19GE5026R0066-Justification and Approval (JA)-for NCh Elevators Repl.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

SECTION 1: IDENTIFICATION OF THE AGENCY AND THE CONTRACTING

ACTIVITY

Department of State Contracting Activity

☒ Acquisition Management

Requiring Activity support of a sole-source contract award to KONE Felvono Kft (KONE Corporation) for the complete replacement of three (3) elevators in the North Chancery at U.S. Embassy Budapest

SECTION 2: NATURE AND/OR DESCRIPTION OF THE ACTION BEING

APPROVED

Approval is requested to solicit and award on a sole-source basis a Firm-Fixed-Price (FFP) contract to KONE Corporation, Budapest, Hungary, for the complete replacement of three (3) elevators located within the North Chancery at U.S. Embassy Budapest on behalf of the Facility Management Section.

This acquisition includes all labor, materials, equipment, engineering, commissioning, testing, certification, training, warranty support, and associated services required for complete turnkey elevator replacement and integration with existing embassy infrastructure.

The anticipated contract value for this procurement, including all options, is estimated at approximately $656,000.00.

The anticipated period of performance is approximately twelve (12) months from notice to proceed through final commissioning and turnover.

SECTION 3: DESCRIPTION OF SUPPLIES/SERVICES REQUIRED TO MEET THE

AGENCY’S NEEDS

The Facility Management Section requires the complete replacement and modernization of three (3) existing elevator systems serving the North Chancery at U.S. Embassy Budapest.

The requirement includes, but is not limited to:

• Removal and disposal of existing elevator equipment

• Replacement of elevator cars, motors, controllers, drives, and door systems

• Modernization of associated control and safety systems

• Integration with existing fire alarm, emergency power, and life safety infrastructure

• Commissioning, testing, certification, and turnover

• Warranty support and follow-on serviceability

• Operator and maintenance training for Facility Management personnel

This requirement is mission-critical to ensure continued safe and reliable vertical transportation access throughout the North Chancery and to maintain uninterrupted support to embassy operations.

The estimated value for the entire period of performance is $656,000.00.

Dismantling of the existing elevator Sealing the gaps between the shaft door frame and the wall after installation using plasterboard or brushed stainless steel Extension of the existing electrical power supply Additional steel structure required for elevator installation

• preparation of dismantling plans for the existing elevator

• dismantling of the existing elevator

• preparation of approval plans for the new equipment

• obtaining the dismantling and construction permits, as well as the occupancy permit (based on authorization)

• preparation of working-stage technical plans for the elevator equipment

• manufacturing of all elevator components, delivery to site including freight and insurance costs (based on CIP parity, INCOTERMS 2000)

• supply and installation of shaft lighting

• supply of installation hooks

• installation of pit access ladder

• sealing of gaps between the shaft door frame and the remaining wall (door-frame sealing)

• installation, commissioning and final official technical inspection of the elevator

SECTION 4: IDENTIFICATION OF THE STATUTORY AUTHORITY PERMITTING

OTHER THAN FULL AND OPEN COMPETITION

This statutory authority permitting other than full and open competition is 41 U.S. Code 1901 as implemented by FAR 12.000; see also FAR 12.102(b).

SECTION 5: DEMONSTRATION THAT THE PROPOSED CONTRACTOR’S

UNIQUE QUALIFICATIONS OR THE NATURE OF THE ACQUISITION REQUIRES

USE OF THE AUTHORITY CITED

KONE Felvono Kft Corporation is uniquely qualified to provide the required services based upon existing installed system compatibility, proprietary systems integration, lifecycle standardization, and operational continuity requirements.

KONE Corporation currently performs all preventive maintenance, repair, troubleshooting, and technical support for the existing KONE elevator systems located in the South Chancery since 2014 and for North Chancery Slade / Otis elevators since 2019. As the incumbent service provider and OEM, KONE possesses unique technical familiarity with embassy elevator operational history, control architecture, software interfaces, proprietary diagnostics, spare parts compatibility, and integration with life safety systems.

Awarding this project to an alternate elevator manufacturer would create non-standard systems across the embassy compound, requiring separate service contracts, proprietary software platforms, spare parts inventories, technician certifications, and diagnostic equipment.

The proposed replacement also involves integration with proprietary KONE elevator controls, diagnostics, firmware, and software-based monitoring systems that are not readily serviceable or supportable by alternate vendors without substantial redesign or system replacement.

The North Chancery supports mission-critical diplomatic operations. Elevator reliability directly affects personnel movement, accessibility compliance, emergency evacuation support, contractor access control, and continuity of embassy operations.

SECTION 6. DESCRIPTION OF EFFORTS TO ENSURE THAT OFFERS WERE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS IS PRACTICABLE,

INCLUDING WHETHER A NOTICE WAS OR WILL BE PUBLICIZED AS

REQUIRED BY FAR SUBPART 5.2 AND, IF NOT, WHICH EXCEPTION UNDER

FAR 5.201 APPLIES

A notice of the Government’s intent to sole was posted to SAM.GOV on May 13, 2026.

SECTION 7. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT IS FAIR AND REASONABLE

The Contracting Officer has determined the anticipated price to the Government will be fair and reasonable based on:

The Contracting Officer has determined the anticipated $656,000.00 to the Government of the supplies/services covered by this J&A will be fair and reasonable based on

• Independent Government Cost Estimate (IGCE)

• Historical embassy elevator modernization costs

• Published OEM pricing

• Local market labor and installation rates

• Comparison with similar OBO elevator replacement projects By signing the justification, the Contracting Officer makes a determination that the $656,000.00 to the Government is expected to be fair and reasonable.

SECTION 8. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED (SEE

PART 10) AND THE RESULTS OR A STATEMENT OF THE REASON MARKET

RESEARCH WAS NOT CONDUCTED

Market research was conducted through review of local and regional elevator modernization providers, manufacturer capabilities, and compatibility requirements with the embassy’s existing installed KONE systems.

The results confirmed that KONE Corporation is uniquely positioned to provide the required modernization while maintaining compatibility, continuity of maintenance support, operational standardization, and lifecycle efficiency.

SECTION 9. ANY OTHER FACTS SUPPORTING THE USE OF OTHER

THAN FULL AND OPEN COMPETITION

Failure to award this requirement to KONE Corporation would introduce substantial technical, operational, and lifecycle risk to embassy operations.

Award to an alternate manufacturer would require additional maintenance infrastructure, duplicate spare parts inventories, separate diagnostic software and proprietary tools, additional technician certifications and training, and increased integration complexity with life safety systems.

The replacement requirement is necessary due to aging infrastructure, lifecycle replacement requirements, and the need to maintain safe and reliable operation of embassy vertical transportation systems.

SECTION 10. LISTING OF THE SOURCES, IF ANY, THAT EXPRESSED, IN

WRITING, AN INTEREST IN THE ACQUISITION

Only one vendor responded to the SAM Intent to Sole Source Notice. East Coast Technologies provided a capabilities statement but failed to provide any clear and convincing evidence to show that they could supply KONE elevators within Budapest, Hungary, as specified in the SAM notice.

SECTION 11. STATEMENT OF THE ACTIONS, IF ANY, THE AGENCY MAY TAKE

TO REMOVE OR OVERCOME ANY BARRIERS TO COMPETITION BEFORE ANY

SUBSEQUENT ACQUISITION FOR THE SUPPLIES OR SERVICES REQUIRED

The Government will continue to evaluate future opportunities for competition during subsequent lifecycle replacement projects.

However, due to the proprietary nature of elevator controls, diagnostics, firmware, and software integration requirements associated with the embassy’s existing installed KONE systems, competition for this requirement is not currently practicable without introducing substantial operational and lifecycle inefficiencies.

SECTION 12. CERTIFICATIONS

All reviews and approvals should be completed in the order listed unless otherwise authorized or required.

TECHNICAL AND REQUIREMENTS CERTIFICATION

I certify that the facts and representations under my cognizance which are included in this Justification and its supporting acquisition planning documents, except as noted herein, are complete and accurate to the best of my knowledge and belief.

Technical Cognizance:

SIGNATURE:

Krisztian B. Kovacs Building Engineer - Supervisor

CONTRACTING OFFICER CERTIFICATION (FAR 6.104-1(a)(12)) I certify that this submission is accurate to the best of my knowledge, and that it contains complete information necessary to enable other officials to make an informed recommendation for approval or disapproval.

SIGNATURE:

Travis Keon Contracting Officer and RPSO Deputy Director

6/10/2026