Attachment_B_JA_Redacted.pdf

70Z04018Q31832B00 12/11/2017 Page 1 of 5

SOLE SOURCE JUSTIFICATION

UNDER 41 U.S.C. 1901 Simplified Acquisition Procedures

Solicitation No. 70Z04018Q31832B00

Pursuant to the requirement of Federal Acquisition Regulation (FAR) Part 13.5, Simplified Procedures for Certain Commercial Items used in accordance with 41 U.S.C. 1901, the justification for the use of the statutory authority is supported by the following facts and rationale required under FAR 6.303-2.

1. Agency and Contracting Activity.

The Department of Homeland Security (DHS), United States Coast Guard (USCG), Surface Forces Logistics Center (SFLC), located at 2401 Hawkins Point Road, Baltimore, MD, proposes to enter into a one-time repair contract, on a sole source basis.

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

The USCG has a requirement, on a sole source basis, to repair Rolls-Royce Marine North America, Inc.

hubs directly supporting the operation and maintenance of the USCG 418’ Maritime Security Cutter (WMSL) Legend Class of USCG Cutters. The current USCG fleet consists of six (6) 418’ WMSL cutters. Two (2) cutters are being built at this time, with a third approved for production for a total of nine

(9) 418’ WMSL cutters. The period of performance will be for 120 days at an estimated value of

. This will be a commercial firm fixed price contract.

This contract will be using FY18 AFC 45 Operations and Maintenance (O&M) funds. The proposed contract will be awarded to the Original Equipment Manufacturer (OEM) Rolls-Royce Marine North America, Inc., 110 Norfolk Street, Walpole, MA 02081, using the procedures established in using the procedures set forth in FAR part 12 and 13.5.

The OEM and proposed contractor’s Dun & Bradstreet (D&B) legal business name is Rolls-Royce Marine North America, Inc. For the continuity of the document we shall only refer to the proposed contract as Rolls-Royce Marine North America.

3. Description of Supplies/Services.

The requirement is for repair of two (2) Rolls-Royce Marine North America hubs for the 418’ WMSL class cutters. The USCG requires the use of OEM parts to match the unique design of existing cutter configuration on the 418’ WMSL cutters. The hubs are considered commercial items. On 01 Mar 2017 the hubs were shipped to Rolls-Royce Marine North America under an existing structural enhancement dry dock availability (SEDA) contract HSCG23-16-C-ADB015SEDA. Due to the expiration of funds for this SEDA contract SEDA only funded the open and inspect cost. LREPL has taken the responsibility of funding the repairs. The total Independent Government Estimate (IGE) for this requirement is

This estimate is based on purchasing various hub propulsion parts and repairs by Rolls- Royce Marine North America. This contract will be using FY18 AFC 45 Operations and Maintenance (O&M) funds.

The A condition hubs will be stored at the SFLC warehouse and will be ready for issue to the fleet when required. We anticipate the need to be for use on the 2018 CGC WAESCHE Dry Dock repairs.

70Z04018Q31832B00 12/11/2017 Page 2 of 5

4. Identification of the 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 Simplified Acquisition Procedures as implemented by FAR Subpart 13.501.

5. Demonstration that the nature of the acquisition requires use of the authority cited.

This acquisition must be made using OEM Hub parts. The statutory authority 41 USC 1901 is applicable because the OEM is the only known source that possesses the required capabilities, drawings, specifications, engineering control procedures and proprietary methods to ensure the latest design configuration, manufacturing and quality control required to produce parts to the latest engineering specifications and requirements. The repair process will include parts, testing, & materials that are exclusively produced by Rolls Royce. The technical data required to successfully repair the hubs is proprietary to by Rolls-Royce Marine North America and they do not utilize a distributor or repair network. Based on this information the CG reasonably assumes no other contractor or repair facility would be able to successfully meet the OEM standards and specifications required for this repair. It’s far too risky to allow anyone other than the OEM to attempt this repair who has not yet been verified as a competent and capable repair facility of these specific Rolls Royce OEM Hubs due to the sensitive nature of the missions of the Coast Guard that the cutter performs. Failure to successfully repair these hubs and then installing them on a Coast Guard Cutter and having them fail due to not having a comprehensive technical understanding of the repair requirements could prove catastrophic to mission success.

Limitation to the use of OEM parts is as follows:

The primary propulsion systems are critical to the safe and efficient operation of the 418’ WMSL cutters.

Using other than the OEM parts to maintain or overhaul a failed component could result in a failure of the main propulsion system. Since the drawings, manufacturing processes, and other technical data is proprietary information to the OEM, it is not possible for the USCG to evaluate and determine whether any non-OEM assemblies are equal to the shafts, hubs, blades and associated parts currently installed on the 418’ WMSL cutters. More than a casual visual inspection is required. The composition of the material, heat treatment (if required), determining whether the assemblies are forged or cast, as well as all dimensions (with tolerances), and operating parameters would be the minimum information needed before an evaluation of these propulsion components could be attempted. Even if this information was available, the USCG does not have the organic capabilities to evaluate and determine if all of the assemblies meet the OEM standards.

Contracting an outside source to perform these evaluations would be cost prohibitive due to the sheer number and complexity of the various parts and assemblies that are included with these propulsion parts.

Allowing non-OEM vendors to qualify their own assemblies would be extremely risky. Without the aforementioned data and manufacturing specifications from the OEM, proving that the non OEM assemblies are equal to Rolls-Royce Marine North America components provided with the purchase of the WMSL would be impossible to determine. Additionally, the main propulsion parts that propel the cutter are critical to the maneuverability of the cutter. Using non-qualified rudder, shaft, and other propulsion assemblies listed in this requirement would be an extremely high risk to assume for the sole purpose of promoting competition. Any attempt to manufacture these parts without the proper specifications, drawings and technical data and electing to use such non-OEM parts could result in serious bodily harm and systemic failure potentially disabling the entire propulsions system in the event that these parts were to fail. A malfunction or failure of a main propulsion component would cause loss of maneuverability and the mission of the cutters to be severely impacted. These cutters operate

70Z04018Q31832B00 12/11/2017 Page 3 of 5 independently, in remote areas of the world, on missions of homeland security, Alien Immigration Migration Operations (AIMO), drug interdiction, fisheries patrol including saving lives through our Search and Rescue operations. Failure to complete any one of these crucial missions could compromise the safety and economic welfare of the United States and its territories by allowing illegal immigrants or dangerous criminals/terrorists to enter, allow illegal drugs to be imported, impede the safety of commercial shipping lanes, and deplete sensitive marine species by overfishing or damaging critical coral beds. This acquisition must be made using OEM Hub parts. The statutory authority 41 USC 1901 is applicable because the OEM is the only known source that possesses the required capabilities, drawings, specifications, engineering control procedures and proprietary methods to ensure the latest design configuration, manufacturing and quality control required to produce parts to the latest engineering specifications and requirements.

The USCG does not own the rights to Rolls-Royce Marine North America’s technical data and is not resourced with the engineering staff or funds required to reverse engineer the thousands of parts required to support the hub overhaul in order to determine their dimensions, tolerances, or chemical composition.

Even if the USCG did have the personnel and funds, there is no guarantee that reverse-engineered parts would work successfully.

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 practicable, a Sources Sought Notice was posted on the Federal Business Opportunities Website on September 26, 2017. This notice informed the industry of the USCG’s intent to have these hubs repaired by the OEM, Rolls-Royce Marine North America. Other organizations that believed they had the expertise and required capabilities to provide equivalent repairs and OEM parts were invited to submit information discussing such capabilities within 30 days calendar days after the posting date. The Acquisition Planning System Forecast record F2017036837 was published on 12 May 2017.

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

The Contracting Officer determines that the anticipated prices will be fair and reasonable based on comparisons with the IGE, market research, previous history and if necessary price negotiation. Price analysis will be performed to ensure a fair and reasonable price is determined in accordance with FAR 13.106-3 and other than cost or pricing data may be obtained if necessary.

8. Description of Market Research:

Extensive market research was conducted between July 2017 and October 2017. Internet searches, direct contact with industry, sources sought posted to FBO, as well as reviews of previous government contracts were researched to look for companies that were capable of providing sufficient overhaul capabilities.

Internet/Industry Contact – USCG has met with Rolls-Royce Marine North America on several occasions. The repair process will include parts, testing, & materials that are exclusively produced by Rolls Royce. The technical data required to successfully repair the hubs is proprietary to by Rolls-Royce Marine North America and they do not utilize a distributor or repair network. Based on this information the CG reasonably assumes no other contractor or repair facility would be able to successfully meet the OEM standards and specifications required for this repair. Access to parts alone should not be viewed as a

70Z04018Q31832B00 12/11/2017 Page 4 of 5 standard of qualification to successfully repair. Technical competence would have to be confirmed in which the Coast Guard does not have the resources to perform such required verification of the level of technical competency required to perform these repairs; namely the OEM standards and specifications that is not made available to the Coast Guard or the public. Currently both of the hubs requiring repair are at the Rolls Royce repair facility awaiting approval to repair. Rolls-Royce Marine North America has established and will continue to maintain facilities to store spare parts and provide technical support. The Internet research revealed that Rolls-Royce Marine North America is the only source identified.

Fed Log – Fed Log research revealed Rolls-Royce Marine North America as the manufacturer for all National Stock Numbers associated with this justification.

Acquisition History –Previous acquisition history research revealed on 01 Mar 2017 the hubs were shipped to Rolls-Royce Marine North America under an existing SEDA contract HSCG23-16-C- ADB015SEDA. The contract covered the open, inspect, and report. There have been no previous repair contracts for these hubs.

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

The WMSL hub parts and repairs performed on the hubs must conform to design, materials and operational requirements. As stated above, manufacturing drawings specifications and other technical data are proprietary to Rolls- Royce Marine North America. Rolls-Royce Marine North America refused to sell this proprietary data.

The Government does not possess the technical data and/or drawings pertaining to the manufacturing process for the required parts to successfully repair the hubs to the OEM specific tolerances, specifications and requirements. The information required to accomplish successful repair of these hubs is proprietary to Rolls- Royce Marine North America. Therefore, the Government does not have any data to compare other manufacturer’s repair to ensure the same fit, form, and function nor does the Government possess the independent expertise to evaluate other manufacturer’s parts. These hubs are designed, engineered, and built to close tolerances and have undergone numerous shop tests and rigorous operational testing before being certified and approved by the OEM for use by the end user. After market (non-OEM) parts manufacturers do not have access to this proprietary information.

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

A synopsis was issued in FedBizOpps on September 26, 2017 requesting that parties express their interest in writing to the contracting officer. This notice informed the industry of the USCG’s intent to have these hubs repaired by the OEM, Rolls-Royce Marine North America. Other organizations that believed they had the expertise and required capabilities to provide equivalent repairs and OEM parts were invited to submit information discussing such capabilities within 30 days calendar days after the posting date. Rolls- Royce Marine North America is the only source that expressed interest in this requirement.

11. A Statement of Actions, if Any, the Agency May Take to Remove or Overcome Any Barriers to Competition Before Any Subsequent Acquisition for Supplies or Services Required.

Rolls-Royce Marine North America has declined to sell their technical data rights upon repeated requests.

The USCG has made several attempts to acquire them with no success, including an attempt for this requirement on October 17th, 2017. Rolls-Royce Marine North America declined our request. The USCG will continue to engage Rolls-Royce Marine North America for release of proprietary data prior to any subsequent requirements.

70Z04018Q31832B00 12/11/2017 Page 5 of 5

12. Technical/Requirements Personnel Certification:

I certify that this requirement meets the Government’s minimum need and that the supporting data, which forms a basis for the justification, is accurate and complete.

Contracting Officer’s Representative Date

13. Contracting Officer’s Certification:

I certify that the data supporting the recommended use of other than full and open competition is accurate and complete to the best of my knowledge and belief.

Contracting Officer Date

14. Legal Review and Concurrence:

I have reviewed this justification and deemed it legally sufficient.

USCG, Procurement Law Attorney Date

15. APPROVAL:

Contracting Officer/ Section Chief Date