Attachment_3_MTU_S60_Parts_Brand_Name_Justification_Redacted.pdf

SOLE SOURCE JUSTIFICATION

For Certain Commercial Items for Procurements Exceeding the Simplified Acquisition

Threshold pursuant to FAR Subpart 13.5, Including Brand Name

Solicitation Number: 70Z04019Q55400B00

Pursuant to the of authority of 41 U.S.C. 1901, as implemented by Federal Acquisition

Regulation (FAR) Part 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), located at 2401 Hawkins Point Rd, Baltimore, MD 21226.

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

The USCG/SFLC, proposes to enter into a requirements type contract using other than full and open competition with vendors using only Original

Equipment Manufacturers (OEM) parts with warranties. The OEM for this requirement is MTU America, Inc., to procure all parts, components, equipment, in support of the MTU Series 60 diesel engines currently in use on 45-Foot, Response Boat-Medium (RB-M) to support on-going USCG operations. The

NAICS/PSC for this requirement is 333618/2815.

This requirement was previously procured under contract, HSCG40-10-D-50003 which concluded on December 15, 2014. Parts have been subsequently purchased by the

USCG/SFLC/Small Boat Product Line (SBPL)/Simplified Acquisition Procedures (SAP) section since then. The USCG/SFLC anticipates that a fixed price requirements contract will be awarded in accordance with FAR Part 12, Acquisition of Commercial Items, using the procedures of FAR Subpart 13.5, Simplified Procedures for Certain Commercial Items.

This brand name justification covers engine parts with an estimated value of $6,139,687.58.

The government intends to award one (1) fixed-price requirements contract to the OEM, MTU America, Inc., or an authorized distributor/dealer. The period of performance will include one (1) base year with four (4) one-year options. Funding will be obligated through individual delivery orders utilizing AFC-30 Operating funds. The period of performance will be from FY19 to FY24.

3. Description of Supplies/Services.

This requirement is for the procurement of various OEM parts to support MTU Series 60 diesel engines. The SFLC requires the use of brand name OEM parts. The name and address of the OEM for this requirement is:

MTU America, Inc.

39525 Mackenzie Drive

Novi, MI 48377

The IGE estimate for this requirement is:

Base Year $1,154,590.24 First Option Year $1,190,151.61 Second Option Year $1,225,808.28 Third Option Year $1,264,593.98 Fourth Option Year $1,303,543.47 Total $6,139,687.58

A list of the applicable parts is found under attachment: 5.1_70Z04019Q55400B00_MTU

S60 Parts List.

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

Competition.

The statutory authority permitting other than full and open completion is 41 U.S.C.

1901 implemented by FAR Subpart 13.501, Simplified Procedures for Certain

Commercial Items.

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

The reproduction manufacturing drawings, specifications, and other technical data required to manufacture these parts were not purchased when the boats were originally procured using the MTU Series 60 diesel engines. Although several email attempts were made to acquire the necessary documents from the OEM, no response was provided. To date, the

USCG does not have the OEM proprietary data to determine if other manufacture’s parts meet the OEM specifications and requirements to ensure form, fit and function of existing government equipment. The MTU Series 60 diesel engines are critical to the operation of the boats and these parts are used by the USCG for repair/maintenance/stock.

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

Potential Sources as is Practicable.

Pursuant to FAR Subpart 5.2, in an effort to solicit as many potential sources as practical, a sources sought notice was posted on FedBizOpps (FBO) on 1 October 2018 ending on

15 October 2018, advising industry that it was the government’s belief that only the

OEM, MTU America Inc., possessed the necessary proprietary data to successfully manufacture these parts. The notice provided other possible sources ten (10) calendar days to respond and provide their capabilities to provide these parts. Four responses were received in 2018. All vendors were verified that they were authorized OEM distributors.

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 IGE and price competition among authorized distributors.

8. Description of Market Research.

Market research has been performed as prescribed in FAR Part 10. The contracting specialist posted a sources sought notice on Federal Business Opportunities (FBO) which was posted on 1 October 2018 and closed on 15 October 2018. That sources sought notice resulted with emails from four interested parties; two small businesses and two large businesses under NAICS code 333618. Due to the fact that the OEM is a large business entity with a network of distributer/dealers licenses, all interested parties are under the

OEM’s distributor/dealer network and will be treated equal under the non-manufacturing rule. All interested parties that responded in via email are known businesses that are currently providing products/services to the USCG/SFLC/Small Boat Product Line

(SBPL) on existing contracts. All four known interested parties have satisfactory or above ratings in PPIRs/CPARs and it is assumed from past performance to perform with little to no risk to the government. With a combination of past performance information, technical information, and commercially available information, the market research supports the

MTU Series 60 engine parts can only be manufactured by the OEM and distributed by authorized distributers/dealers.

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

None

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

Acquisition.

A sources sought notice 70Z04019Q55400B00 posted on FBO, 1 October 2018 and closed on 15 October 2018 requesting parties to express their interest in writing to the contract specialist. The following companies responded:

Clarke Power Services

751 US 41 South

Henderson, KY 42420

DUNS# 188528801

POC: Craig Hahn

Phone: 270.831.8642

Western Branch Diesel, Inc.

3504 Shipwright Street

Portsmouth, VA 23703-2428

DUNS# 003177086

POC: Mark Butler

Phone: 757.673.7189

Pacific Power Group

805 Broadway St Ste 700

Yancouver, WA 98660

DUNS# 059403154

POC: Dan Miller

Phone: 253.520.5173

WWWilliams, Incorporated.

1395 Triplet Blvd

Akron, OH 44306

DUNS# 018969485

POC: Ron Taylor

Phone: 313.584.6150

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.

Although other engine system parts are commercially available, the use of parts that are not manufactured in accordance with original configuration, OEM specifications, materials, tolerances, etc., could cause equipment failure rendering these boats unable to complete critical mission requirements and may compromise the safety of the crew. For these reasons, other engines, engine parts are not deemed interchangeable which restricts competition to the OEM and their distribution network. Moreover, the USCG intends to replace the MTU Series 60 engines used on the 45’ RB-M under the Service Life Extension

Program (SLEP) which is currently in the acquisition planning stage and should be compete on or around 2024; this may/may not open up more competition. Until an award is made under SLEP, the USCG “MUST” continue to procure these OEM engines parts to maintain the MTU Series 60 engines that are currently use. For the near future, barriers to non-OEM competition will remain in place as long as the OEM maintains its proprietary data rights.