Attachment_1_redacted_JA.PDF

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

UNDER 41 U.S.C. 1901

Only One Responsible Source and No Other Supplies or Services

Will Satisfy Agency Requirements

RFQ Number: HSCG40-14-Q-19007

Pursuant to the requirements of Federal Acquisition Regulation (FAR) Part 13.5, Test Program for

Certain Commercial Items, the justification for use of the statutory authority is supported by the following facts and rationale required under FAR 13.501(a)(1)(ii).

1. AGENCY AND CONTRACTING ACTIVITY:

The Department of Homeland Security (DHS), United States Coast Guard (USCG) Surface Forces

Logistics Center (SFLC), Icebreaker, Buoy and Construction Tender (ICBT) section, located at 705

E. Ordnance Road, Baltimore, MD 21226, proposes to enter into a Firm Fixed Price contract on a basis other than full and open competition.

2. NATURE/DESCRIPTION OF THE ACTION:

The USCG SFLC IBCT has a requirement to obtain on a sole source basis two (2) Parker

Hannifin/Village Marine Reverse Osmosis Water Makers, Part Number 2/2K, ACN 4620-01-F12-

2593. The Reverse Osmosis Water Makers are used on the WLB-225, WMEC-210, WMEC-270 and

WPB-110 USCG Cutters. This acquisition will be used to support a Major Maintenance Availability for the WLB-225 fleet. The Independent Government Cost Estimate (IGCE) is $527,800.00.

It is the USCG’s intention that a sole source, commercial, Firm Fixed Price type contract will be awarded using the procedures set forth in FAR Part 12, Acquisition of Commercial Items, FAR

Subpart 13.5, Test Program for Certain Commercial Items.

3. DESCRIPTION OF SUPPLIES/SERVICES:

The requirement is to purchase two (2) Reverse Osmosis (R/O) Water Makers. One will be used to support the USCGC OAK (WLB-211), a 225 foot Sea-going Buoy Tender during its depot level maintenance availability and the other R/O Water Maker will be stocked as a spare to be utilized for the next availability. The vessels WLB-225, WMEC-210, WMEC-270 and WPB-110 USCG Cutters use the R/O Water Maker to provide potable water to the crew so they may be able to sustain themselves in extended periods of time away from port. It is critical that the R/O Water Maker is operating properly for the ship to be able to get underway and perform their missions.

A Parker Hannifin/Village Marine R/O Water Maker was purchased as a sole source (HSCG85-11-P-

P45MV4 via Aqua Pro Properties which conducted business as Village Marine Tec and Offshore

Marine Laboratories and was acquired by Parker Hannifin in 2008) and installed on the “A” Class

WLB 225’s under the authorization of Time Compliance Change Order/ Engineering Change

(TCTO/EC) 225-WLB-A-025. This justification and approval covers the SFLC IBCT’s need to acquire the R/O Water Makers in relation to the current Compliance Change Order/Engineering

Change. The acquisition would provide R/O Water Makers to support the WLB Fleet and can only be met by the Parker Hannifin / Village Marine Reverse Osmosis Water Maker, Part Number 2/2K, ACN 4620-01-F12-2593. There are no authorized distributors available to sell the R/O Water

Makers.

The Original Equipment Manufacturer (OEM) for this Procurement is:

Parker Hannifin Corporation

Filtration Group/Village Marine

POC: Scott Johnson scotta.johnson@parker.com

310-615-9911

Supply: Parker Hannifin / Village Marine Reverse Osmosis Water Maker

Part Number: 2/2K

ACN: 4620-01-F12-2593

Price: $263,900.00 each

Quantity: 2

Total Price: $527,800.00

Required delivery date is 1 March 2015.

4. IDENTIFICATION OF STATUTORY AUTHORITY PERMITTING OTHER THAN FULL

AND OPEN COMPETITION:

The statutory authority permitting other than full and open competition is 41 U.S.C. 1901 implemented by FAR 13.501(a)(1)(ii).

5. DEMONSTRATION THAT THE NATURE OF THE ACQUISITION REQUIRES USE OF

AUTHORITY CITED:

The limitation to use only OEM equipment must be enforced. To date, only OEM equipment has been used and has proven to be effective. Using other than OEM equipment could cause failure to occur; degradation to the vessel’s primary mission could result in the loss of life and property or failure to meet USCG’s operational commitments. The WLB-225, WMEC-210, WMEC-270 and

WPB-110 operate independently of other vessels. Inferior quality equipment, equipment that does not fit or is not fully compatible with the equipment being replaced would not only delay the already expensive availability, but could further corrupt the reliability and functionality of the other equipment. Because the IBCT vessels operate independently and in remote locations, the critical potable water producing equipment must be reliable and dependable. Using other than the OEM could radically affect the reliability and drastically shorten the mean time between failures of this equipment.

As a result of TCTO/EC 225-WLB-A-025, WLB-225 class cutters are modified with a specific foundation, piping and electrical configuration to accommodate the Village Marine Model 2/2K R/O mailto:scotta.johnson@parker.com

Assembly. Use of an alternate water maker would require costly engineering changes to modify the foundation and re-locate piping and electrical connections.

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. Further complicating the reverse engineering process, there is no way of telling whether the OEM equipment 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 equipment could cause damage or failure of the R/O equipment.

All reproduction manufacturing drawings, specifications, and other technical data pertaining to the parts have not been purchased and are not available for use by the USCG. The

USCG does not possess manufacturing data required to obtain full and open competition. Further, the scope of manufacturing, special tools and equipment required to manufacture the various parts are unknown. The technical data that is needed is proprietary. Without the adequate data, the USCG is not capable of evaluating equal or alternate parts manufactured by other than the OEM. In a letter dated 14 April 2014 to the USCG, Parker Hannifin Corporation, Filtration Group/Village Marine affirmed that Parker Hannifin is the parent company of Village Marine. Parker also stated there are

Parker distributors which only provide consumables and repair parts to the USCG; the R/O Water

Maker used on the USCG Sea Going Buoy Tender Fleet is a sole source. In a separate email, the

USCG asked if Parker Hannifin would consider selling its rights to the R/O Water Maker to the federal government. Parker-Hannifin’s response, dated 15 July 2014, communicated they would not sell the rights. The use of OEM equipment will ensure components and process 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 DEEMED PRACTICAL:

In accordance with FAR Part 13, Simplified Acquisition Process (SAP), a combined

Synopsis/Solicitation was issued 8 April 2014 on the Federal Business Opportunity (FBO) website.

A non-competitive sole source purchase was anticipated. It was believed that Parker Hannifin or one of its distributors could fulfill the requirement. Parker and one of its distributors, Shuster

Corporation, offered quotes. Parker proposed the ACN version of the R/O Water Maker. Shuster, however, could only offer a quote for the Village Marine R/O 2/2k system without the ACN configuration. Parker retains all technical rights to the ACN. The quote submitted by Parker was over the SAP threshold of $150,000.00. The RFQ was cancelled and pursued under formal acquisition procedures.

On 26 June 2014, a new Sources Sought notice for the R/O Water Maker was published in accordance with FAR Part 5, Publicizing Contract Actions and FAR Part 10, Market Research. Four

(4) vendors showed interest (listed in paragraph 10); however, because Parker retains the sole source rights to the ACN configuration, no other vendors besides Parker can satisfy the USCG’s requirement. This procurement was posted on DHS-Acquisition Planning Forecast System at http://apsfs.dhs.gov.

7. DETERMINATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED

COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE:

The Contracting Officer has determined the anticipated the awarded price will be fair and reasonable based upon price analysis, comparison, historical pricing, previous awards, with the IGCE and price negotiations.

8. DESCRIPTION OF MARKET RESEARCH:

In accordance with FAR 10.001 (a)(2), market research was performed:

Acquisition history revealed a previous contract purchase, HSCG85-11-P-P45MV4 was awarded sole source to Aqua Pro Properties (which did business as Village Marine Tec and

Offshore Marine Laboratories and was acquired by Parker Hannifin in 2008) based upon

FAR Subpart 6.301-2, “Only one responsible source and no other supplies or services will satisfy agency requirements.”

Sources Sought notices posted to FBO in April 2014 (SAP) and June 2014 (formal contract) for suppliers that may possess the necessary technical data, drawings, manufacturing data, specifications and repair tolerances, and that could provide an OEM equivalent water maker.

A letter dated 14 April 2014 from Parker Hannifin confirmed they were the sole source supplier.

Via the internet between 2 April 2014 to 5 April 2014 o Federal Logistics Data (FED LOG) was searched and Parker Hannifin was listed as the sole supplier.

o Federal Logistics Information Service (Web Flis) was searched and Parker

Hannifin was listed as the sole supplier.

Market Research results indicated that there are worldwide distributors for the Village Marine R/O

Water Maker but Parker Hannifin/Village Marine is the only source of supply for ACN 4620-01-F12-

2593, Part Number 2/2K.

9. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND OPEN

COMPETITION:

The USCG does not possess any manufacturing data that would be required to obtain full and open competition. Further, the scope of manufacturing, special tools and equipment required to manufacture the various parts are unknown. Using inferior non-tested or non-approved R/O Water

Maker could significantly impact the mission of the Sea Going Buoy Tenders. The use of another

R/O Water Maker that is not manufactured in accordance with OEM specifications, materials, tolerances etc. could cause equipment failure rendering the vessel unable to complete mission requirements and place the crew in a hazardous environment possibly causing injury or death.

10. LISTING OF THE SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN

INTEREST IN THE ACQUISITION:

The parties expressing interest in writing to the Contracting Officer are:

Armcor

Finance Specialists

POC: John Fedewa fbo@armco

1-800-873-4161 1001 19 th Street

N. Arlington, VA22209

Dutch Valley Supply Comapany

POC: Steve Kelley

Steve.kelley@dutchvalley.com

757-373-9579

970 Progress Center Avenue

Lawrenceville, GA 30043-4803

Marvin Heymann & Associates

Proposal Writing, Protest Attorneys

POC: Aaron Aaron marvin@feddesignbuild.com 513-706-8098 1393 Alligator Drive

Alligator Point, FL 32346

Maxim Evaporators of America, LLC

POC: Monica Rogers mrogers@maximwater.com

318-629-2460

6702 Lnwood Avenue

Shreveport, LA 711062-2624

Parker-Hannifin/Village Marine Technologies

POC: Scott Johnson scotta.johnson@parker.com

310-615-9911

2630 E. El Presidio Street

Carson, CA 90810

Shuster Corporation

Parker Racor/Village Marine Sales

POC: James Doe j.doe@shustercorp.com

508-999-3261

4 Wright Street

New Bedford, MA 02740

Southeast Power Systems

POC: Dale Galation dgalat@se-power.com

407-293-7971

4220 N. Orange Blossom Trail

Orlando, FL 32804

Water Services, Inc.

POC: Richard Hill quotes@water-services.us

1-801-705-4567

372 S. 900 West

Provo, UT 84601-4155

Parker Hannifin is the sole source provider and distributor for the ACN 4620-01-F12-2593, Part

Number 2/2K, R/O Water Makers. In accordance with FAR 13.501(a)(iii) the approved JOTFOC will be posted with the solicitation at the www.fbo.gov website. If proposals are received from qualified sources, they will be fully considered.

11. STATEMENT OF ACTIONS, IF ANY, THE AGENCY MAY TAKE TO REMOVE OR

OVERCOME ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT

ACQUISITIONS FOR SUPPLIES OR SERVICES:

The Coast Guard does not own the required drawings, specifications, etc., to evaluate other than genuine OEM parts; it is not anticipated that any future requirements can be competed on a full and open competition basis. Furthermore it is highly unlikely that the Coast Guard will have the required funding to purchase such rights if offered by the OEM. However, every attempt will be made to obtain applicable drawings, specifications, etc., from the OEM before any subsequent acquisitions occur.

The Government has mitigated barriers to competition by seeking competition among the various

OEM distributors. At this time there are no other known sources that can provide these specialized parts. The Coast Guard will continue its attempts to obtain proprietary data rights and to conduct market research in accordance with FAR Part 10, with a focus on locating vendors that can supply the parts and services that meet required government specifications.

http://www.fbo.gov/

12. CONTRACTING OFFICER’S CERTIFICATION:

I certify that the date supporting the recommended use of other than full and open competition is accurate and complete to the best of my knowledge and belief.

Andrew J. Northcutt Date

Contracting Officer

13. 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.

Andrew G. Ollerman Date

Contracting Officer’s Representative

14. LEGAL REVIEW AND CONCURRENCE:

USCG, Procurement Law Attorney Date

15. LEVEL ABOVE CONTRACTING OFFICER:

Michelle R. Knox Date

Contracting Officer