Redacted_JA_FME_Engine_for_Solicitation_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

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

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

FAIRBANKS MORSE ENGINE (FME) Parts and Part Kits for Main Diesel Engine Overhaul aboard USCG 210’ and 270’ Class “A and B” Medium

Endurance Cutters (WMEC)

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by Federal Acquisition Regulation (FAR) Subpart 6.3 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, United States Coast Guard, Surface Forces Logistics Center (SFLC), Medium Endurance Cutter Product Line (MECPL), Norfolk, VA, proposes to enter into a requirements contract on a basis of other than full and open competition.

2. Nature and/or Description of Action Being Approved. SFLC seeks approval to enter into a requirements type contract, with firm fixed price delivery orders, to purchase certified OEM ALCO-251 engine parts and parts kits to support planned maintenance (overhaul) and emergent casualty repairs (CASREP) for the main diesel engines (MDE) aboard USCG 210/270 WMEC class cutters.

The parts and parts kits are being used in the main propulsion engine on the five A-class and nine B-class 210’ WMEC cutters and four A-class and nine B-class 270’ WMEC cutters. This requirements contract is for one base year and four option years

During this five-year period, the MECPL will complete the majority of the initial diesel engine overhauls. It is anticipated that the quantities of the parts and kits will change over the option years based on findings during any given main diesel engine overhaul and the quantities are unknown at this time.

3. Description of Supplies/Services. The requirement is for the procurement of various OEM parts and kits (preassembled engine parts kits and individually supplied parts) that are needed to support the MEC platform. It is imperative that parts used to repair or perform routine maintenance on the ALCO 251 MEC engines are the exact form, fit, and function to the parts being replaced (explained in Section 5 below). The technical information for the intended parts is proprietary to FME.

The parts will be stored at the SFLC warehouse and will be ready for issue (RFI) to the fleet when repairs are required. Parts (including kits) will be also purchased through FME for specific cutters. This requirement is essential to the mission capability of the U.S. Coast Guard’s WMEC fleet (explained in Section 5 below). The engine parts and parts kits will be used to overhaul the main diesel engines.

The specification for this contract requires the engine parts kits be ordered, bar coded and stored at the contractor’s facility until needed for a specific planned engine overhaul. The individually supplied parts will be utilized by the SFLC MECPL Asset Managers to satisfy casualty repairs in addition to replacing individual spare parts. The 210’ cutters are expected to be in service for approximately 7 years or until 2021, and the 270’ cutters are expected to be in service for at least another 20 years or until 2034. The continued supportability of the current MEC platform is mandatory as the replacement vessels are not currently in design or production.

4. Identification of the Justification and Rationale. The statutory authority permitting other than full and competition is 10 U.S.C. 2304(c)(1), as implemented by FAR Subpart 6.302-1(a)(2) “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements,” paragraph (c), “Application for Brand Name Descriptions.”

5. Demonstration that the Nature of the Acquisition Requires Use of the Authority Cited.

The requirement to use only OEM parts must be enforced or the mission of the 210’ and 270’ (WMEC) fleet could be jeopardized. Fairbanks Morse Engine are the only known sources that possesses the required capabilities, drawings, specifications, engineering control procedures and proprietary methods to ensure the design configuration, manufacturing, and quality control are in place to produce the parts and kits.

All reproduction manufacturing drawings, specifications, and other technical data pertaining to the parts were not purchased when the original equipment was procured and unsuccessful attempts have been made to procure the data rights.

The Coast Guard does not possess the 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. In an effort to promote full and open competition, the Contract Specialist contacted FME on September 29, 2013, to discuss the possibility of the Coast Guard procuring the data rights.

During the conversation, the Contract Specialist was informed that FME would not allow the Coast Guard to procure the data rights.

Using other than OEM parts could cause an engine failure to occur which would degrade the vessels’ primary missions and could result in life-threatening situation to the crews or to others.

Using substandard quality parts that do not fit or are not fully compatible with the equipment being repaired would degrade the reliability, functionality of the equipment being repaired and cause extensive delay in a repair.

Reverse engineering has not been pursued because of the criticality of the engines 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 to know whether the OEM part 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 engines in which they are installed.

6. Description of Efforts Made to Ensure that Offers are Solicited from as many potential sources as is practicable. In accordance with FAR 5.201, in an effort to solicit as many sources as possible, a Sources Sought Notice was posted on FedBizOpps (FBO) on December 20, 2013, for this procurement notifying the industry that the U.S. Coast Guard is searching for all sources that could provide the required OEM parts under the NAICS code 333618 and that remanufactured or aftermarket parts were not acceptable.

7. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable. The Contracting Officer anticipates that the prices will be fair and reasonable in accordance with the standards set forth at FAR 15.404, based on competition and, if needed, further price analysis will be conducted by comparing the submitted pricing to FEDLOG prices and to prior acquisition history made to Fairbanks Morse Engine for similar parts and parts kits to determine the reasonableness. The Contracting Officer will use the information from the analysis to establish the Government’s objective for purposes of entering into negotiations with the vendor to obtain agreement on a fair and reasonable price for any resulting contract.

8. Description of Market Research. The Availability Program Manager (APM) contacted several potential vendors in an effort to obtain competition regarding their availability to accommodate such a high volume of replacement ALCO 251 propulsion engine parts (including parts kits) to support the Coast Guard 210 & 270 WMEC fleet. This attempt was to locate vendors that may possess the necessary technical data, drawings, manufacturing data, specifications and repair tolerances, and that could provide certified OEM parts. This market research yield negative results.

9. Any Other Facts Supporting the Use of Other Than Full and Open Competition. FME has the current requirements contract to provide OEM parts and part kits that is due to expire on August 15, 2014. The MECPL requires replacement engine parts to support a fleet of twenty-seven aging ships for fifty-four engines. The 251 series engines used for main propulsion service were originally designed and built by the American Locomotive Company (ALCO) from 1950 to date. FME located in Beloit, WI now owns the company. FME, the OEM, is the only source that could provide the unique or specialized parts/part kits and possesses the technical data and/or drawings pertaining to the manufacturing of the 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 government possess the independent expertise to evaluate other manufacturer’s parts.

The need to purchase FME parts is driven by scheduled maintenance such as completion of routine maintenance, periodic engine inspections, scheduled overhauls and by the aging engines.

MECPL also has a need to increase the current inventory (due to the numerous unscheduled Casualty Repairs (CASREPs) and supplemental parts that are required during an Main Diesel Engine (MDE) overhaul) of spare parts used for rapid support of deployed ships with an engine requiring emergent repairs. The USCG anticipates continued use of this engine until approximately year 2034 at which time it is anticipated this class of vessel will be decommissioned and replaced.

Over the many years that this engine has been in production other vendors have attempted to sale refurbished and reproduction parts with limited results. These non-OEM parts fail to perform to the same standards of FME parts resulting in a shorter service life putting the engine at great risk of a catastrophic failure. These parts are unacceptable as they fail to meet the criteria of “certified” FME parts and have no or very limited warranties. All certified FME parts and parts kits include a one-year warranty. If a component fails while in service, FME will replace it and cover the repair cost of any other damage that may have occurred as a result of a failed component.

FME has all rights on data and control of materials and no other companies possess the either capability to provide genuine OEM parts that were not remanufactured or aftermarket. FME will not disclose their drawings, specification, and proprietary rights to any aftermarket manufacturer, if this requirement is not approved for the purchase of engine parts from FME, the Coast Guard would be forced to buy non-standard parts from aftermarket manufacturers.

10. A Listing of the Sources, if any that Expressed in Writing an interest in the Acquisition.

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

Re-engineering the propulsion plant of this legacy fleet of Medium Endurance Cutters to utilize non-proprietary parts is not practical due to cost surrounding planning, re-design and implementation balanced against the remaining service life. FME owns the technical data rights, specifications, engineering design and configurations for the parts and it is unlikely they will see the rights to the Coast Guard. The Coast Guard will continue to engage FME for release of proprietary data.