Attachment 3 - Justification and Approval 70Z03824RB0000008.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

10 U.S.C. § 3204

SOLICITATION NO. 70Z03824RB0000008

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by the

Federal Acquisition Regulation (FAR) Subpart 6.3, the following facts and rationale justify the use of such authority:

1. Agency and Contracting Activity. The Department of Homeland Security, United States Coast

Guard (USCG), United States Coast Guard (USCG), Aviation Logistics Center (ALC), Short

Range Recovery (SRR) Product Line Division prepared this justification for other than full and open competition.

2. Nature and/or Description of the Action being Approved. The USCG, ALC, SRR

Product Line Division intends to procure on a sole source basis, various spare parts used on the USCG MH-65 aircraft. The parts are manufactured by Airbus Helicopters, France (AHF), the Original Equipment Manufacturer (OEM). The only authorized distributor in North America is Airbus Helicopters, Inc. (AHI), who handles the parts and products on behalf of the manufacturer as indicated in Attachment 1. The total estimate cost for this J&A approval is $32,012,394.

(a) Nature of the action: The USCG, ALC, SRR Product Line Division intends to procure on a sole source basis various spare parts used on the USCG MH-65 aircraft.

(b) Name and address of the contractor:

Airbus Helicopters, Inc.

2701 Forum Drive

Grand Prairie, TX 75052

Cage Code: 3GSZ1

(c) Type of action: The USCG intends to award a Firm Fixed-Price Indefinite delivery Requirements type contract consisting of a seven (7) month Base Period and four (4) one-year Option Periods, if exercised. The spare parts will be purchased using individually funded firm fixed-price delivery orders.

(d) Estimated total value (including options): $32,012,394, broken down as follows:

Period Length of Period Total

Base 7 Months $5,456,719

Option One 12 Months $5,893,257

Option Two 12 Months $6,634,717

Option Three 12 Months $6,873,895

Option Four 12 Months $7,423,806

Total $32,012,394

Note: This is a follow-on contract from expired contracts

70Z03821B2000004, 70Z03822DB2000024, 70Z03820DB2000002,

70Z03818DB2000011, and 70Z03819DB2000008, as well as several add on parts that were procured via various purchase orders. SRR Contracting will issue purchase orders for all line items until the new contract is awarded.

(e) Type of funding: Operations and Support funds.

(f) Year of funding: Fiscal Year Operation and Support Funds will be provided annually for

Fiscal Years 2024 through 2028.

(g) Solicitation number: 70Z03824RB0000008.

(h) Background information about the requirement: The items in this requirement are assigned an Acquisition Method Code (AMC) of five (5), which designates “Acquire from Sole Source Contractor which is not the Original Manufacturer” and/or an AMC of three (3) which designates “Acquire directly from the actual manufacturer, whether or not the prime contract is the actual manufacturer”. In addition, all these items are designated an Acquisition Method Suffix Code (AMSC) of R or Q, both of which state that Government does not have adequate data needed to purchase the items from additional sources.

3. Description of Supplies/Services. As the Aviation Inventory Control Point (AICP), ALC must provide effective supply support for all USCG aviation unit and for the Programmed Depot

Maintenance (PDM) Program. This requirement is to be awarded to the OEM and/or their authorized distributors, that have access to the original OEM parts and can provide traceability.

These parts are crucial to meet the USCG’s many missions. The material and estimated quantities to be procured are based on current and past usage data. Projected stocking levels are based on failure and corrosion trends; current upgrades and modifications in process; experience and project scrap rates; and procurement lead times. Stock level recommendations are also obtained from the USCG’s forecasting tool to help ensure we can support all our mission requirements.

The part numbers listed on the following page are included in this J&A.

**Remainder of this page left intentionally blank**

365A32-7114-01

365A32-7824-00

360A32-3036-22

360A32-3026-23

365A32-1067-00

365A32-7035-21

360A32-1218-09

22129BE140178L

22731BE120039M

366A52-1113-00

704A44-616-013

ECS2334BE160M

360A61-2054-20Z

365A35-3021-20

365A58-1102-RS

366A27-3137-01

DHS613-593.02

DHS713-193.01

365A76-8036-0001

365A76-8036-0101

704A32-135-015

704A47-140-004

7101-0200A120T

B013

360A21-1151-21

365A21-3106-4001

366A08-0540-45

366A08-3542-23

366A08-3601-33

366A21-1300-12

366A21-1300-49

366A21-1300-50

366A21-1300-53

366A21-1300-57

366A21-1300-66

366A21-1300-76

366A21-1300-82

366A21-1301-22

366A21-1301-23

366A21-1301-24

366A21-1301-25

366A21-1301-29

366A21-1301-35

366A21-1301-37

366A21-1301-43

366A21-1304-10

366A21-1306-25

366A08-0540-14

366A25-1170-34

366A25-1350-25

366A25-1350-28

366A25-1350-34

366A25-1350-35

366A25-1350-40

366A25-1350-48

366A25-1350-58

366A25-1350-59

366A25-1350-60

366A25-1350-62

366A25-1350-63

366A25-1350-67

366A25-1350-71

366A25-1350-80

366A25-1356-21

366A25-1356-24

366A25-1356-26

366A25-4520-09

366A21-1306-29

366A21-1306-67

366A21-1306-73

366A21-1306-76

366A21-1306-77

366A21-1306-78

366A21-1306-79

366A21-1307-24

366A21-1307-25

366A87-1051-03

366-D-387-05

57303-200

702A30-0200-20

366A84-0195-00

366-D-186-01

366-D-272-02

366-D-280-02

366-D-280-04

360A84-0095-20

360A87-1183-27

365A23-4050-20

365A23-4111-21

365A24-1192-00

365A54-1030-00

365A54-2072-00

365A54-8083-00

365A58-1090-20

365A76-1084-00

365A81-1159-20

366A32-1113-20

366A55-1051-06

704A34-416-092

366A08-0540-12

365A25-3005-08

365A75-2644-20

366A27-3611-20

360A63-1032-23

365A21-3246-01

366A25-1122-20

341A33-5154-20

360A34-1043-20

360A63-1048-21

4. Identification of Statutory Authority Permitting Other Than Full and Open Competition.

The statutory authority permitting other than full and open competition is 10 U.S.C. 3204(a)(1) implemented by FAR Subpart 6.302-1 entitled “Only one responsible source and no other supplies or services will satisfy agency requirements.” Responsible sources are limited to the

OEM and their authorized distributors.

5. Identification of Exception to the Buy American Act. This J&A requirement does not include the exceptions at FAR 25.103(b)(2) for FAR 25.202(a)(2) for the Buy American Act.

6. Demonstration that the Proposed Contractor’s Unique Qualifications or the Nature of the

Acquisition Require Use of the Authority Cited. ALC has a requirement to purchase, on a recurring basis, spare parts manufactured by the OEM, AHF. AHF has one (1) authorized source of supply for North American customers, their affiliates, AHI, located in Grand Prairie, TX.

The USCG self-certifies its aircraft in accordance with standards established by the Code of

Federal Regulations (CFR) and the Federal Aviation Administration (FAA). The CFR Title 14, Aeronautics and Space, Part 21, Certification Procedures for Products and Articles, governs the procedural requirements for issuing and changing design approvals, production approvals, airworthiness certificates, and airworthiness approval. 14 CFR 21 defines airworthiness approval as a document, issued by the FAA for an aircraft, aircraft engine, propeller, or article which certifies that the aircraft, aircraft engine, propeller, or article conforms to its approved design and is in a condition for safe operation.

The USCG will only procure parts which have airworthiness approval. In accordance with 14

CFR 21.9, with limited exceptions, only a replacement or modification article produced under a type certificate or produced under an FAA production approval is suitable for installation on a type-certified product. The CFR Title 14, Subpart K, covers the procedures for the FAA Parts

Manufacturer Approval (PMA). The FAA PMA process is acceptable for an alternate manufacturer for the parts listed in this requirement, provided that the vendor submits a complete data package ensuring that the parts meets or exceed OEM specifications and subsequently, passes the USCG form, fit, and function requirements. To date, there are no known approved FAA

PMA’s for the parts listed in this requirement.

The FAA issued Advisory Circular (AC) 20-62(series) to provide information and guidance for use in determining the eligibility, quality, and identification of aeronautical replacement parts and materials intended for installation on United States (U.S.) type-certificated products and articles, and to enable compliance with CFR Title 14. The AC states that acceptable replacement articles should be identified using one of the following methods:

1) If applicable, Airworthiness Approval Tag (FAA Form 8130-3).

2) If applicable, Foreign manufactured replacement parts when there is a Bilateral

Airworthiness Agreement (BAA) between country of manufacture and the U.S. This certification may be verified on a form similar to the FAA Form 8130-1 (i.e. European

Aviation Safety Agency (EASA) Form 1);

3) If applicable, Certificate of Conformance;

4) FAA Technical Standard Order (TSO) markings;

5) FAA PMA symbol;

6) Production Approval Holder’s PAH) documents or markings;

7) Direct ship authority. In order for manufactured parts with direct ship authority to be recognized as being produced under a manufacturer’s FAA production approval, the manufacturer must specifically authorize the shipping supplier, in writing, and must establish procedures to ensure that the shipped parts conform to the approved design and are in condition for safe operation;

8) Maintenance release document;

9) Identification of critical components; and

10) Marking of life-limited parts.

The AC also states that aircraft part distributors and aircraft supply companies cannot provide a certificate of conformance for the parts they advertise and/or sell, unless they are a PAH.

Therefore, it is the installer’s responsibility to ensure airworthiness and request documentation establishing traceability to a PAH.

Parts provided that do not meet the CFR and FAA requirements could compromise structural and system integrity of the aircraft, putting aircrew personnel and Government property at risk. The

USCG neither compromises nor makes exceptions in matter of human safety and protection of

Government property and does not accept standards in these manners.

Use of OEM parts will ensure the parts are manufactured in accordance with OEM specifications and standards, conform to original form, fit, and function, and are compatible and interchangeable with existing components.

AHI is the only known vendor that can provide the traceability to the OEM as required by the CFR and FAA.

(a) The use of 10 U.S.C. 3204(a) implemented by the FAR Subpart 6.302-1 entitled “Only

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

Requirements.” is necessary because AHI is the only OEM authorized distributor in North

America.

(b) In attempt to promote competition, extensive market research was conducted. However, because of the OEM having only one (1) authorized distributor, the probability of any distributors obtaining prices for the cage code(s) and part numbers in the requirement are unlikely.

(c) Alternate sources could not be considered due to there are no known approve FAA PMA for the part in the solicitation that meets or exceeds OEM specifications and subsequently, passes the USCG form, fit, and function requirements. In addition, there is only one (1)

North American OEM authorized distributor.

(d) In order to maintain structural integrity of the aircraft and ensure complete compatibility of replacement parts, the parts listed in this requirement must be obtained from the OEM or an OEM approved source. Parts produced by another manufacturer will compromise structural and system integrity of the aircraft, putting aircrew personnel and Government property at a safety of flight risk. The USCG neither compromises nor makes exceptions in matter of human safety and protection of Government property and does not accept lower standards in these matters. Therefore, the mission will be impacted as a result f this

J&A not being approved as stated above and not having these parts will negatively impact flight operations of the SRR aircraft and progress of Programmed Depot Maintenance. In a fiscal and stockage environment requiring minimal investment in inventory, it is critically important to secure a reliable supplier that can satisfy the contactor requirements needed to react to every-changing mission requirements.

(e) This J&A requirement does not include the exceptions at FAR 25.103(b)(2) for FAR

25.202(a)(2) for the Buy American Act.

7. Description of Efforts Made to Ensure that Offers are Solicited from as Many Potential

Sources as is Practicable.

(a) This procurement forecast was posted on the DHS-Acquisition Planning Forecast System

(APFS) Number F2024064522 at http://apfs.dhs.gov, published October 18, 2023, and revised on

January 16, 2024, and included in the DHS Forecast of Small Business Opportunities. There were no inquiries received in response to the published APFS.

(b) The proposed contract action will be advertised on the Contract Opportunities website, www.SAM.Gov as a combined sole source synopsis/solicitation. IAW FAR 5.207(c)(16)(ii), the solicitation/synopsis will include a statement that all responsible sources may submit a proposal with a capability statement, which shall be considered by the agency. The estimated date of publication is March 8, 2024.

(c) The exceptions under FAR 5.202 do not apply to this requirement.

(d) The exceptions under FAR 6.305 do not apply to this requirement.

8. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable. The Contracting Officer anticipates that the prices for this procurement will be fair and reasonable. This is based on comparison of proposed prices found fair and reasonable on previous purchases (FAR Part 15.404-1(b)(2)(ii)), comparison with similar item in a related industry) FAR Part 15.505-1(b)(2)(vi)), and comparison to the Independent Government

Cost Estimate (IGCE) (FAR Part 15.202-1(b)(2)(v)).

9. Description of Market Research. IAW FAR Part 10, various methods of market research were launched for this requirement:

(a) Market research was conducted during October 2023 through February 2024, and it did not produce any other OEM authorized distributors that could provide the spare parts in this requirement. A Sources Sought Notice 70Z03824IB0000007 was posted on SAM.Gov from

January 30, 2024, with a closing date of February 13, 2024, resulting in one response from the vendor, which was the OEM, AHF’s only North American authorized distributor, AHI.

Additionally, a Sources Sought Notice 70Z03824IB0000100 that was thought to be full and open, was posted on SAM.Gov on January 29, 2024, with a closing date of February 09, 2024.

As a result of this Sources Sought Notice, it was determined that twenty-four (24) of the twenty-six (26) line items were sole source to AHI and were removed from the Full and Open

Requirement 70Z03824RB0000004 and added to this requirement. All the parts were originally listed with an Acquisition Method Code (AMC) of 1, which identified a part as being suitable for http://apfs.dhs.gov/ http://www.sam.gov/ competitive acquisition. As per the attached e-mail from SRR Engineering, SCIR was created, changing all twenty-four (24) parts to an AMC code of 5, which stipulates “acquire only from the prime contractor although the engineering data identified the Commercial and Government

Entity Code (CAGE) and part number of a source other than the prime contractor.” (See

Attachment 2).

Based on historical data, the results of the Sources Sought Notices, and the E-mail from AHI, the requirement will be solicited on an other than full and open, sole source basis. The USCG will maintain open communications with the OEM and will continually conduct market surveys to identify possible additional sources that may eventually receive OEM authorization to sell AHF products to North American customers.

(b) This J&A requirement does not include the exceptions at FAR 25.103(b)(2) for FAR

25.202(a)(2) for the Buy American Act.

(c) Market Research was conducted. See Section (a).

(d) This requirement does not have or require patents, copyrights, and/or intellectual property.

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

(a) The USCG does not own the necessary technical data required to support the manufacture of the required parts. The drawings and technical date are proprietary and available only from the

OEM. The USCG did not purchase the rights as part of the original acquisition. Due to the proprietary rights, it will be difficult to take steps to foster competition.

(b) The parts in the schedule cannot be reverse engineered and/or modified by other sources because in order to maintain structural integrity of the aircraft and ensure complete compatibility of replacement parts, the parts listed in this requirement must be obtained from the OEM and their authorized distributors.

(c) This requirement is not a follow-on for the continued provision of highly specialized services pursuant to FAR 6.302 (a)(2)(iii).

(d) Not applicable to FAR 6.302-2(d) and HSAR 3006.302-270, this is not an unusual and compelling urgency.

11. A Listing of the Sources, if Any, that Expressed, in Writing, an Interest in the

Acquisition. No other sources have expressed interest in this acquisition. The Contracting

Officer will evaluate any inquiries or responses received prior to the award of contract. AHI is the only North American distributor authorized by the OEM to sell parts identified in this requirement. The proposed contact action will be advertised on the SAM.Gov website and will include a statement that all responsible sources may submit a proposal with a capability statement, which shall be considered by the agency.

12. 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.

(a) Complete specifications and drawings for the components are proprietary to the OEM and therefore, not available to the USCG. The USCG does not possess the technical expertise, nor the software data rights for the components on this requirement. It is difficult to take steps to foster competition as the manufacturing, performance, and acceptance data are proprietary to the OEM. As the AICP, ALC is tasked with supporting systems that have been deployed for use in the aviation community. In an effort to increase competition among manufacturers, affiliates, and distributors, SRR Product Line members attend annual aviation trade shows and host industry days at ALC.

(b) Extensive internet database research was conducted, and requirements were advertised on

Contract Opportunities (SAM.Gov). In support of the Competition in Contracting Act, ALC established the New Product Development Branch (NPD), and a representative of the NPD

Branch is assigned to the SRR Product Line. This representative has the responsibility to search for alternate sources of supply/services and alternate acceptable products.

Engineering, Contracting, and NPD representatives continuously conduct market research to ensure that vendors interested in doing business with the USCG are given every opportunity to compete for requirements. NPD is exploring avenues of reverse engineering for some of the hard to find or expensive to repair items, which should further encourage competition, however, this process is lengthy, costly, and labor intensive.

**Remainder of this page left intentionally blank**

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.

_k;kfj;lajf;laj;fl___________________ ___________

Kristen R. Copeland Date

Contracting Officer, USCG, ALC, SRR

14. 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.

_fl;lkfsjll;_______________________________ ___________

Kristin R. Pelton Date

Item Manager, USCG, ALC, SRR

RECOMMENDED FOR APPROVAL

Tabitha L. Callon Date

Level Above Contracting Officer

Deputy, Chief of The Contracting Office, USCG, ALC

David S. Burgess Date

Chief of The Contracting Office, USCG, ALC

APPROVAL

Keith O’Neill Date

Head of the Contracting Activity (HCA)