A04._Sole_Source_Justification_-_ASE_X-Ray_Maintenance_Redacted_FBO.pdf

DEPARTMENT OF DEFENSE

WASHINGTON HEADQUARTERS SERVICES

1155 DEFENSE PENTAGON

WASHINGTON, DC 20301-1155

ACQUISITION DIRECTORATE

January 9 th

, 2017

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

1. Identification of Agency and Contracting Activity

The Department of Defense (DoD), Washington Headquarters Services, Acquisition Directorate

(WHS/AD) is the contracting activity. The requirement is for the Pentagon Force Protection

Agency (PFPA).

2. Description of the Action Being Approved

WHS/AD proposes to issue a sole source award, utilizing a firm-fixed-price (FFP) contract type, to American Science and Engineering, Inc. (AS&E) (829 Middlesex Tpke, Billerica, Massachusetts, 01821-3907) in an effort entitled “X-ray Machines Maintenance and Repair.”

The anticipated period of performance is for one (1) base year period plus four (4) option year periods beginning 01 March 2017.

3. Description of the Services Required

The purpose of this acquisition is to facilitate the procurement of all-inclusive replacement parts and labor maintenance for all AS&E X-ray machines and associated equipment owned by the

Pentagon Force Protection Agency (PFPA) located on the Pentagon Reservation and throughout the National Capital Region (NCR) that fall under its jurisdiction. Maintenance and repair services for the AS&E X-ray machines and associated equipment were originally procured via purchase order HQ0034-05-P-1016 on 27 July 2005, then contract HQ0034-09-C-3005 on 03

March 2009, and were continued via a follow-on contract, HQ0034-12-C-0020, awarded on 01

March 2012. Each previous contract action was awarded to AS&E as sole source awards as

AS&E is the proprietary owner and provider of the X-ray machines and their associated maintenance.

PFPA requires the ability to inspect all packages, parcels, bags and personal items prior to entering its buildings. PFPA currently uses AS&E X-ray machine systems in the Pentagon, Mark

Center, Department of Health Headquarters (DHHQ), and Raven Rock Mountain Complex

(RRMC) to detect all dangerous objects including metallic, organic, explosive and narcotic substances. Moreover, the purpose of the AS&E X-ray machines is to assist the PFPA officers in screening all personal belongings and packages entering the facilities for security and life-safety concerns, as well as stopping any unwanted or threatening packages attempting to enter the property. The AS&E X-ray machine equipment at the various locations is operated 24-hours a day, 7-days a week. Currently, PFPA’s Maintenance and Sustainment Division provides minimal depot level maintenance to the AS&E X-ray machine equipment, but due to the specialized nature, proprietary parts and proprietary accompanying software upgrades of the AS&E equipment, it is not possible to fulfill this requirement with just Government personnel. AS&E

X-ray systems are proprietary to AS&E due to their patented technologies. Additionally, AS&E

X-ray machines’ detailed schematics and system information are only provided to AS&E service personnel.

The intended contract action is to provide maintenance and replacement part services to thirty-seven (37) PFPA-owned AS&E X-ray machines, specifically the following Serial Numbers:

AS&E X-ray Machine Serial Numbers

FL-815

G6040-4529

G6040-4532

G6040-4376

G6040-4374

G6040-4375

G6040-4362

G6040-4363

G6040-4643

G6040-4644

G6040-4398

G6040-4119

G6040-4104

G6040-4361

G6040-4661

G6040-4662

G6040-4663

G6040-4691

G6040-4692

G6040-4693

G6040-4694

G6040-4695

M66-868

GEM-4083

G7555-1086

G7555-1087

G100-1018

G100-1028

G100-1030

G6040-4424

G6040-4425

G6040-4426

G6040-4427

G6040-4430

G100-1055

G6040-4471

G6040-4472

The total estimated dollar value for this effort is (including a six (6) month extension of services in accordance with FAR 52.217-8) and for the base year (with a potential variance of +/- 5%), which accounts for the maintenance and repair for thirty seven

(37) separate X-ray machines. The breakdown of cost by year is as follows:

Performance

Periods

Performance Period Dates Amount

Base Period 01 March 2017 to 28 February 2018

Option Period I 01 March 2018 to 28 February 2019

Option Period II 01 March 2019 to 29 February 2020

Option Period III 01 March 2020 to 28 February 2021

Option Period IV 01 March 2021 to 28 February 2022

6 month extension IAW

52.217-8

01 March 2022 to 31 August 2022

Base + All Options 01 March 2017 to 31 August 2022

4. Authority Cited

The statutory authority for this non-competitive action is the Simplified Procedures for Certain

Commercial Items (41 U.S.C. 1901) as implemented in FAR 13.501, “Special Documentation

Requirements.”

5. Applicability of Authority/ Contractor’s Unique Qualifications

Failure to issue a sole source award to AS&E would create a potential unacceptable lapse in

AS&E X-ray machine screening services at the Pentagon and the other various NCR locations.

PFPA needs to have the ability to call for expedited repair and maintenance service for all of its

AS&E X-ray machines to avoid any potential security deficiencies and life-safety issues if a machine malfunctions. AS&E is the proprietary owner and provider of the AS&E X-ray machines and related maintenance and does not have any resellers. AS&E is the only company authorized to maintain its specialized X-ray equipment and does not authorize other manufacturers and service providers to perform maintenance on its X-ray machines. In addition, there are proprietary software maintenance upgrades to the machines, which only AS&E controls and distributes; outside vendors do not have access to this software maintenance and would not be able to provide it to PFPA.

As historical background, on 14 December 2011, the Government contemplated a sole source award to acquire the necessary maintenance services in 2012 from AS&E through a contract with a twelve (12)-month base period and four twelve (12)-month option periods. On 12 January

2012, the Government contacted AS&E and two competing backscatter X-ray machine contractors: Rapiscan and Tek84. The Government directly asked all three (3) vendors if they could service, repair and maintain AS&E X-ray backscatter machines; all three (3) vendors stated that due to proprietary hardware and software, only AS&E could maintain its specific machines, which led to the award of contract HQ0034-12-C-0020 to AS&E.

Again, AS&E is the only company that can satisfy the Government’s need. AS&E provided

WHS/AD a signed “Sole Source Letter” on 14 November 2016, which details AS&E’s status as the sole source, proprietary provider of the needed maintenance services. As AS&E X-ray machine design and functionality are proprietary to AS&E and are not shared with any other company, no other company’s X-ray machine maintenance services would meet the maintenance needs of the Government. Essentially, another company cannot maintain and service AS&E X-ray machines, which it does not have knowledge or experience in servicing. Moreover, configuring a different brand of X-ray system other than AS&E would result in substantial duplication of cost to the Government that would not be expected to be recovered through competition.

6. Efforts to Solicit Potential Sources

A “Notice of Intent to Sole Source” was posted to the Government-Wide Point of Entry (GPE) website, Federal Business Opportunities (FBO.gov), on 01 November 2016 and closed on 14

November 2016 in accordance with FAR 5.203(a). The “Notice of Intent to Sole Source” described the Government’s intent to issue a sole source award to AS&E and for industry to provide capability statements if it is able to perform the needed services. No capability statements were received in response to the notice and no challenges to making a sole source award to AS&E were made from industry.

Moreover, at this time PFPA is not in a position to reevaluate its current AS&E X-ray machines system to consider other possible replacement systems. As the AS&E X-ray machines system is the current configuration in place and substantial funds and resources have been invested in the system and maintenance for many years, it will remain in place as long as it meets the continued requirements of PFPA. AS&E will remain the sole source provider of the AS&E X-ray machines system and maintenance unless it opens its sales structure to authorized resellers.

7. Fair and Reasonable Price Determination

The cost to the Government will be determined to be fair and reasonable in accordance with

FAR 13.106-3(a)(2)(ii) and FAR 13.106-3(a)(2)(vi). In making a fair and reasonable determination, the Government will utilize pricing from recent requirements for similar contract actions. Further, the Government will conduct a full price analysis by comparing the received cost to its independent Government cost estimate (IGCE), which was developed through sound market research and historical data, prior to award. Certified cost and pricing data is not required in accordance with FAR 15.403-1(b)(3) as the services needed are commercial in nature.

8. Market Research

American Science and Engineering, Inc. is the sole source provider of the AS&E X-ray machines and maintenance, so it is known that market research would not produce another viable vendor to provide the needed AS&E maintenance at this time.

9. Other Facts

No other facts are pertinent at this time.

10. A Listing of Interested Sources

Not applicable.

11. Future Actions to Be Taken to Overcome Barriers to Competition

AS&E X-ray machines have been in place for more than ten (10) years and have exceeded the mission of PFPA to scan personal items and preserve security and safety within its installations.

PFPA plans to utilize the AS&E X-ray machines for a potential five (5) more years with this purchase order for maintenance services to preserve the AS&E X-ray machines. PFPA will continue to assess the need for the AS&E X-ray machines and will assess whether an overhaul and competition for different brands of X-ray machines are necessary and fiscally viable throughout the course of the impending contract action.

12. Previous Non-Competitive Awards Status

Is this acquisition for a non-competitive follow-on acquisition previously awarded on a non-competitive basis?

Yes. The needed maintenance services from AS&E have previously been procured via

HQ0034-12-C-0020 as a non-competitive, sole source action. The justification and approval executed for the previous action is attached. A long-term strategy was reviewed to determine whether competing the maintenance of the AS&E X-ray machines was viable. PFPA reached out to Industry to open channels of competition and Industry concluded that only AS&E could service and maintain AS&E X-ray machines due to the proprietary nature of the systems.

The Actions to remove any barriers to competition cited on the previous justification were completed:

Yes.

No. [Must include explanation of why the answer is “no”.]

No.

Technical Certification

I certify that the data and information forming the basis for this justification are accurate and complete to the best of my knowledge and belief.

Mr. Timothy Darr Date

Chief, Maintenance Branch

Contracting Officer’s Representative (COR)

PFPA

Contracting Officer Certification & Determination

I certify that the data and information forming the basis for this justification are accurate and complete to the best of my knowledge and belief.

Isiah Mack Date

Contracting Officer

WHS/AD

Competition Advocate Approval

Based on the foregoing, this justification is, hereby, approved.

David D. Sanders Date

Competition Advocate

WHS/AD