Redacted_J&A.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

Electro/Optical Infra-Red (EO/IR) Sensor System (ESS) Support Solicitation Number: HSCG38-16-R-500001

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

1. Agency and Contracting Activity:

The United States Coast Guard (USCG), Aviation Logistics Center (ALC), Engineering Services Division (ESD), Elizabeth City, North Carolina proposes to enter into a support contract on the basis of other than full and open competition.

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

The USCG, ALC, ESD seeks approval to award a contract based on other than full and open competition to procure comprehensive support services for the Electro/Optical Infra-Red (EO/IR) sensor system (ESS) and associated hardware installed on USCG aircraft. These systems are manufactured, maintained and repaired by FLIR Systems Inc., herein referred to as FLIR. FLIR is the Original Equipment Manufacturer (OEM) and maintains the proprietary data rights for the manufacture and repair of the ESS and associated hardware. For these reasons, FLIR is the only source capable of providing the required comprehensive ESS support services for the USCG.

The USCG intends to award a requirements contract consisting of one (1) one-year base period and four (4) one-year option periods. The contract value is estimated at $39,169,704.

The proposed contractor is:

FLIR Systems, Inc.

25 Esquire Road North Billerica, MA 01862-2501 (Cage 3UVR3)

3. Description of the Supplies/Services:

The ESS provides aircrews with enhanced search capabilities to locate, identify and track surface targets day or night; a critical capability for both search and rescue and law enforcement missions. This requirement provides for the comprehensive support of the ESS at a firm fixed price. This support includes management, logistical support, asset accountability, tooling, test equipment, depot repair, overhaul, modification and sparing support for the ESS resulting in ready for issue (RFI) systems and components to the USCG field units. In addition, this effort will also provide technical data, engineering support and field service representative services.

This support will continue to ensure the availability of the ESS required to support USCG operations.

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

The total estimated value of the base period plus all options is $39,169,704. The anticipated value of each period of performance is shown in the following table.

Period Total Base $7,173,635

Option Period 1 $7,533,276 Option Period 2 $7,922,451 Option Period 3 $8,346,225 Option Period 4 $8,194,117

4. Identification of the justification and the 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 (b)(1)(ii) 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:

FLIR is the sole design authority and the OEM of the ESS currently installed on USCG aircraft.

FLIR is responsible for furnishing all necessary parts, material, labor, repairs, tooling, test equipment, specifications, technical manuals, logistics, engineering and field service support, sustaining engineering, and facilities to provide comprehensive ESS support for the ESS. The contract will also include provisions for incident notification, access to OEM ground/flight software codes, OEM engineering staff, and technical support.

In order to maintain integrity of the system and ensure compatibility of the replacement for USCG aircraft, these services must be obtained from the OEM or an OEM approved source.

FLIR maintains all proprietary rights, as stated in a letter from FLIR dated 2 October 2015.

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

This acquisition is forecasted in the Department of Homeland Security (DHS) Acquisition Planning Forecast System (APFS), number F2015030015 and can be found at https://www.apfs.gov.

Request for Information (RFI) HSCG38-16-I-500002 was posted to the Federal Business Opportunities (FBO) website on 13 January 2016. The responses to the RFI were adjudicated on 29 August 2016 as detailed in Paragraph 8. This information confirmed the USCG’s position that no source, other than FLIR, is able to provide the required services.

After approval of the Justification for Other than Full and Open Competition, a combined https://www.apfs.gov/

Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements synopsis/solicitation will be advertised on the FBO website and IAW FAR 5.207(c)(16)(ii) the solicitation will include a statement that all responsible sources may submit a proposal or capability statement which shall be considered by the agency. Should a proposal be received by an offeror other than FLIR with evidence of being able to provide comprehensive ESS support or OEM authorization to provide the services, the proposal will be adjudicated at that time.

However, based on the recent adjudication of the responses provided to the RFI and the market research results, it is not anticipated any sources other than FLIR 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 the prices for this procurement will be fair and reasonable based on a price analysis (FAR Subpart 15.404-1 (b)) utilizing a combination of price analysis techniques to include: comparison of proposed prices to historical prices paid, (FAR 15.404-1 (b)(2)(ii)), current published catalog prices (FAR 15.404-1 (b)(2)(iv)), and an analysis of other than certified cost and pricing data (FAR 15.404-1 (b)(2)(vii)).

8. Description of market research:

FLIR is the only OEM approved source for comprehensive ESS support. Market Research completed between March 2015 and January 2016 did not produce any other vendors with the ability to provide the comprehensive ESS support required by this acquisition. Request for Information (RFI) HSCG38-16-I-500002, was posted to FBO website on 13 January 2016 and resulted in only one timely response from FLIR. Two late responses were received from L-3 Sonoma and Elbit Systems of America.

L-3 Sonoma stated that they build, test, and repair ESS systems for WESCAM, another L-3 Division. Elbit Systems of America responded and stated that they were “interested in exploring this opportunity to see what we can do to support the USCG”. The RFI asked any Contractor, other than the ESS OEM, to describe their supplier depot repair/overhaul capability, provide a statement describing the Contractor’s plan to meet the USCG’s requirements and to list the OEM publications they would be able to access to ensure they had the latest technical documentation required to provide the comprehensive ESS support. Neither L-3 Sonoma nor Elbit Systems of America provided any of this information or any other information to suggest they were able to acquire the proprietary information required to provide comprehensive support for the FLIR ESS used by the USCG.

To further validate the information received in response to the RFI, L-3 Sonoma and Elbit Systems of America were contacted to confirm that they did not have the ability, including access to all FLIR manuals, specifications, engineering data, tools, parts, spares, etc., to provide comprehensive support on the USCG's current FLIR ESS. If they did not have the ability, they were asked to provide a response as to why they could not provide the services. L-3 Sonoma

Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements responded that they “are not the OEM” and that “our company is a competitor of FLIR and we do not partner with them for service support.” Elbit Systems of America responded that “we do not have access to FLIR manuals, specifications, engineering data, tools, parts, spares, etc., to provide comprehensive support on the USCG's current FLIR ESS.” They also stated, “we are unable to provide the services requested due to a lack of the data cited above. In order to carry out the services and to be successful in engineering changes we would need access and authority to make changes to the product for long term sustainment.” This information further supports the USCG’s assertion that FLIR is the only company able to provide the required services.

Market research also consisted of internet searches and attendance at the USCG Industry Day in March 2015 in an attempt to locate other commercial sources capable of providing the required comprehensive ESS support. All produced negative results. This procurement was also forecasted in APFS. No other company has contacted the USCG to request information on the APFS entry.

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

None

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

As stated in Paragraph eight (8), FLIR, L-3 Sonoma and Elbit Systems of America provided responses to the RFI. However, neither L-3 Sonoma nor Elbit Systems of America provided any of the required information to show ability to meet the requirements.

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:

As stated in Paragraph five (5), FLIR maintains all proprietary rights and does not grant these rights to any business, organization, person or commercial interest. This policy has limited the USCG’s ability to provide adequate technical descriptions to potential new sources. The USCG will maintain communications with the OEM and will continually conduct market research to identify possible additional sources that may eventually receive authorization to provide comprehensive ESS support for FLIR systems. However, granting access to technical packages or authorizing other firms to support their systems is solely a FLIR business decision.

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

12. 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.

Crystal G. Taber Date Contracting Officer

13. 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.

Bernard Ruetten Date Inventory Manager, ESD

14. Legal Review and Concurrence:

I have reviewed this justification and deemed it legally sufficient.

CG-LSC-9 Legal Office Date

Reviews:

David S. Burgess Date Chief of the Contracting Office

Approval:

James Knight Date USCG Procuring Activity Competition Advocate