Justification and Approval_REDACTED.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

10 U.S.C. § 3204(a)(1)

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

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302-1, the following facts and rationale justify the use of such authority:

1. Agency and Contracting Activity.

The Department of Homeland Security, United States Coast Guard (USCG), Surface Forces Logistics Center (SFLC), Contracting and Procurement Division (CPD), 2401 Hawkins Point Road, Baltimore, MD 21226.

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

(a) Nature of the action: The USCG SFLC intends to solicit and award a Requirements contract with fixed priced delivery orders for the purchase of MTU/Rolls Royce Solutions America (RRSA) Main Propulsion Diesel Engines (MPDE), model 20V1163TB93 assemblies (parts and components). The assemblies will support the recurring maintenance requirements for the MTU model 20V1163 TB93 MPDEs currently installed on the 418’ WMSL cutter fleet.

(b) Name and address of the contractor: MTU /Rolls-Royce Solutions America (RRSA) Inc.

39525 Mackenzie Drive, Novi, MI 48377.

(c) Type of action: Firm Fixed-Price, Single Award, Requirements Contract, with fixed priced delivery orders.

(d) Estimated total value (including Ordering Periods):

Base Year Estimated Total

Ordering Year 1 Estimated Total

Ordering Year 2 Estimated Total

Ordering Year 3 Estimated Total

Ordering Year 4 Estimated Total

TOTAL

(e) Type of funding: Surface Operations

(f) Year of funding: Subject to FY of all Delivery Order awards.

(g) Solicitation number: PR2124404B4500AD031

(h) Background information about the requirement: A five (5) year supply parts IDV (70Z0851D31801B00) expired in FY23. Since the expiration, the Long-Range Enforcer Product Line (LRE PL) has been supporting the requirement via simplified acquisition purchases (SAP) (contract numbers - 70Z08523P39015B00 and 70Z08524P30036B00). The USCG currently contracts the overhauling of the MTU 20V1163 TB93 main propulsion diesel engines installed on the 418’ WMSL cutters.

This onboard maintenance is performed by skilled technicians capable of performing the engine overhauls using genuine MTU parts. These parts will be procured from the OEM – MTU/RRSA only.

3. Description of Supplies/Services.

The requirement is designated as a purchase of supply parts - MPDE (OEM) assemblies supporting the MPDEs overhaul of the model MTU 20V1163 TB93. The full list of constituent parts comprising the scope of these assemblies is attached, See Attachment I.

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. § 3204(a)(1) implemented by the FAR Subpart 6.302-1 entitled “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. Identification of Exception to the Buy American Act. The Buy American Act does not apply according to FAR 25.103(b)(1). FAR 25.104(a) 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.

MTU/RRSA retains exclusive intellectual property rights over all technical data, including manufacturing specifications, testing data, integration algorithms and other data essential for conclusively assessing fitness, interchangeability, confirming durability of replacement parts and components, which makes it impossible, within reasonable expense constraints, to provide manufacturers with the data necessary to duplicate MTU/RRSA engine parts and to evaluate the suitability of engine parts from other than the OEM supply network.

These proprietary data constraints necessitate ongoing reliance on MTU/RRSA original parts until responsible alternative access solutions emerge potentially expanding flexibility without compromising quality and compatibility of engine parts. Additionally, RRSA will not sell their MPDE parts and components to any other 3rd party contractors for the 1163 series engines.

7. Description of Efforts Made to Ensure that Offers are Solicited from as Many Potential Sources as is Practicable.

The source sought notice was posted on SAM.gov on March 28, 2024, maximizing visibility of this upcoming MTU parts requirement. The posting requested feedback from all industry partners capable of meeting OEM MPDE model 20V1163 TB93 engine parts provision needs. Through this SAM.gov posting, one company provided a response.

Acquisition Planning Forecast System (APFS) F2024065645 was posted 22 April 2024.

However, no responses were received.

An announcement is being planned for posting in Contract Opportunities, with the solicitation. The estimated date of publication is 28 June 2024.

8. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable. The Contracting Officer (KO) determines that the anticipated prices will be fair and reasonable based on comparison with the IGCE, and comparison to available previous history for similar parts. Other than cost and pricing data will be requested from the OEM if required.

9. Description of Market Research. Market research was conducted between 28 March 2024 and 22 April 2024 by the Contracting Officer’s Representative (COR) and Contract Specialist. This included review of MTU and authorized distributor pricelists to map supplier alternatives and comparative pricing on marine engine parts kit. To support awareness and solicit feedback with lead time, this upcoming MTU parts requirement was posted to the APFS (notice F2024065645) on 22 April 2024. However, no responses were received given lack of visibility into necessary integration procedures, compatibility specifications, and durability testing protocols which is only available from MTU/RRSA.

Additionally on 28 March 2024, a public sources sought notice posted on SAM.gov requested capability statements from potential parts and component providers. This yielded one (1) response, though alignment with exact MTU OEM parts supply appeared very limited.

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

The USCG does not possess the technical expertise to manufacture, repair, or support the required engine parts. RRSA is the only vendor that can fulfill this requirement.

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

The following companies responded to the sources sought notices posted for this acquisition and are expected to be able to meet this requirement: On 11 April 2024, one (1) company responded to the Sources Sought Notice. The response was provided to the APM, who contacted the company via telephone regarding their interest and their capabilities. The company informed the APM that they are primarily an investment company. They would primarily be relying on 3rd parties to meet the requirements. The company also informed the APM that they have no idea if such parties exist nor if these parties can purchase the supply parts from RRSA. The company is not an OEM distributor.

12. A Statement of the Action, 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 has made several attempts to formally request release of the proprietary data rights related to manufacturing and maintenance of the MTU MPDEs model 20V1163 TB93, including an attempt for this acquisition. On 31 August 2023, the USCG contacted RRSA in order to gauge their interest in selling or otherwise releasing the necessary blueprints, data rights, and other technical drawings related to this requirement. On 31 August 2023, RRSA responded via email that they were unwilling to release any blueprints, data rights, and other technical drawings supporting the MPDEs. There have been numerous discussions with RRSA involving similar requirements such as crankshafts supply which RRSA and the manufacturers for the crankshafts stated that they would not provide their proprietary data rights nor work with other contractors besides RRSA. MTU/ RRSA categorically refuse any allowances for licensing, sale or access grants around strictly protected intellectual property covering all facets of overhaul manuals contents, tools, diagnostics, repair methods, components upgrades or configurations.

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.

Date Name Contracting Officer Mark Cap

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.

Date Name

RECOMMENDED FOR APPROVAL

SFLC Procuring Activity

Advocate for Competition (PAAC)

APPROVAL

Date

Date Head of the Contracting Activity