J&A_HEALY_MDE_Tech_Rep_Redacted_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

UNDER 10 U.S.C. 2304(c) (1) & FAR 6.302-1

Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

Solicitation 70Z08519QP4540300

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by Federal Acquisition Regulation (FAR) Subpart 6.3 and in accordance with the requirements of FAR 6.303-1, the justification for the use of the statutory authority under FAR Subpart 6.3 is justified by the following facts and rationale required under FAR 6.303-2 as follows:

(1) Agency and Contracting Activity:

The Department of Homeland Security (DHS), United States Coast Guard (USCG), Surface Forces Logistics Center (SFLC), Contracting & Procurement Division, Contracting & Procurement Branch 2 in support of the Long Range Enforcement Product Line (CPD2 LREPL) proposes to enter into a contract on a sole source basis.

(2) Nature and/or Description of the Action Being Approved:

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 Simplified Procedures for Certain Commercial Items. The Government intends to award a contract on a sole-source basis to Wartsila Defense, Inc. (Wartsila) for technical representative services in support of the USCGC HEALY Main Diesel Engine (MDE) Overhaul under Request for Quote (RFQ) 70Z08519QP4540300. The total estimated value of this acquisition is with a period of performance of March 15, 2019 to May 15, 2019. Operating and Support funds for Fiscal year 2019 will be utilized for this requirement.

The proposed contract will be awarded to the Original Equipment Manufacturer (OEM) of USCGC HEALY’s MDE, Wartsila Defense Inc., 3617 Koppens Way, Chesapeake, VA 23423.

(3) Description of Supplies/Services:

The USCG requires the use of a Wartsila Defense Inc. authorized service representative(s) to accomplish the attached Scope of Work titled “MDE Technical Representative and Shop Overhaul Services”

(4) Identification of Statutory Authority Permitting Other Than Full and Open Competition:

The statutory authority permitting other than full and open competition is 10 USC 2304(c) (1) implemented by FAR Subpart 6.302-1, “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

(5) Demonstration that the nature of the acquisition requires use of the authority cited:

Due to the nature of the equipment, Wartsila Defense Inc. is the only known source to have the access to the proprietary data needed to overhaul the engines and certify these systems for operation. Wartsila Defense Inc. is the Original Equipment Manufacturer (OEM) of the MDE installed on CGC HEALY and possesses the proprietary design data, drawings, and knowledge to complete the work. The Coast

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Guard does not possess the necessary specific technical knowledge and specifications to provide oversight or enable another vendor to provide oversight. Wartsila Defense is the only source for a certified repair shop and qualified tech representatives.

If a third party vendor who does not have access to proprietary data and certified shop services were to provide engine overhaul oversight, chances of an engine failure would be considerably increased, posing an unacceptable and entirely avoidable risk to the cutter, crew, and mission. An engine casualty would threaten completion of several National Science Foundation funded missions and possibly strand the HEALY in the Arctic.

(6) Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable:

The procurement is posted on the DHS Advanced Planning Forecast System (APFS) No.

F2018044501. Source Sought was issued on 1 Feb 2019. No responses were received, except from Wartsila Defense Inc.

In accordance with FAR 5.203(a)(2) and FAR 12.603 the proposed contract action (pre solicitation notice) was published in FBO, stating that the Government intends to solicit and negotiate with only one source. This Sole Source Justification will be posted on FedBizOpps in accordance with FAR 6.305.

(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 a price analysis utilizing a combination of techniques to include market research, comparison to the Independent Government Estimate and comparison to historical prices paid. Previous contract 70Z085-18-P-P4533700, awarded May 1, 2018 for will be used for comparison purposes. Additionally, in accordance with DHS policy, the offeror may be required to submit Data Other than Certified Cost or pricing Data (FAR 15.403-3) to support price negotiations.

(8) Description of market research:

Through historical data and market research conducted from December 2017 to February 2019 it was determined that Wartsila Defense Inc. is the only source capable of providing technical oversight for the USCGC HEALY MDE Overhaul. Market research included a review of acquisition history, commercial and government databases (Fed Log, Inventory Locator Service research tools, internet research and FedBizOpps), interviewing knowledgeable individuals in the industry, and direct interviews with the OEM. Due to the proprietary nature of the systems involved and the technical risk associated with repairs, only the OEM certified technical representatives will be capable of overseeing the service required and only OEM parts may be used for these critical work items.

(9) Any Other Facts Supporting the Sole Source Action:

The Coast Guard does not possess the technical data, knowledge and/or drawings pertaining to the manufacturing or the maintenance of the Wartsila Defense MDEs. These engines are designed, engineered, and built to close tolerances and have undergone numerous shop tests and rigorous

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operational testing before being certified and approved by the OEM for use by the end user. Wartsila Defense and their distributors are the only known sources possessing the original drawings, specifications, engineering control procedures and proprietary methods to ensure the design configuration, manufacturing and quality control required to ensure these engines operate in accordance with engineering specifications and requirements.

(10) A listing of sources, if any, that expressed, in writing, an interest in the acquisition:

No other sources have expressed interest in performing these services on the USCGC HEALY’s MDEs.

(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:

The USCG has not been able to procure data rights from the OEM and has no plans at this time to pursue a configuration change that would allow purchasing of data rights. In the future, if Wartsila Defense provides a price for the proprietary data rights, the Coast Guard will weigh the benefits of purchasing the rights at that time.

As part of the source sought and gathering market research information, USCG emailed Wartsila to inquire about purchasing the MDE proprietary design data. Wartsila’s regional account manager responded via email that the engine design data is not for sale to the best of his knowledge.

The signature page has been redacted in its entirety.