J A_Polar_Cranks__Redacted.pdf

HSCG85-16-R-P45339

Justification for Other Than Full and Open Competition 10 USC 2304 and 41 USC 1901

Only One Responsible Source and No Other Supplies or Services will Satisfy Agency Requirements

HSCG85-16-R-P45339

Pursuant to 10 USC 2304 and 41 USC 1901, the justification for the use of the statutory authority is supported by the following facts and rationale required under FAR 13.501(a)(1)(ii).

(1) Agency and Contracting Activity.

The Department of Homeland Security (DHS), United States Coast Guard (USCG), Surface Forces Logistics Center (SFLC), Long Range Enforcer Product Line (LRE PL) 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.

The United States Coast Guard (USCG) intends to solicit, on a sole source basis, to NW Propeller Operations, Inc. 10902 25th Ave S Lakewood, WA 98499, for the fabrication of cranks for POLAR Class Escher Wyss Controllable Pitch Propellers (CPP). The contract will be firm fixed-price using AFC 45 Naval Engineering fiscal year 2016 funds.

The total estimated cost of the procurement is .

(3) Description of Supplies/Services.

The USCG requires the use of Original Equipment Manufacturer (OEM) parts to match the unique design of the existing propellers. Due to significant failures of the existing cranks the Coast Guard anticipates the need to replace up to five sets of cranks within the next year.

The need for crank replacement was discovered as part of the Vigor Works LLC (formerly Oregon Iron Works) contract for propeller overhaul and is integral to the completion of the already obligated overhaul of the propellers. These cranks are one of many parts that are inside the propellers and experienced damage as a result of operations. The internal damage to the propeller is not apparent until the system is disassembled during overhaul. There are no stock propeller cranks available in the supply system.

The cranks are estimated to cost as follows:

Description Quantity Unit Cost Total Fabrication of Cranks

(4) Identification of Statutory Authority Permitting Other Than Full and Open Competition:

The statutory authority permitting other than full and open competition is 10 USC 2304 and 41 USC 1901 as implemented by FAR Subpart 13.5.

(5) Demonstration that the nature of the acquisition requires use of the authority cited.

Based on the Government's market research, Andritz Hydro, the OEM, will not sell CPP components directly to the United States Coast Guard and it’s only authorized parts agent is NW Propeller. Andritz Hydro owns the proprietary detailed design data (manufacturing drawings) needed to produce the Escher Wyss POLAR class propeller cranks. Any other source would not have access to the necessary data, drawings, and proprietary information required to perform this work.

The POLAR vessels are unique and critically important assets to the U.S. Coast Guard.

These vessels have ice-breaker capability and are the only CG vessels able to complete missions to Antarctica. Due to the harsh conditions there, POLAR propeller hubs need to be overhauled after every annual Deep Freeze Mission requirement. If these replacement cranks are not readily available, then the spare propeller hubs cannot be reassembled.

Without a spare propeller hub, CG would need to remove the existing propellers, attempt to overhaul them, and return them to the vessel during a single dry dock. This would take excessive additional time. As a result, if there are no spare cranks available for ready replacement, then it is highly likely that the POLAR vessel would simply not be able to meet its annual Antarctic mission requirement. The consequences of this could be disastrous, as the POLAR serves vital functions such as maintaining open shipping channels in Arctic waters, providing potentially life-saving support in the event of a mishap with a commercial or private vessel in the area, and supporting the CG's many missions, including search and rescue.

Simplified Procedures for Certain Commercial Items allows for the use of simplified acquisition for the procurement of supplies and services in amounts greater than the simplified acquisition threshold but not exceeding $7 million, including options, if the contracting officer reasonably expects, based on the nature of the supplies or services sought, and on market research, that offers will include only commercial items. The procedure empowers contracting officers to execute commercial item acquisitions with more flexibility and procedure discretion, maximizing efficiency and minimizing burden.

This acquisition qualifies for the procedures because the parts being procured are commonly purchased in the commercial marketplace and the value of the acquisition, expected to be , is significantly under the program’s threshold of $7 million.

(6) Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

A presoliciation Intent to Sole Source HSCG85-16-R-CRANKS was posted on 29 October 2015. The USCG received no responses. The Contracting Officer also contacted the Original Equipment Manufacturer to inquire about buying the proprietary data necessary to produce the parts and was denied.

(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 ability to employ the pricing analysis techniques in FAR13.106-3 to make a determination that the anticipated price(s) will be fair and reasonable.

(8) Description of market research.

Market research was conducted to determine if there were any other viable resources available to meet the needs of this justification, however, due to the proprietary nature of the systems involved only the OEM distributor is capable of providing the parts for these critical repairs.

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

The OEM is the only company that has the proprietary knowledge, design data, and drawings to manufacture the parts needed, and NW Propeller is the only authorized North American parts distributor Using other than the parts provided through the OEM poses an unacceptable risk of catastrophic failure to this system.

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

NW Propeller is the only source that expressed 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.

For reasons set forth in Paragraph 5, the USCG has no plans at this time to solicit these requirements competitively. If another potential source emerges, the USCG will assess whether competition for future requirements is feasible.