Attachment 3 Redacted J and A - 70Z03823RB2000003.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

10 U.S.C. § 3204

SOLICITATION NO. 70Z03823RB2000003

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.3 and in accordance with the requirements of FAR 6.302-1, the justification for 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 United States Coast Guard (USCG), Aviation

Logistics Center (ALC), Short Range Recovery (SRR) Product Line Division, Elizabeth

City, North Carolina proposes to enter into a contract on the basis of 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 one (1). The total estimated cost for this J&A approval is $36,299,555 for the part numbers listed in section three (3).

(a) Nature of the action: This is a sole source acquisition.

(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 one-year 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): $36,299,555 broken down as follows:

Period Length of Period Total

Base 12 Months $6,569,305

Option One 12 Months $6,897,770

Option Two 12 Months $7,242,658

Option Three 12 Months $7,604,791

Option Four 12 Months $7,985,031

Total $36,299,555

Attachment 3

Note: This is a follow-on contract from contract 70Z03820DB2000016, which expires on

December 31, 2022. If the contract award is not completed prior to the expiration date of the previous contract, SRR Contracting will issue purchase orders to cover the gap until the contract is awarded.

(e) Type of Funding: Operation and Support Funds.

(f) Year of Funding: Fiscal Years 2023 through 2027 funds will be used as appropriate.

(g) Solicitation number: 70Z03823RB2000003.

(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 contractor is the actual manufacturer”. In addition, all the items are designated an Acquisition

Method Suffix Code (AMSC) of R or Q, both of which state the Government does not have adequate data needed to purchase the items from additional sources.

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

Programmed Depot Maintenance (PDM) Program. This requirement is to be awarded to the

OEM, or a responsible source, that has 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 projected 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 following are the part numbers included in this J&A:

365A31-1179-05

365A33-6145-21

365A31-1115-05

365A32-1678-00

365A32-7115-20

365A32-7121-20

365A34-6202-05

365A35-1010-24Z

366A32-1188-20

365A33-3541-01

365A38-0130-02

365A38-3046-01

366A32-1148-00

365A38-3014-03

365A12-0070-01

366A27-3400-05

365A32-7110-00

365A32-7112-00

365A33-3511-03

360A32-1035-21

360A32-1667-01

365A31-1122-21

365A31-1171-00

365A31-1212-0051

365A31-1998-02

365A31-2060-20

366A32-1147-00

365A31-1100-05

365A32-2046-15

365A32-7021-24

360A32-2034-23

365A33-6222-20

360A32-3173-20

704A34-113-220

365A27-3111-01

365A27-3189-00

365A27-3206-02

365A31-1101-14

365A33-3537-20

704A34-114-041

PS701-5436-000

B70

365A61-1675-01

365A32-7108-00

366A32-1024-02

360A32-1658-01

360A32-1671-01

365A32-1680-00

365A32-9011-00

365A33-3544-00

360A32-3654-02

360A32-1661-01

365A32-1677-01

365A32-4340-02

365A33-6104-05

366A52-1049-20

366A25-1350-47

366A08-0545-02

366A55-1040-20

366A27-3401-02

365A33-3536-20

366A55-1047-07

366A25-1350-50

350A27-1060-24

365A27-3511-09

365A27-3511-08

330A54-0212-22

330A31-1379-22

366A25-1354-00

366A25-1352-00

366A21-1300-43

366A75-3771-01

365A42-4010-00

A45083

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 the FAR Subpart 6.302-1 entitled “Only one responsible source and no other supplies or services will satisfy agency requirements.”

5. Identification of Exception to the Buy American Act. The exception to the Buy American Act, FAR 25.103(b)(1) Non-availability-Class Determinations was made for the articles listed at FAR

25.104, for “Spare and replacement parts for equipment of foreign manufacture, and for which domestic parts are not available” applies to this acquisition.

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, and affiliates, AHI, located in Grand Prairie, TX.

The USCG self-certifies its’ aircraft in accordance with the 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 approvals. 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-certificated product.

Title 14 of the CFR 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 part meets or exceeds 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 Title 14 of the CFR. The AC states that acceptable replacement articles should be identified using one of the following methods:

1) Airworthiness Approval Tag (FAA Form 8130-3);

2) Foreign manufactured replacement parts when there is a Bilateral Airworthiness Agreement

(BAA) between country of manufacture and the United States. This certification may be verified on a form similar to the FAA Form 8130-3 (i.e. European Aviation Safety Agency

(EASA) Form 1.);

3) FAA Technical Standard Order (TSO) markings;

4) FAA PMA symbol;

5) Production Approval Holder’s (PAH) documents or markings;

6) 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 a condition for safe operation;

7) Maintenance release document;

8) Identification of critical components; and

9) Marking of life-limited parts.

The AC also states that aircraft part distributors and aircraft supply companies cannot certify the airworthiness of the parts they advertise and/or sell, unless they are a PAH. Therefore, it is the installer’s responsibility to ensure airworthiness and to request documentation establishing traceability to a PAH.

Parts provided that do not meet the CRF 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 matters 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 EASA Form 1 and traceability to the OEM as required by the CFR and FAA.

1) The use of 10 U.S.C. 3204(a)(1) is necessary because AHI is the only OEM authorized distributor in North America.

2) 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 part numbers in the requirement is unlikely.

3) Alternate sources could not be considered due to there are no known approved FAA

PMA for the parts 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.

4) 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 of 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 contractual requirements needed to react to ever-changing mission requirements.

5) This J&A is using the authority other than full and open competition 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.” The parts in the requirements are spare parts utilized on the USCG MH-65/SRR aircraft. These parts are to be manufactured by the OEM, AHF and procured through AHI, their only North

American authorized distributor capable of fulfilling the requirement. Procuring parts from any other manufacturers/contractors may compromise form, fit, and function, which could compromise the functionality and dependability of the spare parts in the requirement, thereby creating a safety of flight risk. A safety of flight risk is never acceptable. Therefore, no alternate parts, or deviations from OEM specifications will be considered for this procurement.

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 F2022058078 at http://apfs.dhs.gov, published April 25, 2022 and included in the DHS Forecast of Small Business Opportunities. There were no inquiries received in response to the published APFS.

(b) A sources sought notice was posted on SAM.Gov on September 09, 2022, with one vendor providing a response. The one response was from AHI. An E-mail from AHI (Attachment 1) states that all of the parts identified on this requirement were sole source to AHI.

(c) 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 October 31, 2022.

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

(e) 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 reasonable on previous purchases (FAR Part 15.404-1(b)(2)(ii)), comparison with similar items in a related industry

(FAR Part 15.404-1(b)(2)(vi)), and comparison to the Independent Government Cost Estimate

(IGCE) (FAR Part 15.404-1(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 August 2021 – September 2022. A Sources Sought

Notice was posted to SAM.gov from September 9 – 23, 2022, resulting in one response from one vendor, which was the OEM, AHF’s only North American authorized distributor, AHI. Based on historical data, the results of the Sources Sought notice, 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) or FAR 25.202(a)(2) for the Buy American Act.

(c) See section (a).

http://apfs.dhs.gov/

(d) This requirement does not have or required 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 data are proprietary and available only from the

OEM. The USCG did not purchase the rights as parts 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 or an OEM approved source.

(c) For a proposed contract subject to the restrictions of FAR 6.302-1 for follow-on acquisition as prescribed in FAR 6.302-1(a)(2)(iii), provide an estimate of the cost to the Government that would be duplicated and detailed information on how the estimate was derived. Not applicable.

(d) For a proposed contract subject to the restrictions of FAR 6.302-2(d) or HSAR 3006.302-270 and where FAR 6.302-2 is cited as the authority, describe the exceptional circumstances allowing for an award for a period of performance in excess of the one-year limitation

(applicable to all federal agencies) or the DHS-specific statutory 150-day limitation.

N/A 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 inquires or responses received prior to the award of contract. AHI is the only North American distributor authorized by the OEM to sell the parts identified in this requirement. The proposed contract 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. 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 the ALC.

(b) Extensive internet database research is conducted and requirements are 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 companies 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.

13. Contracting Officer’s Certification.

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

Kristi R. Copeland Date

Contracting Officer, USCG, ALC, SRR

14. Technical / Requirements Personnel Certification

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

Kristin R. Pelton Date

Item Manager, USCG, ALC, SRR

APPROVAL:

Reviews:

Tabitha L. Callon Date

Level Above the Contracting Officer

Supervisory Contracting Officer, USCG, ALC, SRR

David S. Burgess Date

Chief of the Contracting Office, USCG, ALC

James Knight Date

Coast Guard Procuring Activity Competition Advocate (CG PACA)