FOUO-EMCS-JA-20180830_Redacted.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition

FOR OFFICIAL USE ONLY

March 2018 FOR OFFICIAL USE ONLY Page 2 of 6

I. Contracting Activity.

673d Contracting Squadron 10480 Sijan Avenue Joint Base Elmendorf-Richardson (JBER), Alaska

II. Nature and/or description of the action being processed.

A firm-fixed-priced contract is contemplated for a JBER-wide Energy Management Control System (EMCS) maintenance services contract. The projected Period of Performance (POP) for this requirement is base plus four option years, 1 October 2018 through 30 September 2023. The current contract for this requirement expires on 30 September 2018.

III. Description of supplies/services required to meet agency needs.

This requirement provides for the service of JBER's existing EMCS and technical support to Government EMCS operators. This includes but is not limited to system maintenance, inspection, and repair (emergency and routine basis), equipment replacement (as required), system back up, on-site technical assistance, and annual training for Government EMCS operators.

The EMCS is a computerized system designed to regulate the energy consumption, down to the individual facility, by remotely controlling the operation of its Heating, Ventilation, and Cooling (HVAC) system. The EMCS operator employs this system to monitor, control, and adjust individual HVAC systems from a single existing front end computer. Through this system, the base achieves Air Force directed energy cost savings. The EMCS utilized by JBER is manufactured by Automated Logic Corporation (ALC).

The proposed contract will provide services to approximately JBER facilities on the EMCS network. Major categories of work include EMCS equipment replacement, technical support, software services, graphics back-up, field panel database system file back-up, desktop and laptop database updates, server system updates and upgrades, electronic operations and maintenance manual updates and upgrades, field panel database diagnostics and software consultation. The proprietary network protocols and systems shall be limited to ALC origin.

IV. Statutory authority permitting other than full and open competition.

41 U.S.C. § 1901, as implemented in FAR13.106-1(b)(2), 13.500, and 13.501(a)(2)(ii)

V. Demonstration that the contractor's unique qualifications or nature of the acquisition requires the use of the authority cited above (applicability of authority).

JBER's ALC brand EMCS is a proprietary system that only authorized ALC vendors/dealers have the

March 2018 FOR OFFICIAL USE ONLY Page 3 of 6 necessary access to service and maintain. A list pulled from the ALC website, http:// www.automatedlogic.com/locations/northamerica confirms that Meridian Systems, Inc. is the sole ALC vendor for the state of Alaska. ALC's Corporation Regional Sales Manager, , was contacted via email on 15 Feb 2018 and stated, “Meridian is the only factory authorized dealer in the region. We are not currently looking to expand distribution in this territory.” No other vendor/ manufacturer has the intellectual property rights or access to the control system coding and therefore cannot seamlessly integrate to the existing system or maintain it. Only an authorized ALC dealer can receive factory support services such as software updates, security patches, and warranty work.

Replacement of EMCS field hardware devices such as zone control modules, communication routers, gateway products, sensors, room controllers, and ancillary devices are also limited to existing proprietary network protocols and systems of ALC origin.

Meridian Systems, Inc., a local small business concern, as the sole authorized vendor, has full reach back support from ALC as it pertains to the proprietary data rights specific to JBER's ALC systems.

The ALC controls are positively connected within numerous base systems which ensures mission capability.

Currently, the JBER ALC EMCS is fully integrated into base facilities and remotely controls approximately of JBER's HVAC systems.

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable.

A sources sought was posted through the Government Point Of Entry (GPE) on 10 Jan 2018 to draw interest from any company capable of meeting the requirements of this contract. The one response received supports data that Meridian Systems, Inc., the incumbent contractor, is the only authorized vendor for ALC manufactured parts/systems, within the Alaska region. A combined synopsis solicitation will be issued IAW FAR 5.2.

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The contracting officer will determine price fair and reasonable based on updated and relevant cost data from the local commercial market (comparison between maintenance and training rates of similar EMCS providers), market research (current GSA pricing schedule), comparison of proposed prices with prices found reasonable on previous purchases (current contract), the contracting officer's personal knowledge of the item being purchased, comparison of proposed prices with an independent government cost estimate, analysis of pricing information provided by the offeror (commercial rates provided to local businesses), or any other reasonable basis IAW FAR 13.106-3(a).

VIII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

To determine if EMCS market changes have taken place since the award of the current contract, a sources sought was posted through the Government point of entry on 10 Jan 2018, for a period of 15 days. Interested parties were asked for proposed or equal products/systems please describe how your product/system is compatible with the existing Automated Logic Corporation brand type system and how seamless integration can be achieved, to include the ability to obtain factory authorized

March 2018 FOR OFFICIAL USE ONLY Page 4 of 6 technical support for the existing system.” Along with being posted to the GPE, the posted link was emailed to six local EMCS businesses. Vendor responses are listed in Section X of this document.

To determine how EMCS is handled in the local market, the Facilities Supervisor for University of Anchorage Alaska (UAA) and the Facilities Supervisor for the Municipality of Anchorage (Muni) were contacted. Both supervisors acknowledged that due to proprietary protocols, integrating differing manufactured EMCS's isn't possible. UAA's EMCS is comprised of three manufacturers and has to operate as three separate systems. Muni's EMCS is comprised of two manufacturers and has to operate as two separate systems. Each system has to be maintained by their respective brands local authorized dealer. UAA's supervisor indicated that it would be hard to quantify the cost of training operators on three separate systems. It makes their job tough because knowing the operational aspect of just one system is challenging. He also indicated that utilizing one manufacturer is the most cost effective and efficient way to operate.

Two Government Accountability Office (GAO) cases (B-266180 and B-249428) were reviewed in relation to this requirement. The cases support that when a base has a substantial amount of a particular manufacture's equipment in place, utilizing a single, base-wide, integrated system (in this case, EMCS) is a legitimate government need since it eliminates the need for different types of communication cables and monitoring terminals (thereby decreasing installation, maintenance, repair, training, and energy costs). The fact that the particular manufacturer will have a competitive advantage over other manufacturer as a result of the compatible system approach does not preclude the agency from permitting it, so long as the advantage did not result from unfair motives or action by the contracting agency. The single, base-wide, integrated system appears to be the most cost effective solution for the government.

In reference to brand name use of ALC, ten J&A's for JBER, Alaska were approved for installation of EMCS. One project was awarded as FA5000-16-R-0035. Eight projects were awarded as separate task orders under a JBER Multiple Award Construction Contract (MACC). The MACC task orders awarded were FA5000-12-D- 0005-0015, FA5000-12-D-0005-0016, FA5000-12-D-0009-0033, FA5000-12- D-0009-0034, FA5000-12-D-0009-0035, FA5000-12-D-0009-0036, FA5000-12-D-0009-0038, and FA5000-12-D-0009-0042. One project was approved and awarded by the Corps of Engineers, Alaska District Control No. POA 11-2, solicitation W911KB-11-R-0020. Additional facilities are programmed to be added to the ALC EMCS network this current fiscal year. Meridian Systems, Inc. completed the ALC EMCS portion for all of the above mentioned projects.

The results of the market research indicate that there is only one responsible source and no other service will satisfy the Government's requirement. An award to any other source would result in a substantial duplication of cost to the Government that is not expected to be recovered through competition. In this circumstance, the award of a sole source, firm-fixed-price contract under FAR 13.5, Simplified Procedures for Certain Commercial Items, for a period of one year plus four option years, is in the best interest of the Government.

IX. Any other facts supporting the use of Other Than Full and Open Competition.

Other comparable EMCS brands and/or people that provide similar services are available in the commercial market, however, each brand's software is proprietary in nature and although the software capabilities are similar, they are not identical. For these reasons, the user cannot obtain 100 percent integration when substituting one system for another. All manufacturers safeguard their EMCS

March 2018 FOR OFFICIAL USE ONLY Page 5 of 6 products through the use of authorized maintenance dealers/vendors, much in the same manner as ALC. These facts support the historical consistency of awarding this requirement under other than full and open competition.

The initial ALC EMCS service contract was sole sourced to Meridian Systems, Inc., for a POP 1 October 2008 to 31 March 2014. Sole source justification was based on proprietary information and other vendor's inability to provide the specific training and support.

The follow-on service contract was sole sourced to Meridian Systems, Inc., for a POP of 1 April 2014 to 1 April 2015.

The current service contract was solicited as a full and open, brand name requirement but was awarded to Meridian Systems, Inc., for a POP of 1 April 2015 to 30 Sept 2018 as they were the only offer received.

X. List of any sources that expressed, in writing, an interest in the acquisition.

Meridian Systems - Provided formal response to sources sought to include an updated letter from ALC stating that Meridian is the sole source for all ALC products, after sales service, and warranty on all ALC products installed in their territory (Alaska).

Siemens Industry, Inc. - Vendor stated that due to the proprietary nature of the specifications in the PWS, they cannot provide the services as requested. No formal response to the sources sought was received.

Alaska Integrated Services - Vendor stated that due to the specifications in the PWS, they cannot provide the services as requested. No formal response to the sources sought was submitted.

XI. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before making subsequent acquisitions for the supplies or services required.

In relation to JBER's EMCS, the only possibility of completing the requirement would be to procure an entire system replacement. If required to purchase an alternative system, a complete retro-commissioning of every facility would be required to include certification of the new program, replacement software, and retraining of JBER's EMCS operators.

The Government would still be faced with the same limitations of proprietary requirements on the new system, regardless of manufacturer, for system support and maintenance.

773 CES states that each EMCS has a “point count.” A “point” is a virtual or physical value in the system that's used to make a calculation to perform a function within the system. Examples of points are freeze stats, room sensors or outdoor air temperature sensors. The industry standard cost is an estimated $1500 - $2500 per point (point cost is driven by the complexity of the facility to be controlled). Typical items that are included in the “point” pricing include planning, design, manpower, installation, complexity, programing, parts, training, and commissioning of the final product. Intangible items such as existing networks connection via fiber, DSL modems, switches, servers, and wireless systems are needed for the point, but often are included after pricing the main components of the point. JBER's EMCS has an approximate point count ( are physical points). On the low end, that places the approximate value of the JBER system at .

Ultimately, replacing the entire system to increase competition would result in a substantial duplication of costs, a

March 2018 FOR OFFICIAL USE ONLY Page 6 of 6 waste of the resources already in place, and wouldn't be in the best interest of the Government.

At this time, the 773 CES has no plans to acquire an alternative system. JBER's EMCS's integration and maintenance activities, for all facilities, are tied directly to the proprietary ALC system. The base's long term plan is to add the remaining JBER facilities, as funds become available, to the current EMCS and achieve full compatibility/integration across the ALC network. Other EMCS's have been considered currently and historically, but due to interoperability issues, full integration is not possible. We will continue to evaluate the EMCS market to determine if future efficiencies can be gained. At that time, we will strive for competition among vendors.

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief IAW FAR13.106-1(b)(2) & 13.501(a)(2)(ii).

XIII. Certification by the technical/requirements personnel.

As evidenced by my (our) signature(s) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.