JOTFOC_225A_Turbo_Redacted.pdf

SOLE SOURCE JUSTIFICATION

Simplified Procedures for Certain Commercial Items for Procurements Exceeding the

Simplified Acquisition Threshold pursuant to FAR Subpart 13.5 Solicitation Number:

HSCG40-17-Q-40219

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 support 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), Icebreaker, Buoy and Construction Tender (IBCT) Product

Line, located at 2401 Hawkins Point Road, Baltimore, MD 21226 proposes to enter into a Firm

Fixed Price Requirements contract on a sole source basis.

2. NATURE/DESCRIPTION OF THE ACTION:

The USCG has a requirement to obtain on a sole source basis, open and inspect, overhaul and/or purchase of Turbocharger, NSN 2950-01-421-4390, part number VTC254-14/HT408015

(hereinafter “Turbocharger”) and Cartridge, Turbocharger, NSN 2990-01-467-2076, part number

10900 (hereinafter “Turbo Cartridge”) installed on the WLB-225 “A” class buoy tenders.

This acquisition is for the overhaul of “F” Condition turbochargers and turbo cartridges. In the event a unit is deemed beyond economical repair (BER), the requirement contract will include an option to purchase a new turbocharger or turbo cartridge. The option to purchase new may also be exercised when “F” Condition turbochargers are not available for repair, but turbochargers and turbo cartridges are required to maintain adequate warehouse stocking levels.

It is the Coast Guard’s intention that a sole source, commercial, firm fixed price requirements type contract will be awarded using the procedures set forth in FAR Part 12, Acquisition of

Commercial Items and FAR Subpart 13.5, Simplified Procedures for Certain Commercial Items.

The total estimated value of this acquisition is utilizing operations and maintenance

(O&M) funds.

The OEM for this procurement is ABB Inc., BU Turbocharging (hereinafter ABB). ABB has multiple US locations that are geographically divided by region because ABB enforces zoning for each of their authorized repair/service facilities. Depending on the location of the buyer, will dictate which ABB facility will be used. Because the buyer, SFLC, is located in Maryland, the

New Jersey location is the only location that is authorized to perform this service, as determined by ABB. The location assigned to the Maryland region is:

ABB Inc., BU Turbocharging

1460 Livingston Ave.

North Brunswick, NJ 08902-1832

(732) 397-5496

POC: Mike Trapani

3. DESCRIPTION OF SUPPLIES/SERVICES:

The requirement is to open and inspect, overhaul and or purchase new turbochargers and turbo cartridges to support geographically dispersed WLB-225 foot “A” class buoy tenders. The

Caterpillar 3608 Main Propulsion Diesel Engine was designed for the “A” class buoy tenders using these turbochargers and turbo cartridges. The USCG Specification R-233-2023, “Overhaul and Purchase Specification for the ABB Turbochargers and Cartridges Used on 225 Ft WLB

Coast Guard Vessels” describes the requirements for the receipt, disassembly, inspection, condition/test reports, overhaul, reassembly, testing, preservation, packaging, packing, marking and option to purchase new ABB turbochargers and turbo cartridge assemblies used on the

USCG 3608 Series Caterpillar Diesel Engines, Serial Numbers 8LL00001 thru 8LL00010. The manufacturer, ABB is the sole owner of the technical data which contains the drawings and tolerances for the turbochargers and turbo cartridges and is not willing to sell this data to the government.

The estimated quantity for this requirement is:

CLIN QTY Description

0001 1 Open and Inspect NSN 2950-01-421-4390 P/N: VTC254-14/HT408015

0001A 1 Overhaul NSN 2950-01-421-4390 P/N: VTC254-14/HT408015

0002 1 Purchase new NSN 2950-01-421-4390 P/N: VTC254-14/HT408015

0003 1 Open and Inspect NSN 2990-01-467-2076 P/N: 10900

0003A 1 Overhaul NSN 2990-01-467-2076 P/N: 10900

0004 1 Purchase new NSN 2990-01-467-2076 P/N:10900

4. IDENTIFICATION OF STATUTORY AUTHORITY PERMITTING OTHER THAN

FULL AND OPEN COMPETITION:

The statutory authority permitting other than full and open competition is 41 USC 1901 as implemented by FAR 6.302-1(a) and FAR 13.501(a) -- Special documentation requirement, Sole source (including brand name) acquisitions; HSAM 3013.501, and CGAP 3013.

Period Total

Total

5. DEMONSTRATION THAT THE NATURE OF THE ACQUISITION REQUIRES

USE OF AUTHORITY CITED:

ABB has classified a category of parts required to remanufacture the turbochargers and turbo cartridges as “noble parts”. These items include any rotating component such as the compressor wheel that, according to ABB, requires an ABB certified technician to install. ABB has stated they do not sell “noble parts” to any unauthorized third party repair facility without also charging them for an ABB technician to install the “noble part.” This even applies to companies’, such as

Caterpillar, that manufacturer engines with ABB turbochargers installed on them. These “noble parts’ are propriety in design to ABB.

ABB owns the proprietary processes, material and quality control specifications for overhaul processes and materials. ABB also has access to original manufacturing design and performance data. In order to return the turbochargers or turbo cartridges to a like new condition, the vendor utilizes the drawings and specifications of the original design. Only the OEM, ABB, has the design information, drawings and standards that describe the original equipment. The OEM also has proprietary data regarding acceptable test result standards for this specific machine design.

The ABB is not willing to sell this data

Reverse engineering has not been pursued because of the criticality of the equipment in which the parts are installed. Without drawings and tolerances, risky assumptions must be made as to clearances and tolerances required between the various moving parts. Further complicating the reverse engineering process, there is no way of telling whether the OEM equipment that is being reverse engineered has been manufactured on the high side or low side of the allowed tolerance.

Without this critical information, the resultant reverse engineered parts could cause damage or failure to the equipment in which they are installed.

All reproduction manufacturing drawings, specifications, and other technical data pertaining to the turbochargers and turbo cartridges have not been purchased and are not available for use by the government. The government 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 that is needed is proprietary.

Without the adequate data, the government is not capable of evaluating equal or alternate parts manufactured by other than the original equipment manufacturer. The use of OEM equipment and specifications will ensure components and process 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 PRACTICABLE:

In accordance with FAR 12.102(c) and FAR 12.202 (as per FAR 13.500(b)), a sources sought synopsis was posted at FedBizOpps for the period of November 13, 2015 thru November 24, 2015 and again February 27, 2017 thru March 09, 2017 requesting that interested sources provide information demonstrating their ability to obtain the engineering data and required OEM parts necessary to overhaul/purchase the turbochargers and turbo cartridges and to show past performance of successful completion of said items.

During the first synopsis, no vendors responded to the sources sought notice within the specified time frame. During the second synopsis (February 2017), there were two companies that replied to the notice; , which claim they remanufactured the items using “aftermarket” ABB parts which may or may not conform to OEM reusability standards and are not certified or warranted by the OEM. As such, they would not be considered a viable offeror and who claims that they have the ability to obtain new turbochargers and turbo cartridges from OEM and they will ship all items that require

“certified” overhauls to ABB in New Jersey. This has the appearance that ABB will be conducting all the repairs and no work will be performed

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 the comparisons with the Independent Government Estimate and previous contract pricing.

Additionally, in accordance with DHS policy, the offeror may be required to submit Other Than

Certified Cost or Pricing Data (FAR 15.403-3) to support price determination.

8. DESCRIPTION OF MARKET RESEARCH:

In accordance with FAR 10.001 (a)(2), market research was performed between January 2015 to

April 2017 and a FBO notice posted on November 13, 2015 thru November 24, 2015 and again

February 27, 2017 thru March 09, 2017 to identify any other sources that can remanufacture these items in accordance with the necessary technical data, drawings, manufacturing data, specifications and repair tolerances, and that could also provide OEM brand turbocharger and turbo cartridges. No additional sources were located meeting the requirements of the specification.

Acquisition history revealed previous contracts were awarded on a sole-source basis to ABB based upon FAR Subpart 6.301-2, “Only one responsible source and no other supplies or services will satisfy agency requirements” as follows:

In a letter dated February 6, 2015 and verified via telephone on April 25, 2017, ABB stated that the drawings, design, tolerances, and other technical data pertaining to ABB turbocharger part number VTC254-14/HT408015 and ABB turbo cartridge part number 10900 are proprietary to

ABB Inc., BU Turbocharging and that this data is not for sale to the U.S. Government. (See

Attachment 1A).

According to a conversation held with ABB, only ABB authorized repair/service locations can purchase and install “noble parts.” In order for a third party repair facility (non OEM) to purchase “noble parts” they would also have to agree to purchase the item and hire an ABB technician to install said part. It would not be advantageous to the government to have other than the OEM remanufactures these items and risk the potential of non OEM parts or aftermarket parts, or OEM specifications being used.

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

OPEN COMPETITION:

The USCG does not possess the proprietary rights to the engineering data, drawings, or repair manuals needed to overhaul or manufacture these items. The technical data available to the

Coast Guard is inadequate to ensure that other manufacturers’ parts offer the same form, fit, and function as the OEM’s parts. 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, specifications, and standards could result in the failure of the items and create shipboard hazards. ABB is also the only known source that can provide the OEM services and parts previously noted to the original OEM procedures and performance standards, guaranteeing the latest technologies and designs.

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

INTEREST IN THE ACQUISITION:

A source sought was issued in the FebBizOpps on November 13, 2015 thru November 24, 2015 and again February 27, 2017 thru March 09, 2017 requesting interested parties express their interest in writing to the Contracting Officer. Two vendors replied to the sources sought dated

Feb. 2017. Both vendors were unable to provide supporting documentation confirming they were OEM authorized facilities, possess the ability obtain OEM technical data, or to purchase and install “noble parts.” The OEM will only sell “noble parts” to authorize repair facilities or include the cost to have an OEM certified technical to install the item. One vendor confirmed they were intending to use “aftermarket parts” for the overhauls. Aftermarket parts, which are often less expensive then OEM parts come with some drawbacks that may have detrimental impact on the units status if failure were to occur. Aftermarket parts typically don’t have the same warranty of new OEM parts and they are generally inconsistent in their quality. The use of non-OEM parts will nullify any warranty on OEM parts already installed due to the symbiotic relationship of all parts that make up the turbochargers. Additionally, because non-OEM parts manufacturers do not have access to drawing tolerances and material composition for the various parts that comprise the ABB turbochargers and turbo cartridges, reduced reliability and decreased lifespan of the items may be experienced.

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:

Due to the fact that ABB owns the technical data and drawings, it is unlikely they will sell the rights of such data to the USCG. The USCG has made several attempts to acquire them with no success, including an attempt for this acquisition. The program office will continue in the future to purchase the proprietary data rights for the turbocharger and turbo cartridge. All future requirements will be synopsized. Unsuccessful efforts to obtain OEM data make it unlikely that barriers to competition will be overcome. At the present time, there are no other known manufacturers that are capable of producing aftermarket ABB turbochargers and turbo cartridges which are suitable or interchangeable with the OEM, ABB Inc., BU Turbocharging.

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.

13. TECHNICAL/REQUIREMENTS PERSONNEL CERTIFICATION:

I certify this requirement meets the Government’s minimum need and that the supporting data, which forms a basis for this justification, is complete and accurate.

14. LEGAL REVIEW AND CONCURRENCE:

I have reviewed this justification and deemed it legally sufficient.

15. ADDITIONAL REVIEWS AND CONCURRENCE: