Attachment 4 - Redacted J and A.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

10 U.S.C. § 2304

H-65 Engine Support by the Hour Services

Solicitation No. 70Z03823RB2000006

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 (IAW) the requirement 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, United

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

(SRR) Division, Elizabeth City, North Carolina (NC) prepared this justification for other than full and open competition.

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

(a) Nature of the action: The SRR Procurement Branch requests approval to solicit and award on a sole source basis, a contract for H-65 Engine Support Services (Support by the Hour (SBH)) for the USCG SRR Arriel 2C2CG engines. The Arriel 2C2CG engine is manufactured by Safran Engines France (SafranSA); however, all support for the engines will be provided by Safran Helicopter Engines USA, Inc. (SafranHE USA) (Cage Code

7Y709). SafranHE USA is the only authorized source in North America capable of providing the required SBH services for the Arriel 2C2CG engines. This support includes management, logistical support, asset accountability, tooling, test equipment, depot repair, overhaul, modification, and sparing support for USCG Arriel 2C2CG engines resulting in ready- for-issue engine and engine components to USCG field units.

In addition, this effort will also provide technical data, engineering support, and on-site technical representative services at both Elizabeth City NC, ALC and the SafranHE USA facility in Grand Prairie, Texas. This support will continue to ensure the availability of engines required to support the H-65 operations.

(b) Name and address of the contractor:

Safran Helicopter Engine USA, Inc.

2709 North Forum Drive

Grand Prairie, Texas 75052

Cage Code: 7Y709

(c) Type of action: Firm Fixed-Price Indefinite Delivery Requirements type contract consisting of one (1) twelve month Base Period and up to four (4) twelve month Option

Periods, if exercised. The basic contract for SBH (per engine flight hour) rate, technical and maintenance support, and optional training make up the majority of the contract.

Labor hour prices will be established for exclusion proposal and service bulletin labor hour rate. These items are very rarely utilized and are expected to contribute to less than

5% of the total contract value.

(d) Estimated total value (including options): broken down as shown below:

Period Unit Price Total

Base Year

12 mo.

$2,170,915

$26,050,983

Option Year 1 12 mo. $2,279,461 $27,353,532

Option Year 2 12 mo. $2,393,434 $28,721,209

Option Year 3 12 mo. $2,484,632 $29,815,593

Option Year 4 12 mo. $2,632,197 $31,586,365

Total $143,527,682

Note: This requirement was previously awarded under contract 70Z03818DB2000016.

The period of performance for this contract will expire on August 31, 2023.

(e) Type of funding: Operations and Support funds

(f) Year of funding: Fiscal Year 2023 through 2028 funds will be used as appropriate.

(g) Solicitation number: 70Z03822RB2000008

(h) Background information about the requirement: As the Aviation Inventory

Control Point (AICP), ALC is required to provide effective supply support for all USCG

Aviation Units and for Program Depot Maintenance (PDM) support. During the modernization of the USCG H-65 helicopter fleet in 2004, all engines were replaced with the Arriel 2C2CG engine. SafranHE USA (formerly Turbomeca) was chosen by

Integrated Coast Guard Systems as the supplier for the replacement engine based on the best value to the USCG in terms of operational effectiveness and total ownership costs.

The USCG currently operates ninety-eight (98) H-65 aircraft. Each aircraft is equipped with two (2) Arriel 2C2CG engines. This acquisition is the third follow-on contract to the original contract established in 2005. Since the re-engining of the of the H-65 aircraft, the USCG has supported these engines on a SBH basis with SafranHE USA.

Engine SBH support will be required through the end of the H-65 aircraft’s projected service life, currently estimated until 2035. This support will continue to ensure the availability of engines required to support MH-65 operations.

3. Description of Supplies/Services. This requirement is for the continued SBH comprehensive sustainment services for the USCG’s Arriel 2C2CG engines on a firm fixed price per engine flight hour basis. This specialized, high demand aircraft currently enables the USCG to perform missions such as search and rescue, law enforcement, international ice patrol, marine environmental protection, and marine resource conservation. With a demanding operational tempo, aircraft engine support and availability are essential to mission success.

As previously stated, the comprehensive support includes management, logistical support, asset accountability, tooling, test equipment, depot repair, overhaul, modification, and sparing support for the Arriel 2C2CG engine resulting in ready-for-issue engines and engine components to USCG field units. In addition, this effort will also provide technical data, engineering support, field service and technical support representative services and optional training. There are no set delivery requirements as long as eighteen (18) spare engines are maintained at all times. Components and associated replacement parts are considered flight critical. In order to maintain integrity of the system, ensure compatibility of the replacement parts and safe operation of the aircraft, these services must be obtained from the OEM. All parts serviced, repaired, overhauled, and/or modified under this requirement must be airworthy and suitable for installation on USCG aircraft.

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. 2304(c) (1) as implemented by the FAR 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. This requirement is for repair/overhaul services therefore the Buy American Act does not apply to this requirement.

6. Demonstration that the Proposed Contractor’s Unique Qualifications or the Nature of the Acquisition Require Use of the Authority Cited. SafranSA is the sole design authority and the OEM of the Arriel 2C2CG engines. SafranHE USA is the only OEM approved North American Source capable of furnishing all necessary parts, material, labor, depot repair, tooling, test equipment, specifications, technical manuals, engineering support, technical representative support, and facilities for Arriel 2C2CG engines. This SBH requirement will also include provisions for incident notification, access to OEM flight safety information, OEM engineering staff, technical support and development of product changes. The Arriel 2C2CG engine support specified by the requirement is currently provided for by SafranHE USA and IAW Contract 70Z03818DB2000016. This contract, which supports 98 H-65 aircraft was awarded on a sole source basis to SafranHE. This requirement is the third follow-on contract to the original contract established in 2005 when the H-65 fleet was re-engined with the Arriel 2C2CG turbine shaft engines.

In order to maintain integrity of the system, ensure compatibility of the replacement parts and safe operation of the aircraft, components and associated replacement parts covered in this acquisition are considered flight critical. All parts serviced, repaired, overhauled, and/or modified under the requirements of this acquisition must be airworthy and suitable for installation on USCG aircraft. The contractor shall maintain OEM and Federal Aviation

Administration (FAA) certifications throughout the life of the contract. SafranHE USA is the only approved source that can meet this requirement as stated in a letter from SafranHE

USA dated January 20, 2022.

(a) The use of 10 U.S.C. 2304 (c) (1) is necessary because SafranSA is the OEM of the Arriel 2C2CG engine and SafranHE USA is the only OEM authorized repair/overhaul facility in North America.

(b) In an attempt to promote competition, extensive market research was conducted.

SafranHE USA provided a letter dated January 20, 2022 (Attachment 1) stating they are the only authorized Arriel 2C2 repair facility in the US.

(c) In order to maintain structural integrity of the aircraft, and ensure complete compatibility of replacement parts, the parts listed in this requirement must be repaired and or overhauled by either the OEM or an OEM approved source. Components repaired by an unauthorized OEM supported facility will compromise structural and system integrity of the aircraft putting aircrew personnel and aircraft at a safety of flight risk.

The USCG neither compromises nor makes exceptions in matters of human safety and protection of Government property and does not accept lower standards in these matters.

(d) Failure to approve this sole source J&A will jeopardize performance of the USCG’s mission due to grounding of the aircraft as a result of no stock being available as components are required. Additionally, in a fiscal and stock age environment requiring minimal investment in inventory, it is critically important to secure sources that can satisfy the contractual requirements needed to react to ever-changing mission requirements.

(e) This requirement meets the exception at FAR 25.401 – acquisitions not using full and open competition authorized by subpart 6.302 and the exception to 52.225-1, Buy

American - Supplies IAW the class determination at 25.103 and FAR 25.104(a)(1)(i)

Non-available Articles-Spare and replacement part for equipment of a foreign manufacture, and for which domestic parts are not available.

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

Potential Sources as is Practicable.

(a) This procurement was published in the Department of Homeland Security (DHS)

Acquisition Planning Forecast System (APFS) No. F2022057200 on February 8, 2022, and included in the DHS Forecast of Small Business Opportunities. There were no inquiries received in response to the published APFS.

(b) In accordance with FAR 5.203(a)(2) and FAR 12.603, the proposed contract action will be advertised on the Contract Opportunities website at SAM.Gov as a combined sole source synopsis solicitation. The estimated date of publication is July 5, 2022.

(c) The exception s 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 based on a price analysis (FAR

15.404-1 (b)) utilizing a combination of price analysis techniques to include: comparison of proposed prices to historical prices paid (FAR 15.404-1 (b)(2)(ii)), current published catalog prices (FAR 15.404-1 (b)(2)(iv)), comparison of proposed prices with the independent Government cost estimate (FAR 15.404-1(b)(2)(v)), and an analysis of other than certified cost and pricing data (FAR 15.404-1 (b)(2)(vii)).

9. Description of Market Research.

(a) SafranHE USA is the only known OEM approved source for SBH support of Arriel

2C2CG engines. Market research completed between June 2021 and December 2021 consisted of internet searches utilizing General Services Administration (GSA)

Schedule, Defense Logistcs Agency’s Integrated Logistics Support (ILS) Mart, North

Atlantic Treaty Organization (NATO), and other Internet sites (Google search engine) did not produce any other vendors with the ability to provide the SBH support required in this acquisition. The Helicopter International Tradeshow was attended in 2021. SRR representatives routinely attend Helicopter Association International Tradeshows as well as review professional journals (e.g. Roto Wing and Vertical 911) and no additional information was obtained regarding SBH support. No other vendor capable of providing the required SBH support was found to be available at the time of the search, which further supports Safran HE USA’s claim that no other vendors are able to provide the requirements of this acquisition. A source of sought notice was conducted in May 2022. No additional vendors responded as capable of providing the required

SBH support.

(b) This requirement meets the exception to 52.225-5, Trade Agreements IAW FAR

25.401 – acquisitions not using full and open competition authorized by subpart 6.302 and the exception to 52.225-1, Buy American - Supplies IAW the class determination at

25.103 and FAR 25.104(a)(1)(i) Non-available Articles-Spare and replacement part for equipment of a foreign manufacture, and for which domestic parts are not available.

(c) IAW FAR Part 10, various methods of market research were launched for this requirement.

(d) This requirement dose not 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 major repair 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 this requirement cannot be reverse engineered and/or modified by other sources, because this requirement is for the SBH major repair of existing parts. In order to maintain structural integrity of the aircraft and ensure complete compatibility of the repaired parts, the parts listed in this requirement must be repaired by the OEM approved Maintenance, Repair, and Operations (MRO) facility.

(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) or HSAR 3006.3020270. This is not considered unusual and completing 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 the contract. The proposed contract action will be advertised on Sam.gov website and will include a statement that all responsible sources may submit a quotation 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 Aviation Inventory Control Point (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 was conducted and requirements are advertised on

Contract Opportunities. 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 routinely explores avenues of reverse engineering for some hard to find or expensive to repair items, which could further encourage competition; however, this process will not be part of this solicitation as this requirement is for Support by the Hour (SBH).

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.

Catrina M. McDonald Date

Contracting Officer

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.

Douglas M. Grove Date

Contracting Officer Representative, USCG, ALC, SRR

APPROVAL:

Reviews:

Tabitha L. Callon Date

Level Above the Contracting Officer

Supervisory Contracting Officer, USCG, ALC

David S. Burgess Date

Chief of the Contracting Office, USCG, ALC

James Knight Date

Coast Guard Procuring Activity Competition Advocate (CG PACA)

Keith J. O’Neill Date

Head of the Contracting Activity

Paul Courtney

Chief Procurement Officer Date

Department of Homeland Security