Northern_Lights_Overhaul_JA_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

RFQ Number: 70Z08019Q15002B00

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 justification:

1. AGENCY AND CONTRACTING ACTIVITY:

The Department of Homeland Security, United States Coast Guard (USCG), Surface Forces Logistics Center (SFLC), located at 2401 Hawkins Point Road, Baltimore, Maryland proposes to enter into a requirements contract on a basis other than through full and open competition.

2. NATURE/DESCRIPTION OF THE ACTION:

The Coast Guard has a requirement on a brand name basis, to remanufacture

Northern Lights Marine Diesel Generators model numbers M1066A1.11CGP and

M1066A1.11CGS used on the 110’ WPB Mission Extension Project (MEP) patrol boat fleet. The NAICS code is 333618 and the PSC Code is J028. The Coast

Guard has thirteen (13) 110’ WPB Patrol Boats. Each vessel has two (2) Diesel

Generators. The generator system installed on the 110’ WPBs is a highly complex commercial system, comprised of hundreds of interrelated parts, designed and manufactured by Northern Lights, Inc. Northern Lights certified technician’s uses proprietary data to perform the diesel generator remanufacturing to ensure proper configuration.

The OEM is Northern Lights, Inc. 4420 14th Ave N, Seattle, WA 98107. Northern

Lights is the only vendor who retain the proprietary information and technical data require to remanufacture the diesel generators.

The Coast Guard will need approximately 2-6 diesel generators remanufactured per year based on the age of the generators and their life expectancy. The Coast

Guard intends to award a requirements type contract with firm-fixed-priced delivery orders to the technician with the capabilities to remanufacture the Coast

Guard generators based on the OEM proprietary data.

3. DESCRIPTION OF SUPPLIES/SERVICES:

The requirement is for the OEM certified technician to remanufacture diesel generator in support of the USCG 110’ WPB Patrol Boats. The Ship’s Service

Diesel Generators are used to provide electrical power to the ship’s power distribution system, providing critical electrical power for main propulsion, auxiliary, navigation, hotel, and sanitary services while enabling the vessels to meet their operational requirements.

The Base and Option Year 1 forecast six (6) units per year with fewer units in the following years. Twenty-two (22) generators are estimated to need remanufacture.

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. 1901as 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 Ship’s Service Diesel Generators are commercial items, comprised of multiple interrelated parts, designed and manufactured by Northern Lights. Other than basic part/component (part numbers, etc.) provided by Northern Lights, the

Government does not possess descriptions adequate for remanufacturing the diesel generators.

The OEM certified technicians must use OEM proprietary data to remanufacture generators in accordance with OEM specifications, materials, and tolerances.

Using another company can increase the probability of equipment failure rendering the vessel unable to complete mission requirements, reduced reliability, and reduced safety. The Coast Guard must maintain properly remanufactured generators supported by the manufacturer’s warranty. The actual equivalency of any non-OEM remanufacture efforts are not known, and are not easily determined. The risk of accepting remanufactured Diesel generators without fully vetting the vendor’s technicians and their manufacturing procedures is unacceptable and may result in excessive cost to the Government, reduced reliability, reduced safety, and may hamper the Coast Guard mission requirements.

Manufacturing drawings, specifications and other technical data sufficient for the government to solicit the remanufacture of the Diesel Generators on a full and open basis were not purchased when these systems were fitted to the prototype vessels for Time Compliant Technical Order (TCTO) number TD0000.0. Further, the scope of manufacturing, special tools and equipment required to remanufacture the Diesel Generators are unknown.

6. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS IS PRACTICAL:

This requirement was posted on the Acquisition Planning Forecast System

(APFS) on February 7, 2018. The APFS number is F2017036931.

In accordance with FAR Subpart 5.203, in an effort to solicit as many potential sources as practicable, a Sources Sought Notice was issued on the Federal

Business Opportunities Website, hereafter FBO, from February 13, 2018 through

March 05, 2018. This notice yielded eight (8) vendors expressing an interest in this project.

7. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND

REASONABLE:

The Contracting Officer will determine that the anticipated prices to be fair and reasonable based on prices analysis in accordance with FAR Subpart 15.404-1(b), utilizing a combination of price analysis techniques to include: comparison of proposed prices to historical prices paid (FAR 15.404-1 (b)(2)(ii)), current catalog prices (FAR 15.404-1(b)(22)(iv)), and an analysis of other than certified cost and pricing data (FAR 15.404-1(b)(2)(vii)).

Additionally, if determined necessary by the Contracting Officer, the offeror may be required to submit Other Than Certified Cost or Pricing Data (FAR 15.403-3) to support price negotiations.

8. DESCRIPTION OF MARKET RESEARCH:

Extensive market research, as prescribed in FAR Part 10 was conducted from July

2016 through December 2017 in an effort to identify companies that can provide the requested remanufacture of Diesel Generators. On February 13, 2018, a

Sources Sought Notice was posted to FBO seeking potential contractors capable of remanufacturing Northern Light generators. Eight (8) vendors responded to the notice. Four (4) of the vendors that responded were authorized parts dealers and

Northern Lights authorized overhaul facilities.

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

AND OPEN COMPETITION:

The remanufacture of 110’ WPB diesel generators must conform to design, materials and operational requirements. The Northern Lights Diesel Generators are the required units for TCTO# TD0000.0, the new standard configuration to be installed onboard the 110’ WPB’s. As stated above, manufacturing drawings, specifications and other technical data are proprietary to Northern Lights.

Northern Lights has declined selling their proprietary data to the Coast Guard.

Any attempt to remanufacture these diesel generators without the proper specifications, drawings and technical data could result in damage to the vessel’s electrical power distribution systems.

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

INTEREST IN THE ACQUISITION:

A sources sought notice was issued in FBO on February 13, 2018, requesting that parties express their interest in supplying the required diesel generator remanufacture services.

The following companies responded via email to the Source Sought Notice:

Company Address

Melton Industries Petticoat Bridge Rd., Columbus, NJ 08022

Performance Diesel Inc. 12130 Galveston Rd Bldg. 2, Webster, TX 77598

All Power Services, Inc. 12130 Hwy 3 Building 2 Webster, TX 77573

Bay Diesel Corporation 3736 Cook Blvd., Chesapeake, VA 23323

Dependable Marine, Inc. 3134 Main Street, San Diego, CA 92113

Bay Marine Boatworks, Inc.

310 W. Cutting Blvd., Richmond, CA 94804

Reagent World Inc. 2048 E. Francis St., Ontario, CA 91761

Southwinds Marine

Consulting

5695 Rabbit Creek Dr., Theodore, AL 36582

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:

Northern Lights owns the proprietary technical data for their generators. On 21

March 2018, Coast Guard-SFLC sent an email message to Northern Lights, Inc.

requesting Northern Lights to sell the Government data rights to their generators;

which, includes permission to distribute the data to any entity that the government does business with.

On 26 March 2018, Northern Lights, Inc. denied our request; however, the Coast

Guard will continue to engage Northern Lights for the release of proprietary data prior to any subsequent acquisition. In the future, if Northern Lights accepts the

Coast Guard request for the proprietary data rights, the Coast Guard will weigh the benefits of purchasing the data rights at that time.