JA MTU Overhauls_Redacted.pdf

Justification for Other than Full and Open Competition 10 United States Code (USC) 2304(c)(1)

70Z08020R15001B00

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 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 (DHS), United States

Coast Guard (USCG), Surface Forces Logistics Center (SFLC), Contracting and Procurement Division (CPD), 2401 Hawkins Point Road, Baltimore, Maryland 21226.

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

(a) Nature of the Action: The USCG has a requirement to overhaul Original Equipment Manufacturer (OEM), Motoren Und Turbinen-Union ((MTU) America) Main Diesel Engines (MDE) used on the Coast Guard’s 154’ Fast Response Cutter (FRC) fleet. The need for these overhaul contracts are based on the age of these engines and the number of operating hours accumulated through their life span. The NAICS code is 333618 and the PSC Code is J028.

(b) Name and Address of the Contractor: Competition is limited to the OEM and MTU distributers:

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 o Western Branch Diesel; DUNS# 003177086; Address: 3504 Shipwright St, Portsmouth, VA

23703 o W. W. Williams Southeast, LLC. (Williams); DUNS# 883298085; Address: 5025 Bradenton Ave., Suite 130 Dublin, OH 43017 o MTU America; DUNS 020016718; Address: 39525 Mackenzie Dr., Novi, Michigan 48377

(c) Type of Action: The USCG intends to award at least two Indefinite Delivery, Indefinite

Quantity (IDIQ) type contracts 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 (multiple awards will have a shared ceiling):

Ordering Period Performance Period Quantity

Base Ordering Period 12 Mo. from date of award

4 overhauls 4 wear analysis

Ordering Period 1 12 Mo. from end of Base 8 overhauls Ordering Period 2 12 Mo. from the end Period 1 8 overhauls

USCG 154 FRC MTU MAIN DIESEL ENGINE OVERHAULS

The estimate includes a three percent escalation rate from the base year.

Based on the Bureau of Labor and Statistics (BLS) Producer Price Index (PPI).

(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 FY funds.

(g) Solicitation number: 70Z08020R15001B00

(h) Background information about the requirement: Currently, no overhaul contract exists for the MTU 20V4000M93L MDE. Additionally, the wear analysis portion of the proposed contracts will define the actual load conditions and help the OEM and USCG Engineers determine if 12,000 hours or 6 ½ years is the appropriate time to take an engine out of service.

3. Description of Supplies/Services. The requirement is to provide overhaul for the MTU marine diesel engines model 20V4000M93L. Thus, the engine is taken out of service, shipped to the MTU distributors where the engine is inspected and overhauled within 70 days according to MTU, the OEM standards. The overhauled engine is shipped back to the USCG and installed on 154’ FRC as part of a schedule maintenance project. The MTU distributors are the only source that have access to MTU proprietary technical data and that can provide new OEM components and parts. The wear analysis will determine the amount of wear and help define actual load conditions of the engines during operation. Results from the wear analysis will be used to determine future preventative and routine maintenance schedules for the MDEs.

4. Identification of Statutory Authority Permitting Other Than Full and Open Competition. The statutory authority permitting other than full and open competition is 10 United States Code (USC) 2304(c)(1) implemented by Federal Acquisition Regulation (FAR) Subpart 6.302-1(c)(1) entitled “Only One Responsible Source and no Other Supplies or Services Will Satisfy Agency Requirements.”

5. Identification of Exception to the Buy American Statute. 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.

6. Demonstration that the Proposed Contractor’s Unique Qualifications or the Nature of the

Acquisition Require Use of the Authority Cited. The FRCs were procured in two Phases with the intent to standardize the hull form, general arrangements, and a number of systems and associated design data contained in the Re-procurement Data and License Package (RDLP). During Phase I of the FRC propulsion plant standardization, the MTU engines were competitively proposed by the shipbuilder and were already being used on Coast Guard Coastal Patrol Boats (WPB), Response Boat-Medium (RB-M) and National Security Cutters (WMSL). The Coast Guard and shipbuilder, Bollinger Shipyards, completed a significant amount of design and integration work to ensure the propulsion plant system meets performance requirements, weight constraints, and engine room volume constraints. Standardization of the Phase I Propulsion Plant equipment installed onboard the 154’ ensured logistics supportability and consistency among both Phase I and Phase II cutters while reducing schedule risk and promoting cost avoidance. The 20V4000M93L (MDE) was included as part of the propulsion plant components, so the continued sustainment of these engines was anticipated from the design to implementation stages of the life for the 154’.

The 20V4000M93L MDEs are critical to the safe and efficient operation of the 154’ FRC cutters.

The FRCs 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. Based on market research it is not expected that other companies will be able to overhaul the MTU 20V4000M93L series diesel engine components and provide new OEM parts without access to MTU proprietary information. MTU has authorized distributors however, all proprietary technical data and parts remains under MTU control.

7. Description of Effort Made to Ensure that Offers are Solicited from as Many Potential Sources as is Practicable. Any repair facility with a distributor agreement will be invited to submit proposals. In accordance with FAR Subpart 5.203, in an effort to solicit as many potential sources as practicable, Sources Sought Notice 70Z08020S5001B00 was posted via beta.SAM.gov from December 10, 2019 to January 6, 2020 with a market survey questionnaire in an effort to gain further insight on the nuances of this requirement and to identify qualified small business contractors with access to the OEM technical data. Additionally, CPD Branch 1 and the PBPL hosted an Industry Day on January 15, 2020 in Baltimore, Maryland. The Industry Day provided an opportunity for the Government and Industry to conduct a prolonged interactive question and answer session and allowed for the Government to ask specific questions based on the responses to the Sources Sought Notice.

Three companies responded to the December 10th Sources Sought Notice as well as WW Williams and Western Branch Diesel attended PBPL Industry Day. Section 2(b) lists interested vendors.

The 154’ FRC requirement was published in the Acquisition Planning Forecast System (APFS) on August 30, 2019 and updated on February 25, 2020. The APFS number is F2019046951. No inquires received from industry for APFS F2019046951.

8. Determination by the Contracting Officer that the Anticipated Cost to the Government will be

Fair and Reasonable. The Contracting Officer will determine that the anticipated prices to be fair and reasonable based on prices analysis in accordance with FAR Subpart 15.404-1(b), utilizing a combination of price analysis techniques to include: comparison of proposed prices to historical prices paid for the overhauls of similar engine types. (FAR 15.404-1 (b)(2)(ii)), current catalog prices (FAR 15.404-1(b)(22)(iv)), and an analysis of other than certified cost and pricing data (FAR 15.404- 1(b)(2)(vii)).

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 February 2019 through January 2020 in an effort to identify companies that can provide the requested services. Market research was conducted by identifying various companies on the internet, Federal Supply Schedules, and site visits to companies previously contracted with that provide MTU OEM parts and services. Based on the market research the COR and KO have concluded that only MTU and their distributors possess access to the OEM proprietary technical information required to successfully complete the overhaul of these engines.

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

The MTU MDE system installed on the FRC is identified a Configuration Item (CI) per COMDTINST M4130.6C, CG Configuration Management Policy. The aforementioned policy describes how CI are sustained for the life-cycle; the fundamental purpose of configuration management is to ensure that these assets meet their requirements. These cutters are assets that are used to satisfy a need for the Coast Guard’s mission. The configuration of these high value assets specifically impact safety, security, performance, schedule, cost and the environment. This configuration information is paramount to making timely and effective decisions regarding mission execution, mission support, and financial stewardship, and it is therefore imperative that consistency be maintained between these critical assets, their documented configuration.

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

Market research efforts revealed that the OEM and four (4) MTU distributors are expected to compete for this requirement as evidenced by their responses to the Sources Sought Notice or Industry Day attendance. The companies whom expressed interest in receiving a copy of the solicitation when released and were verified to be the OEM or an OEM distributors. Details of the interested parties can be found in Section 2(b).

12. A Statement of the Actions, if Any, the Agency May Take to Remove or Overcome Any

Barriers to Competition Before Any Subsequent Acquisitions for Supplies or Services Required. 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 on February 24, 2020.

MTU responded stating that, “the data rights will not be for sale in the foreseeable future.” The USCG will continue to engage MTU for release of proprietary data prior to any subsequent requirement.

(Intentionally left Blank)

KNIGHT.JAMES.

LYNN.1097377

Digitally signed by

KNIGHT.JAMES.LYNN.1097

377746 Date: 2020.07.23 16:05:22 -04'00'