Tab_6_-_JOFOC_FY15_-SNI_Upgrade_FINAL_Redacted.pdf

Version 08/10/2015

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. CONTRACTING AGENCY:

Bureau of Engraving and Printing Hans Decker Office of Production Engineering

2. DESCRIPTION OF ACTION:

The contractor shall provide production software, material, labor, training materials and warranty needed to upgrade the BEP Single Note Inspection (SNI) systems at each facility with Optical Banknote Inspection System (OBIS 3) software from version V3.19c to Version V3.20 or latest available version.

This upgrade will expand the capabilities of the system to capture more data and store more defective note images for later review and analysis.

Contractor Information: Giesecke & Devrient America, Inc. (GDAI) 45925 Horseshoe Drive Dulles, VA 20166-6588 United States Tel.: 703-480-2000 ext. 12127 Email: mike.litton@gi-de.com

3. DESCRIPTION OF SUPPLIES/SERVICES:

The Bureau of Engraving and Printing (BEP) presently uses Single Note Inspection (SNI) systems to inspect the quality of certain banknotes. Each SNI system consists primarily of a BPS 2000 OBIS banknote processing system with Optical Banknote Inspection System (OBIS 3). Acquisition for the BPS 2000 OBIS systems began in Fiscal Year 2012 and resulted in installation and implementation under contract award number TEPV12-14055. The SNI systems were initially put into service to process an existing inventory of the Next Generation (NXG)$100 notes with a planned longer-term strategy that would include single note inspection of other United States banknotes. This longer-term strategy includes a program to reclaim “good” notes from the current sheet inspection process. The BEP inventory of SNIs presently consists of two (2) units at the Washington, D.C. Facility (DCF) and two (2) units at the Western Currency Facility (WCF).

To support the migration of the systems to the longer-term strategy, the existing SNI systems require a software upgrade. The BPS 2000 are manufactured by Giesecke & Devrient America, Inc. (GDAI)

4. AUTHORITY CITED: 41 U.S.C. 3304(a)(1) as implemented by FAR 6.302-1, "Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements."

DEPARTMENT OF THE TREASURY

BUREAU OF ENGRAVING AND PRINTING

WASHINGTON, D.C. 20228

Source Selection Information - See FAR 2.101 and 3.104 mailto:mike.litton@gi-de.com

5. APPLICABILITY OF AUTHORITY CITED:

In accordance with FAR 6.302-1 (a)(2)(ii), this justification for other than full and open competition (JOFOC) is issued under the authority of FAR 6.302-1, only one responsible source and no other supplies or services will satisfy agency requirements. This requirement is deemed to be available from the original source as this a follow-on for the continued production of highly specialized equipment and major components of the SNI systems. The SNI examines the optical properties of banknotes and accepts or rejects notes based on the result of these inspections. The required upgrades will bring the systems to OBIS 3 version 3.20 software.

The augmentation of the SNI will further expand the offline inspection capabilities of the BEP to ensure that only high quality banknotes are produced and supplied to the BEP’s customers. The inspection capability is a core component of the system. G&D is the manufacturer and developer of the Banknote Process System, including software/algorithm, which is the system that both the BEP and the Federal Reserve Board (FRB) use. The BPS 2000 with OBIS 3 inspection was purchased from G&D through FCN, Inc. to inspect notes at a high rate of speed (up to 40 notes/second).

Production issues in fiscal 2010 involving the NXG $100 created a need for a system to inspect a large quantity (1.5 billion) of notes before they could be shipped to the FRB. The BPS 2000 OBIS was able to perform the required inspections. G&D has successfully passed the Bureau Acceptance Test for their BPS 2000 OBIS Systems procured under BEP contract number TEPV12-14055. G&D is the manufacturer of the BPS 2000 OBIS Systems; G&D is the only company that has the technical expertise, specialized knowledge of and access to the proprietary software/algorithm in which the Banknote Process System runs on. Any changes to the BPS 2000 OBIS Systems by other than G&D could impose substantial operation risk to the SNI; BEP cannot guarantee that another vendor could match the augmentation required to the SNI to ensure that only high quality banknotes are produced and supplied to the BEP’s customers.

The upgrades will expand the capabilities of the SNI to fully inspect incoming notes using the latest available software version. The software and image recording capability is a core component of the system and is not manufactured by any other vendor. The proposed upgrades being requested are proprietary in nature to the proposed source and there are no known alternate sources from which these upgrades can be purchased. Since the proposed source is the original equipment manufacturer of the single note inspection system to which the upgraded software and hardware is to be integrated, the proposed source is the only source capable of performing this effort.

Overall, the proposed source represents the only responsible and qualified source that has the requisite capabilities and specialized technical expertise and knowledge to provide the equipment and perform the associated services required.

6. EFFORTS TO OBTAIN COMPETITION:

A notice of intent to sole source was issued under BEP-RFI-16-0339 on FBO.gov from 28 July 2016 05 August 2016 under NAICS Codes 811310 - Commercial And Industrial Machinery and Equipment Repair and Maintenance. The notice included a synopsis of the detailed work to be performed. When the notice closed, there were no responses from industry.

7. FAIR AND REASONABLE COSTS:

The BEP shall make a determination of fair and reasonable price by using FAR 15.404-1, Proposal analysis techniques. These estimates are based on costs incurred during prior inspection related projects undertaken by the BEP within the last three to seven years. Specifically, the NotaSave III on I-10 Inspection Upgrade (TEP-10-0023), Currency Inspection System procurement, Komori Press Upgrades, KBA AFX Upgrades (TEPJ14-01536 & TEPA14-33450), CVIS Upgrades TEPA14-33451 Mühlbauer, and the NotaSave III on Super Orlof Intaglio press.

8. MARKET RESEARCH:

The following market research techniques were conducted:

• Search of companies that provide a Single Note Inspection (SNI) o Goeble GmbH (64293 Damstadt)

• SBA Dynamic Search – Research was conducted under SBA Dynamic Small Business Search under North American Industry Classification System Code (NAICS) 333244 - Printing Machinery and Equipment Manufacturing, during the SBA search, the result regenerated “no matches” for this NAICS Code and keyword: “single note inspection system.”

• Historical procurement: Queried Federal Procurement Data System - Next Generation (FPDS- NG) database, it produced the following result:

o FCN, Incorporated o ACUMEN Enterprises Inc.

o MEP Consulting Services o Electronic Systems Services Inc.

o Cummins Allison Corporation o Cadillac Products

None of the aforementioned companies provided upgrades to the SNI systems.

o Under BEP contract award number TEP-10-0005 the BEP issued the task orders to G&D for the following services under a similar SNI system (BPS3000):

• TEPV10-1000: BPS3000 technical support for resolving BPS3000 issues

• TEPB10-25002: BPS3000 system enhancements

• TEPB10-25003: BPS3000 system enhancements to include an Universal Magnetic

Authentication Device (UMAD) sensor analysis for use with the BEP’s New Universal Magnetic Authentication Device (NUMAD) inspection sensor environment hard drive

• TEPV12-02175: BPS3000 analytical and technical support

Based on the market research, G&D is the only company that has the technical expertise, specialized knowledge of and access to the proprietary software/algorithm in which the Banknote Process System runs on. Of additional importance, G&D has unique access to and knowledge of the Federal Reserve Bank requirements given that they use the BPS currency system as well.

9. OTHER FACTS:

None

10. INTERESTED SOURCES:

Due to the circumstances outlined above, there are no other known sources at this time that can provide this item.

11. STEPS TO FOSTER COMPETITION:

The Government does not anticipate that this requirement will be recurring; therefore, no actions to increase competition are planned at this time.

REVIEW AND APPROVAL (ALL JUSTIFICATIONS, ALL LEVELS):

12. TECHNICAL/REQUIREMENTS PERSONNEL CERTIFICATION (ALL LEVELS):

I certify that the supporting data under my cognizance which is included in this limited sources justification is accurate and complete to the best of my knowledge and belief.

SIGNATURE:

TITLE: Office of Engineer – Contracting Officer Representative (COR)

13. CONTRACTING OFFICER’S CERTIFICATION (ALL LEVELS):

I hereby certify that this limited source justification is accurate and complete to the best of my knowledge and belief.

TITLE: Contract Specialist

14. SMALL BUSINESS CERTIFICATION (ALL LEVELS):

I have conducted a search of vendor files in the System for Award Management and the Small Business Administration’s Dynamic Small Business Search to locate potential offerors for this procurement. If any were found, a list is attached. I hereby concur / do not concur with the rationale of this justification.

TITLE: Small Business Specialist

15. POLICY DIVISION (ALL LEVELS):

I have reviewed this justification and hereby concur / do not concur with the rationale of this justification.

TITLE: Policy Manager

16. CONTRACTING OFFICER APPROVAL

Based on the foregoing, I approve this limited source justification subject to availability of funds, and provided that the services and supplies herein described have otherwise been authorized for acquisition.

SIGNATURE:_

TITLE: Contracting Officer

DOLLAR THRESHOLD REVIEW AND APPROVAL LEVELS (ALL JUSTIFICATIONS):

17. LEGAL COUNSEL REVIEW (>$500K):

I have reviewed this justification and deemed it legally sufficient.

TITLE: Legal Counsel

18. COMPETITION ADVOCATE (the HCA or the SPE may approve) APPROVAL (>$650K):

I have reviewed this justification and hereby concur / do not concur with the rationale of this justification.

TITLE: Competition Advocate