CAT BETA (S1.4d) CAT Justification and Approval_70Z08520QP459630 20APRIL2020_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

10 U.S.C. § 2304 (c) (1) Including Brand Name

Solicitation Number: 70Z085-20-Q-P4596300

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 6.303-1, 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 (DHS), U.S.

Coast Guard (USCG) Surface Forces Logistics Center (SFLC), Contract Procurement

Division (CPD) Branch 2, Icebreaker, Buoy and Construction Tender Product Line

(IBCTPL) located at 1301 Clay Street, Suite 800-N, Oakland, CA 94612. Proposes to enter into a contract on a basis other than full and open competition using Brand Name.

2. Nature and/or Description of the Action being Approved. A short paragraph describing the effort to be placed on contract, or the modification action.

Include the following information:

(a) Nature of the action: Example: It is the Coast Guard’s intention that a

Brand Name commercial, firm fixed indefinite quantity; multiple award delivery order contract be awarded to multiple OEM Caterpillar dealers using the procedures set forth in FAR Part 12, Acquisition of Commercial

Items and FAR Subpart 15, Contracting by Negotiation.

(b) Name and address of the contractor: N/A. Brand Name Open to

Caterpillar’s Dealership in the United States.

(c) Type of action: Firm Fixed Price Indefinite quantity (IDIQ); Multiple

Award Delivery Order Contract with fixed price delivery orders.

(d) Estimated total value (including options): , broken down as follows:

Period Unit Price Total

Base Year

12 mo.

Option Year 1 12 mo.

Option Year 2 12 mo.

Option Year 3 12 mo.

Option Year 4 12 mo.

Total 5 (e) Type of funding: Operation and Maintenance AFC 45 is anticipated however, contingency funds may be utilized in times of crisis/natural disaster.

(f) Year of funding: Fiscal Year 2021; annual appropriations for option years.

(g) Solicitation number: 70Z08520QP4596300

(h) Background information about the requirement: This justification for other than full and open competition seeks approval to award four, indefinite delivery, indefinite quantity (IDIQ); Multiple Award Delivery Order Contract with fixed price delivery orders with the original equipment manufacturer (OEM) dealer.

The intent of four awards is to allow for coverage of the IBCT Product Line which is dispersed throughout the United States and outlying areas.

3. Description of Supplies/Services. The contractor shall provide installed remanufactured main propulsion diesel engines on the WLB, WLI, WLM, WLIC, WLR, WTGB, and WYTL cutter class vessels in accordance with OEM standards.

The Contractor shall provide all personnel, labor, materials, parts, tools, test equipment, test fittings, supplies, and consumables and other items necessary to accomplish the following: tests (pre-operational and operational), inspections, calibrations, overhauls, alignment checks, diagnostic testing, evaluation of engine parts for reutilization, renewing/replacing parts in conjunction with overhaul and maintenance procedures, and preparation and submission of reports in accordance with industry standard in conjunction with the overhauls and other maintenance procedures. The remanufactured

CAT Engines may include CAMPAR testing, engine timing synchronization, engine valve rotators, and vibration analysis.

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) 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.. N/A. American Owned.

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

(a) Rationale for using the authority cited in section 4 of the J&A:

This acquisition must be solicited utilizing the authority cited because Caterpillar is the OEM of these supplies. There are distributors authorized by the OEM to supply remanufactured Caterpillar Models D353, D379, D3304, D3306, D3406, D3412, D3508 AND D3608 marine diesel engines and control systems.

Caterpillar diesel engines, generators, and controls are currently in use on the WLB, WLI, WLM, WLIC, WLR, WTGB, and WYTL cutter class vessels. The detailed technical, engineering and manufacturing data necessary to provide these supplies are proprietary to Caterpillar. The data rights were not procured when the engines were originally acquired with this vessel and, therefore, is not available for release to generate competition for these supplies or to CG personnel to evaluate parts supplied by other than the OEM. Caterpillar is the only known source that possesses the required capabilities, drawings, specifications, engineering control procedures, and proprietary methods to ensure the latest design configuration and manufacturing compatibility and quality of parts to include quality control.

(b) Details covering what events lead to the situation requiring use of other than full and open competition procedures including whether any portion of the work can be segregated to allow for competition:

Caterpillar is the OEM for these engine components on the WLB, WLI, WLM, WLIC, WLR, WTGB, and WYTL cutter class vessels. Caterpillar does not publish proprietary information and has not released the rights to the Coast

Guard. Only authorized repair facilities can obtain the proprietary information to provide these remanufactured engines. Further, Caterpillar tracks engine overhauls performed by authorized repair facilities using a proprietary engine history tracker. In order to certify the safe operation of these engines for use and ensure that the engines are properly maintained, the Government requires these remanufactured engines procured from an OEM authorized facility.

(c) Summarize alternatives considered and why they will not work;

(1) Caterpillar will not warranty remanufactured engines by other than OEM authorized facilities.

(2) Non-Caterpillar Certified suppliers do not have the required knowledge of

Caterpillar specific parts and parameters..

(3) Non-Caterpillar Certified Technical Representatives will not have access to the

OEM’s proprietary information, software, and tools pertinent to the supply of remanufactured engines.

(4) Suppliers other than OEM authorized repair facilities do not have access to the

Computer Aided Marine Performance Analysis Reporting (CAMPAR) system to analyze and record the testing and procedures performed on the remanufactured engines which provides compliance with OEM procedures and standards.

(5) If an engine failure were to occur after a remanufactured engine is provided by a vendor other than an OEM authorized dealer, the Coast Guard would not have access to the OEM to determine the reason for the failure.

(d) Impact to the mission that would result if the J&A is not approved and, consequently, the product not provided.

The Government would be faced with duplication of cost or unacceptable delays due to non OEM certified companies requiring proprietary information, software, repair process standards, tools and parts pertinent to the parts held solely by the OEM and

OEM certified technical representatives.

If the Coast Guard does not use OEM Certified remanufactured engines, we would risk failure of the engine and safe operation of Coast Guard Cutters and execution of their missions. This would include icebreaking, maintaining aids to navigation and properly positioning navigational aids for safe transit by marine traffic. Failure of the remanufactured engines would limit range of cutter and ability of Coast Guard to conduct missions. This would be a disadvantage to the government and its mission if the justification for other than full and open competition is not approved.

(e) Which authority applies and why:

10 U.S.C. 2304 (c) (1) “Only One Responsible Source and No Other Supplies or

Services Will Satisfy Agency Requirements”. This is for brand name remanufactured engines. There are authorized CAT dealers and only CAT dealers can provide these genuine CAT parts that will satisfy the USCG requirements. The

USCG does not possess the necessary information required to obtain full and open competition. The drawings and technical data to build and maintain these remanufactured engines are proprietary and rights were not released to the government.

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

Potential Sources as is Practicable. This section should include the following information:

In an effort to promote full and open competition and solicit as many potential vendors as possible, a sources sought notice was posted on March 5, 2020 on the beta.SAM.gov

Contract Opportunities website. This notification informed industry of the Government’s intent to solicit and negotiate with only Caterpillar and/or their authorized dealers.

Interested vendors were invited to submit information discussing their capabilities within ten (10) calendar days of the posting date. Nine (09) firms expressed interest as discussed in Paragraph 8.

On 02 April 2020, Caterpillar sent via email a letter on company letterhead confirming that they will not release technical data rights to the USCG for these engines or components thereof.

8. Determination by the Contracting Officer that the Anticipated Cost to the

Government will be Fair and Reasonable. The contracting officer determines that the anticipated price(s) will be fair and reasonable based on adequate competition from

Caterpillar OEM suppliers. The Contracting Officer will also utilize historical prices paid, and compare to the Independent Government Estimate. Price analysis will be performed to ensure fair and reasonable prices are obtained.

9. Description of Market Research. Market research is required by FAR Part 10, and the results of the market research should be summarized here. Include the following information:

(a) Describe the market research techniques used, results, date when the market research was conducted, and how it was used by the contracting officer to determine price reasonableness.

In accordance with FAR 10.001 (a)(2), market research was conducted by the

Contracting Officer’s Representative (COR) and Contracting Officer to identify companies capable of performing these supplies. Nine (09) authorized Caterpillar dealers responded to the sources sought notice posted to beta.SAM.gov Contract Opportunities website on March 5, 2020 and phone made to Caterpillar dealers. In addition to the sources sought notice, a search of the Internet was made to locate find OEM authorized dealers and telephone calls were made to locate additional vendors. The Caterpillar website provides the opportunity to enter a zip code to find local dealers. This search identified several authorized dealers in the United Sates. According to Caterpillar, any authorized dealer can quote on any requirement.

(b) If patents, copyrights, and/or intellectual property are applicable to the acquisition, describe the circumstances for acquiring a patented or copyrighted product on the representation of the intellectual property holder that has not been licensed for resale.

Caterpillar possesses the proprietary technical data and/or drawings for these remanufactured engines. The OEM, along with their authorized dealers, are the only sources that have access to these supplies. This data is proprietary to Caterpillar and therefore the Government must continue to rely solely on the OEM and/or authorized dealers for these specific remanufactured engines to meet our needs. Changes required to the vessel configuration, costs, and delays to develop the necessary technical data to procure replacements to the current system(s) in a competitive manner would be prohibitive.

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

Caterpillar owns the technical data and drawings and it is unlikely that they will sell the rights to such data to the Coast Guard.

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

Acquisition.

Puckett Power Systems Highway 49 North Gulfport, MS 39503

Gregory Poole Equipment

Company 1500 Sensation Weigh

Beaufort, NC 28516

NC Power Systems CAT

17900 West Valley HWY

Tukwila, WA 98188

Holt Texas, LTD

5665 Southeast Loop 410

San Antonio, TX 78222

Carter Machinery Co., Inc.

3404 Business Center Drive

Chesapeake, VA 23323

Cleveland Brothers Equipment Co. Inc.

336 Fairville Ave

Harrisburg, PA 17112

Thompson Caterpillar

1333 Foster Ave

Nashville, TN 37210

Michigan CAT

7650 Millett Hwy, Lansing, MI 48917

Mustang CAT Marine Services

7001 Easthaven Blvd

Houston, TX 77017

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. Unsuccessful efforts to obtain OEM data make it unlikely that barriers to competition will be overcome. At the present time no other known equipment manufacturers, produce aftermarket components that are suitable or interchangeable with the propulsion system and associated equipment onboard the

WLB, WLI, WLM, WLIC, WLR, WTGB, and WYTL cutter class vessels.