Redacted_JA_70Z08019Q17001B00.docx

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: 70Z08019Q17001B00

Pursuant to the requirement of the authority of 41 U.S.C. 4901, 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), Patrol Boat Product Line (PBPL) and Contracting and Procurement Division (CPD), located at 2401 Hawkins Point Road, Baltimore, Maryland proposes to enter into a requirements contract on a basis other than full and open competition.

2. Nature and/or Description of the action being approved:

(a) The SFLC intends to procure, on a sole source basis, the overhaul of Performance Diesel Engine Generators model number D0824LF01/UCM224F13/NSN: 2815-01-F98-0167 used on the 87’ WPB patrol boat fleet. The NAICS code is 333618 and the PSC Code is J028. The Coast Guard has seventy-three (73) 87’ WPB patrol boats. Each vessel has two (2) Diesel Generators. The generator system installed on the 87’ WPBs is a highly complex commercial system, comprised of hundreds of interrelated parts, designed and manufactured by Performance Diesel, Inc. (PDI) using manufacturer proprietary data are required to perform the diesel generator overhauls to ensure configuration management in the Coast Guard cutter fleet to eliminate the time and costs associated with the acquisition of new installation drawings, technical manuals, and provisioning technical data for an alternative system.

The need for an overhaul contract is based on the age of these engines and the number of operating hours accumulated through their life span. The Coast Guard intends to overhaul approximately 4 -18 diesel generators per year, for the base year of 2019, plus the four (4) one (1) year option periods. USCG SFLC intends to award a requirements type contract with firm fixed price delivery orders utilizing the procedures established under FAR Part 13.5 Simplified Procedures for Certain Commercial Items.

This is a sole source requirement for the use of Original Equipment Manufacturer (OEM) using OEM proprietary data. This requirement reduces competition, but guarantees the generators will be properly overhauled and the product will be supported by the manufacturer’s warranty.

(b) Contractor: Performance Diesel Inc., 12130 Galveston Road Bldg. 2, Webster, TX 77598

(c) Type of action: Firm Fixed-Price Contract

(d) Type of funding: Annual Operating Expense funds.

(e) Year of funding: beginning with FY 2019, then the particular fiscal year for the order.

3. Description of Supplies/Services:

This action involves a mission requirement associated with maintaining USCG Patrol Boat availability in support of various Homeland Security missions. 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 USCG will supply item NSN: 2815-01-F98-0167 to the contractor for inspection and disassembly of engine. The contractor will complete a condition report, perform overhauls, test, preserve, paint, package, and return to the USCG.

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 Subpart 13.501, 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 (SSDG’s) listed in this requirement are commercial items, comprised of multiple interrelated parts, designed and manufactured by Performance Diesel, Inc. The original procurement of the SSDG’s was for a commercial item, not based on Government technical data, and the Government did not procure the technical data associated with the SSDG’s. Other than basic part/component descriptions (part numbers, etc.) provided by Performance Diesel, the Government does not possess descriptions adequate for remanufacturing the diesel generators.

Overhauls not in accordance with OEM specifications, materials, tolerances, etc. could cause equipment failure rendering the vessel unable to complete mission requirements. In order for the cutters to meet their mission requirements, the Coast Guard must maintain properly overhauled generators supported by the manufacturer’s warranty. The actual equivalency of any non-OEM efforts are not known, and are not easily determined.

The use of OEM Diesel Generator processes and proprietary information will ensure components and processes are sufficient to enable physical and functional interchangeability, as well as meeting source, size, configuration, and performance requirements. All manufacturing drawings, specifications and other technical data pertaining to the Diesel Generators were not purchased when these systems were fitted during the procurement of the 87’ Patrol Boats. Further, the scope of manufacturing, special tools and equipment required to overhaul the Diesel Generators are unknown. The technical data that is needed is proprietary. Without the adequate data, the Coast Guard is not capable of evaluating units overhauled by other than the OEM.

6. Description of Efforts Made to Ensure that Offers are Solicited from as Many Potential Sources as is Practicable:

This requirement was published in the Acquisition Planning Forecast System (hereafter APFS) on October 25, 2018. The APFS number is F2016031877.

Pursuant to FAR Subpart 5.2, 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 May 24, 2018 through June 7, 2018.

7. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable:

The Contracting Officer will utilize techniques outlined in FAR 13.106-3(2) in determining that prices are fair and reasonable based on historical pricing of previous awards, comparison of pricing in the Naval and Electronics Supply Support System (NESSS) for similar SAP purchases, comparison with the IGE and if necessary, will request data other than certified cost or pricing data in accordance with FAR 15.403-3, to support negotiations.

8. Description of Market Research:

Extensive market research as prescribed in FAR Part 10 was conducted by the Contracting Officer and the Contracting Officer’s Representative (COR) from March 2016 through June 2018 in an effort to identify companies that can provide the requested overhaul of Diesel Generators. Market research was conducted by searching for similar companies on the internet, available companies through Federal Supply Schedules, and companies that have been previously contracted with for similar overhaul services. PDI was determined to be the sole provider to perform overhauls on NSN: 2815-01-F98-0167.

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

The overhaul of 87’ WPB diesel generators must conform to design, materials and operational requirements. As stated above, manufacturing drawings, specifications and other technical data are proprietary to PDI. PDI has refused to sell this proprietary data to the SFLC. Any attempt to overhaul these diesel generators without the proper specifications, drawings and technical data could result in damage to the vessel’s electrical power distribution systems, and present a serious hazard to equipment and personnel were the system to fail.

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

A sources sought notice was issued in FBO on May 24, 2018, requesting that parties express their interest in supplying the required diesel generator overhaul services.

No vendors responded to the FBO notice but the following vendor responded to a direct email inquiry:

· Performance Diesel Inc. 12130 Galveston Rd Bldg. 2, Webster, TX 77598; (281) 464-2345, lstewart@performancediesel.com; www.performancediesel.com

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