J&A_Redacted.pdf

Justification 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 Number: HSCG38-17-Q-500020

Pursuant to the requirements of the Competition in Contracting Act and in accordance with the requirements of FAR 13.5 Simplified Procedures for Certain Commercial Items, this justification is prepared under the authority of FAR 13.501, Special Documentation Requirements. Use of FAR 13.501 is justified by the following facts and rationale using the format at FAR 6.303-2 modified to reflect an acquisition under the authority of Simplified Acquisition Procedures at 41 U.S.C. 1901:

(1) Agency and Contracting Activity.

The United States Coast Guard (USCG), Aviation Logistics Center (ALC), Engineering Services Division (ESD), in 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 Other Than Full and Open Competition (J&A) for review and approval.

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

Approval is requested to solicit, on an other than competitive basis, a follow-on firm-fixed price requirements contract to procure material, maintenance, and technical/engineering services to support the USCG Vibration Analysis Program. The material and services are considered commercial in nature and will be procured utilizing the procedures listed in FAR Part 12. This requirement is a follow-on to contract HSCG38-13-D-500002 which expires January 30, 2018.

Fiscal year 2018 Operating Expense Funds will be utilized to fund the base year in the amount of with a total contract value of

The proposed contractor is:

Helitune Inc.

Cage Code: 3KKA6 190 Grove St.

Elk Grove Village, Illinois 60007-1120

(3) Description of the Supplies/Services.

The requirement is to acquire calibration, function testing, repair, technical/engineering support services and supply sparing to effectively support the RT5JS+ Rotortuner, RT-JEMS Jet Engine Monitoring System, associated software and firmware, and a variety of adapter and interface devices. The RT-5JS+ and RT-JEMS Rotor Track and Balancing (RTB) equipment monitors vibration and balance levels on the MH-65 helicopters, HC130, HC144 and HC27 fixed-wing aircraft.

By continuously monitoring the vibration levels of the aircraft, the USCG can accurately assess the condition of the aircraft and its components. This will provide information as to whether or not any components are deteriorating and if component failure is imminent. This will allow the

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

Solicitation Number: HSCG38-17-Q-500020 replacement of any failed components before a tragedy occurs. Failure to acquire these services and supplies may cause aircraft to be grounded.

It is anticipated that one (1) firm-fixed price requirements contract will be negotiated and awarded, consisting of one (1) one-year base period and four (4) one-year option periods.

The estimated total of the base year plus all options is as shown below:

Period Total

BASE YEAR

OPT YR 1

OPT YR 2

OPT YR 3

OPT YR 4

GRAND TOTAL

(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) as implemented by the Federal Acquisition Regulation (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.

Beran Instruments Ltd. located in Devon, England is the only company with the proprietary rights and data necessary to provide calibration, function testing, repair, technical support services and supply sparing to effectively support the RT5JS+ Rotortuner, RT-JEMS Jet Engine Monitoring System, associated software, firmware and a variety of adapter and interface devices.

Helitune Inc. (DBA Beran USA) is the Beran subsidiary and licensed to provide all in-country sales and support functions for the Helitune/Beran equipment. To date, Helitune Inc. does not utilize any third parties to perform these activities on its behalf. This was reiterated in a letter received from Helitune dated on March 17, 2017.

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

This procurement was forecasted in the DHS-Acquisition Planning Forecast System (APFS) No.

F2016035446. A Sources Sought was posted to Federal Business Opportunities (FBO) March 21, 2017. Two sources identified in paragraph 10 expressed an interest to the Sources Sought notice.

In accordance with FAR 5.201, the intent to contract for these components and services will be advertised on FBO as a combined synopsis solicitation under streamlined acquisition procedures

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

Solicitation Number: HSCG38-17-Q-500020 for commercial items utilizing FAR Part 12.6. Any eligible vendor may submit a proposal; all responsible offers will be considered. If any responses are received as a result of this solicitation, the file will be documented accordingly and the requirement competed among all eligible offerors. Award will be based on the lowest priced technically acceptable offer.

(7) Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable.

It is the Contracting Officer's opinion that prices ultimately negotiated for this procurement will be fair and reasonable based on a comparison to commercial prices, a comparison to similar items and, if determined necessary, an analysis of other than cost and pricing data that will be requested in the solicitation.

(8) Description of Market Research.

Market research completed on March 16, 2017 indicated that the procurement of these items and/or similar parts is commercial in nature. The RT-5JS+ and RT-JEMS configurations can be used on all operational helicopters. According to Helitune’s website, there are currently more than 1,000 Rotortuner systems.

Prior to the Sources Sought posted on FBO, Helitune provided a letter dated March 17, 2017 stating that “intellectual property and all other rights in relation to this equipment are exclusively owned and retained by Helitune, and no third parties have access to the intellectual property in relation to these products. Helitune does not intend to release this information to the USCG or any other third party”. They also stated that “failure to obtain the appropriate Certificate of Calibration will void the equipment accuracy and should be removed from use on aircraft as a Safety of Flight issue”.

Market research completed on March 16, 2017 shows that there are several different companies that also offer some form of Vibration and Analysis equipment. However, none of them are able to calibrate or repair the Helitune RT-5JS+ and RT-JEMS system currently used by the USCG.

Their systems are also proprietary and changing to a new system would require years of testing and evaluation. Since a new system would also be a non competitive procurement, changing to a new system as this time would not be cost effective.

(9) Any Other Facts Supporting the Use of Other Than Full and Open Competition.

The Original Equipment Manufacturer (OEM) has refused to sell the data rights to this equipment which has limited the USCG’s ability to provide adequate technical descriptions to potential new sources. Therefore, it is impossible to take steps to foster competition as the manufacturing, performance, and acceptance data are proprietary to the OEM.

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

Solicitation Number: HSCG38-17-Q-500020

(10) A Listing of the Sources, if Any That Expressed in Writing, an Interest in the Acquisition.

A Sources Sought was posted to Federal Business Opportunities (FBO) on March 21, 2017.

Only two interested companies responded: Helitune, CAGE 3KKA6, 190 Gordon Street, Elk Grove Village, IL 60007 and Angels Instrumentation, Inc, CAGE 1SJM1, 928 Canal Drive, Chesapeake, VA 23323. Angels Instrumentation inquired if the calibration services for the identified accelerometers could be accomplished under an existing contract that the Coast Guard holds with Angels Instrumentation. The accelerometers are only one part of the total Helitune RT-5JS+ configuration.

Angels Instrumentation is not certified to provide calibration, repair or engineering services on the complete RT-5JS+ Rotortuner Kits and the RT-JEMS Jet Engine Monitoring System. While Angels Instrumentation could be a viable source for that one piece of the system, the USCG would have to dismantle the kit to send the one piece to be calibrated, and have to send the remainder of the unit to the OEM for the rest of the calibrations. After getting the pieces back from two separate manufacturers, the entire kit would have to be reassembled. This could cause the calibrations that had been performed to be voided. This would not be a cost effective or safe method to complete the calibrations on the RT-5JS+ or the RT-JEMS systems. As an existing contract with Angels Instrumentation already exists when it is necessary to only calibrate the accelerometers, services under that contract will continue for that purpose. When an entire RT- 5JS+ Rotortuner Kit requires calibration (of which can only be performed by Helitune) then the accelerometer will be issued with the kit.

(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 Supplies or Services Required.

The data rights to these components were not purchased with the initial buy nor are complete specifications and drawings for these components available to the USCG. As a result of the above, it would be difficult to foster a competitive procurement effort. ALC is tasked with supporting systems that have been deployed for use in the aviation community. Ensuring the right components are available is crucial to, not only the USCG’s mission readiness, but also the safety of the flight crews.

For these reasons, these parts must be calibrated, repaired and have traceability to the OEM which has prevented the agency from taking actions to overcome barriers to competition. In an effort to increase competition among affiliates and distributors, extensive internet database researches are conducted (i.e. GSA, FEDLOG research, Inventory Locator Service, Haystack).