Attachment 4 Justification and Approval for Sole Source IAW FAR 13.501(a).pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

41 U.S.C. § 1901

In compliance with Federal Acquisition Regulation (FAR) 13.501(a)(1)(ii), this justification uses the format at FAR 6.303-2 and is modified to state that the procedures in FAR subpart 13.5 are used.

1. Agency and Contracting Activity.

The Department of Homeland Security, United States Coast Guard (USCG), Surface Forces Logistics Center (SFLC), Icebreaker, Buoy and Construction Tender Product Line (IBCTPL), located at 2401 Hawkins Point Road in Baltimore, Md. proposes to enter into a contract on a basis of other than full and open competition.

2. Nature and/or Description of the Action being Approved.

(a) Nature of the action: USCG intends to procure on a sole source basis the overhaul of a Main Propulsion Stator Assembly used on 140-foot WTGB Icebreaking Tugs. This effort is being undertaken to ensure that deep insurance spare generator assemblies are available in the event of a future shipboard casualty. The proposed sole source contractor is the Original Equipment Manufacturer (OEM) of the generator.

(b) Name and address of the contractor:

TECO-Westinghouse Motor Company 5100 N. Interstate 35 Ste. A Round Rock, TX 78681-2407

UEI: R3QXGSVL8AJ4

CAGE: 60089

(c) Type of action: It is anticipated that a firm-fixed-price contract for commercial supplies will be awarded in accordance with FAR Part 12 in conjunction with FAR Subpart 13.5.

(d) Estimated total value (including options):

(e) Type of funding: Operations and Support funds

(f) Year of funding: Fiscal Year 2024

(g) Solicitation number: 70Z08524QIBCT0025

(h) Background information about the requirement: This requirement has previously been satisfied via orders under Indefinite Delivery Requirements Contract No. HSCG40-14-D-60661 that was awarded on a sole source basis to the OEM in 2014. Order #70Z04019F61450B00 and Order #70Z04019F61458B00 were completed in May 2020.

3. Description of Supplies/Services.

Complete a factory overhaul of one 1000 kW direct current main propulsion generator magnet frame and two armatures.

The generator magnet frame, recently damaged in a flashover casualty, had been previously (prior to 2003) overhauled by an electrical machinery servicing shop that did not have access to the OEM’s proprietary data and design drawings. The configuration of this magnet frame is visibly different from sister machines that have not been modified. Other less obvious deviations from original configuration may also be present.

The two generator armatures had been previously (prior to 2003) overhauled by an electrical machinery servicing shop that did not have access to the OEM’s proprietary data and design drawings. These armatures have been in storage since this overhaul and were recently inspected just prior to installation on a WTGB to correct a casualty. These armatures were found to be unusable because of uncured resin beneath the commutator bars.

The Government anticipates having the OEM return all components to original configuration by rewinding the magnet frame and the stator, reusing steel structure, copper bars, and laminated iron cores whenever possible. Based upon tests and inspections to be performed by the OEM upon receipt of the generator assemblies, the Government is willing to entertain any OEM condition found proposal that achieves the same end result at lower cost.

The end result will be a set of generator major assemblies in like new condition that will be the only deep insurance spares for the nine cutters of the WTGB fleet.

The OEM has superior proprietary processes, and material and quality control specifications for overhauls. The OEM also has access to original manufacturing design and performance data. In order to return a generator to a like new condition, the vendor must have the drawings and specifications of the original machine. Only the OEM has the design information, drawings and standards that describe the original generator. The OEM is not willing to sell this data as explained in Section 6.

The OEM also has proprietary data regarding acceptable test result standards for this specific machine design. As stated before, these standards are not for sale.

The Government anticipates having the OEM execute the contract over a two to seven month period. The vendor shall provide overhaul, testing, and all other functions listed in the Statement of Work.

The contract value was calculated using previous contracts for similar machinery using reasonable estimates and adjustments. Note that the cost of an overhaul is directly related to the condition of each generator assembly to be refurbished and the work necessary to return to the original design configuration, which are unknown at this time.

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

The statutory authority permitting other than full and open competition is 41 U.S.C. § 1901 implemented by FAR Subpart 13.501(a) Sole source (including brand name) acquisitions as defined in FAR 2.101.

5. Identification of Exception to the Buy American Act. The USCG has not identified any necessary exception to the Buy American Act or Trade Agreements Act.

6. Demonstration that the Proposed Contractor’s Unique Qualifications or the Nature of the Acquisition Require Use of the Authority Cited.

The USCG does not own the rights to the detailed process, material and quality control specifications needed to overhaul these generator assemblies to a like new condition; these are proprietary to the OEM. Using alternative parts, materials and general repair guidelines as opposed to OEM drawings, specifications, and test procedures may compromise the integrity or performance of the main propulsion generator. Such has already been demonstrated by the improper curing of the armature resin. Third party modifications to the magnet frame may have been a contributing factor in the recent flashover of another armature.

Installation of a new generator from an alternate manufacturer will require duplicate engineering design, prototyping and testing previously incurred during the original 140’ design. Installation of a new generator will increase the engineering scope of work beyond the main generator including modifications to the propulsion system, control systems, and ship’s structure – all at substantial cost.

Significant effort and expense is incurred to remove and install a main generator in this hull.

Depending upon the damage, repair work could add $100,000 or more to the total recovery effort cost. If defects or improper tolerances during the generator overhaul affect performance or cause generator failure, the machine may need to be removed, repaired, and re-installed. The ship will need to have a large access cut into the hull just above the waterline, with attendant interference removal and flooding mitigation cofferdam installation, to replace the generator.

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

Sources as is Practicable.

Sources sought notice #70Z08524S40041B00SSN was posted at SAM.gov from February 23 - March 8, 2024, requesting that interested sources provide information demonstrating their ability to overhaul the 140’ main propulsion generator in accordance with TECO-Westinghouse specifications, and testing them in accordance with OEM procedures. No formal responses were received as a result of this notice. Furthermore, the OEM was sent an email on June 18, 2024 requesting unlimited data rights to the proprietary technical data for this generator so it could be provided to industry in a competitive procurement. The contractor responded via email on July 30, 2024 declining the request for unlimited data rights to be shared with its competitors.

8. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable.

The Contracting Officer anticipates that the cost to the Government will be fair and reasonable based on comparison to the Independent Government Estimate and previous acquisition history for similar overhauls identified in Section 2(h).

9. Description of Market Research.

Market research was conducted in accordance with FAR Part 10 from August 2023 through March 2024. The internet was searched for vendors able to renew the main direct current (DC) propulsion generator to like new conditions. Research showed there are a number of electrical machinery repair companies that can work on large DC machines but only the OEM has the data to overhaul the generators to like new condition with the operational characteristics expected by the main propulsion control system.

No other vendors were considered due to their inability to obtain proprietary data. A market research questionnaire was sent to the OEM, and the responses confirmed that the OEM is still capable of performing the work. The OEM declined a request to sell the proprietary data to the Government.

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

To overhaul the generators to like new condition and re-establish the original design configuration, OEM data is required. The USCG does not own the data rights and the OEM is not interested in selling the data rights. Additionally, if the OEM was willing to sell these rights, it is not likely that the cost of purchasing those rights, as well as the re-procurement or engineering costs, would be recovered through cost savings from full and open competition. The USCG does not have adequate technical data that can be made available to potential vendors for this overhaul. OEM is uniquely qualified to meet the Government’s requirements for the following reasons:

Employment of personnel experienced with constructing, rewinding, overhauling and repairing large DC machinery.

Access to proprietary generator data including manufacturing specs, procedures, performance specifications, acceptable generator test results, part tolerances, and engineering backed repair methods.

Approval of this justification for other than full and open competition will allow overhaul of major Bay Class cutter propulsion generator assemblies to meet deep insurance spare needs with minimal consequence. This will reduce maintenance time and costs, permitting relatively quick restoration of a cutter to operational status in the event of a catastrophic main propulsion generator casualty.

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

No sources formally responded to the sources sought notice as explained in Section 6.

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.

Given the low failure rate experienced to date (the generator assemblies to be overhauled sat in a warehouse for more than 20 years), future acquisitions for purchasing or overhauling this generator are not expected, as these cutters will be decommissioned after their extended 15-year life cycle. However, the Coast Guard will continue to conduct market research as required by FAR Part 10 to locate alternative manufacturers and overhaul facilities for its equipment.

Furthermore, although the original acquisitions for equipment on the various cutter classes is not managed at the SFLC prior to commissioning, we will continue to pursue the manufacturers’ data rights when acquiring new or replacement equipment for the cutter classes that we maintain in an attempt to utilize full and open competition.

13. Contracting Officer’s Certification.