J_A_Sole_Source_350_W_1st_Street_Elevators_07212021_signed_Redacted.pdf

Jul 21, 2021

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

PER FAR 13.501(a)

FOR

FULL ELEVATOR MAINTENANCE, REPAIR AND REPLACEMENT SERVICES

AT

350 W 1ST STREET COURTHOUSE

1. Agency & Contracting Activity: General Services Administration (GSA), Region 9, Facilities Management Division (FMD), Building Services Branch (9PQS), Los Angeles Service Center (LASC).

2. Nature and Description of Action: Approval is sought for a sole source award under FAR Part 13.501(a) to OTIS Elevator Company. for the maintenance, repair and replacement services for the elevators located at 350 W 1st Street, Los Angeles, CA.

On September 1, 2017, a contract was awarded to the incumbent for the maintenance of the 350 W 1st Street Courthouse Vertical Transportation Equipment (VTE). However, the incumbent has been unable to repair the VTEs due to the highly specialized nature of the proprietary equipment that was installed during the building’s construction. As a result, the Government requires an award to the Original Equipment Manufacturer (OEM), OTIS Elevator Company, in order to successfully fulfill customer requirements and routine maintenance in a safe and timely manner.

3. Description of Services (including the estimated value) & Background: The services are for Full Elevator Maintenance, Repair and Replacement, defined by the technical specifications established by Facilities Management Division (FMD), Region 9 as a requirement for the 1st Street Field Office. A Firm Fixed Price contract to OTIS is necessary due to the highly specialized nature of the VTE control systems contained in all of the VTE at 350 W 1st Street. These VTE, which are OTIS OEM, were installed in the new Los Angeles Courthouse at 350 W 1st Street with a date of final acceptance in August 2016. The elevator control systems, specifically the systems, are proprietary and cannot be maintained by a third party. While the incumbent has had no issues maintaining non-proprietary parts, the critical components of the VTE are not within its capabilities. The mission impact loss attributed to this contract affected time, customer satisfaction, cost savings, interruption of court services, compromised prisoner transportation, public safety and the overall structural integrity of the new Los Angeles Courthouse at 350 W First Street.

Critical issues with the current contract over the past four years include (1) elevator drive failures which the incumbent was unable to repair, and (2) an elevator being non-operational for over a year. In August 2018, Elevator #1 at 350 W First Street became non-operational and could not be successfully maintained. After 18 months of non-operation, in January 2019, the Property Management had to issue a separate award to OTIS to fix Elevator #1 and bring it into operational status again. Since this event, there have been more technological issues preventing the incumbent from successful contract performance.

As of July 15, 2021, there are five (5) non-operational elevators on site. During the 5-year load testing commenced in June 2020, confirmation of the incumbent’s inability to perform was received with the vendor describing that its procedures are incompatible with the combination of proprietary elevator equipment The incumbent has highlighted the specific need for OTIS Elevator Company’s firmware and programming expertise in order to pass inspection and the 5-year testing.

Estimated Values are as follows:

Base Year Price: $ 244,800 FAR Part 52.217-8 Option to Extend (6 MO if needed): $ 122,400

Total Estimated Price: $ 367,200

4. An Identification of the Statutory Authority Permitting Other Than Full and Open Competition: This acquisition will utilize FAR Part 13.501(a)(ii) in preparation of sole source justification using the format as prescribed by FAR 6.303-2 modified to reflect the procedures in FAR Part 13.5 in accordance with 41 U.S.C. 1901, Simplified Acquisition Procedures.

5. A Demonstration that the Proposed Contractor’s Unique Qualifications or the Nature of the Acquisition Requires Use of the Authority Cited: The vendor selected for this service contract will be OTIS Elevator Company. Only OTIS possesses the specialized skill and knowledge to maintain the elevators at the courthouse because of the proprietary equipment that is OEM to the company. Efforts by other vendors to perform the elevator requirement will ultimately result in subcontracting to OTIS or for the government to contract with OTIS via purchase orders, on an as needed basis. Due to the inevitability of OTIS’ involvement, it is in the government’s best interest to contract directly with OTIS for this requirement to save work burden hours and to ensure that 350 W 1st Street Courthouse operations will continue to be safe and efficient.

6. A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by FAR subpart 5.2 and, if not, which exception under 5.202 applies: None of the exceptions in FAR 5.202 are applicable. OTIS Elevator Company is the only vendor qualified to perform the requirement. The 350 W 1st Street Courthouse contains OTIS elevators, which affects competition for this requirement. Further research and studies will be undertaken to consider our options, including consideration of whether competition amongst small businesses is acceptable to achieve established national and agency goals.

7. A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable: OTIS Elevator Company clearly demonstrates their capabilities to meet all the needs for Full Elevator Maintenance, Repair and Replacement services, based on the OEM nature of the VTE. Upon receipt of the official quotation, the contracting officer will make a determination of fair and reasonable pricing will be based using pricing analysis techniques in accordance with FAR Part 15.404-1(b).

8. A description of the market research conducted and the results or a statement of the reason market research was not conducted: GSA R9 Facilities Management Division (FMD) completed market research on June 28, 2021. During the market research, it was verified that OTIS Elevator Company is the only vendor qualified to maintain the elevators at the 1st Street Courthouse, due to the reasons stated previously in this document. The GSA Region 9 Equipment Specialist stated that:

“[The] New Los Angeles Courthouse was design-built with Otis Elevator ‘proprietary’ elevator control systems:

Main passenger 6-car group is designed with

Due to the technical proprietary limitations OTIS Elevator is the only contractor capable of performing the code required testing and will only provide this service if an existing elevator maintenance service contract is in place.

elevator control systems that cannot be maintained by 3rd party elevator maintenance contractors. The incumbent maintenance provider was awarded a contract with GSA based on their lower price and stated ability to maintain the elevators. Even with the [OTIS] access and programmed devices, the incumbent with all of their hardwork and determination has not been able to repair failed motor drives or perform all functions required to perform annual and 5-year inspections and testing necessary to maintain the elevators moving forward. The last remaining option is to sole-source a procurement with OTIS Elevator.”

9. Any other facts supporting the use of other than full and open competition: None.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition: None.

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 the supplies or services required: During the construction of the First Street Courthouse, OTIS elevators were installed. The installation of these proprietary elevators has propelled the acquisition team to directly contract with OTIS Elevator Company, due to the installation of proprietary parts as discussed above. The fact that OTIS elevators are contained within the courthouse affects competition in the industry. Further study and research will be conducted to improve the competition and efficiency of this requirement. After awarding this sole source procurement, this justification and authorization will be posted on the global website for 14 days.

12. The contracting officer’s certification that the justification is accurate and complete to the best of the contracting officer’s knowledge and belief: I, Mike Hughes, justify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

13. Technical/Requirement Certification. I, Steven MacLachlan, justify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

CERTIFICATION

Pursuant to FAR 13.501, and based upon the above facts, a sole source award is justified due to the highly specialized nature of the equipment.

STEVEN MACLACHLAN, Building Management Specialist, VTE Date:

KRIS TOLFO, Contract Specialist, AMD, LASC, Recurring Services Date:

MIKE HUGHES, Contracting Officer, AMD, LASC, Recurring Services Date:

BRUCE CHAMBERLAIN, AMD Branch Chief, Recurring Services Date:

MIRJAM MCCLELLEND, Competition Advocate Date:

EMMA COCKS, Director, AMD Date:

MARGARET HAGGERTY, Regional Counsel Date: