HSCG85-14-D-P45E01_JA_Final_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

HSCG85-14-Q-P45E01

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by FAR 6.3 and in accordance with the requirements of FAR 6.303-1, the justification for the use of the statutory authority under FAR 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 (USCG), Surface Forces Logistics Center (SFLC), Contract and Procurement Branch 2 (C&P2), proposes to enter into a contract on a basis other than full and open competition.

2. Nature and/or description of the action being approved.

USCG SFLC intends to procure, on a sole source basis, support and maintenance for the USCGC HEALY Integrated Power Plant (IPP), Machinery Plant Control and Monitoring Systems (MPCMS), Dynamic Positioning System (DPS) and Science Winch Control Systems for proprietary software services and associated supplies at an estimated cost of

The proposed contract action is a bridge contract that fills-in the need for these services and supplies between the end of the existing IPP contract, HSCG85-08-D-6BX169, on 01July2014 and the award of a new IPP IDIQ contract. The time allotted by this bridge contract will allow for the creation of the new technical package and award of the new IPP contract.

This will be solicited as a sole-source, indefinite-delivery/indefinite-quantity (IDIQ) contract with firm-fixed price delivery orders. The contract duration is for a 6-month base and two six-month option periods. The six month period duration was selected based on the predicted milestone for establishment of the award of the full period, base plus four option years, for these supplies and services. The contract will be awarded with accounting funding code (AFC) 45 funds for fiscal year 2014 via procurement request number 2114854P45E01.

An IDIQ type contract was chosen, because it allows the placing of orders at our discretion after meeting a minimum ordering threshold. A requirements contract was not considered a viable option, because all work may not be ordered in the time period specified.

The proposed contractor is: GE Energy Power Conversion USA, INC. (GE Energy), 610 Epsilon Drive, Pittsburgh, PA 15238-2880. Alstom Power Conversion Inc. (Alstom) initially

- 1 -manufactured and installed these systems during the HEALY procurement. Alstom changed their name to Converteam, Inc. Converteam, Inc. was purchased by General Electric and is now called GE Energy. Therefore, GE Energy is now the only vendor who possesses the proprietary information and technical background to provide the required support for this custom control system.

3. Description of Supplies/Services.

The requirement is to provide support, maintenance and supplies for the USCGC HEALY Integrated Power Plant (IPP), Machinery Plant Control and Monitoring Systems (MPCMS), Dynamic Positioning System (DPS) and Science Winch Control Systems at a total estimated cost of . lists the equipment requiring maintenance support under this contract broken down by ship location (i.e., Shipboard for remote work location and Shoreside for Homeport location).

A summary of the government estimate per performance period is provided. A detailed government estimate price breakdown is provided as

Period Total Base Period 6 mo Option Period 1 6 mo Option Period 2 6 mo Est.

Grand Total

GE Energy is the only company that holds the proprietary rights to these systems, and therefore is the only company with the necessary knowledge to support them.

4. Identification of the justification and the rationale.

The statutory authority permitting other than full and open competition is 10 USC 2304(c)(1) implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302- 1, “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.

The required maintenance support is only available to the government from GE Energy. The USCGC HEALY Specification of Requirements (SOR) required the shipbuilder to task a Single System Vendor (SSV) with sole responsibility for design and construction of the Main Propulsion Power Plant on USCGC HEALY. The SSV’s tasking included the selection and integration of all central power plant components. By purchasing the SSV (Alstom/Converteam), GE Energy is the only vendor with access to complete technical documentation on the systems necessary to provide the full range of technical support

- 2 -services and replacement parts required for performance of the contract. Under the initial ship contract with Avondale Industries, the Government purchased selected, but limited, technical documentation for some for the systems, such as Machinery Plant Control and Monitoring Systems (MPCMS) customization software code. The original contractor sold the Government limited rights to this data so long as the data is not transferred to other vendors. Other data such as Continuous Test & Evaluation System (CTES) and Science Winch Control Software are proprietary to the SSV and data rights were not obtained.

Through communications between the Coast Guard and GE ENERGY, it has been determined that they have not sold or licensed proprietary data to another company and they are not comfortable doing so in this case. Review of the technical support documentation shows that it is not detailed enough for the Coast Guard to competitively procure the wide range of technical support services or replacement parts for all of the IPP components.

The impact of not approving this Justification & Approval and subsequently not awarding this contract would jeopardize the HEALY’s mission, because the vessel’s integrated propulsion system would not be maintained. The HEALY operates in the remote Arctic region making any failure a life threatening event.

The HEALY was built to be highly automated in order to reduce the size of the crew needed to operate her. Significant portions of the integrated power plant system are becoming obsolete and need upgrading, maintenance and/or repair in order to keep the HEALY operational to perform her missions. If this contract is not in place to provide the needed maintenance for the aforementioned systems then the cutter would lose mission readiness and require repairs on an emergency basis. This contract allows for these repairs to be accomplished avoiding delays or missed missions such as those with the National Science Foundation (NSF).

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

This procurement is posted as DHS-Acquisition Planning Forecast System (APFS) No.

201400793 at http://apfs.dhs.gov. Additionally, as required by FAR Subpart 5.2 a sources sought notice was posted on the Federal Business Opportunities (FedBizOpps) site on January 22nd, 2014 detailing the work and notifying industry that it is the Coast Guard’s intent to award a sole-source contract to the OEM, GE Energy, for this acquisition

It also invited other vendors with the expertise and required knowledge for this work to submit information discussing such capabilities. The notice closed on February 1st, 2014. The only response received from GE Energy.

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 Independent Government Estimate and extensive acquisition history with GE Energy. Price analysis will be performed to ensure a fair and reasonable price is negotiated in accordance with FAR 15.404. The current contract that is near

- 3 -http://apfs.dhs.gov/ expiration will provide over 6 years of pricing history for this work. In addition, the contractor has provided the current DCAA forward pricing rate agreement documentation, and in accordance with DHS policy, the offeror may be required to submit Data Other than Certified Cost or Pricing Data (FAR 15.403-3) to support price negotiations.

8. Description of market research.

Extensive Market Research was conducted by the Contract Specialist during Apr 2014. Internet searches, direct contact with industry, as well as reviews of previous government contracts were researched to look for companies that were capable of providing this work.

Internet/Industry Contact - The internet research and industry contact revealed that GE Energy is the only known contractor identified as possessing the necessary technical data, drawings, manufacturing data, software, specifications and repair tolerances.

FedLog - FedLog research identified GE Energy as the incumbent for all National Stock Numbers (NSN) listed with this justification.

Acquisition History – This support was previously provided by contract HSCG85-08-D- 6BX169 which was awarded to Converteam, Inc. (now GE Energy). This contract expires on 01 July 2014. The following contracts preceded the one currently in place: HSCG85-07-C-6BX502 which was awarded to Converteam, Inc. (now GE Energy) and HSCG85-01-D-625211 which was awarded to Alstom Power Conversion, Inc. (acquired by Converteam, Inc. and now GE Energy).

9. Any other facts supporting the use of other than full and open competition.

The Government does not possess 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 the Government possess the independent expertise to evaluate other manufacturer’s parts. USCGC HEALY is a high latitude research vessel. Technical documentation and data rights for much of the equipment and software to be supported was not purchased with the original award for the system; therefore, the documentation and data rights remains proprietary to GE Energy. These system designs represent a significant investment for GE Energy. In particular, GE Energy was tasked through the shipbuilder with developing CTES for linking of the MPCMS with shore-side equipment, to permit remote technical support of MPCMS operations. Although all shore-side equipment is Government owned, the Government would have to transfer the entire shore-side installation and the knowledge gained in its use during the last twelve-years of USCGC HEALY’s operations to a separate shore-side installation to enable another vendor to provide the remote technical support for the MPCMS. Additionally, updates/upgrades are incorporated periodically by the OEM to ensure the continued reliable and safe operation of these systems. Given all of these factors, USCGC HEALY must continue to rely heavily on GE Energy parts, as well as their maintenance and support to assist Coast Guard personnel to reduce the risk of equipment failure and to maintain a high degree of cutter reliability.

- 4 -

On May 16th, 2014, an email was sent to GE Energy requesting the release of data rights to the Coast Guard. On May 21st, 2014, GE Energy chose to retain such information and declined to grant the request for proprietary information.

10. A listing of the sources, if any that expressed, in writing, an interest in the acquisition.

A synopsis was issued in the FedBizOpps on January 22nd, 2014 requesting that parties express their interest in writing to the contracting officer. The only company that responded was GE Energy.

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.

Due to the fact that GE Energy owns the technical data and drawings, it is unlikely they will sell the rights of such data to the Coast Guard; however, the Coast Guard will continue to engage GE Energy for the release of proprietary data prior to any subsequent acquisition. In the future, if GE Energy quotes a price for the proprietary data rights, the Coast Guard will weigh the benefits of purchasing the rights at that time.

All future requirements will be synopsized. Unsuccessful efforts to obtain OEM data make it unlikely that barriers to competition will be overcome. At this time, no other known company has the proprietary knowledge required to provide the necessary support for these systems.

- 5 -