Attachment_3_Justification_for_the_Limited_Number_of_Source_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

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

Brand Name Justification Only a Limited

Number of Sources, and No Other Supplies or Services

Will Satisfy Agency Requirements

RFQ Number: HSCG85-16-Q-6B4500AN048

Pursuant to the requirements the Competition in Contracting Act (CICA) as implemented by the

Federal Acquisition Regulations (FAR) Subpart6.3 and in accordance with the requirements of

FAR 6.303-1, the justification for the use of the statutory authority under FAR Subpart 6.3 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 (DHS), United States Coast Guard (USCG), Surface

Forces Logistics Center (SFLC), Ice Breaker, Buoy and Construction Tender Product Line

(IBCTPL), located at 1301 Clay Street Oakland, CA 94612 proposes to enter into single and/ or multiple indefinite delivery indefinite quantity (IDIQ) contract(s) to satisfy this requirement on a basis other than full and open competition for brand name products.

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

The SFLC has a requirement to repair and purchase Brand Name , Ingersoll-Rand Model HU and Ingersoll-Rand Model LS2-600R-PH2M-GP to support geographically dispersed WLR-65’ and WLR-75’ Class Inland River Tenders. The 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 contractor(s) capable of providing the specified Ingersoll Rand Winches and repair services.

The Independent Government Estimate (IGE) is over five (5) years. The type of funding shall be Operations and Maintenance 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.

The U.S. Coast Guard SFLC has a requirement for the overhaul/repair of Ingersoll Rand Model

HU and LS2-600R-PH2M-GP pneumatic winches in accordance with specified OEM procedures, references, standard practices, and USCG SFLC Specification R-583-0222 Revision

G, support geographically dispersed WLR-65’ and WLR-75’ Class Inland River Tenders.

TheHU and LS2-600R-PH2M-GP pneumatic winches are used for anchoring, mooring, and boat handling operations. 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 program manager whether the winches are beyond economical repair (BER). If they are determined to be BER, an option to purchase new winches may be exercised and new winches will be shipped to the warehouse. If they are not determined to be BER, the motors will be overhauled.

In the event any winch is deemed beyond economical repair (BER) or as necessary to maintain adequate warehouse stocking levels, an option to purchase new or refurbished/remanufactured winches may be exercised. This Brand Name Justification documents the U.S. Coast Guard’s need to acquire specific commercial brand name parts for the overhaul/repairs. It is anticipated that a commercial firm fixed-price requirements type contract for one base year and four option years will be awarded for the overhauls/repair of the equipment. The awarded contractor will be required to use OEM parts, when available (i.e. not obsolete), as specifically identified in

Specification R-583-0222.

This brand name justification applies to the Ingersoll-Rand model LS2-600R-PH2M-GP pneumatic winch. The Model LS2-600R-PH2M-GP is still supported by the OEM; therefore, only Ingersoll-Rand parts may be used for this winch model. Support for the model HU winch has been discontinued by Ingersoll-Rand; thus certain parts required for repair may be obsolete and require substitute parts. These parts will be ordered from suppliers that have the capability to overhaul Model HU winches and/or supply remanufactured/refurbished replacements.

It is estimated that up to five (5) defective HU winches will be submitted each year for inspection, requiring activation of one or more of the line items noted in the table below. It is estimated that five (5) HU winches are expected to be suitable for overhaul. There is an option to procure one (1) refurbished HU winch each year of the contract, if the winch is deemed beyond economical repair.

It is estimated that one (1) LS2-600R-PH2M-GP winch will be submitted each year for inspection, requiring one or more of the line items noted in the table below. It is estimated that one (1) LS2-600R-PH2M-GP winch is expected to be suitable for overhaul. There is an option to procure one (1) new LS2-600R-PH2M-GP winch 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/refurbished

OEM pneumatic winch. This option may also be exercised when necessary to increase the pool of spares in warehouse inventory. For winches deemed BER, the Contractor will scrap the material locally and submit a completed Inventory Disposal Report, Standard Form SF-1424 to the Contracting Officer. The overhaul must be conducted by an Ingersoll Rand, 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 QTY DESCRIPTION

HU Winch, NSN 3950-00-368-5253

0001 5 EA Open, inspect, and submit Material Test & Inspection Report iaw specification R-583-0222 Section 3.2

0001AA 5 EA Delivery of overhauled, inspected, preserved, packaged and marked iaw

Specification R-583-0222

0001AB NSP Beyond Economical Repair (BER) Items: Submit completed SF 1424 to the Contracting Officer

0002 1 EA Purchase refurbished, iaw Appendix A of Specification R-583-0222

LS2-600R-PH2M-GP winch, NSN 2030-01-604-1099

0003 1 EA Open, inspect, and submit Material Test & Inspection Report iaw

Specification R-583-0222 Section 3.2

0003AA 1 EA Delivery of overhauled, inspected, preserved, packaged and marked iaw

Specification R-583-0222

0003AB NSP Beyond Economical Repair (BER) Items: Submit completed SF-1424 to the Contracting Officer

0004 1 EA Purchase iaw Appendix B of Specification R-583-0222

The estimated cost for this acquisition is shown below:

Period Price

Base Year

Option Year 1

Option Year 2

Option Year 3

Option Year 4

Total

It is estimated that 100 percent of the winches submitted the first year of contract award for inspection will be suitable for overhaul. The NAICS Code is 333923- Machinery Manufacturing.

4. Identification of Statutory Authority Permitting Other Than Full and Open

Competition

The statutory authority permitting other than full and open competition for LS2-600R-PH2M-GP winch NSN 2030-01-604-1099 for brand name description is 10 U.S.C. 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.

For model LS2-600R-PH2M-GP winches, 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 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) applies because only one responsible source and no other supplies or services will satisfy USCG requirements for purposes of brand name application. Due to the existence of limited data and patent rights the required overhaul and procurement of the LS2-600R-PH2M-GP winch is available from Ingersoll Rand, the only source for these supplies and services.

Impact on mission if J&A is not approved. If a contract is not awarded, it could jeopardize the

WLR-65’ and WLR-75’ Class Inland River Tender’s mission because the Ingersoll Rand, Model

LS2-600R-PH2M-GP winch is used for anchoring, mooring and boat handling. Failure of the cutter class could result in equipment damage, loss of vessel operational hours, inability to complete mission requirements and possible personnel injury.

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

Acquisition Planning Forecast Record number F2015027672 was posted on 09 November 2015 at https:///apfs.dhs.gov. As required by FAR Subpart 5.102(a) (6) and 5.2, in an effort to solicit as many potential sources as practical a sources sought notice was posted on FedBizOpps on 28

April 2015, requesting that any vendors capable of opening, inspecting, reporting, overhauling, and furnishing new Ingersoll Rand Model LS2-600R-PH2M-GP and HU winches using genuine

OEM parts express their interest in writing. Five vendors responded to the sources sought.

Procurement history was reviewed to identify any other sources that have supplied the required item. Recent acquisition history identified the following contracts:

For the model HU winch -

HSCG40-14-P-49130, repair order, awarded to Ram Winch & Hoist (CAGE 3RT39)

HSCG40-14-P-49088, repair order, awarded to Zenmar (CAGE 43969)

HSCG40-14-P-40478, purchase order, awarded to Tool Smith Company (CAGE 7Z244)

For the model LS2-600R-PH2M-GP winch –

HSCG40-13-P-40373, purchase order awarded to Air Centers of Florida (CAGE 0NF31)

No repair history exists for this item.

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.

Market research was previously conducted in October 2013 for a similar requirement that included the model HU winch and another model unrelated to this acquisition. During that https://apfs.dhs.gov research, knowledgeable individuals in the commercial industry stated that Ingersoll-Rand no longer supports the model HU winch, but there are several businesses that claimed the ability to manufacture their own replacement parts. The requirement was revised in May 2015 to include the model LS2-600R-PH2M-GP winch. In accordance with FAR 10.001 (a)(2), market research was performed via the internet and by telephone to identify companies capable of overhauling and furnishing the HU and LS2-600R-PH2M-GP winch models. The companies contacted included numerous authorized Ingersoll-Rand dealers, as well as Ram Winch & Hoist, who has previously overhauled model HU winches for the Coast Guard and claimed the ability to overhaul and furnish LS2-600R-PH2M-GP winches. It has been determined that the market has not changed since the sources sought notice from June 2015.

The following companies were determined to have the capability to overhaul model HU winches and/or supply remanufactured/refurbished replacements:

Zenmar Pneumatic Tools

CAGE 43969, Business size: Small

243 Cockeysville Rd.

Cockeysville, MD 21030

Air Systems & Pump Solutions

CAGE 4PZ59, Business size: Small

3200 S. Ann Arbor

Oklahoma City, OK 73179

Zo-Air Co., Inc.

CAGE 1JKC0, Business size: Small

1320-6 Lincoln Ave.

Holbrook, NY 11741

Craneveyor Corp.

CAGE 94933, Business size: Small

1524 North Potrero Ave.

South El Monte, CA 91733

Ram Winch & Hoist, CAGE 3RTJ9, Business Size: Small

14603 Chrisman Rd.

Houston, TX 77039

*Not an authorized Ingersoll Rand sales/ service center (although not required)

The above listed companies, with the exception of Ram Winch & Hoist, are authorized Ingersoll-

Rand sales/service centers, and are capable of overhauling/repairing and furnishing new model

LS2-600R-PH2M winches.

Supplies and services are not available through other Government agency contracts or schedules.

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

For the LS2-600R-PH2M-GP model, OEM parts and procedures are required to ensure the reliability of the winches. The operations supported by these winches are critical to the ships’ ability to perform assigned missions. Any failure or inoperable condition of the specified winches could render the vessel out of service until repaired or replaced. Additionally, changes in equipment could lead to malfunction; therefore jeopardizing the ship, installed systems, personnel safety, and vessels’ mission.

The USCG does not possess the proprietary rights to the technical data, drawings, manufacturing data, specification and repair tolerance, to provide OEM equivalent to the Model LS2-600R-

PH2M-GP winches. Therefore, the USCG does not have any substantive data to compare other manufacturer’s parts to ensure the same fit, form and function; nor does the USCG 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.

Ingersoll-Rand is the only known source of supplies that can provide the standards, guaranteeing the latest technologies and designs. Since the HU winch has been discontinued by Ingersoll-

Rand, certain parts required may be obsolete and require substitute parts. These parts will be ordered from suppliers that have the capability to overhaul model HU winches and/or supply remanufactured/refurbished replacements. In regards to the Model LS2-600R-PH2M-GP, these parts will be ordered directly from Ingersoll Rand or authorized Ingersoll-Rand sales/service centers that are capable of overhauling/repairing and furnishing new model LS2-600R-PH2M-

GP winches.

To keep the existing winch and attempt to support it through another company (other than

Ingersoll-Rand): If awarded for other than OEM supplies, 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). 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 WLR-65’ AND WLR-75’ Class Inland River Tenders 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

Ingersoll-Rand. There is also substantial risk in venturing out to a new design and/or different contractor, particularly in the operational and supportability areas. Additionally, the decision would be made at a different USCG level. 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 in April 2015 to determine if there were sources capable of meeting the requirements of providing genuine Ingersoll-Rand parts only for the Model HU and LS2-600R-PH2M-GP winches. Five vendors responded to the sources sought; however, none were listed under the NAICS Code 333923.

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 WLR-65’ AND WLR75’ Class Inland

River Tender will continue to be an on-going need for the Coast Guard. Seeking outside expertise on this data for the LS2-600R-PH2M-GP winch cannot be considered for reasons stated earlier in this justification.

The Coast Guard does not currently own the required parts and technical data to evaluate other than OEM expertise, it is not anticipated that any future requirements can be competed on a full and open completion basis to repair/replace LS2-600R-PH2M-GP pneumatic winches to support the WLR-65’ AND WLR-75’ Class Inland River Tenders. The Government will continue to make all attempts to obtain the data rights for these items for future acquisitions.

19MAY2016