5_ReDac,_Cummins_8_Eng_JnA_18-Q-55399_23_Aug_18.pdf

SOLE SOURCE JUSTIICATION

for Certain Commercial Items for Procurements Exceeding the Simplified Acquisition

Threshold pursuant to FAR Subpart 13.5, including Brand Name

Solicitation Number: 70Z04018Q55399B00

Pursuant to the requirements under the authority for commercial items at 41 U.S.C. 1901 as implemented by Federal Acquisition Regulation (FAR) Subpart 13.501, and consistent with the content requirements of FAR 6.303-2 the following facts and rationale support this justification:

1. Agency and Contracting Activity. The Department of Homeland Security (DHS), U.S.

Coast Guard (USCG), Surface Forces Logistics Center (SFLC), Small Boat Product

Line (SBPL), located at 2401 Hawkins Point Road, Baltimore, MD 21226 proposes to enter into a contract on a brand name basis.

2. Nature and/or Description of the Action being Approved. The USCG/SFLC, has a requirement, on a brand name basis to procure eight (8) new Cummins diesel engines to be used in the 26-Foot, Over the Horizon (OTH IV) Boat to replace engines currently used in boats to support on-going Coast Guard operations.

This one-time purchase is needed to provide new (replacement) engines as needed to ensure mission capabilities. Currently there is a critical need for four engines for replacement on four, OTH IV boats that are currently non-operational due to engine failures, with the remaining four engines to be put into stock and issued as needed per the NESSS published stock levels. This commercial item purchase will be made using the procedures of FAR Part 13.5, Simplified Procedures for Certain Commercial Items and FAR part 12, Acquisition of Commercial Items. The proposed contract is anticipated to be awarded to an Original Equipment Manufacturer (OEM) Cummins, Inc., authorized distributor/dealer, or any other responsive/responsible vendor who can provide the engines called for in the specification. The period of performance will be 90 days from award. It is anticipated that funding will be provided through utilizing FY 18 AFC-30 Operating funds.

3. Description of Supplies/Services. This requirement is for the purchase of eight (8) new

QSB 6.7, Cummins Diesel Engines, NSN: 2815 01-623-8159. The SFLC requires the use of brand name OEM engines. The name and address of the Original Equipment

Manufacturer (OEM) for this requirement is:

Cummins, Inc.

500 Jackson Street

Columbus, IN 47201

The IGE estimate for this requirement is:

Engine Est: $38,800.00 Qty 8 $310,400.00

Shipping Est: $2,000.00 Qty 8 $16,000.00

Total Estimate: $326,400.00

A list of the applicable engines is as follows:

CUMMINS DIESEL ENGINE

DESCRIPTION

Manufacturer Cummins

Engine Model # QSB 6.7

Description Main Propulsion Engine

NSN 2815 01-623-8159

Engine Pricing

Line No. Description Part No. Qty. Unit Price Total Price

1 Engine QSB6.7L 8 $38,800.00 $310,400.00

TOTAL: $310,400.00

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

Competition. Under statutory authority 41 U.S.C. 1901 pursuant under FAR subpart 13.501.

5. Demonstration that the Nature of the Acquisition Require Use of the Authority Cited.

The decision to procure only OEM engines is necessary to ensure proper form, fit and function with the uniquely configured OTH IV boats. The Cummins diesel engines are critical to the operation of the 26-Foot, OTH IV boats, which are critical to search and rescue operations in extreme weather conditions, law enforcement, marine safety and security, and environmental protection missions. The 26-Foot, OTH IV boats were specifically designed to include this particular Cummins diesel engine. The technical data necessary to competitively procure another engine compatible with the OTH IV boats is proprietary to the OEM, Cummins Inc. Several attempts were made to obtain data rights from Cummins, Inc.; however, all attempts have been unsuccessful.

Due to the proprietary nature of the Cummins diesel engine design, use of any other engine would require redesign of the propulsion unit, gears, outdrives, or jet drives to meet the

Coast Guard specifications. The redesign of the specifications is outside the time and cost restraints of the Coast Guard. To seek another suitable platform with a different engine manufacturer against current Coast Guard like boat specification, combining weight restriction, horsepower requirements, fuel consumption, and other design features including hull changes modifying engine mounts, exhaust system/s, fuel supply lines, fuel return lines, fuel tank placements, as well as hatch changes, vents is not practical nor cost effective. This development process would necessitate hundreds of man hours for changing maintenance cards, uploading technical manual data/information into Coast

Guard-LIMS system, and uploading supply manuals. This process would also be estimated to take between five to seven years from conception and research through development and build stage before an alternative source could be tested against Coast

Guard specifications. This delay would likely render the entire class of boats unusable and would not allow for the Law Enforcement and Search and missions of the WMEC and

WHEC platforms.

Although other engine systems are commercially available, other engines are not manufactured in accordance with original and unique OEM specifications, materials, and tolerances. Use of non-OEM engines could result in equipment failure rendering these boats unable to complete critical mission requirements and may compromise the safety of the crew, possibly resulting in injury or death.

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

Potential Sources as is Practicable. In an effort to solicit as many potential sources as practical, a sources sought notice was posted on FedBizOpps (FBO) on 2 April 2018. This notice which closed on 9 April 2018 provided four (4) potential sources identified in

Section 10 of this document. Government market research has concluded that these engines can only be purchased through an authorized Cummins OEM dealer/distributer;

however, any responses received from responsible offerors will be considered.

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

Government will be Fair and Reasonable. The Contracting Officer anticipates the price will be fair and reasonable based on comparisons with the market research performed, price comparison utilizing available previous history, the Independent Government Estimate

(IGE) and price competition among authorized distributors.

8. Description of Market Research. Extensive market research, as prescribed in FAR Part

10, was conducted over the months of January 2018 through April 2018. While other engines exist within the commercial marketplace, the Government does not possess the necessary technical and engineering data and drawings necessary to be able to determine if these alternate sources can manufacture the engines to OEM specifications and standards.

Market research, which included research of internet websites and Government databases as well as a sources sought notice, has concluded that OEM engines meet the form, fit and function requirements of this requirement.

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

These engines must conform to design, materials, and operational requirements. The OEM engines are designed, engineered, and built to close tolerances with all parts operating dependently, and have undergone numerous tests and rigorous operational testing before being certified and approved by the OEM and accepted by the Coast Guard against OEM unique design specifications.

The use of only OEM engines will ensuring source, size, configuration, mating and attachment characteristics, functional characteristics, and performance requirements that are essential in the planning and execution of small boat missions.

10. A Listing of the Sources, if Any That Expressed, in Writing, an Interest in the

Acquisition. Sources Sought notice 70Z04018Q55399B00 was posted in FBO on

April 2, 2018 and closed on April 9, 2018. Four businesses OEM licensed dealers expressed their interest in writing to the contract specialist.

11. 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. These engines will continue to be an on-going need for the Coast

Guard. An attempt was made by the USCG to acquire the proprietary data from Cummins, Inc. On June 20, 2018, an email response from Cummins, Inc. stated that they would not provide unrestricted rights to the specifications and drawings, as the engines and all components were developed exclusively at Cummins Inc. expense. Cummins Inc. will not release proprietary data to other non-authorized business entities, nor the U.S. Coast Guard.

The Government will continue to engage Cummins Inc., for release of proprietary data prior to any subsequent requirement.