ATTACHMENT_3_SOLE_SOURCE_JUSTIFICATION_REDACTED.pdf

SOUL SOURCE JUSTIFICATION

For Certain Commercial Items for Procurements Exceeding the Simplified Acquisition

Threshold pursuant to FAR Subpart 13.5, Including Brand Name

Solicitation 70Z04019Q53024B00

Pursuant to the authority of 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 sole source 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), Contracting and Procurement

Division (CPD), located at 2401 Hawkins Point Rd, Baltimore, MD 21226 proposes to enter into a contract on a basis other than full and open competition with Microtech Electronics, Inc.

2. NATURE/DESCRIPTION OF THE ACTION

The USCG/SFLC/SBPL has a requirement on a sole source basis for the overhaul of the Balmar

98 Series alternator P/N 9824-220-BL, utilized on the 47’ Motor Life Boat (MLB) at an estimated total cost of REDACTED for one (1) base year with three (3) one-year options. The USCG intends to award a commercial, fixed-price requirements service contract. The OEM for this requirement is Balmer Acquisition Company LLC, located at 15201 39th Ave NE Marysville, WA 98270-8901.

Although the parts are proprietary to Balmar Acquisition Company LLC, the proposed contractor for this sole source requirement is Microtech. Through our market research efforts, we have determined that the only servicer is Microtech. Microtech is the only company authorized to overhaul subject alternators. Balmar Acquisition Company LLC will not perform the overhaul of subject alternators.

3. DESCRIPTION OF SUPPLIES/SERVICES

This acquisition is for the procurement of services to overhaul these alternators. Each alternator inducted for overhaul shall be required to be disassembled, inspected, overhauled, tested, preserved, packaged, and marked utilizing Coast Guard Specification.

The Government’s estimate for this requirement is:

Base Year $REDACTED

First Option Year $ REDACTED

Second Option Year $ REDACTED

Third Option Year $ REDACTED

Total $ REDACTED

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 FAR 13.5, Simplified Procedures for Certain Commercial Items.

5. DEMONSTRATION THAT THE NATURE OF THE ACQUISITION REQUIRES

USE OF AUTHORITY CITED:

The limitation to use only OEM parts for the overhaul of these alternators must be enforced to ensure physical and functional interchangeability. The alternators are a critical component of the

47’ MLB engines. The Coast Guard does not possess the necessary data required to obtain full and open competition. Further, the scope of manufacturing, special tools, and equipment required to manufacture various parts are unknown. The technical data (manuals, drawings, specifications, etc.,) necessary is not available from any other source and is proprietary to Balmar. Without the adequate data, the Coast Guard is not capable of evaluating equal or alternate parts manufactured by other than the OEM.

The 47’ MLB boats are critical to Coast Guard small boat operations, including search and rescue, marine safety, law enforcement and other multi-mission operations. All reproduction manufacturing drawings, specifications, and other technical data required to manufacture these parts or overhaul these alternators were not purchased when the engines were originally purchased for the 47’ MLB boat class.

6. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED

PRACTICABLE:

Pursuant to FAR Subpart 5.2, in an effort to solicit as many potential sources as practical, sources sought notice HSCG40-17-Q-53024 was posted in FedBizOpps (FBO) on September 13, 2017.

The notice provided other possible sources 14 calendar days to respond and provide their capability to service these alternators. No response was received, however the COR sent a market research questionnaire to the following vendors during the market research phase of this acquisition: Microtech Electronics Inc.; Hatton Marine and Generator Systems Inc.; and Mobile

Electronic Power Solutions. Microtech Electronics was the only vendor who responded back to the CORs market research questionnaire. Microtech Electronics is the only known authorized

OEM repair facility. The OEM has stated that Microtech is the only vendor authorized to perform overhaul services of subject alternators. Therefore, Government market research has determined that the purchase of the Balmar 98 Series alternator and the overhaul of these alternators can only be made through Microtech.

7. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND

REASONABLE:

The Contracting Officer has determined that the anticipated price will be fair and reasonable based on market research performed, price analysis in comparison with the IGCE, and by comparing the proposed pricing against the IGCE and prior acquisition history of Balmer 98 series alternators. Additionally, the offeror may be required to submit Data Other Than

Certified Cost or Pricing Data to support price negotiations, if deemed necessary by the

Contracting Officer.

8. DESCRIPTION OF MARKET RESEARCH:

Market research, as prescribed in FAR Part 10, was conducted from continuously conducted and concluded in April 2019. Market research efforts included researching via Internet websites and

Government databases. Acquisition history and market research indicates the alternators supplied to the Coast Guard are specific to the 47’ MLB engines. The alternators are procured from Balmar and repaired/overhauled by Microtech Electronics to support engine performance requirements.

The information identifying the modifications to the alternator is not known or available to the

Coast Guard. The technical information is proprietary. No other sources that can overhaul or sell these alternators have been identified through market research.

9. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND

OPEN COMPETITION:

None identified.

10. LISTING OF SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN

INTEREST IN THE ACQUISITION:

Sources Sought notice HSCG40-17-Q-53024 was posted in FBO on September 13, 2017 requesting parties to express their interest in writing to the Contract Specialist and a refresh was posted April 5, 2019. No responses were received. However, the following company responded to the CORs market research questionnaire:

Microtech Electronics, Inc.

DBA: MEI

4177 Sucia Drive

Ferndale, WA 98248-9583

Business Size: Small

DUNS: 102057408

Cage Code: 1YQX7

Microtech Electronics, Inc. is an authorized distributor/repair facility and the only vendor authorized by Balmar to overhaul subject alternators.

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

OR OVERCOME ANY BARRIERS TO COMPETITION BEFORE ANY

SUBSEQUENT ACQUISITIONS FOR SUPPLIES OR SERVICES:

An attempt was made to acquire the data rights from the OEM on July 25, 2017 and the OEM declined the CG’s requests for proprietary data. A second attempt to acquire data rights were made on April 5, 2019. Vendor denied our request to acquire data rights. The 98 Series alternators and related parts/services will continue to be an on-going need for the Coast Guard.

Replacement of these alternators cannot be considered for reasons stated within this justification.

Although the Coast Guard does not currently own the required drawings, specifications, etc., to evaluate other than OEM parts, the Government will continue to make all attempts to obtain this data for future acquisitions.