2. 70Z08522QPLRE0094_JA_20211019_CPACA signed_Redacted.pdf

70Z08521RP4563300 Page 1 of 5

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

41 U.S.C. § 1901

In compliance with Federal Acquisition Regulation (FAR) 13.501(a)(ii), this justification uses the format at FAR 6.303-2 and is modified to state that the procedures in FAR subpart 13.5 are used.

1. Agency and Contracting Activity.

The Department of Homeland Security, United States Coast Guard (USCG), Surface Forces Logistics Center (SFLC) prepared this justification for other than full and open competition.

2. Nature and/or Description of the Action being Approved.

(a) Nature of the action: The USCG, SFLC has a requirement on a sole source basis for upgrading the various software and hardware required to conduct the required propulsion control system optimization for Main Propulsion Diesel Engine (MPDE) low load mitigation, load sharing, increased fuel efficiency, fine pitch and shaft RPM adjustment capability on 418’ Maritime Security Cutter-Large (WMSL) cutters JAMES, MUNRO, KIMBALL, MIDGETT, STONE, CALHOUN, and follow on vessels to include

FRIEDMAN.

(b) Name and address of the contractor: MTU America, Inc. (MTU), 39525 Mackenzie Drive, Novi, MI 48377-1602

(c) Type of action: Indefinite Delivery Contract (Requirements Contract) with Firm Fixed-Price Task Orders

(d) Estimated total value (including options):

This is a multi-year award not to exceed 5 years with five 12-month ordering periods for non-personal, severable services at a total estimated amount of . Funding will be obligated upon issuance of individual task orders.

Previously awarded contracts for propulsion optimization:

Contract Number Requirement Performance Period

70Z08518CP4530700 BERTHOLF DS MPDE FQ2

FY18

3/26/2018 – 7/1/2018

70Z08520CP4500500 WAESCHE DS MPDE FQ1

FY20

10/15/2019 – 3/14/2020

(e) Type of funding: AFC-45, Operations and Maintenance Fund

(f) Year of funding: Fiscal Year 2022 - 2027

(g) Solicitation number: 70Z08522QPLRE0094

(h) Background information about the requirement:

MTU performed a Propulsion Optimization Study after operational data identified engine performance issues to include control schedules for pitch mapping, load sharing, and Combined Diesel and Gas (CODAG) mode performance. Optimization is required for Main Propulsion Diesel Engine (MPDE) low load mitigation, load sharing and increased fuel efficiency, and addition of fine pitch and shaft RPM

70Z08521RP4563300 Page 2 of 5 adjustment capability. The Propulsion Optimization Study led to authorization of propulsion control system optimization by the USCG, SFLC on 418’ WMSL cutters. MTU already completed propulsion control system optimization for the USCG on 418’ WMSL cutters BERTHOLF, WAESCHE, and HAMILTON.

3. Description of Supplies/Services.

The requirement is to conduct the required propulsion control system optimization for Main Propulsion Diesel Engine (MPDE) low load mitigation, load sharing, increased fuel efficiency, and fine pitch and shaft RPM adjustment capability on 418’ Maritime Security Cutter-Large (WMSL) cutters JAMES, MUNRO, KIMBALL, MIDGETT, STONE, CALHOUN, and follow on vessels to include FRIEDMAN, including software development, software and hardware upgrades, and sea trial performance support. MTU is the only vendor that provides this work on MTU 20V1163TB93 Series Engines. MTU does not have authorized distributors to work on this type of engine for the USCG or Navy vessels.

4. Identification of Statutory Authority Permitting Other Than Full and Open

Competition.

The statutory authority permitting other than full and open competition is 41 U.S.C. § 1901 implemented by the FAR Subpart 6.302-1 entitled “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

5. Identification of Exception to the Buy American Act.

No exception to the Buy American Act has been identified.

6. Demonstration that the Proposed Contractor’s Unique Qualifications or the Nature of the Acquisition Require Use of the Authority Cited.

(a) Rationale for using the authority cited in section 4 of the J&A: MTU is the original equipment manufacturer (OEM) and Original Integrator (OI) of the WMSL propulsion control system for the MPDEs and associated propulsion equipment. Therefore, MTU is the only source for the required proprietary information.

(b) Details covering what events lead to the situation requiring use of other than full and open competition procedures including whether any portion of the work can be segregated to allow for competition: The USCG did not acquire the related drawings and data supporting the engine and its design that integrated them into the propulsion system. There are no other vendors that possess the manufacturer drawings, specifications, and technical data that include the updates and technical bulletins which are critical to the maintenance of the MPDEs. No portion of the work can be segregated to allow for competition.

(c) Summarize alternatives considered and why they will not work: In an effort to maximize competition, on 11 January 2021, the USCG asked a representative from MTU whether they would be willing to release proprietary data and MTU responded by indicating their company is unwilling to release any manufacturing drawings, specifications, or other technical data related to the maintenance of the MPDEs. This proprietary data would be required in order to open competition for these services to any other vendor. Attempting to perform propulsion optimization services without access to this technical data, which includes performance tolerances, characteristics, and parameters, would create a significant increased risk of engine failure.

(d) Impact to the mission that would result if the J&A is not approved and, consequently, the product or service not provided: If the product and services are not provided, the MPDEs will operate less efficiently resulting in increased fuel consumption and accelerated wear and tear. In addition, without fine pitch

70Z08521RP4563300 Page 3 of 5 adjustment, at-sea evolutions such as Fueling At Sea (FAS) and Replenishment At Sea (RAS) are performed only with a much greater degree of difficulty and with increased risk of failure and potentially severe consequences. FAS and RAS evolutions are essential to accomplishing national security missions.

7. Description of Efforts Made to Ensure that Offers are Solicited from as Many Potential

Sources as is Practicable.

In accordance with FAR Subpart 5.2, in an effort to promote competition, a Sources Sought Notice 70Z08521SSNWMSLDS was posted on https://beta.sam.gov on 07 October 2020 and closed on 27 October 2020. No vendors expressed interest in the sources sought notice. MTU did note interest in this requirement. On 7 January 2021, MTU indicated that they are the sole OEM for MTU 20V1163 engines for WMSL cutters. In addition, this procurement was initially published as DHS - Acquisition Planning Forecast System (APFS) No. F2020051856 at http://apfs.dhs.gov on 11 January 2021 and no responses were received.

8. Determination by the Contracting Officer that the Anticipated Cost to the

Government will be Fair and Reasonable.

The Contracting Officer anticipates that the cost to the Government will be fair and reasonable based on a price analysis comparison of the proposal with the Independent Government Estimate (IGE) and comparison to historical prices. MTU America, Inc. previously performed similar MPDE optimization services under contract numbers 70Z08518CP4530700 in FY18 for USCGC BERTHOLF and 70Z08518CP4531300 in FY18 for USCGC HAMILTON. Also, if necessary, the Contracting Officer will obtain and review other than certified cost and pricing data from the vendor.

9. Description of Market Research.

Market research was conducted in accordance with FAR Part 10 from October 2020 – March 2021 and the results confirmed that only the OEM has the proprietary data rights to the software they have developed.

Market research included a review of acquisition history, commercial and government databases to include Contract Workbook Database, internet research to find repair contractors and beta.SAM.gov.

A sources sought notice was posted on beta.SAM.gov on 07 October 2020 with a response due date of 27 October 2020. No responses were received.

The Program Manager contacted MTU on 7 January 2021 to solicit interest in the requirement. They expressed interest in the contract on 7 January 2021 but later on 11 January 2021 responded to the Contract Specialist that they would not sell engine propriety data to 3rd party companies.

Additionally, the contract specialist conducted independent internet searches to find alternatives of a domestic origin. It was reaffirmed that only MTU produces this engine. Based on the results of the market research, it has been determined that the requisite supplies are not available.

10. Any Other Facts Supporting the Use of Other Than Full and Open Competition.

All technical information necessary for a partial replacement of the Machinery and Plant Control Monitoring System (MPCMS) is proprietary to the OEM and unavailable for the Government to evaluate or implement alternatives using other vendors and MTU does not have any authorized distributors or certified service centers for this model engine (20V1163TB93).

11. A Listing of the Sources, if Any, that Expressed, in Writing, an Interest in the Acquisition.

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Only MTU America, Inc. expressed interest.

12. A Statement of the Actions, if Any, the Agency May Take to Remove or Overcome Any

Barriers to Competition Before Any Subsequent Acquisition for Supplies or Services Required.

The USCG anticipates MTU to continue to retain sole ownership of the proprietary technical data necessary for performing the required services on the WMSL cutters’ propulsion control systems. However, the Coast Guard will continue its attempts to obtain proprietary data rights and conduct market research in accordance with FAR Part 10, with a focus on locating contractors capable of meeting the requirement before subsequent acquisitions occur.