JA_Ram_Winch__Redacted_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

41 U.S.C. 1901 AND 10 U.S.C. 2304 (c) (1) Sole Source Acquisition

RFQ Number: HSCG85-16-Q-5B4500

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by the Federal Acquisition Regulations (FAR) Part 13.5, Simplified Procedures for Certain Commercial Items, and in accordance with 41 U.S.C. 1901, this justification for under FAR Subpart 13.501(a)(1)(i) is supported by the following facts and rationale:

1. Agency and Contracting Activity.

The Department of Homeland Security (DHS), United States Coast Guard (USCG), Surface Forces Logistics Center (SFLC), Ice Breaker, Buoy and Construction Tender Product Line (IBCTPL), located at 2401 Hawkins Point Road, Baltimore, MD 21226-5000 proposes to enter into a sole source Requirements type contract with RAM Winch & Hoist, LTD under the FAR 13.5, Simplified Procedures for Certain Commercial Items, on a basis other than full and open competition.

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

The SFLC, has a sole source requirement to overhaul Ram Winch & Hoist Model HU40- REMAN/HU40-9.5, with the option to procure new OEM winches to support geographically dispersed WLIC-75, WLIC-100, and WLIC-160 Class Buoy and Construction Tenders. The Requirements contract term will be a base year with four (4) one (1) year options on the basis of other than full and open competition to the Original Equipment Manufacturer (OEM), RAM Winch & Hoist, LTD, 14603 Chrisman Road, Houston, TX 77039.

The Independent Government Estimate (IGE) is over five (5) years. The type of funding shall be Operations and Maintenance (O&M) and Sustainment. Base year task orders through September 30, 2016 will be funded with FY16 O&M funding. All subsequent task orders will be funded with O&M funding for that current year.

3. Description of Supplies/Services.

This acquisition is for the inspection, overhaul, testing, painting, preservation, packaging and marking of the Ram Winch & Hoist Model HU40-REMAN and HU40-9.5 RAM used on the WLIC-75, WLIC-100, and WLIC-160 Class Buoy and Construction Tenders. The Ram Winch & Hoist Model HU40-REMAN/HU40-9.5 is used for anchoring and mooring. These winches are integral and critical pieces of equipment that are required for normal operation. The intent of this procurement is to overhaul the winches, with the option to procure new Ram Winch & Hoist Model HU40-9.5. After the initial open and inspection of winches, the contractor shall develop an individual written inspection report as to the condition of the motors and report to the Contracting Officer and Program Manager whether the winches are beyond economical repair. If determined to be beyond economic repair, an option to purchase new winches may be exercised and new winches will be shipped to the warehouse. If determined to not be beyond economic repair, then the motors will be overhauled. These Ram Winch & Hoist Model HU40-REMAN/HU40-9.5 support geographically dispersed WLIC-75, WLIC-100, and WLIC-160 Class Buoy and Construction Tenders. It is imperative that parts used to repair the winch are exact in fit, form, and function to the parts being replaced. The Ram Winch & Hoist Model HU40-REMAN/HU40-9.5 is an Ingersoll-Rand Model HU40 with a drum modification for USCG use. The drawings, tolerances, and other technical data for the drum modification are proprietary to Ram Winch & Hoist, LLC.

The Ram Winch & Hoist Model HU40-REMAN and HU40-9.5 winches are functionally identical and are stocked under the same National Stock Number (NSN) 3950-01-566-3921. The only difference between the two part numbers is that the HU40-REMAN is remanufactured from an existing winch and the HU40-9.5 is considered as a new part.

It is estimated that up to eleven (11) defective winches will be submitted each year for inspection, and require activation of one or more of the line items noted in the table below. In addition, it is estimated that seven (7) of the eleven (11) winches are expected to be suitable for overhaul. There is an option to procure four (4) new winches each year of the contract, if the winch is deemed beyond economical repair. Exact quantities will depend on the cutter availabilities, individual cutter needs and SFLC warehouse inventory levels. In the event any winch inducted for overhaul is deemed beyond economical repair (BER), the Government may exercise an option to purchase a new Ram Winch & Hoist Model HU40-9.5. This option may also be exercised when necessary to increase the pool of spares in warehouse inventory. For winches deemed BER, the contractor will be authorized to scrap the asset locally and submit a completed Inventory Disposal Report, Standard Form SF-1424 to the Contracting Officer. The overhaul must be conducted by a RAM Winch & Hoist, LTD certified technician, in accordance with OEM specification and standards in order to ensure operability and proper warranty of the equipment. The government intends to award one requirements type contract for the following Contract Line Item Numbers (CLINS):

CLIN DESCRIPTION

0001 Open and Inspect NSN 3950-01-566-3921, P/N HU40-REMAN and submit inspection report to the Contracting in accordance with Specification R-583- 0222 (11 each)

0001AA Overhaul NSN 3950-01-566-3921, P/N HU40-REMAN in accordance with Specification R-583-0222 (7 each)

0001AB Scrap NSN 3950-01-566-3921, P/N HU40-REMAN at Contractor’s facility and submit SF-1424(only BER)

0002 Option to purchase new NSN 3950-01-566-3921, P/N HU40-REMAN-9.5 in accordance with Appendix A of specification R-583-0222 (4 each)

The estimated dollar value for this requirement is:

Period Total

Base Year Option Year 1 Option Year 2 Option Year 3

Option Year 4 Total

It is estimated that sixty four percent of the winches submitted each year for inspection will be suitable for overhaul. Therefore the NAICS Code is 333249-Other Industrial Machinery Manufacturing. This is determined to be a service as defined in FAR Subpart 37.101, Service Contracts-General.

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) and 41 U.S.C. 1901, as implemented by FAR 13.5 entitled Simplified Procedures for Certain Commercial Items.

5. Demonstration that the nature of the acquisition requires use of the authority cited.

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

Inferior quality parts, parts that do not fit or are not fully compatible with the parts being replaced would degrade the reliability and functionality of the equipment.

The original pneumatic winches outfitted on the WLIC-75, WLIC-100 and WLIC-160 class vessels were equipped with a 7 inch diameter drum. The vessel’s anchoring and mooring operations require a 5/8” diameter wire rope on this drum. In accordance with current American Society of Mechanical Engineers (ASME) winch standards, this combination is not recommended. To meet industry standards, the drum has been modified to increase the drum diameter to 9.5. The drawings, design, tolerances and other technical data for this modification are proprietary to Ram Winch & Hoist, LTD.

All manufacturing drawings, specifications, and other technical data pertaining to the parts were not purchased and are not available for use by the USCG and are proprietary to Ram Winch & Hoist. 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 is proprietary. Without adequate data, USCG is not capable of evaluating equal or alternate parts manufactured by other than the OEM. 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.

Statutory Authority 10 U.S.C. 2304(c)(1) and 41 U.S.C. 1901 applies because only one responsible source and no other supplies or services will satisfy USCG requirements. Due to the existence of limited rights in data and patent rights the required overhaul and procurement of the Ram Winch & Hoist Model HU40 REMAN/HU40-9.5 are available from only one source which is Ram Winch & Hoist, LTD. The company has also provided a letter indicating its proprietary data rights to the technology and technical data for the subject requirement.

If this Justification is not approved, the WLIC-75, WLIC-100, and WLIC-160 Class Buoy and Construction Tender’s missions could be jeopardized, because the Ram Winch & Hoist Model HU40-REMAN/HU40-9.5 is used for anchoring and mooring. In order to anchor and moor the cutter, the winches are integral to “parking” the cutter so that it does not move beyond a certain degree. If the cutter is not moored properly, it could lead to disruption of the operation and may result in damages. Additionally, the inability to replenish inventory stock levels with the proper OEM winches and hoists could result in equipment damage, loss of vessel operational hours, inability to complete mission requirements and possible injury to the crew.

6. A description of the efforts made to ensure that offers are solicited from as many potential sources as possible.

In an effort to solicit as many potential sources as practical, a sources sought notice was posted on FedBizOpps (FBO) 28 April 2015, detailing the required work, that proprietary data was involved and notifying the industry that it is the Coast Guard’s intent to award a sole source contract to the OEM, RAM Winch & Hoist, LTD for this acquisition. It also invited vendors with the expertise and required knowledge for this work to submit information discussing such capabilities. No vendors responded to the notice to express an interest in this requirement. Ram Winch & Hoist, LTD was contacted by email and telephone on 28 April 2016 and confirmed their continued interest in this requirement. Procurement history was reviewed to identify any other sources that have supplied the required items. All previous contracts were awarded to Ram Winch & Hoist, LTD.

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

The Contracting Officer has determined that the anticipated awarded price will be fair and reasonable based on price analysis, comparison with the IGE, historical pricing, previous awards and price negotiation. Price analysis will be performed to ensure a fair and reasonable price is determined in accordance with FAR 13.106-3.

8. Description of market research.

In accordance with FAR 10.001 (a) (2), market research was performed in April/ May 2015 and April 2016 to identify companies capable of providing Ram Winch & Hoist model HU40- REMAN and HU40-9.5 winches. Attempts were made by searching the internet for suppliers that may possess the necessary technical data, drawings, manufacturing data, specifications and repair tolerances, and that could provide OEM equivalent winches. The results of the market research revealed that Ram Winch & Joist LTD is the only company that possesses the necessary technical data, drawings, manufacturing data, specifications and repair tolerances to perform the overhaul of the winches.

Acquisition history revealed several contracts were awarded on a sole-source basis to Ram Winch & Hoist because they were the only source available to ensure form, fit, and function on this class of cutters.

a) HSCG40-13-C-40005, purchase of ten HU40-REMAN, Ten Qty

b) HSCG40-14-C-40600, purchase of ten HU40-9.5, Ten Qty

c) HSCG40-14-C-40005, repair of twelve HU40-REMAN, Twelve Qty

Federal Logistics Information Service (Web Flis) and Federal Logistics Data (FED LOG) were searched and Ram Winch & Hoist, LTD was listed as the sole supplier for HU40-

REMAN/HU40-9.5.

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

When the WLIC-75, WLIC-100, and WLIC-160 class cutters were built, the USCG did not purchase the manufacturing drawings for these winches. In order to meet industry standards for combinations of drum diameter and wire rope size, these winches require a drum modification to increase the diameter size from 7 to 9.5 inches. During previous acquisitions, the government attempted to identify other sources capable of furnishing winches with the 9.5 inch modification.

No other sources were found.

The USCG SFLC does not possess the proprietary rights to the technical data, drawings, manufacturing data, specification and repair tolerance, to provide OEM equivalent winches.

Therefore, the Coast Guard does not have any substantive data to compare other manufacturer’s parts to ensure the same fit, form and function; nor does the Coast Guard possess the independent expertise to evaluate other manufacturer’s parts. The use of other than OEM parts, specification and standards could result in the failure of anchoring and mooring, and create shipboard hazards. RAM Winch & Hoist is the only known source that can provide the standards, guaranteeing the latest technologies and designs. Furthermore, the WLIC-75, WLIC- 100 and WLIC-160 class cutters original pneumatic winches were equipped with a 7 inch diameter drum. The vessel’s anchoring and mooring operations require a 5/8” diameter wire rope on the drum. In other to meet industry standards, the drum was modified to increase the drum diameter to 9.5”. The drawings, design, tolerances and other technical data for this modification are proprietary to RAM Winch & Hoist, LTD.

Finally, given all these factors, the Coast Guard must continue to rely heavily on RAM Winch & Hoist, LLC parts, as well as their maintenance and support to assist Coast Guard personnel to reduce the risk of failure and to maintain a high degree of buoy tender reliability.

To keep the existing crane and attempt to support it through another company (other than Ram Winch & Hoist, LLC): If awarded to other than the OEM, the new contractor would have to take custody of one pneumatic winch and reverse engineer all the system components as well as develop knowledge required by certified technical representatives to oversee servicing of the equipment. Sourcing the production of such items would include an undetermined lead time to produce. The reverse engineering timeline is estimated 10 months. Production and quality assurance of the reverse engineered parts, would have to be managed and approved by a technical expert that is well versed in pneumatic winches capability and considered a subject matter expert (SME). This is a potential high risk. The entire process, including the efforts of other fields such as contracting and project management is estimated to take in excess of 2.5 years in which the other class cutters currently in service would not be supported.

If the Coast Guard were to purchase a whole new design from a different contractor:

Requirements for the WLIC-75, WLIC-100 and WLIC-160 class vessels to include design capabilities, compatibility and supportability would have to be created and vetted through the proper Coast Guard entities, estimated at approximately 10 months. Solicitation and award of the new requirement would have to be completed, estimated at approximately 6-8 months.

Production of the new design and install of pneumatic winches, 1-1.5 years; follow on pneumatic winches would be built and installed over the next 7 years based on completing 2 a year. All supportable documents, drawings, tech-pubs, and MPCs would have to be updated to reflect the new design. The time investment would be extensive and personnel hours associated with the above task would also be extensive.

The cost for both of these alternative options is not easily quantifiable and would be substantially higher than continuing to sustain the existing support services through the sole source entity RAM Winch & Hoist, LLC. There is also substantial risk in venturing out to a new design and/or different contractor, particularly in the operational and supportability areas. Additionally, such a decision would have to be made at a different USCG office. USCG does not possess the manpower, expertise or funding to execute these alternatives.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition

A Sources Sought Notice was posted to FedBizOpps on 28 April 2015 to determine if there were sources capable of meeting the requirements of providing genuine Ram Winch and Hoist parts only for the HU40-REMAN/HU40-9.5. No sources expressed an interest in the acquisition.

Further efforts included an internet search to find other suppliers that were capable of selling or repairing the HU40-REMAN/HU40-9.5, and the only results were from excess property resellers.

11. A statement of actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for required supplies or services.

Seeking parts and technical data for the sustainment of WLIC-75, WLIC-100 and WLIC-160 Class Buoy and Construction Tenders will continue to be an on-going need for the Coast Guard.

Seeking expertise from other than Ram Winch & Hoist, on this data cannot be considered for reasons stated earlier in this justification. Although the Coast Guard does not currently own the required parts and technical data to evaluate other than OEM expertise, past attempts were made to request release of data rights to the Coast Guard; and RAM Winch & Hoist, LTD has indicated no interest or intention to sell the data rights. On 21 July 2015 the Coast Guard again inquired about acquiring the proprietary data and Ram Winch & Hoist, LTD again stated the same response. The Government received confirmation from RAM Winch & Hoist, LTD in a letter dated 26 June 2014 and 21 July 2015 that the drawings, design, and tolerance for the 9.5 inch drum modification are proprietary to RAM Winch & Hoist, LTD. RAM Winch & Hoist, LTD is the only known source that possesses the required capabilities, drawings, parts and specifications to ensure the latest design configuration, manufacturing and quality control required to maintain and support the hydraulic motor. As a result of this and the other reasons noted in this J&A, it was determined that RAM is the only contractor that can adequately provide the HU40-

REMan and HU40-9.5 winches to support the geographically dispersed WLIC-75, WLIC-100, and WLIC-160 Class Buoy and Construction Tenders.

It is not anticipated that any future requirements can be competed on a full and open competition basis to repair pneumatic winches to support the WLIC-75, WLIC-100 and WLIC 160 Class Buoy and Construction Tenders. The Government will continue to make all attempts to obtain the data rights for these items for future acquisitions.

(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.

DateContracting Officer

USCG SFLC CPD C&P2 IBCT

(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.

Technical Representative Date

(14) Legal Review and Concurrence:

I have reviewed this justification and deemed it legally sufficient.

Attorney Date USCG, Legal Service Command

Date

USCG SFLC CPD C&P2

HSCG85-16-Q-5B4500

11/5/15

24MAR2016

Date

Chief of Contracting Office

USCG SFLC CPD

APPROVAL:

DateDOUGLAS M. SCHOFIELD, CAPT

Command Procuring Activity Competition Advocate

USCG SFLC

HSCG85-16-Q-5B4500