RESTRICTING COMPETITION NOT EXCEEDING THE SIMPLIFIED

ACQUISTION THRESHOLD

SECTION 1: IDENTIFICATION OF THE AGENCY AND THE CONTRACTING

ACTIVITY

□ Acquisition Management

Department of □• Foreign Service Institute State Contracting □ Office of Foreign Missions Activity D U.S. Mission to the United Nations

~ Overseas Post US EMBASSY PANAMA

Requiring The replacement and retrofit of the Embassy's Main Electrical Service Activity Distribution Switchgear (Compound and Building)

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

APPROVED

Approval is requested to award on a sole source basis to SCHNEIDER ELECTRIC CENTRO AMERICA for the supplies and/or services described in Section 3 on behalf of the Requiring Activity.

SECTION 3: DESCRIPTION OF SUPPLIES/SERVICES REQUIRED TO MEET

The requirement is to provide REPLACEMENT AND RETROFIT OF THE EMBASSY's MAIN ELECTRICAL SERVICE DISTRIBUTION SWITCHGEAR at COMPOUND AND CHANCERY BUILDING. The estimated value for the entire period of performance is $202,000.00, including options.

These supplies/services require the emergency replacement of obsolete main power system breakers that are 20 years old and have reached end-of-life status. The existing Siemens 480-volt breakers can no longer be procured or repaired due to obsolescence and pose an imminent risk of catastrophic failure. The retrofit requires the supply and installation of genuine OEM Schneider Electric Square D breakers, which are the only components compatible with the Embassy's existing proprietary electrical distribution infrastructure.

The work includes removal of obsolete breakers, installation of new Schneider Electric · breakers, system integration, testing, and commissioning to ensure full operational

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This will allow the Office of Facilities Management to accomplish the critical mission objective of maintaining continuous, reliable electrical power to all Embassy operations, including security systems, communications infrastructure, and life-safety equipment.

Failure to complete this retrofit immediately creates an unacceptable risk of complete electrical system failure, which would result in a total shutdown and cessation of all .

Embassy operations.

Additional Pertinent Information:

The Embassy's electrical distribution system is classified as mission-critical security infrastructure. The existing system utilizes Schneider Electric's proprietary Square D breaker technology throughout the main distribution panels. Due to the age and obsolescence of the current breakers, there is an imminent risk of failure that could cause a complete power outage affecting all Embassy operations. The breakers have exceeded their rated service life, and replacement parts are no longer available from the original manufacturer (Siemens). Only Schneider Electric Centro America, as the sole authorized distributor and service provider for Schneider Electric products in Panama, can provide the genuine OEM components, technical expertise, and warranty-compliant installation services required for this time-sensitive emergency retrofit. The use of non-OEM or adapted components is prohibited under USG safety and security standards for sensitive infrastructure.

SECTION 4: IDENTIFICATION OF THE STATUTORY AUTHORITY

PERMITTING OTHER THAN FULL AND OPEN COMPETITION

In accordance with Federal Acquisition Regulation (FAR) 12.102(a), the Contracting Officer has deemed only one source reasonably available based on the following:

□ Urgency

□ Exclusive licensing agreements

~ Brand-name

□ Industrial mobilization

□ Other

SECTION 5: DEMONSTRATION THAT THE PROPOSED CONTRACTOR'S

UNIQUE QUALIFICATIONS OR THE NATURE OF

THE ACQUISITION REQUIRES USE OF THE AUTHORITY CITED

SCHNEIDER ELECTRIC CENTRO AMERICA is the only responsible source capable of meeting the Embassy's requirements for this mission-critical electrical infrastructure retrofit. The sole source determination is based on the following factors:

I. Proprietary Equipment and Patent Protection The Embassy's electrical· distribution system is built exclusively on Schneider Electric's proprietary Square D breaker technology. Schneider Electric manufactures and owns the patents on Square D breaker products, which are the only breakers compatible with the Embassy's existing main electrical distribution panels. This is a product-specific retrofit requiring proprietary components that cannot be substituted with alternative brands. No other manufacturer can legally produce compatible components for this patented system.

2. Exclusive Authorized Distributor Status SCHNEIDER ELECTRIC CENTRO AMERICA is the sole authorized distributor and service provider for Schneider Electric products in Panama. Only this vendor has:

• Factory authorization to distribute genuine OEM Schneider Electric components

• Access to proprietary technical specifications and installation software

• Factory-trained and certified technicians qualified to work on Schneider Electric systems

• Authorization to perform warranty-compliant installations on Schneider Electric equipment

• Local presence in Panama for immediate emergency response and ongoing technical support

3. Warranty Preservation Requirements The Embassy's existing electrical distribution system is covered under manufacturer's warranty. Only installations performed by authorized Schneider Electric service providers using genuine OEM components maintain this warranty coverage. Use of any other vendor or non-genuine components would immediately void the manufacturer's warranty, exposing the USG to significant financial risk and potential liability in the event of system failure.

4. USG Security and Safety Compliance The Embassy's electrical distribution system is classified as sensitive security infrastructure supporting mission-critical operations. USG safety and security standards strictly prohibit the use of adapted, reverse-engineered, or non-OEM components in such systems. Only genuine Schneider Electric components installed by authorized technicians meet these stringent security and safety requirements.

5. Urgency and Mission-Critical Timeline The existing main breakers are 20 years old, have reached end-of-life status, and pose an imminent risk of catastrophic failure. Any failure of these breakers would result in:

• Complete electrical shutdown of the Embassy compound and Chancery building

• Immediate cessation of all Embassy operations, inc)uding consular services

• Loss of critical security systems, access control, and surveillance infrastructure

• Failure of communications systems and IT infrastructure

• Compromise of life-safety systems including fire alarms, emergency lighting, and

HVAC

• Potential security vulnerabilities during power outage

• Estimated operational losses exceeding $50,000 per day during shutdown

• Potential evacuation of personnel and suspension of all mission activities

This emergency situation requires immediate action with the only qualified vendor capable of performing warranty-compliant repairs within the required timeline to prevent catastrophic system failure.

Market Research Conducted Comprehensive market research was conducted locally in accordance with FAR Part 10 to identify potential sources capable of providing retrofit services for the Embassy's Schneider Electric electrical distribution system. The market research included:

• Internet-based research of electrical contractors and distributors in Panama

• Direct contact with local electrical service providers

• Inquiry with alternative equipment manufacturers and distributors

• Price comparisons for similar switchgear retrofit projects

• Verification of authorized Schneider Electric distributors in Panama

Market Research Results:

The market research conclusively determined that:

1. Only one authorized source exists in Panama: SCHNEIDER ELECTRIC CENTRO AMERICA is the sole authorized distributor and service provider for Schneider Electric products in the country.

2. All distribution channels converge: All potential suppliers of Schneider Electric components in Panama must procure through SCHNEIDER ELECTRIC CENTRO AMERICA as the exclusive authorized distributor. No alternative distribution channels exist.

3. Alternative vendors cannot meet requirements: Other electrical contractors contacted during market research could only offer:

o Adapted or reverse-engineered components (prohibited for USG security infrastructure) o Third-party non-OEM parts (would void manufacturer's warranty) a Installation by non-certified technicians (would void warranty and violate security protocols) o Components from alternative manufacturers (incompatible with proprietary

Schneider Electric system)

~ ~ Global Acquisitions ~ U.S. DEPARTMENT of STATE

4. Adapted solutions are prohibited: USG safety and security standards explicitly prohibit the use of adapted, non-genuine, or reverse-engineered components in sensitive security infrastructure. Alternative vendors' proposed solutions using adapted components do not meet these requirements.

5. No alternative manufacturers: The existing infrastructure is built on proprietary Schneider Electric technology that cannot accept components from other manufacturers without complete system replacement at a cost exceeding $2 million and requiring 6-12 months of design and construction.

6. Time-sensitive requirement: Only SCHNEIDER ELECTRIC CENTRO AMERICA could support this emergency retrofit within the required timeframe to prevent catastrophic system failure.

The market research confirmed that no other responsible source exists that can meet the Embassy's technical specifications, security requirements, warranty obligations, and emergency timeline.

Why This Vendor is the Only Source SCHNEIDER ELECTRIC CENTRO AMERICA possesses unique qualifications that no other vendor can provide:

• Exclusive factory authorization to distribute and service Schneider Electric products in Panama

• Sole access to genuine OEM components required for the proprietary Square D breaker system

• Factory-trained certified technicians authorized to work on Schneider Electric systems

• Warranty preservation capability as the only entity that can perform warranty compliant installations

• Security clearance and authorization to work on sensitive USG electrical infrastructure

• Proprietary technical knowledge includjng system specifications, installation software, and integration protocols

• Local emergency response capability with immediate availability in Panama City

• Ongoing technical support for the life of the equipment

No other vendor in Panama possesses these combined qualifications, and no other vendor can legally provide genuine Schneider Electric components or warranty-compliant installation services.

Harm if Award is Not Made Immediately If this sole source award is not made immediately to SCHNEIDER ELECTRIC CENTRO AMERICA, the following harm will result:

Operational Impact:

• Imminent risk of catastrophic electrical failure causing complete Embassy shutdown

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• Loss of all consular services affecting American citizens and visa applicants

• Cessation of diplomatic operations and mission activities

• Estimated operational losses of $50,000-$75,000 per day during power outage

• Potential evacuation of Embassy personnel

Security Impact:

• Loss of physical security systems including access control and surveillance .

• Compromise of classified communications infrastructure

• Vulnerability to security breaches during power outage

• Failure of intrusion detection and alarm systems

Safety Impact:

• Loss of life-safety systems including fire alarms and emergency lighting

• HVAC system failure affecting habitability

• Potential health and safety risks to personnel

Financial Impact:

• Daily operational losses during shutdown

• Emergency generator fuel costs (estimated $5,000-$10,000 per day)

• Potential damage to sensitive equipment from power fluctuations

• Loss of warranty coverage if unauthorized repairs are attempted

• Potential liability for injuries or damages resulting from electrical failure

Timeline Impact:

• Delay in award could result in breaker failure before retrofit is completed

• Recovery from catastrophic failure would require 2-4 weeks of emergency repairs

• Extended mission shutdown affecting bilateral relations and consular services

The urgency of this requirement cannot be overstated. The breakers have exceeded their rated service life and pose an imminent failure risk. Only immediate award to the sole authorized vendor can mitigate this critical threat to Embassy operations, security, and personnel safety.

SECTION 6. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT IS FAIR AND REASONABLE

By signing the justification, the Contracting Officer makes a determination that the price to the Government is anticipated to be fair and reasonable.

The Contracting Officer has determined that the anticipated cost of $202,000.00 is fair and reasonable based on comprehensive market research of comparable Schneider Electric switchgear retrofit proje9ts, internet-based pricing comparisons for similar OEM electrical distribution equipment and installation services, and analysis of industry standards for· proprietary electrical infrastructure retrofits of this scope and complexity. The proposed price is consistent with prevailing market rates for emergency electrical system retrofits requiring genuine OEM components, factory-certified installation, and warranty-compliant service. The contract value is within the simplified acquisition threshold. The price reasonableness determination is further supported by the critical nature of this emergency requirement and the sole source status of the vendor as the exclusive authorized Schneider Electric distributor in Panama.

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