JA 87 MTU Engine Overhaul redacted.pdf

70Z08023R15006B00 Page 1 of 5

USCG 87’ WPB MTU MAIN DIESEL ENGINE OVERHAULS

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

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

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

(Brand Name Justification)

RFP Number: 70Z08023R15006B00

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.3, the following facts and rationale justify the use of such authority:

1. Agency and Contracting Activity. The Department of Homeland Security (DHS), United States Coast Guard (USCG), Surface Forces Logistics Center (SFLC), Contracting and Procurement Division Branch 1 (CPD-1), Patrol Boat Product Line (PBPL), 2401 Hawkins Point Road, Baltimore, Maryland 21226.

2. Nature and/or Description of the Action being Approved.

(a) Nature of the action: The USCG intends to procure, on a brand name basis, the overhaul of Original Equipment Manufacturer (OEM), Motoren Und Turbinen-Union ((MTU) America) MTU 8V396 TE94 Main Diesel Engines (MDE) used on Coast Guard 87’ WPB patrol boats. This is a five (5) year procurement with fourteen (14) engines expected to be overhauled per year.

(b) Name and address of the contractor: Competition is limited to MTU authorized distributors:

o Pacific Power Group (Pacific Power); DUNS# 059403154; Address: 7215 S. 228th

Street, Kent, WA 98032 o Stewart & Stevenson FDDA, LLC. (FDDA); DUNS# 946365236; Address: 4141

S.W. 30th Avenue, Ft. Lauderdale, FL 33312

(c) Type of action: The USCG intends to award a requirements type contract with firm-fixed-priced delivery orders utilizing the procedures established in FAR Part 12, Acquisition of Commercial Items in conjunction with FAR Part 15 Contracting by Negotiation as prescribed by FAR Subpart 12.102(b).

(d) Estimated total value of five (5), one (1) year ordering periods with a term of December 2022 through December 2027 is broken down as follows:

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Independent Government Estimate:

The Independent Government Estimate (IGE) used actual pricing data extracted from the Naval & Electronics Supply Support System (NESSS) using previous contract, HSCG40-17-D-19004. A 6% escalation rate is applied to the IGE based on the Bureau of Labor and Statistics (BLS) Producer Price Index (PPI), and includes mandatory parts, shipping, packaging and bar coding.

(e) Type of funding: Delivery orders issued against the contract may use annual Operations and Support funds.

(f) Year of funding: Delivery orders will use appropriate fiscal year funds.

(g) Solicitation number: 70Z08023R15006B00

(h) Background information about the requirement: The previous MTU 8V396 TE94 contract HSCG40-17-D-19004 was awarded on a brand name basis to Pacific Power Group for a period of performance of 01 June 2017 to 30 May 2022. The need for this overhaul contract is based on the age of these engines and the number of operating hours accumulated through their life span.

3. Description of Supplies/Services. The requirement is for overhaul of MTU MDE model

8V396 TE94. The engines will be taken out of service, shipped to the MTU authorized distributor, inspected and overhauled according to the OEM standards, and shipped back to the USCG WPBs as part of a scheduled maintenance project.

4. Identification of Statutory Authority Permitting Other Than Full and Open Competition. The statutory authority permitting other than full and open competition is 10 U.S.C. § 2304(c)(1) implemented by the FAR Subpart 6.302-1 entitled “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements, Application for Brand Name Descriptions.”

5. Identification of Exception to the Buy American Act. The exception to the Buy

American statute permitting the purchase of articles that are not domestic end products is FAR 25.103(b)(1) Non-availability, Class determinations, FAR 25.104(a) Non-available articles, Spare and replacement parts for equipment of foreign manufacture and for which domestic parts are not available.

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6. Demonstration that the Proposed Contractor’s Unique Qualifications or the Nature of the Acquisition Require Use of the Authority Cited. MTU authorized distributors are the only sources that possess the required capabilities, drawings, specifications, engineering control procedures and proprietary methods to ensure the latest design configuration, manufacturing and quality control required to overhaul these engines to the latest engineering specifications and requirements. Model 8V396 TE94 diesel engine is designed, engineered and built to close tolerances, and have undergone numerous shop tests and rigorous operational testing before being certified and approved by the OEM.

The 8V396 TE94 MDEs are critical to the safe and efficient operation of the 87’ WPB cutters. A malfunction or failure of MDEs would cause loss of maneuverability and the mission would be severely impacted. The WPB’s operate independently, in remote areas of the world, on missions of homeland security, search and rescue, Alien Immigration Migration Operations (AIMO), drug interdiction and fisheries patrol.

This requirement must use OEM authorized technicians who possess an MTU 1b service dongle. The dongle is a software key used by the OEM and its certified technicians to view and make changes to the engine calibration data within the control system software.

Non-OEM authorized distributors are not permitted to possess or use the OEM provided 1b service dongle and thus not be able to properly overhaul the MTU 8V396 TE94 series diesel engine.

7. Description of Efforts Made to Ensure that Offers are Solicited from as Many

Potential Sources as is Practicable. Any authorized distributor having a distributor agreement with MTU will be invited to submit a proposal. In accordance with FAR Subpart 5.203, in an effort to solicit as many potential sources as practicable, a Sources Sought Notice was posted on the SAM.gov website from January 26, 2022 to February 15, 2022. The Sources Sought Notice was seeking vendors able to overhaul of the 8v396 TE94 series engines. Businesses having the expertise and required capabilities to perform this work were invited to submit information on their companies. At the conclusion of the notice two (2) companies responded stating their interest and ability to meet this requirement. If any responses are received as a result of the solicitation, the file will be documented accordingly and the requirement competed among the eligible offerors.

The 87’ MDE overhaul requirement was published in the Acquisition Planning Forecast System (APFS) on January 25, 2022 and updated on August 11, 2022. The APFS number is F2021056367.

8. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable. The Contracting Officer (KO) will determine that the anticipated prices are fair and reasonable based on comparisons with the IGE, market research, previous acquisition history on contract HSCG40-17-D-19004 with Pacific Power Group, period of performance May 2017-May 2022, price competition among authorized distributors and, if necessary, require the offeror to submit other than certified pricing data.

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9. Description of Market Research. Extensive market research as prescribed in FAR Part

10 was conducted by the Contracting Officer’s Representative (COR) and Contracting Officer (KO) from April 01, 2021- February 15, 2022 in an effort to identify qualified companies. Market research was conducted by identifying various companies on the internet, Federal Supply Schedules, and visits to authorized distributors’ facilities previously contracted with that provide MTU OEM overhauls. The Contracting Officer concluded that only MTU and their authorized distributors possess this capability to successfully complete the overhauls. Technical information is proprietary to the OEM and is unavailable to allow the Government to evaluate other options.

10. Any Other Facts Supporting the Use of Other Than Full and Open Competition.

None

11. A Listing of the Sources, if Any that Expressed, in Writing, an Interest in the Acquisition.

Market research efforts determined that two (2) MTU distributors, Pacific Power Group of Kent, WA and Stewart & Stevenson FDDA, LLC of Ft. Lauderdale, FL are expected to compete for this requirement as evidenced by their responses to the Sources Sought Notice.

The companies expressed interest in the solicitation and were verified to be MTU authorized distributors.

12. 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.

The Coast Guard does not own the rights to MTU’s technical data and cannot reverse engineer the thousands of parts or the software required to support the propulsion units in order to determine their dimensions, tolerances, or chemical composition. MTU owns the technical data, the engines are commercial items developed exclusively at private expense.

Therefore, MTU will only provide those rights in technical data that are customarily provided to customers of commercial items or services. MTU has declined to sell their technical data rights upon repeated requests over the years from the USCG. The most recent request to purchase the data rights was emailed to MTU in January 2022. MTU stated in their email response dated 01/25/2022, “we will not sell the rights”. To increase competition on future acquisitions, the Coast Guard will continue to monitor the market for additional authorized OEM distributors. MTU will not consider the release of any proprietary data at this time; however, if in the future, MTU reconsiders and quotes a price for the proprietary data rights, the USCG will weigh the benefits of purchasing the data rights at that time.

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13. 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.

LUCAS.JENNIFER.B.14

09914299

Digitally signed by

LUCAS.JENNIFER.B.1409914299

Date: 2022.08.16 12:42:33 -04'00'

Jennifer Lucas Date Contracting Officer

14. Technical/Requirements Personnel Certification.

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

MULROONEY.PATRI Digitally signed by

MULROONEY.PATRICK.R.JR.1036

546480 Date: 2022.08.17 08:56:20 -04'00'

Patrick Mulrooney Date Technical Representative/COR

APPROVAL:

FOUT.THOMAS.F.10

42165197

Digitally signed by

FOUT.THOMAS.F.1042165197

Date: 2022.08.31 08:16:01 -04'00'

Mildred A. Escobosa Date Chief of the Contracting Office

James Knight Date Coast Guard Procuring Activity Competition Advocate (CG PACA)

CK.R.JR.1036546480

KNIGHT.JAMES.L

YNN.1097377746

Digitally signed by

KNIGHT.JAMES.LYNN.109737774

Date: 2022.09.15 13:55:51 -04'00'