JOTFOC_Redacted.pdf

Page 1 of 6 6/5/2017

Justification for Other Than Full and Open Competition Under 41 U.S.C. 1901 Simplified Acquisition Procedures

Solicitation No.

Pursuant to the requirements under the authority of the simplified procedures for certain commercial items at 41 U.S.C. 1901 as implemented by Federal Acquisition Regulation (FAR) Subpart 13.501 and consistent with the content requirements of FAR 6.303-2 the following facts and rationale supports this sole source justification:

1. Agency and Contracting Activity.

The Department of Homeland Security (DHS), United States Coast Guard (USCG), Surface Forces Logistics Center (SFLC), Long Range Enforcement Product Line (LRE PL) located at 2401 Hawkins Point Road, Baltimore, MD, proposes to enter into a purchase order, 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 MTU America Inc. Brand-name parts which support the operation and maintenance of the 20V1163 TB93 Main Propulsion Diesel Engines (MDE), installed on the USCG 418’ Maritime Security Cutter (WMSL) Legend Class of CG Cutters. The current CG fleet consists of six 418’ WMSL cutters, each with two MDE engines. The SFLC anticipates that a firm fixed-price purchase order to the OEM MTU America Inc. (USA Headquarters), 39525 Mackenzie Drive Novi, MI 48377 USA, will be awarded utilizing the procedures set forth in FAR Part 12, Acquisition of Commercial Items, FAR Subpart 13.5 Simplified Procedures for Certain Commercial items, and FAR Part 15, Contracting by Negotiation. The period of performance will be for 6 months at an estimated cost of

The OEM subsidiary and proposed contractor’s current Dun and Bradstreet (D&B) Legal Business Name is MTU America Inc. This contractor’s previous D&B Legal Name was Tognum America Inc. and has done business as Motoren-und Turbinen-Union (MTU) and MTU Detroit Diesel, Inc. For the continuity of the document, we shall only refer to the proposed contract as the current D&B Legal Business Name:

MTU America Inc.

3. Description of Supplies/Services.

The USCG anticipates awarding a purchase order to purchase MTU America Inc. parts used on model 20V1163TB93 diesel engines. The CG requires the use of OEM parts to match the unique design of existing cutter configuration on the 418’ WMSL cutters. The supplies are considered commercial items.

This purchase includes (17) line items for a total quantity of (1319) maintenance parts used on the model 20V1163TB93 diesel engine. Theses spare parts will be stored at the SFLC warehouse and will be ready for issue to the fleet when required.

Purchasing the components below allows the Coast Guard supply teams responsible for providing these parts to the fleet the ability to support current back-ordered items requested by the fleet in a timely manner.

Page 3 of 6 6/5/2017 to produce parts to the latest engineering specifications and requirements. Limitation to the use of OEM parts is as follows:

The 20V1163TB93 MDEs are critical to the safe and efficient operation of the 418’ WMSL cutters.

Using other than the OEM parts to maintain a failed engine assembly could result in a failure of the main propulsion system. Since the drawings, manufacturing processes, and other technical data is proprietary information to the OEM, it is impossible for the CG to evaluate and determine whether another manufacturers’ component parts are equal to the 20V1163TB93 diesel engines parts currently installed on the 418’ WMSL’s. More than a casual visual inspection is required. The composition of the material, heat treatment (if required), determining whether the components are forged or cast, as well as all dimensions (with tolerances), and operating parameters would be the minimum information needed before an evaluation of another diesel engine components could be attempted. Even if this information was available, the CG does not have the organic capabilities to evaluate and determine if another manufacturer’s parts and assemblies meet the OEM standards. Contracting an outside source to perform these evaluations would be cost prohibitive due to the sheer number and complexity of the various parts and components that are included with a main propulsion diesel engine. Without the aforementioned data and manufacturing specifications from the OEM, proving that another company’s components are equal to MTU America Inc would be impossible. Using other than OEM components and parts would be an extremely high risk because the MDEs are critical to the maneuverability of the WMSLs. A malfunction or failure of MDEs would cause loss of maneuverability and the mission would be severely impacted.

The WMSLs operate independently, in remote areas of the world, on missions of homeland security, search and rescue, Alien Immigration Migration Operations (AIMO), drug interdiction, and fisheries patrol. Failure of the CG to complete any one of these crucial missions could compromise the safety and economic welfare of the United States and its territories. Additionally, because non-OEM parts manufacturers do not have access to drawing tolerances and material composition for the various parts that comprise the components of a model 20V1163TB93 diesel engine, reduced reliability and decreased lifespan of the components of a model 20V1163TB93 diesel engine may be experienced.

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 June 09. 2017. The APFS number is F2017037379 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 June 02, 2017 to June 09, 2017. This notice informed the industry of the CG’s intent to purchase these components of a model 20V1163TB93 diesel engine manufactured by the OEM, MTU America Inc. Other organizations having the expertise and required capabilities to provide equivalent parts were invited to submit information discussing such capabilities within seven (7) calendar days after the posting date. The notice yielded one expressing interest in this project. The one interest was the OEM, MTU America Inc.

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, will conduct price negotiations. 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

Page 4 of 6 6/5/2017 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) between October 2016 – June 2017 as an effort to identify companies that can provide the requested services.

Market research was conducted by identifying various companies on Internet searches, direct contact with industry, as well as reviews of previous government contracts were researched to look for companies that were able of providing capable components. MTU has declined to sell their technical data rights upon repeated requests. The CG has made several attempts to acquire them with no success, including an attempt for this requirement June 5th, 2017. MTU America Inc. declined our request.

Internet/Industry Contact –MTU America Inc. hosted an owners meeting for military users of their various engines in April 2015. This included CG and Navy interest in attendance. During the meeting MTU America Inc. explicitly stated they have no intentions of opening up the large engine division to a distribution network. MTU America Inc. claim due to the small number of large engines in service in the US, and the number of parts that would be required for vendors to store and provide the technical support would never be profitable to the vendors. MTU America Inc. has established and will continue to maintain facilities to store spare parts and provide technical support that will remain part of MTU America Inc. The 20V1163 TB93 engine falls under MTU America Inc. large engine division. Internet research revealed that MTU America Inc. is the only source identified. Recently in 2017, when “20V1163 TB93” is entered into a “Google” search, MTU America Inc. data pages are the only sources of information found. MTU America Inc’s technical data currently available to the USCG is inadequate to seek out manufacturing resources of parts or repair facilities, that could satisfy performance, form, fit, and function requirements since this data remains proprietary to MTU America Inc.

Fed Log – Fed Log research revealed MTU America Inc as the incumbent for all National Stock Numbers associated with this justification.

Acquisition History –Previous acquisition history research revealed that MTU America Inc was contracted in the past under HSCG40-08-A-50461, HSCG40-13-D-30010, and HSCG40-17-P-31723.

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

The WMSL MDEs must conform to design, materials and operational requirements. As stated above, manufacturing drawings specifications and other technical data are proprietary to MTU. MTU refused to sell this proprietary data to the USCG. Any attempt to manufacture these parts without the proper specifications, drawings and technical data could result in damage to the diesel engines, 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 MTU America Inc. 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. These assemblies of a model 20V1163TB93 diesel engine are designed, engineered, and built to close tolerances and have undergone numerous shop tests and rigorous operational testing before being certified and approved by the OEM for use by the end user. After market (non-OEM) parts manufacturers do not have access to this proprietary information and therefore could not produce parts that are demonstrably equal.

Page 5 of 6 6/5/2017

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

A synopsis was issued in FedBizOpps on June 01, 2017 requesting that parties express their interest in writing to the contracting officer. MTU America Inc. 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.

The Coast Guard does not own the rights to MTU’s technical data and is not resourced with the engineering staff or funds required to reverse engineer the thousands of parts required to support the assemblies in order to determine their dimensions, tolerances, or chemical composition. MTU has declined to sell their technical data rights upon repeated requests. The CG has made several attempts to acquire them with no success, including an attempt for this requirement June 5th, 2017. MTU America Inc. declined our request. The Coast Guard will continue to engage MTU America Inc. for release of proprietary data prior to any subsequent requirement.