JOTFOC_redacted.pdf

Sole Source .Justification 41 u.s.c. 1901

Per FAR 13.50 I (a) Sole source (including brand name) acqui sitions

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Pursuant lo the requirements of the 41 U.S.C. 1901 as implemented by FAR Part 13.5.

Simpl(fied ProceduresjiJr Certain Commercial Items. this justification fo r the use of the statutory authority is supported by the following facts and rationale required under F /\R 6.303-1

1. Agency and Contracting Activity: The Department of Homeland Security. United States Coast Guard (USCG), Surface Forces Logistics Center (SFLC), Long Range Enforcement Product Line (LRE PL).

2. Nature/Description of the Action: SFLC LRE PL proposes to enter into a contract on a sole source basis with MTU /\merica. Inc. (MTU), 39525 Mackenzie Drive, Novi . Ml 48377-1602. to purchase services and materials required to conduct the required Main Propulsion Diesel Engine (MPDE) preventative maintenance and Diesel Engine Inspection on the USCGC BERTHOLF. The total estimated value of this acquisition is . A firm-fixed price commercial solicitation will be issued using the procedures set forth in FAR Parts 12 Acquisition of Commercial Items, and FAR Subpart 13.5 Simpl(fied Proceduresfor Cer1ain Commercial Items. The period of performance for this contract is 26 March 2018 thru 25 May 20 18. Operating & Equipment funds fo r Fiscal year 20 18 wi ll be utilized for thi s requirement.

3. Description of Supplies/Services: This contract will address the critical need on board the USCGC BERTHOLF to complete Maintenance and Diesel Engine Inspection and preventative maintenance (see table below).

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Period of Performance: 26 March 20 18 thru 25 May 20 18. A breakdown of the government est imate follows:

Item Description Tota l

Main Propulsion Diesel Engine. Diesel Engine Inspection. Perfom1

Main Propulsion Diesel Engine, Engine Coolant Pumps. Renew

Main Prooulsion Diesel Engine. Raw Waler Pump. Renew

Main Propulsion Diesel Engine. Cylinder Head. Renew

Coffordam. I nsiall

Main Prooulsion Diesel Engine. Engine Coolant Pumps. Mechanical Seal. Replace

Propulsion Optimization TCTO SI

Total $4

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4. Identification of Statutory Authority: The statutory authority permitting this sole source action is 41 U.S.C 1901 for the use of the Simplified Procedures for Certain Commercial Items. as implemented by FAR 13.5.

5. Demonstration that the Nature of the Acquisition Requires Use of the Authority Cited: MTU is the only source for proprietary information. because the company is the original equipment manufacturer (OEM) and integrator (01) of the BERTHOLF·s diesel engine system. MTU is both the OEM of the main engines and the 01 of the engines connections to the support generators. and they are the integrator for the connection of both Main Propulsion Diesel engines to the controls for the controllable pitch propellers. At the time the MTU 20V. 20-eylinder 9,730 horse power engines were purchased for all the WSML' s from MTU America, the Coast Guard ' s Surface Force Logistic Center did not acq uire the related drawings and data supporting the engine and its design that integrated them into the propuls ion system. The engine parts have very ti ght tolerances and the correct assembly procedures are critical to the performance of the engines. There are no other firms that possess the manufacturer drawings. specifications, and other technical data that include the updates and technical bulletins which are pertinent to the maintenance of the MPDEs. In an effort to maximize competition. on September 29. 20 17. the USCG asked a representative from MTU whether they would be willing to release proprietary data. MTU responded by indicating that they and their parent companies were unwilling to release any manufacturing drawings, specifications. or other technical data related to the maintenance of the MPDEs.

This proprietary data would be required in order to open competition for these services to any other vendor, because attempting to perform maintenance and inspection services without access to this technical data which includes performance tolerances/characteristics/parameters would create a significantly increased risk of engine failure.

If a third party vendor were to perfom1 the repairs without access to the OEM proprietary data, chances of an engine failure in open waters is significantly increased. If the MPDEs were to fa il while on patrol in open water and propulsion systems were to fail. not only wou ld the congressionally mandated operational schedule be placed at risk due to delays associated with the repair. but the crew could be placed in harm's way awaiting that repair.

If the Main Propuls ion Diesel engines on BERTHOLF were to fail. the fo llowing mission capabilities would be placed at risk.

Search and Rescue: T hi s is the most common and visible mission of the United States Coast Guard. Since these missions deal with life and death, the MPDE must meet an exceptionally high standard for reliability and performance. Completing all the planned maintenance is the best way to assure this .

Counter Narcotics Operations: When intelligence is received or a target is located, the MPDEs will be ramped up, so the cutter can respond as fast as possible. Not maintaining the MPDEs. or limiting its performance due to symptoms (ex: overheating, unusual noise.

high vibration). will significantly degrade the cutter·s ability to respond.

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Fisheries Enforcement: These are endurance operations that requ ire the MPDEs to ei ther be sprinting to the next fi shing fl eet, or be in standby, while the cutter station-keeps alongside a fishi ng vesse l with a board ing team onboard. Fisheries Enforcement patro ls will require the MPDEs to be constantly engaged with pred ictable performance.

Defense Opera tions: Defense Operations are extremely high tempo with an exceptionally s li m margi n for error. While in a precarious s ituation, halting the MPDEs fo r even short periods to correct minor casualties is unacceptable. They must be performing at their peak.

Delays due to engine fa ilures could result in schedule impacts that could s igni ficantly reduce the ability of BERTHOLF to support US interests around the g lobe.

Most importantly. the reason fo r the sole source status of MTU on the BERTHOLF fo r mai ntenance is they hold the technical expertise. manufacturing drawings, specifications.

and all other technical data as it relates to the BERTHOLF"s engines.

6. Description of efforts made to ensure that offers arc solicited from a s many potentia l sources as is practicable: In an effort to promote competition a Sources Sought was posted on Fedbizopps (# HSCG85-18-S-P45N92) on September I. 20 17.

Additionally. this procurement is posted as OHS-Acquisition Planning Forecast System (APFS) No. f2017038256 at http://apfs.dhs.gov

In accordance with FAR 5.203(a) the proposed contract action (pre so licitation notice) was published in FBO. stating that the Government intends to solicit and negotiate with only one source. Th is Sole Source Justification wi ll be posted on FedBizOpps in accordance with FAR 6.305.

7. Determination by the C ontracting Officer that the Anticipa ted cost to the Government will be Fair and Reasonable: The Contracting Officer anticipates that the price will be fair and reasonable price based on a price analysis comparisons with the Independent Government Estimate and extensive acquisition history with MTU America.

Additionally. in accordance with DI-IS policy, the offeror may be required to submit Data Other than Certified Cost or pricing Data (f AR 15.403-3) to support price negotiations.

8 . Description of Market Research: Market research was conducted from August 3, 2017 to September 30. 2017. Market research incl uded a review of acquis ition hi story, commercial and government databases (f ed Log, Inventory Locator Service research tools.

internet research and FedBizOpps). A Sources Sought Notice was posted on Fedbizopps on September 1. 2017 with a response due date by September 25, 20 17. In addition. distributors were contacted v ia telephone to search for any authorized distributors/service providers for MTU engine systems uti lized by the USCG National Security Cutters. Market research confi rmed that MTU /\mcrica does not have any authorized distributors or certified service centers for this model engi ne.

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9. Any Other Facts Supporting the Sole Source Action: The Coast Guard possesses the MTU special tooling on the cutter; this is for the convenience for the MTU technician. The spec ial tools were initi ally purchased for storage on the vessel. By doing this the CG saves the expense of MT U's shipment of these tools to jobsites for each project. Neither the Coast Guard nor any marine engine repair company has the expertise to use these tools. The Coast Guard is completely dependent on MTU.

During market research the Coast Guard learned that after market (non-01) vendors do not have access to the MTU tech data which is the proprietary information. Additionally, updates/upgrades to this data are incorporated periodically to ensure continued reliabi lity and safe operation o f the main engine propulsion system. These updates arc not available commercia lly, e.g. there are no dealers of MTU parts and technical data.

I 0. A listing of sources, if any, that expressed, in writing, an interest in the acquisition.

As a result of the sources sought notice # HSCG85-1 8-S-P45N92 posted on FBO on September I, 2017, an email from MTU America was received on September 29, 2017, stating their qualifications and they responded that they would not release any manufacturing drawings, speci fications or related technical data necessary for accomplishing the maintenance on the MPDEs. There were two other companies who responded to the sources sought notice posted on FBO. They were Integrated Marine Services, Inc. (IMS) of Chula Vista CA and STILTEN of Houston TX. IMS was contacted by phone on 11 /3/2017, and asked if they had contacted MTU to obtain the engines' drawings and technical data. IMS's response was that they do not have the MTU proprietary information to independently perform the required engine preventative maintenance. IMS also stated that they wou ld need to subcontract the repair to MTU.

STI L TEN was contacted by cmai 1 on 11 /3/20 17 because their phone number could not be found. This email asked STILTEN if they had contacted MTU about obtaining the proprietary technical data. No response was received from STILTEN. Based on responses received and the proprietary nature of the required technical data, the Contracting Officer has determined that these two companies wi ll be incapable of performing the specifications of this contract.

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: Due to the fact that MTU America continues to retain proprietary ownership of the technical data necessary for performing the required services on the BERTHOLF's diesel engines and has decl ined to release the data to the Coast Guard it is anticipated that a ll future maintenance and inspections will be through them. However, Coast Guard Contracting will continue to advertise future requirements through FBO and wi ll continue to seek access to the technical data sufficient to enable competition.

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12. Technical/Requirements Personnel Certification. I certi fy this requirement meets the Government ' s minimum need and that the supporting data, which forms a basis for this j us ti fication. is complete and accurate.

Date: 2018.01.10 12:11:33 ·08'00'

Date

13. Contracting Officer 's Certification. I certify that the data supporting the recommended sole source action is accurate and complete to the best of my knowledge and belief.

Ol911•tty 119n<d by

Level Above Review and Approval:

14. Lega l Review:

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