A.02BrandNameMTUParts_Redacted.pdf

v4, 5 Jan 2015; previous version obsolete

BRAND NAME JUSTIFICATION

(Simplified Acquisition Procedures under FAR Part 13 Not Exceeding $700K)

1. Agency/Contracting Activity: U.S. Army Corp of Engineer, Portland District, 333 SW 1st Ave #200, Portland, OR 97204

2. Description of Action:

Nature: New Requirement Follow-on Requirement Mod to Existing Purchase Order/Contract Number

Pricing: Firm-Fixed Price Time & Materials Funds: OMA Other Funds:

Proposed Contractor:

MTU Authorized Dealer

3. Description of Services or Supplies:

The total estimated value of the proposed action is .

Background: The Dredge Yaquina is a U.S. flagged vessel owned by the federal government. The vessel is currently fully inspected under the authority of the U. S. Coast Guard. Requirements for maintaining certificates authorizing the operation of this vessel in U. S. territorial waters. The Dredge Yaquina was re-powered in 2010 with seven (7) new MTU engines. Preventative maintenance must be performed at scheduled hourly intervals to keep the engine’s operation safe and prevent damage. This maintenance requires genuine MTU parts from authorized dealers. The required maintenance is completed by both crew and service technicians.

Supplies: Provide sixteen (16) MTU 8V4000 Injectors, part # EX524075000273, forty-eight (48) MTU 12V2000 Injectors, part # E0060704101, four (4) turbochargers MTU 8V4000, and six (6) Series 60 Injectors. All parts shall be genuine MTU parts from an authorized dealer.

Sixteen (16) MTU 8V4000 Injectors, Part # EX52407500049 Twenty-four (48) MTU 12V2000 Injectors, Part # E0060704101 Four (4) MTU 8V4000 Turbochargers, S/N: 524101142 Six (6) Series 60 Injectors, S/N: 06R1009461 Twenty-eight (28) MTU 12V2000 Complete Cylinder Head, Part # E5360101320/87

4. Authority:

Action using simplified acquisition procedures (select one):

FAR 13.106-1(b)(1): For purchases not exceeding the simplified acquisition threshold (SAT), contracting officers may solicit from one source if the contracting officer determines that the circumstances of the contract action deem only one source reasonably available (e.g. urgency, exclusive licensing agreements, brand name, or industrial mobilization)

FAR 13.501(a)(1): For actions for commercial supplies or services greater than the SAT but not exceeding $7M, the requirements of FAR 13.501(a) apply to sole-source acquisitions conducted pursuant to Subpart 13.5 (Reference: FAR 13.106-1(b)(2)). Subpart 13.5 is the Test Program for Certain Commercial Items (see 41 USC 1901; or for contingencies see 41 USC 1903)

5. Reasons for Authority Cited:

Justification: Authorized dealers have been authorized by the original equipment manufacturer (OEM) to sell, lease, or assemble parts by the manufacturer. They are authorized to sell these parts directly to the consumer. Since the parts are certified by the OEM, they come with warranties from the manufacturer. This includes product defects and premature failure. This eliminates questioning the source, authenticity, and quality of the parts received. When purchasing parts from authorized sellers, they have terms and conditions that protect the buyer from receiving defective parts. These parts will go back to the OEM if they do not pass the inspections.

Impact: The parts to be purchased are for services to be performed at the regular MTU maintenance interval. The parts will be used to service the two (2) main engines, two (2) dredge engines, two (2) ship service generators, and one (1) bow thruster engine. The main and bow thruster engines are required for propulsion of the ship. The ship service generators are needed to provide power to the all of the ship. The dredge engines are required to power the dredge pumps.

If this mission critical equipment is not serviced at the required interval, failure to the engine may occur during the operating season. This will cease all dredging activity due to habitability and operational reasons. This will result in a loss of production at a rate of $95,000/daily. For this reason, it is crucial for the equipment to be serviced at this interval with genuine MTU parts. This greatly reduces the risk of failure to the engines and keeps operation safe.

Although the favorable pricing of the non-authorized dealers (gray market) is alluring, it lacks one major component. The dealers/sellers more often than not are not authorized by the manufacturer to sell OEM parts. This can create a list of problems. The biggest problem is the unknown sourcing of the goods. They may not have come directly from the manufacturer. They could be used or discarded and resold by an unauthorized dealer. This puts the durability, authenticity, and integrity of the parts into question. If these parts fail, they may not have manufacturer’s warranty due to the origin and sourcing of the products. If these products were purchased by the Government for use on our equipment, it could result in damage to the engines. These risks can easily avoided by using quality parts from the OEM.

For this reason, it is vital to purchase from dealers authorized to sell parts directly from the OEM.

Many authorized dealers have terms in their sales that refer directly to the original equipment manufacturer. It eliminates many of the problems stated above. It ensures the parts are authentic and in good condition. This also includes the twelve (12) month, unlimited hours warranty directly from the OEM.

Alternatives: There are several authorized MTU dealers. The parts can be sourced by any dealer, so long as they have proper certification to sell OEM parts. They may be sourced from the manufacturer, but they mostly sell to their authorized dealers.

6. Actions to Increase Competition:

The Government intend to compete this as full and open to increase competition to the maximum extent possible. Currently, there are no known compatible aftermarket products that will maintain the integrity of the engines and warranty. MTU authorized dealers are the only OEM authorized centers to sell genuine parts. Any unauthorized dealers need to submit proof of authenticity of the parts. This document would originate directly from the original manufacturer. They would also need to provide manufacturer warranty on the parts.

7. Market Research:

The OEM has regional distributors in Oregon, Washington, California, Idaho, and Nevada. These distributors generally do not provide parts and services outside of their region.

8. Procurement History:

Previous Purchase Order(s) or Contract(s): Yes No

If "Yes", for each purchase order or contract provide:

Purchase order or contract number: ______________________ Was action competed? Yes No

If action was not competed, state the cited authority, summarize rationale:

9. Additional Facts and/or Information to support the justification.

N/A

10. Technical / Requirements Certification: I certify that the supporting data under my cognizance which is included in this abbreviated J&A is accurate and complete to the best of my knowledge and belief.

Submitted By:

Position Title:

Email address:

11. Fair and Reasonable Price Determination: As contracting officer, I hereby determine that the anticipated cost to the Government for this contract action will be fair and reasonable. Basis for the determination is as follows:

There is little competition given the proprietary nature of these components. However, costs are compared with past procurements and the price is expected to be fair and reasonable. In accordance with FAR 13.106-3(a)(2)(ii) and FAR 13.106-3(a)(2)(vi), the Government will compare the proposal to the Independent Government Estimate to ensure price reasonableness.

12. Contracting Officer’s Approval (actions less than $700K): I hereby certify that this justification is accurate and complete to the best of my knowledge and belief. Based on the foregoing, I approve this sole source justification subject to availability of funds, and provided that the services and supplies herein described have otherwise been authorized for acquisition.