non-sequential Large Examining and Printing Equipment (ns-LEPE) JOFOC v.2 _Redacted.pdf

Source Selection Information - See FAR 2.101 and 3.104

BEP-OCPOFORM-FY22-01

Date: 11/01/2021; Version: #1 Approved by: Chief, Office of the Chief Procurement Officer

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. CONTRACTING ACTIVITY:

U.S. Department of the Treasury Bureau of Engraving and Printing (BEP) Office of the Chief Procurement Officer (OCPO) 14th and C Streets, SW Washington, DC 20228 Policy Tracking No. BEP-OCPO-FY24-0003

2. THE DESCRIPTION OF ACTION:

The purpose of this sole source justification is to obtain approval to award a firm fixed priced contract to Koenig & Bauer (K&B) for the purchase of non-sequential Large Examining and Printing Equipment (ns-LEPE) machines described in section 3 below. The period of performance for this contract will be 10 years from the date of contract award; estimated to be July 26, 2024, to July 25, 2034. The equipment to be supplied under this contract shall match the design and processing capabilities of the existing ns-LEPE machinery in operation at both Bureau of Engraving and Printing (BEP) Western Currency Facility (WCF) and the BEP Washington D.C. Facility

(DCF).

3. DESCRIPTION OF SUPPLIES/SERVICES:

The BEP has a requirement for the design, fabrication, assembly, integration, delivery, installation, set-up, testing and training of five ns-LEPE machine delivered to the DC Replacement Facility (DCRF) that will convert previously printed sheets into finished currency. The equipment to be supplied under this contract shall match the design and processing capabilities of the existing ns- LEPE machinery in operation at WCF and DCF. Currency produced with the machinery to be supplied under this contract shall appear physically identical to that presently produced by ns-LEPE currently in use at BEP. Identical machines is necessary for counterfeit deterrence and to ensure integrity of currency that meets the standards of the Federal Reserve Board and Secrete Service.

Options for two (2) additional ns-LEPE machines may be requested by written notice and delivered to the BEP WCF.

The BEP intends to purchase spare parts for the ns-LEPE to include options using indefinite delivery vehicle (IDV) 2031ZA22D00010 and follow on IDVs for ns-LEPE.

DEPARTMENT OF THE TREASURY

BUREAU OF ENGRAVING AND PRINTING

WASHINGTON, D.C. 20228

Approved by: Chief, Office of the Chief Procurement Officer

The ns-LEPE is part of the BEP’s migration away from production of packages containing sequential banknotes and the use of “Star” notes. ns-LEPE capabilities include examining incoming blank currency papers, typographically overprinting Serial Numbers, Federal Reserve Seals, Treasury Seals, and Federal Reserve Designator Numeral or Letter/Numeral onto acceptable sheets.

Once printed, the ns-LEPE cuts sheets into notes, accumulate, package, and label the notes into straps, bundles, bricks, and cash-paks, then offloads the finished product onto skids. The ns-LEPE accepts a wide range of sheet sizes and formats (notes per sheet). The ns-LEPE is configurable for different batch sizes as well as the ability to produce small special batches. The combination of the operation lessens labor and streamlines the currency finishing operation. The Government currently uses the K&B ns-LEPE equipment at DCF and WCF.

The independent government cost estimate (IGCE) for this procurement, including all options is

. Design and development cost only apply to Color Check Full Sheet Scanner for ns-LEPE#1.

Projected Delivery Schedule System 1 DCF 12/2026 System 2 DCF 03/2028

System 3 DCF 12/2028 System 4 DCF 03/2030 System 5 DCF 06/2031 System 6 WCF 09/2032

System 7 WCF 11/2033

Machine Cost ns-LEPE #1 ns-LEPE #2 ns-LEPE #3 ns-LEPE #4 ns-LEPE #5 ns-LEPE #6 ns-LEPE #7 Total Average nsLEPE

BAT

FIT

Training Sheet Inspection System

Final Reports Travel Total

Options ns-LEPE #1 ns-LEPE #2 ns-LEPE #3 ns-LEPE #4 ns-LEPE #5 ns-LEPE #6 ns-LEPE #7 Total Average UV Curing System

FIT & Demo Materials Verticle NB

Trim Collection Refresher Training

Spare NB Stand Spare Bander Stand

Color Check Full Sheet Scanner Total

Total Machine Cost + Options

Approved by: Chief, Office of the Chief Procurement Officer

4. APPLICABILITY OF AUTHORITY CITED:

The statutory authority permitting other than full and open competition is 41 U.S.C. 3304 (a) (1) implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302-1 Only one responsible source and no other supplies or services will satisfy agency requirements. The items being procured are for continuity of operations to meet mission requirements. Award to any other source would result in substantial duplication of cost (replacement of same like items and liability concerns) to the Government that is not expected to be recovered through competition and award.

Award to any other source at this time would result in unacceptable delays in fulfilling the agency’s requirements.

K&B, as the Original Equipment Manufacturer (OEM) and sole producer of ns-LEPE machines is the only contractor with the immediate operational capabilities to meet the requirements of the BEP.

The ns-LEPE program involves extensive support tasks than include Program Management, Logistics, Design, Engineering, Testing and related tasks. No other contractor except K&B, can meet the BEP’s needs, and no other source possesses the technical data and documentation needed to fully support ns-LEPE machines.

Additionally, K&B maintains ns-LEPE machines currently in use at BEP using proprietary spare parts, that the BEP either carries in stock or order on a repetitive basis. K&B has the engineering expertise with experienced personnel capable of developing timely and accurate responses to issues arising on complex software and electrical systems. As such, K&B has the unique capabilities and qualifications to supply the equipment under this contract as it will match the design and processing capabilities of the existing ns-LEPE machinery currently in operation at WCF and DCF.

ns-LEPE systems are highly specialized and available only from the OEM. Only the OEM can ensure compatibility of new equipment with the existing equipment and continuity in the production of United States currency. This procurement supports the BEP need for continuity of operations and replacing legacy equipment in support of future currency designs that require additional inspection capabilities with respect to specific IR wavelengths, security features, and image capture and measurement tables. If the BEP doesn’t award this contract, we will lack the continuity in production which will jeopardize future currency designs. Thereby, K&B has the unique technical capabilities and resources required for this acquisition. Based on the results of the market research conducted, it is hereby determined that this requirement can only be met using non-competitive procedures.

5. EFFORTS TO OBTAIN COMPETITION:

A Notice of Intent (NOI) 2031ZA24N00002 to sole source this requirement was posted on SAM.gov dated 20 November 2023 with a closing date of 7 December 2023. This notice did not yield a single response. The objective of the notice was to obtain information regarding the availability and capability of all sources qualified to provide ns-LEPE machines.

6. FAIR AND REASONABLE COSTS:

The Government will determine that the anticipated cost is fair and reasonable based on FAR 15.404-1 techniques. The Government anticipates the cost will be fair and reasonable based on the following:

Approved by: Chief, Office of the Chief Procurement Officer

- The BEP developed an IGCE based upon previous procurements and historical prices paid. The IGCE will be used as a baseline for determining the vendor’s proposed prices to be fair and reasonable.

- Cost analysis will also be used to evaluate certified cost or pricing data to determine cost reasonableness when a fair and reasonable price cannot be determined through price analysis alone for non-commercial items.

8. MARKET RESEARCH:

Based on the findings in the market research two (2) or more small business concerns have not been identified that could meet this requirement. Therefore, this requirement will not be a small business set-aside. There are no viable Treasury mandatory, or small business, sources capable of meeting this requirement. No small businesses or socioeconomic programs were found that can satisfy the agency’s requirement. No vendors were found on GSA that possess the capabilities required to successfully perform this requirement. A review of capabilities narratives for NAICS code 333248 on SBA Dynamic Search doesn’t show any vendor capable of meeting this requirement.

K&B is the only known vendor capable of providing the unique capabilities and qualifications to meet this requirement.

Refer to the SF1010 Market Research Summary Report for specific details.

9. OTHER FACTS:

Contracts TEP-06-0038 and 2031ZA17C00174 for the ns-LEPE were both competed based on data received from market research, when both solicitations closed, only one offer was received. Koenig- Bauer (K&B) was the only contractor to submit a capable offer in response to solicitations for TEP- 06-0038 and 2031ZA17C00174.

Under contract TEP-06-0038 K&B supplied one (1) ns-LEPE for WCF and one (1) for DCF. ns- LEPE under this contract had an estimated unit price of per machine. BEP anticipated that the complexity of the system, advancement in technology, and new security features requirements for ns-LEPE would evolve over time. Under contract 2031ZA17C00174 K&B supplied two (2) ns- LEPEs for WCF, one (1) ns-LEPE for DCF, modification to convert the three (3) existing LEPE into ns-LEPE with options for three (3) additional ns-LEPEs, Ultraviolet (UV) Curing Systems, Factory Inspection Test (FIT) and Demonstration Materials, Spare Parts, Numbering Blocks, and New Design Support. ns-LEPE under this contract had an estimated unit price of per machine.

10. INTERESTED SOURCES:

To date, no other sources have written to express an interest in this acquisition and no additional interested sources are expected based on procurement histories and knowledge of this requirement.

11. STEPS TO FOSTER COMPETITION:

The BEP OCPO will continue to conduct market research to find other potential sources for future ns-LEPE requirements.

Approved by: Chief, Office of the Chief Procurement Officer

REVIEW AND APPROVAL (ALL JUSTIFICATIONS, ALL LEVELS)

TECHNICAL/REQUIREMENTS PERSONNEL CERTIFICATION (ALL LEVELS):

I certify that the supporting data under my cognizance which is included in this justification is accurate and complete to the best of my knowledge and belief.

SIGNATURE: _ __ DATE: _______________

NAME:

TITLE:

CONTRACTING OFFICER APPROVAL

Based on the foregoing, I approve this justification and provided that the services and supplies herein described have otherwise been authorized for acquisition. I certify that the supporting data under my cognizance which is included in this justification is accurate and complete to the best of my knowledge and belief.

SIGNATURE: ____________________________________ DATE: _______________

TITLE:

DOLLAR THRESHOLD REVIEW AND APPROVAL LEVELS (JUSTIFICATIONS

>750K>)

ADVOCATE FOR COMPETITION (if >$750,000 and <=$15 million) (Contracting Activity).

I have reviewed this justification for other than full and open competition and find it to be accurate and complete to the best of my knowledge and belief. Therefore, unless additional approvals are required as prescribed below, as the ordering activity’s Advocate for competition, I hereby approve this justification based on the authority specified in paragraph 4.

SIGNATURE: __ DATE: _______________

TITLE:

Approved by: Chief, Office of the Chief Procurement Officer

HEAD OF THE PROCURING ACTIVITY OR AUTHORIZED DESIGNEE (if >$15 million and <=$75 million) (Contracting Activity).

I have reviewed this justification for other than full and open competition and find it to be accurate and complete to the best of my knowledge and belief. Therefore, unless additional approvals are required as prescribed below, as the ordering activity’s Head of Contracting Agency (HCA), I hereby approve this justification based on the authority specified in paragraph 4.

SIGNATURE: ___ _ DATE: _______________

TITLE:

SENIOR PROCUREMENT EXECUTIVE (if >$75 million).

I have reviewed this justification for other than full and open competition and find it to be accurate and complete to the best of my knowledge and belief. Therefore, unless additional approvals are required as prescribed below, as the ordering activity’s Senior Procurement Executive (SPE), I hereby approve this justification based on the authority specified in paragraph 4.

SIGNATURE: __ DATE: _______________

TITLE: