAAE-07-99-C-L052 29-SEP-1999 Sole-Source FAR 6.302-1

DAAK-70-92-C-0059 24-JUL-1992 Sole-Source FAR 6.302-1

DAAK-70-87-C-0043 24-SEP-1987 Sole-Source FAR 6.302-1

DAAK70-85-C-0007 01-OCT-1984 Sole-Source FAR 6.302-1

DAAK-70-84-C-0071 14-AUG-1984 Sole-Source FAR 6.302-1

DAAK-70-83-0070 05-MAY-1983 Sole-Source FAR 6.302-1

DAAK70-82-C-0001 01-OCT-1981 Sole-Source FAR 6.302-1

b. Acquisition data availability: The WDs typically build upon work done under a previous WD. To avoid duplication of effort, it is most economical to use the same lab for all of the R&D requirements under this contract. The work is not routine work and draws upon past efforts in order to produce sound results.

Having one lab conduct portions of the effort while another lab attempts to build upon the results of those effort will result in significant inefficiencies and duplications of time, effort, and costs.

c. Subcontracting competition: A small business subcontracting plan will be required as part of the proposal. Once approved, the subcontracting plan will be incorporated into the contract by reference. The solicitation and contract will contain the clauses FAR 52.219-8, “Utilization of Small Business Concerns”, FAR 52.219-9, “Small Business Subcontracting Plan,” and FAR 252.219-16, “Liquidated Damages - Subcontracting Plan” for the promotion and utilization of subcontracting opportunities for Small Businesses. The contract will also include the following clauses: FAR 52.244-5, “Competition in Subcontracting,” and FAR 52.244-2 Alt I, “Subcontracts” to promote small business participation at the work directive level. In addition, every effort will be made during negotiations to maximize SwRI's small business subcontracting participation. Small business participation will be promoted through management of Small Business Subcontracting Plan goals.

11. Technical Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

NAME: MAGID ATHNASIOS DATE: 1 July 2014 TITLE: Executive Director SIGNATURE:

12. Requirements Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

NAME: MAGID ATHNASIOS DATE: 1 July 2014 TITLE: Executive Director SIGNATURE:

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost to the Government for this contract action will be fair and reasonable. This determination will be based on results of a DCAA audit as applicable, DCMA technical review as appropriate; Independent Government Cost Estimates and a Cost and Price Analysis are required for all work directives, and the submission of certified cost or pricing data from the contractor is required for those actions meeting the certified cost and pricing data threshold.

NAME: LYNN M. BYRNE DATE: 2 Jul 2014 TITLE: Contracting Officer SIGNATURE:

14. Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

NAME: LYNN M. BYRNE DATE: 2 Jul 2014 TITLE: Contracting Officer SIGNATURE:

Concurrence:

Date:_________12 Aug 2014_____________

Signature:

__________Hand signed____________________________

KENNETH BOUSQUET

Principal Assistant Responsible for Contracting Army Contracting Command-Warren

APPROVAL

Based on the foregoing justification, and as Principal Assistant Responsible for Contracting pursuant to Army Materiel Command Head of the Contracting Activity Delegation of Authority #14-01, I hereby approve the procurement of up to 300,000 man-hours LOE (inclusive of all options) from Southwest Research Institute to support the homogeneous and integrated fuels, lubricants, and related automotive-fluids and materials research on an other than full and open competition basis pursuant to the authority of 10 U.S.C.2304(c)(1), as implemented by FAR 6.302-1(a)(2)(iii), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.” This approval is subject to availability of funds and provided that the property and services described herein have otherwise been authorized for acquisition. The total estimated value of this action is $46M.

Date:_____20 Aug 2014_ Signature:_______hand signed____________

THEODORE C. HARRISON III

Major General, U.S. Army Commanding Army Contracting Command