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HSCG40-13-R-30226

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

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

BRAND NAME JUSTIFICATION

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

Agency Requirements RFP No. HSCG40-13-R-30226

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

1. Agency and Contracting Activity.

The United States Coast Guard, Surface Force Logistics Center (SFLC), Long Range Enforcer Product Line (LREPL), proposes to enter into a contract on the basis of other than full and open competition.

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

The Coast Guard has a requirement for the purchase of three (3) Fairbanks Morse Engine (FME) Center Section Overhaul Kits in support of the 378’ WHEC (High Endurance Cutter) class vessels’ propulsion machinery. The SFLC anticipates that a commercial firm fixed price contract will be awarded to Fairbanks Morse Engine (OEM) or its authorized distributor, Incredible Supply Logistics, utilizing the procedures set forth in FAR Subpart 6.3 – Other than Full and Open Competition, FAR Part 12 – Acquisition of Commercial Items, and elements from FAR Part 15 – Contracting by Negotiation, as appropriate. The estimated cost is $1,318,427.34 The delivery date of these kits is 210 days after award of the contract.

This justification documents SFLC’s requirement to acquire commercial brand name parts, in response to this requirement.

Original Equipment Manufacturer (OEM):

Fairbanks Morse Engine 701 White Avenue Beloit, WI 53511-5492

Authorized Distributor:

Incredible Supply Logistics 1439 N. Great Neck Road

Virginia Beach, VA 23454

3. Description of Supplies or Services:

This requirement is for three (3) complete FME center section overhaul kits needed to repair and overhaul the 3600 hp FME Model 38TD 8-1/8 Opposed Piston engines. These kits will be purchased and stored as warehouse ready-for-issue kits in anticipation of scheduled dockside availabilities during Fiscal Year (FY) 2014. During that period, three FME Model 38TD 8-1/8 Opposed Piston Main Diesel Engines (MDE’s) are scheduled to be overhauled on the WHEC class cutters. A Center Section Overhaul kit consists of a number of parts such as gaskets, piston assemblies, bearings, drive hub and gear assemblies, camshafts, shims, nozzles, bushings, cylinder liners, rings, couplings, etc., all of which are necessary to overhaul a WHEC MDE.

CLIN Item Description Part No. National Stock Number Qty Unit Price Total

0001 Center Section Overhaul Kit 16612392 2815-01-586-7128 3 $439,475.78 $1,318,427.34

Total $1,318,427.34

4. Identification of the 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) implemented by the Federal Acquisition Regulation (FAR) 6.302-1(c) entitled “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements,” “Application for Brand Name Descriptions.”

5. Demonstration that the Nature of the Acquisition Requires Use of the Authority Cited:

This acquisition must be made using brand name parts manufactured by the OEM, Fairbanks Morse Engines. FME is the only known source that possesses the proprietary knowledge and design data and drawings to manufacture these parts for the FME Model 38TD 8-1/8 Opposed Piston engines used aboard WHEC class vessels. The Coast Guard does not possess the necessary drawings and specifications that would enable another vendor to manufacture the parts kits listed.

Several of the MDE’s installed in the WHEC’s are approaching their maximum engine operating hours requiring routine overhaul and maintenance during upcoming scheduled dockside availabilities. The leadtime for delivery of the kits is 210 days. If the parts kits are not purchased now and made available for installation during these upcoming (FY 2014) cutters’ dockside availabilities, the cutters will exceed their engine operating hours per COMDINST M9000, Naval Engineering Manual, which could result in catastrophic failure of the engines causing delays to the cutters’ mission.

Unscheduled/emergency dockside availabilities take valuable Coast Guard assets out of commission while the vessel is being repaired. Spare parts may have to be ordered from the manufacturer causing further delays to the cutter’s mission. Using other than OEM parts or parts that do not fit or are not fully compatible with the equipment being repaired could cause problems and delay the vessels’ return to operational status causing degradation of the vessel’s primary mission resulting in loss of life and property or failure to meet Coast Guard operational commitments.

Reverse engineering has not been pursued because of the criticality of the equipment in which the parts are installed. Without drawings and tolerances, risky assumptions must be made as to clearances and tolerances required between the various moving parts.

There is no way to ascertain whether the OEM part that is being reverse engineered has been manufactured on the high side or low side of the allowed tolerance. Without this critical information, the resultant reverse engineered parts could cause damage or failure to the equipment. The contract specialist contacted Fairbanks Morse Engine to inquire whether they would be willing to share or sell the necessary proprietary. FME in return provided a letter of OEM data rights refusal (see Attachement A).

The use of OEM brand name parts will ensure components and processes are sufficient to enable physical and functional interchangeability, as well as identifying source, size, configuration and performance requirements.

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

In accordance with FAR 5.2, a synopsis of this requirement was posted on the Federal Business Opportunities (FedBizOpps) website as a sole source procurement to Fairbanks Morse Engine on July 18, 2013. Interested firms were invited to submit responses to the notice. The response date was July 29, 2013. Interested firms were required to demonstrate their ability to provide the Fairbanks Morse Engine parts kits.

While no formal responses were received in response to the sources sought notice, the contract specialist was contacted by both Incredible Logistics Supply (ILS) and FME after the notice closing date of 29 July 2013. ILS president Chris Faison called the contract specialist the day after the notice closed to inquire about the requirement. ILS is FME’s sole authorized distributor for these parts. David Hoover of FME emailed the contract specialist on 31 July 2013 to tell him that they had been notified of the upcoming Coast Guard requirement by ILS.

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

The Contracting Officer anticipates the final negotiated price will be fair and reasonable, based on the following. A price analysis will be performed to ensure a fair and reasonable price is negotiated in accordance with FAR 15.404. We will compare proposed prices with historical prices and with prices of component parts used on other vessels that are most similar to the WHECs. Additionally, in accordance with DHS policy, the offeror may be required to submit Data Other Than Certified Cost or Pricing

Data (FAR 15.403-3) to support price negotiations. If by any chance the proposed prices are equal to each other the delivery schedule will become the determing factor for award.

8. Description of market research:

The Contracting Officer’s Technical Representative (COR), Mr. Gary Pehrson, conducted market research from June 10 - 24, 2013 by carefully evaluating the technical requirements for this acquisition. The result of his evaluation follows.

The Fairbanks Morse Engine technical data currently available to the U.S. Coast Guard is inadequate to seek out manufacturing resources of parts that could satisfy performance, form, fit, and function requirements since a significant portion of this data remains proprietary to Fairbanks Morse Engine.

In addition, the COR found that the Coast Guard did not purchase the rights to drawings, specifications, engineering control procedures and proprietary methods that the COR would need to evaluate any proposals other than the OEM. Fairbanks Morse Engine does not publicly advertise this information or provide any technical publications concerning the equipment on the 378’WHEC vessels.

Fairbanks Morse Engine indicates on its company website (www.fairbanksmorse.com/oem_parts.php) that it is the only authorized OEM parts provider for Fairbanks Morse Opposed Piston engines. However FME has recently entered into an agreement with Incredible Supply Logistics allowing them to be an authorized distributor of FME parts. Incredible Supply Logistics is based out of Virginia Beach , VA.

Previous acquisition history research demonstrates past acquisitions have been awarded requiring the same OEM parts.

Contract No. Vendor Competitive Dollar Value

HSCG40-12-C-30224 Incredible Supply Logistics Yes $831,896.00 (2 kits)

HSCG40-11-C-30210 FME No $1,651,821.48 (4 kits)

HSCG40-10-C-30225 FME No $826,777.74 (2 kits)

HSCG40-10-C-30118 FME No $1,240,727.11 (3 kits)

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

Fairbanks Morse Engine is the only known entitiy possessing the original drawings, specifications, engineering control procedures and proprietary methods to ensure the design configuration, manufacturing and quality control required to produce parts to engineering specifications and requirements.

In late 2012, FME established a distributor partnership with Incredible Supply & Logistics of Virginia Beach, VA. At present, ILS is FME’s only authorized distributor for these parts.

10. Sources Expressing Interest in This Procurement:

Fairbanks Morse Engine

Incredible Supply & Logisitcs

11. Agency Actions to Remove or Overcome Competition Barriers on Subsequent Acquisition(s) for the Supplies or Services:

The Coast Guard does not own the required proprietary engineering information and data, i.e. drawings and specifications to evaluate other than OEM parts. We will synopsize similar requirements in the future but because of the age and relatively short expected life of legacy WHECs and longstanding unsuccessful efforts by the Coast Guard to obtain OEM data, it is not realistically expected that barriers to competition will be overcome during the remaining useful life of the WHECs.

12. Technical/Requirements Personnel Certification. I certify this requirement meets the Government’s minimum need and that the supporting data, which forms a basis for this justification, is complete and accurate.

Gary Pehrson Date Contracting Officer’s Technical Representative

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.

Jennifer Stock Date Contracting Officer

14. Legal Review and Concurrence:

Richard Robison Date Procurement Law Attorney

APPROVAL:

Barbara M. Kuklinski Date SFLC, Chief of Contracting Office

Laura Spillane Date CG Headquarters Procuring Activity Competition Advocate

JMApolonio

Typewritten Text

CG Headquarters Procuring Activity Competition Advocate

2013-08-28T12:15:15-0400

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