JOTFOC_-_FOIA_Redactions.pdf

Justification for Other than Full and Open Competition

Under 41 U.S.C. 1901

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

Requirements

Solicitation Number HSCG40-14-R-61250

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

Commercial Items, the justification for the 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), U.S. Coast Guard (USCG) Surface Force Logistics Center

(SFLC), In-Service Vessel Sustainment (ISVS) section, located at 707 E. Ordnance Road, Baltimore, MD

21226 proposes to enter into a contract on a basis other than full and open competition.

2. NATURE/DESCRIPTION OF THE ACTION

The Department of Homeland Security, U.S. Coast Guard, Surface Forces Logistics Center (SFLC) has a requirement, on a sole source basis, for upgrading the various software and hardware subsystems of the

Machinery Plant Control and Monitoring System (MPCMS) currently installed on all 225’ Sea Going

Buoy Tenders (225 WLB) class cutters. The intent of the procurement is to award a Requirements contract consisting of one (1) base year and two (2) option years, utilizing firm, fixed pricing, to the

Original Equipment Manufacturer (OEM) of the system, L-3 Communications Henschel, located at 90

Nemco Way, Ayer, MA 01432. The acquisition will use the commercial acquisition procedures established under FAR Part 13.5, Test Program for Certain Commercial Items. The Independent

Government Cost Estimate (IGCE) for this requirement is $5,004,155. The requirement will use

Acquisition, Construction &Improvement (AC&I) funding, which will be obligated under individual task orders. The AC&I funding will be available for five (5) years from the appropriated Fiscal Year.

3. DESCRIPTION OF SUPPLIES/SERVICES

This requirement is for the procurement of software and hardware development, installation and commissioning, integrated logistics documentation, depot and unit level spare parts, integration with the

TANONET (a proprietary data network protocol) MPCMS Remote Terminal Units (RTU’s) and L3

Dynamic Positioning System, home port and Coast Guard Yard deployment to all WLB-225’ Cutters, plus one installation at the Integrated Ships Control System Training Center.

Base/Option IGCE

Base 12 Mo. $2,086,215

1st Option 12 Mo. $2,281,400

2nd Option 12 Mo. $ 636,540

TOTAL: 3 Years $5,004,155

Under 41 U.S.C. 1901

4. IDENTIFICATION OF STATUTORY AUTHORITY PERMITTING USE OF OTHER THAN

FULL AND OPEN COMPETITION

The statuary authority permitting other than full and open competition is 41 U.S.C. 1901 implemented by

FAR 13.501(a)(ii).

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

AUTHORITY CITED

The limitation to procure only OEM upgrades must be enforced or the Government will experience negative repercussions in terms of time and cost. The 225-WLB MPCMS is a critical shipboard system that provides control and monitoring of the cutters’ propulsion plant and auxiliary systems. The MPCMS also provides integration of the cutters Dynamic Positioning System, which is used in one of the cutter’s primary mission to maintain buoys and other navigational aids in U.S. waterways.

This project includes a modification to the hardware and software components of an existing system that is proprietary to the OEM, which includes changes only the OEM can make without replacing the entire system. Changes to this system must be carefully implemented, as this is the main navigational and positional system installed, and provides the ability to operate the cutter with a reduced crew size, while increasing mission effectiveness, vessel control, and vessel safety.

This project includes upgrading the obsolete subsystem Versa Module Europa (VME) style of computers running ADA software developed by L-3 COM. In order to accomplish the MPCMS subsystem upgrade vendors need the original source code and also require the ability to interface with the system’s remaining components, which communicate using TANONET. The technical and software data and the rights to use this data were not procured or available for procurement at this time as indicated in Section 6. The

Government does not possess the necessary data required to obtain full and open competition for a subsystem upgrade.

6. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOLICITED FROM

AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

In accordance with FAR Subpart 5.2, in an effort to solicit as many potential sources as practical, a sources sought notice was posted on FedBizOpps (FBO) on May 30, 2014 with a response date of June 9, 2014, advising industry that it is the Government’s belief that only L-3 COM Henschel could successfully provide a subsystem upgrade to VME computers.

The only response received was from L-3 COM Henschel which expressed an interest in receiving the solicitation when it was released.

Additionally, the Government requested L-3’s position regarding the acquisition of data rights to the

MPCMS software, hardware, and source codes during market research and received a letter dated 24 June

2014 declining our request.

Under 41 U.S.C. 1901

7. DETERMINATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST

TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

The Contracting Officer anticipates that the cost to the Government will be fair and reasonable based on market research performed and price history of previously procured commercial subsystem upgrades on the L-3 COM Dynamic Positioning System installed on the 225-WLB cutters, and long term MPCMS technical support and logistics support price reasonableness. Lastly, price analysis will include a comparison of the proposal to the IGCE.

8. DESCRIPTION OF MARKET RESEARCH

Market research was conducted in accordance with FAR Part 10 during the period of October 2013 through June 2014, and the results confirmed that only the OEM has the proprietary data rights to the software they’ve developed. Additionally, the Government contracted a third party vendor to conduct a

Business Case Analysis (BCA) to help identify an appropriate solution that was the most cost effective, timely, and contained the least amount of risk. The BCA evaluated various options that included upgrading the obsolete VME components using VME technology, upgrading the VME computer subsystem using hardware that was more widely available, or replacing the entire system using either commercial or government entities. The results of the BCA recommended replacing the VME computer system using PLC/PC components. An additional follow-up evaluation effort determined that the lowest risk, most economical, and timely solution would be to upgrade using PC technology similar to the upgrade path chosen by the other Government Agencies that have similar systems using the same components.

Specifically, the BCA compared costs and time to replace the entire system from three alternate sources:

1) a NAVSEA solution similar to the MPCMS installed on USCGC 270’ WMEC cutter with a $32M projected cost to develop and install on the 225 WLB cutters, 2) a commercial solution with a $38M cost with costs derived from experience replacing similar sized systems, and 3) the recommended OEM solution with a total projected cost of less than $10M. Time to develop and deploy the OEM solution as prototypes on the first two (2) 225’s is approximately 6 months (followed by additional installation, testing, and training on the remaining 225’s) versus the 24 months required by a full system replacement prototype and allows for a cost savings of over $20M from the alternative replacement options.

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

COMPETITION

SFLC IBCT, ESD-ESS and ESD-ISVS recommended that ISVS implement L-3 Henschel’s proposed solution in a white paper dated 27 May 2014, summarizing additional efforts to analyze MPMCS upgrade options. The SFLC is confident that this solution can be implemented across the WLB fleet within the required 2 1/2 year timeframe.

A final decision was made by the Coast Guard’s Technical Authority (CG-4) to pursue upgrading the obsolete VME computer system by the OEM based on estimated cost, time, and risk versus replacing the entire system.

Under 41 U.S.C. 1901

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

THE ACQUISITION

A sources sought synopsis was posted on FedBizOpps 30 May 2014 to 09 June 2014, and the OEM, L-3

COM Henschel, was the only source that responded.

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

These parts, components, and software will continue to be an on-going need for the Coast Guard.

Although the Coast Guard does not currently own the required software, specifications, etc., to evaluate other than OEM subsystem components, the Government will make all attempts to obtain this data and rights to software for future acquisitions. The Government will also continue to conduct market research in accordance with FAR Part 10 to identify potential sources in the event the L-3 networks with other partners. The Government anticipates that this upgrade path will allow the Government to procure and maintain the hardware used in the upgrade independent of the OEM in order to maintain the system’s computer components.