7183_11_WMSL_Air_Compressor_Sauer_JOTFOC_redact_Redacted.pdf

HSCG40-17-Q-31727

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

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

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

Solicitation Number: HSCG40-17-Q-31727

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

1. Agency and Contracting Activity.

The Department of Homeland Security, U.S. Coast Guard Surface Forces Logistics Center (SFLC), Long Range Enforcer (LRE) Product Line (PL), located at 2401 Hawkins Point Road, Baltimore, MD, proposes to enter into a firm-fixed price contract, on a basis of other than full and open competition.

2. Nature and/or Description of the Action Being Approved.

The United States Coast Guard (USCG) has a requirement, on a sole source basis, to purchase Sauer Compressors USA brand-name parts which support the operation and maintenance of the Ship Service Air Compressor, installed on the USCG 418-foot Marine Security Cutter, (WMSL) Legend Class of CG Cutters. The period of performance will be for a three month period. The IGCE for this acquisition is for an estimated value of The proposed contract will be awarded to the OEM, Sauer Compressors USA, 245 Log Canoe Circle, Stevensville, MD, 21666, utilizing the procedures established under FAR Part 15 Contracting by Negotiation, in conjunction with FAR Part 12 Acquisition of Commercial Items as defined in FAR Part 2.101(5) (i).

3. Description of Supplies/Services.

The USCG anticipates awarding a purchase order to purchase Sauer Compressors USA parts installed on the USCG 418’ cutters. The CG requires the use of Original Equipment Manufacturer (OEM) parts to match the unique design of existing cutter configuration on the 418’ WMSL cutters. The supplies are considered commercial items and are currently purchased through SAP.

This purchase includes seven (7) line items for a total quantity of two hundred and twenty-five

(225) parts. Theses spare parts will be stored at the SFLC warehouse and will be ready for issue to the fleet when required.

It is anticipated that more parts will be needed as the equipment ages and as additional cutters are delivered we incur stocking shortfalls due to having no formal contract avenue for purchases that exceed the SAP threshold. Purchasing the components below provides significant protection against the Coast Guard not having the required items in stock should an immediate unforeseen need occur as well as expected maintenance these parts are needed for. Just as important is that this purchase allows the Coast Guard supply teams responsible for providing these parts to the fleet the ability to support back-ordered and push parts items requested by the fleet in a timely manner.

Part Number ITEM QUANTITY

WP65L-4KF-NSC SPARE PARTS KIT, NSC 10

37158 LAMELLAR VALVE 30

56235 GASKET 76

BEKOMAT 12 CO PN DRAIN, CONDENSATE 20

85518 FILTER ELEMENT, FLUID 53

030 752 VALVE, SAFETY RELIEF 20

030 915 VALVE, SAFETY RELIEF 16

TOTAL COST

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 USC 2304(c) (1) implemented by FAR Subpart 6.302-1 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.

This acquisition must be made using brand name parts from Sauer Compressors USA, the OEM.

The applicable statutory authority applicable is 10 USC 2304(c) (1) due to because the OEM is the only known source that possesses the required capabilities, drawings, specifications, engineering control procedures and proprietary methods to ensure the latest design configuration, manufacturing and quality control required to produce parts to the latest engineering specifications and requirements. Limitation to the use of OEM parts is as follows:

The limitation to use only OEM parts must be enforced to ensure compatibility and/or interchangeability with existing and future WMSL ship service air systems. It is imperative that all parts conform to the exact same form fit and function as the existing parts. Using other than OEM parts could cause problems that includes starting of the main diesel engines. An air pressure leak from air storage flask by an improper seal could cause failure of the air compressor system which would result in a major degradation of the ship’s ability to perform its mission and put crew safety at risk. Failure to provide pressurized air to the engine propulsion system will also result into engine damage.

During initial development and current building of the WMSL class of vessels proprietary data was requested to acquire for the parts and components utilized. That request was denied. The SFLC does not possess the necessary drawings and specifications that would enable another vendor to manufacture any of the parts listed. The scope of manufacturing, tolerances, specifications, procedures, equipment and special tools required to manufacture these parts is unknown. The technical data needed is proprietary to the OEM Sauer Compressors USA without the adequate data the Coast Guard is not capable of evaluating equal or alternative parts manufactured by other than the OEM. The use of OEM 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.

This requirement was posted in the Acquisition Planning Forecast System (APFS) on February 10, 2017. The APFS number is F2017036132. In accordance with FAR Subpart 5.203, an effort to solicit as many potential sources as practicable, a Sources Sought Notice was posted on the Federal Business Opportunities Website from February 22, 2017 to March 03, 2017. This notice informed the industry of the CG’s intent to purchase these components of an air compressor parts manufactured by the OEM, Sauer Compressor USA. Other organizations having the expertise and required capabilities to provide equivalent parts were invited to submit information discussing such capabilities within nine (9) calendar days after the posting date. The notice yielded one expressing interest in this project. The one interest was the Sauer Compressors USA.

7. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable.

The Contracting Officer determines that the anticipated prices will be fair and reasonable based on comparisons with the IGE, market research, previous history and if necessary price negotiation. Price analysis will be performed to ensure a fair and reasonable price is determined in accordance with FAR 15.404. Finally, the Contracting Officer may request data other than certified cost or pricing data in accordance with FAR 15.403-3 if the initial price analysis does not result in the Contracting Officer’s ability to determine the proposed prices fair and reasonable.

8. Description of Market Research:

Extensive market research was conducted by the Contracting Officer’s Representative (COR) and Contract Specialist (KS) in February 2017 as an effort to indentify companies that can provide the requested services. All technical information is proprietary to the OEM and is unavailable to allow the government to evaluate alternative parts. During market research the COR and Contract Specialist contacted the OEM for a list of qualified distributors. The research showed that only Sauer Compressors USA possessed these capabilities and there are no authorized distributors.

Internet/Industry Contact - The results of the internet research and industry contact revealed that Sauer Compressor USA is the only contractor identified as being the OEM, possessing the necessary technical data, drawings, manufacturing data, specifications and repair tolerances.

The Contracting Officer's Representative (COR) searched Sauer Compressor USA website for authorized distributors, and have an email from Sauer Compressor USA saying that they have no authorized distributors.

FedLog – FedLog research revealed that Sauer Compressor USA as the incumbent for all National Stock Numbers associated with this justification.

Acquisition History – Previous acquisition history research revealed that Sauer Compressor USA was contracted in the past under the following purchase orders: HSCG40-09-P-50425, HSCG40-09-P-30011, HSCG40-12-P-41219, HSCG40-13-P-40148, HSCG40-15-E-40269, HSCG40-15-P-40148, HSCG40-15-P-40436, HSCG40-16-P-40122 and HSCG40-16-P-40314.

9. Any Other Facts Supporting the Use of Other Than Full and Open Competition.

The WMSL air compressor components must conform to design, materials and operational requirements. As stated above, manufacturing drawings, specifications and other technical data are proprietary to Sauer Compressor USA. Sauer Compressor USA refused to sell the proprietary data to the USCG on February 8, 2017. Any attempt to manufacture these parts without the proper specifications, drawings and technical data could result in damage to the ship’s air compressor, fire and serious bodily harm if the system components were to fail. The Government does not possess the technical data and/or drawings pertaining to the manufacturing of Sauer Compressors USA parts, which are proprietary. Therefore, the Government does not have any data to compare other manufacturer’s parts to ensure the same fit, form, and function nor does the Government possess the independent expertise to evaluate other manufacturer’s parts. After market (non-OEM) parts manufacturers do not have access to this proprietary information and therefore could not produce parts that are equal.

10. A Listing of Sources, if Any, That Expressed, in Writing, and Interest in the Acquisition.

A synopsis was issued in FedBizOpps on February 22nd, 2017 requesting that parties express their interest in writing to the contracting officer. Sauer Compressors USA is the only source that expressed interest in this requirement.

11. A Statement of Actions, if Any, the Agency May Take to Remove or Overcome Any Barriers to Competition Before Any Subsequent Acquisition for Supplies or Services Required.

Due to the fact that Sauer Compressors USA owns the technical data and drawings, it is unlikely that they will sell the rights of such data to the Coast Guard. The Coast Guard has made an attempt to acquire them with no success, including an attempt for this acquisition. On February 8, 2017 the Contract Specialist sent an email to Sauer Compressors USA requesting the release of data rights. On February 8, 2017 Sauer Compressors USA chose to retain such information and declined to grant the request for proprietary information. The Coast Guard will continue to engage Sauer Compressors USA for release of proprietary data prior to any subsequent acquisition.

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.

Contracting Officer Date

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 complete and accurate.

Contracting Officer’s Representative Date

14. LEGAL REVIEW

USCG, Procurement Law Attorney Date

APPROVAL:

Contracting Officer