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Justification and Approval for Other Than Full and Open Competition

Under 10 U.S.C. 2304 (c)(1)

Only One Responsible Source and No Other Supplies or Services Will Satisfy

Agency Requirements Solicitation HSCG38-14-R-H00009

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by The Federal Acquisition Regulation (FAR) 6.3 and in accordance with the requirements of FAR 6.303-1, the justification for the use of the statutory authority under FAR 6.3 is justified by the following facts and rationale required under FAR 6.303-2.

(1) Agency and Contracting Activity.

The United States Coast Guard (USCG), Aviation Logistics Center (ALC), Long Range Surveillance (LRS) Contract Section, Elizabeth City, North Carolina, proposes to enter into a contract on the basis of other than full and open competition and presents this Justification and Approval for review and approval.

(2) Nature and/or description of the action being approved.

The USCG intends to solicit, negotiate, and award on a sole source basis, a fixed price Requirements contract for proprietary repair services conducted at the contractor’s facility, engineering and field technical services in support of the MX-20 Electro-Optical/Infrared (EO/IR) Imaging and Camera System and associated components at an estimated cost of $9,026,257.38. This commercial contract is a follow on to sole source contract number HSCG38-10-D-H00003. The proposed contractor is L3 Communications/Wescam, 649 North Services Road West, Burlington, Ontario, Canada, and L7P5B9.

(3) Description of Supplies/Services.

The requirement is for proprietary repair services, engineering and field technical services in support of the MX-20 EO/IR System manufactured by L3 Communications/Wescam for the USCG HC-130H fleet. The support provided under this contract will include inspection, component repair and final testing for the avionics components that make up the system. There will be engineering, technical and repair support services in the event of a field repair. The system consists of:

The various avionics components identified in the table have been installed on the HC-130H aircraft since approximately 1989. L3 Communications/Wescam is the sole designer and original equipment manufacturer (OEM) for this equipment and there are no approved sources that can fulfill the requirements for this acquisition. This contract will allow the USCG to transition from the current Performance Based Logistics (PBL) contract HSCG38-10-D-H00003 into a fixed price Requirements contract.

The proposed contract type is a fixed price Requirements contract where individually funded fixed price task orders can be placed for the repair of the MX-20 EO/IR System components. The contract will be a 12-month base period and four (4) 12-month option periods for a total contract period not exceeding five (5) years. The estimated contract value is $9,026,257.38. The following lists the total pricing for each year of the contract:

This procurement forecast is posted as DHS-Acquisition Planning Forecast System (APFS) No. P2014020677 on www.dhs.gov.

(4) Identification of the justification and rationale.

The statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c)(1) as implemented by FAR 6.302-1 entitled “Only one responsible source and no other supplies or services will satisfy agency requirements”.

(5) Demonstration that the nature of the acquisition requires use of the authority cited.

L3 Communications/Wescam of Ontario, Canada, the OEM and sole designer of the MX-20 EO/IR System, possess the proprietary rights to the drawings and specifications needed to perform this requirement. There are currently no other OEM approved sources that can meet this requirement. The USCG does not have the technical expertise, nor do they own or have access to the technical data necessary to repair the MX-20 EO/IR System. L3 Communications/Wescam has declined to provide the proprietary rights to the Government and they have maintained their status as the only source qualified to fulfill this requirement, in that they are the only contractor with the proprietary data required to perform the work, the technical expertise to interpret the data, and the ability to solve technical problems, all of which are vital for the continued operational readiness of the system. Without these repairs, the aircraft will be severely impacted, thus affecting USCG missions necessary for avoidance of imminent threats to human life, protection of property and national security i.e.; search and rescue, law enforcement, and other critical missions.

(6) Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

A sources sought HSCG38-14-I-H00002 was released for this effort on the Federal Business Opportunities (FBO) website on January 28, 2014 with a closing date of March 3, 2014. A response was received from L3 Communications/Wescam stating they are the OEM and the only authorized supplier that can provide proper repair of the imaging and camera system originally designed and supplied by them for the USCG. A second response was received from BAE Systems of Warner Robins, GA., on March 12, 2014, indicating their ability to repair the MX-20 EO/IR System. They stated they have an open agreement with L3 Communications/ Wescam to repair any of their products, if requested and mutually agreed upon. They acknowledged that although BAE Systems currently does not repair the MX-20 EO/IR System, expanding their capabilities to support the MX-20 would be fairly insignificant because the systems are very similar in technology and houses the same repair parts as well as similar or same repair procedures, test equipment and special tools. On April 1, 2014, notification was received from L3 Communications/Wescam stating that while BAE is an authorized Wescam Service Center, they have only been trained and tooled to support AFSOC MX-15 Single Sensor Systems. They are not tooled, trained or qualified to repair L3 Communications/Wescam MX-20 Systems, and they do not have the rights to use L3 Communications/Wescam intellectual property to compete against L3 Communications/Wescam for any USCG repair activity. On April 9, 2014 notification was received from BAE Systems that they would not pursue this effort any longer. The requirement will be publicized on the FBO website as a combined synopsis solicitation and in accordance with (IAW) FAR 5.207(c)(15)(ii). The solicitation will include the statement that all responsible sources may submit a proposal which will be considered by the agency. As of this request no other source is authorized or intended to be authorized by L3Communications/Wescam to provide the scope of services required to repair the MX-20 EO/IR System. It is not anticipated any additional sources will respond to the solicitation.

(7) Determination by the Contracting Officer that the anticipated cost to the government will be fair and reasonable.

The Contracting Officer anticipates that prices ultimately negotiated for this procurement will be fair and reasonable in comparison to the IGCE and historical pricing for these services. Additionally, the Contracting Officer will request Other Than Cost or Pricing Data IAW FAR 52.215-20 as necessary.

(8) Description of market research.

Market research was conducted from January 2014 through March 2014 using internet search, query of DLA sources and meeting with the OEM, to identify alternate sources that provide the repair services required for the MX-20 EO/IR System. The procurement history was reviewed and indicated that this system was originally purchased from L3 Communications/Wescam on a sole source basis in 1998. Further investigation showed that three (3) independent contracts were used to support this system over the past fourteen (14) years. They were DTCG23-98-C-EA8016, HSCG38-04-D-H00008, and HSCG38-10-D-H00003. All three (3) contracts were sole source to L3 Communications/Wescam. A sources sought notice was posted on FedBizOps on January 28, 2014 with a closing date of March 3, 2014. The market research showed that L3 Communications/Wescam is the sole designer and OEM for this equipment and there are no approved sources that can fulfill the requirements for this acquisition.

(9) Any other facts supporting the use of other than full and open competition.

The USCG did not purchase data rights as part of the initial system acquisition for the MX-20 EO/IR System; therefore, it would be difficult to take steps to foster competition as the manufacturing, performance and acceptance data are proprietary and the USCG does not have adequate technical descriptions. The USCG has inquired with L3 Communications/Wescam on the availability of this information several times. In October 2013, L3 Communications/Wescam clarified that they are not interested in selling the proprietary rights to this system nor do they have authorized repair centers for the MX-20 EO/IR System.

(10) Listing of the sources, if any that expressed in writing, an interest in the acquisition.

A sources sought notice was posted on FedBizOps for a thirty-four (34) day period on January 28, 2014. A response was received from L3 Communications/Wescam stating they are the OEM and the only authorized supplier that can provide proper repair of the turret systems originally designed and supplied by them for the USCG. A second response was received from BAE Systems of Warner Robins, GA., on March 12, 2014, indicating the ability to repair the MX-20 EO/IR System. They stated they have an open agreement with L3 Communications/Wescam to repair any of their products, if requested and mutually agreed upon. They acknowledged that although BAE Systems currently do not repair the MX-20 EO/IR System, expanding their capabilities to support the MX-20 would be fairly insignificant because the systems are very similar in technology and houses a lot of the same repair parts as well as similar or same repair procedures, test equipment and special tools. On April 1, 2014, notification was received from L3 Communications/Wescam stating that while BAE is an authorized Wescam Service Center, they have only been trained and tooled to support AFSOC MX-15 Single Sensor Systems. They are not tooled, trained or qualified to repair L3 Communications/Wescam MX-20 Systems, and they do not have the rights to use L3 Communications/Wescam Intellectual Property to compete against L3 Communications/Wescam for any USCG repair activity. On April 9, 2014 notification was received from BAE Systems that they would not pursue this effort any longer.

(11) A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for required supplies or services.

The USCG did not purchase data rights as part of the initial system acquisition of the MX-20 EO/IR System; therefore, it would be difficult to take steps to foster competition as the maintenance manuals and technical descriptions are proprietary to the OEM. The USCG does not have the required data or drawings to overcome the sole source barrier to full and open competition and L3 Communications/Wescam has refused to sell or license the necessary propriety information to the USCG or to a third party competitor; however the USCG will check annually with L3 Communications/Wescam on the availability of technical data released in order to promote competition. In the event funding becomes available to pursue proprietary data, the USCG will actively pursue unlimited data rights such that other interested parties may submit a proposal. When it becomes necessary to replace the MX-20 EO/IR system, the Coast Guard will satisfy the future system requirement through full and open competition.

(12) 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.

John Turmelle

Date Item Manager, USCG, ALC, LRS Product Line

(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.

Nancy DeBerry Date Contracting Officer, USCG, ALC, LRS Product Line

(14) Legal Review and Concurrence:

I have reviewed this justification and deemed it legally sufficient.

Attorney Date

CG LSC-9E

CONCURRENCE:

I agree with the Contracting Officer 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.

David S. Burgess, Chief of Contracting Officer, USCG, ALC Date

APPROVAL:

J.F. Martin, CAPT, USCG

Date

CG ALC

Command Procuring Activity Competition Advocate