JnA_Redacted.pdf

JUSTIFICATION & APPROVAL FOR FAR SUBPART 13.5 SOLE

SOURCE (INCLUDING BRAND NAME) ACQUISITIONS

Treasury Standard Form – 1013 (Rev 12/15)

Prescribed by Treasury: DTAP 1013.501

3.a A description of the supplies or services required to meet the agency’s needs:

It is anticipated that this will be a single-award Blanket Purchase Agreement (BPA) with Firm Fixed Price Line Item Numbers. The BPA shall have an ordering period from the effective date of the agreement for one (1) full year or when the BPA ceiling is reached, whichever occurs first.

A BPA with the original manufacturer will enable proper inventory count of spare/replacement parts to support the maintenance, repair and operability of BEP’s currency manufacturing equipment presses which are pivotal to the BEP’s mission. Attached is the complete list of Original Equipment Manufacturer (OEM) spare parts, Attachment A (Parts List).

3.b Estimated value: $ $7,000,000.00

4. Identification of the authority being used (Check the appropriate box that applies):

41 U.S.C. 1901 – Simplified acquisition procedures.

41 U.S.C. 1903 – Special emergency procurement authority.

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

KBA is the original equipment manufacturer of the above-mentioned equipment used by BEP for currency manufacturing. In order for the BEP to have continuity in operations, spare parts must be purchased and sufficient inventory stock be maintained to support these distinctive currency printing presses which support the Bureau’s complex, highly-integrated currency production infrastructure.

The above equipment are integral parts of the Bureau’s continued operations and are fundamental to the BEP’s ability to fulfill its critical missions of developing and producing US currency notes that are trusted worldwide. The quality, legacy, and the fidelity of these spare parts are vital to the operation of the equipment used to fulfill the U.S. currency printing mission.

The awardee that can provide all of the spare parts as listed in the attached SOW has been identified as KBA, a large business, and the original manufacturer for these press/equipment.

This vendor has been found technically acceptable to supply all of these spare parts to support uninterrupted currency manufacture services and to ensure continued daily currency manufacture operations.

In the past, BEP tried to use few after-market consumable spare parts but to no avail as those items failed to sustain the presses because of incorrect size or erroneous voltage of the after-market spare parts, resulting also in undue duplication of operational costs and unnecessary delay to the BEP Currency Manufacturing Facilities. BEP Office of Acquisition made an effort to identify any potential alternative sources by posting a sources sought notice to the Government Point of Entry at fbo.gov. As documented in the Market Research Report, the Treasury Mandated Source or other pre-existing government-wide source were researched; the search only yielded one source that can satisfy these requirements – the OEM, KBA. Other potential source(s) within the industry were researched and produced the same results. In order to prevent the functional obsolescence of these highly specialized equipment, BEP must

Treasury Standard Form – 1013 (Rev 12/15) Prescribed by Treasury: DTAP 1013.501 maintain a high level of inventory spare parts to replace failing parts at or below critical inventory levels at each BEP Currency Manufacturing facility. OEM parts are needed to not only provide the quality of materials, but will also ensure the warranty of the equipment lifecycle as the OEM parts are the same components as those used when the equipment was initially manufactured. There are no known sources authorized to sell all of the OEM spare parts other than KBA. OEM parts are tested with the machines and matched to specifications of the original machine design.

6. A description of efforts to ensure that offers were 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 FAR 5.202 applies:

The Contract Specialist did not find additional sources nor are there existing Treasury contract vehicles that can fulfill this requirement. The spare part required are OEM spare parts and there are no known sources authorized to sell all these OEM spare parts other than KBA.

The following notice was publicized as required by FAR subpart 5.2:

A notice of intent under RFI 2031ZA20N00021 was posted in beta.SAM.gov on 19 February 2020, to award a sole source BPA to KBA. The purpose of the notice is two-fold; 1) to inform the industry of BEP’s intent to award a sole source to KBA; and 2) to seek vendor(s) other than KBA that is capable of the providing all the OEM spare parts listed and attached to the notice. There were no responses from sources other than

KBA.

7. A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable:

The Government will evaluate price for reasonableness. Price evaluation will be conducted in accordance with FAR 13.106-3(a) to determine that the proposed price is fair and reasonable..

As such, the Government will use any combination of the proposal analysis techniques stipulated under FAR Subpart 13.106-3 to aid in the price evaluation process. The Government anticipates the cost will be fair and reasonable based on the following:

The BEP has developed an IGCE based upon previous small procurements. The IGCE will be used as a baseline for determining the vendor’s proposed prices to be fair and reasonable.

The solicitation will allow the vendor to propose a discount off list prices, as an alternative to set prices.

The contracting officer will have the option to negotiate prices.

Historical data showed that prices from previous purchases made from KBA has been determined to be fair and reasonable.

8. A description of the market research conducted (see FAR part 10) and the results or a statement of the reason market research was not conducted:

The following are the techniques, findings and impact of the market research conducted:

Treasury Standard Form – 1013 (Rev 12/15) Prescribed by Treasury: DTAP 1013.501

A sources sought was issued via the Federal Business Opportunity site at FedBizOpp.gov under BEP Solicitation Number 2031ZA20N00021. The notice was issued on 18 February 2020 with a response date of 26 February 2020. The purpose of the notice was to obtain information regarding the availability and capability of all sources qualified to provide ALL the items required for this action. Only one capability statement was received in response to the notice from KBA.

KBA is the manufacturer of the equipment mentioned above. The BEP Office of Currency Manufacturing (OCM) team reviewed the capability received and affirmed that KBA is the only source that can provide all replacement parts meeting the required specifications per the requirement herein. The OEM parts are critical to the life of the equipment. KBA, being the original manufacturer, can provide parts that meet warranty requirements and provide for extended warranty advantages. . Replacement parts by other than the OEM are unacceptable as they would endanger the machines which could lead to costly repairs, voiding equipment warranty and complete interruption of currency manufacturing operation. Based on these facts, KBA is the only vendor qualified to meet the requirement herein.

Other sources/market research conducted are as follow:

Queried GSA Advantage: GSA Advantage! Online shopping was queried for parts and support. No sources where found that can provide the parts required for the equipment. The parts cannot be procured through GSA.

Treasury Mandatory Sources were also reviewed. The Contract Specialist did not find sources nor existing Treasury contract vehicles that can fulfill this requirement. The spare part required are OEM spare parts; there are no known sources authorized to sell all these OEM spare parts other than KBA.

Reviewed prior acquisition history for similar or identical requirements. The procurement history for each previously purchased part was pulled from BEP procurement system, Business Process Expert - Contract Lifecycle Management (BEN-CLM). The report confirmed that the majority of these parts have only been purchased from KBA. Since 2015, the BEP has awarded 300 purchase orders to KBA for spare parts; an analysis of these awards show prices that appear to change based on exchange rates rather than on inflation.

As documented above, the following notices were also issued via FBO:

A source sought notice, 2031ZA20N00021 was posted on beta.SAM.gov on 19 February 2020 to seek vendors other than KBA who can provide the over 1,000 OEM spare parts listed and attached to the notice. Only one response was received from KBA.

The extent of BEP’s continuing market research did not produce any favorable results.

Therefore, the market research results established that the BEP’s Currency Manufacturing requirement for inventory OEM spare parts cannot be met by other vendors within the industry except by KBA.