J&A_FBO.pdf

N104-17-R-4901

CLASS JUSTIFICATION AND APPROVAL (J&A)

FOR USE OF OTHER THAN FULL AND OPEN

COMPETITION

1. Contracting Activity: Department of the Navy, Military Sealift Command (MSC), Ship Repair Division (N104).

2. Description of the Action Being Approved:

a. This action provides the basis and rationale for awarding of at least one (1) contract on an other than full-and-open competition basis for long-standing, recurrent requirements covering a broad range of diesel engine systems/items and services in support of the following MSC class vessels: AS (Submarine Tender); T-AH (Hospital); T-AKE (Dry Cargo/Ammunition); T-AO 187 (Fleet Replenishment Oiler); T-ESB (Expeditionary Mobile Base); and T-ESD (Expeditionary Transfer Dock).

b. MSC recognizes its obligation to further competition to the maximum extent possible, which it routinely does and will continue to do. However, as further described below, the decision to procure these items via limited sources is based on a significant amount of MSC experience purchasing the very systems/items listed in paragraph 5, using previous related J&As. Specifically, contract history shows consistently procuring parts and services for these systems/items utilizing other than full-and-open competition for at least the past ten (10) years. Rather than duplicate a J&A each time the covered systems/items are required, this J&A consolidates the previous relevant J&As for efficiency. This will be an indefinite-delivery, indefinite-quantity (IDIQ) type contract with firm-fixed price task and delivery orders.

3. Description of Supplies/Services:

MSC requires a broad range of Original Equipment Manufacturer (OEM) systems/items and and/or exclusively authorized OEM manufacturer/parts provider/service technician services to maintain the following diesel engines contained within multiple MSC classes of ships. These systems/items and related services are for:

a. ALCO 251F (Ship Service Diesel Generator)

b. Colt-Pielstick PC4.2 (Main Propulsion Diesel Engine)

c. Fairbanks Morse 38D 8-1/8 (Emergency Diesel Generator)

d. MAN 6L 48/60 (Diesel Engine)

e. MAN 8L 48/60 (Diesel Engine)

f. MAN 9L 48/60 (Diesel Engine)

g. MAN 12V 48/60CR (Diesel Engine)

Maintenance may include, but is not limited to, appraisals, groom, inspections, life cycle management, overhauls, refurbishment, repairs, reports, tests, and upgrades.

The total maximum value of this requirement is $ , which includes the base ordering period and four (4) optional ordering periods, not to exceed one (1) year per ordering period. It is anticipated that each task and/or delivery order will be funded utilizing corresponding Fiscal Year (FY) United States Navy Working Capital Funds (NWCF)

4. 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), as implemented by FAR 6.302-1(b), whereby parts and services sources are unique or available from one or a limited number of sources. Competition will be limited to OEMs and/or exclusively OEM-authorized parts providers/service technicians providing brand name parts.

5. Rationale Justifying Use of Cited Authority:

This is not a new requirement. MSC has acquired the below systems/items and services for decades on an other than full-and-open competition basis using a series of J&As. Currently, the required systems/items and services to maintain the diesel engines used in the above-described ship classes are procured through individual contracts and purchase orders utilizing other than full-and-open competition; an inefficient and administratively burdensome process. This class J&A is designed to simplify acquisition by consolidating this recurrent requirement into a single J&A.

a. ALCO 251F (Ship Service Diesel Generator)

Basis. There are currently three (3) active T-AOs in the MSC fleet with two (2) ALCO 251F Ship Service Diesel Generator (SSDG) per hull, for a total of six (6). SSDG sets provide ship service power and/or provide electrical power to motorize the power take off (PTO) for emergency propulsion. The OEM for this equipment was the ALCO company at the time of manufacture. Coltec Industries Inc., doing business as (DBA) Fairbanks Morse Engine (FME), acquired the ALCO engine product line (ALCO 251) in 1994, thereby obtaining proprietary data/drawing and manufacturing and repair procedures trade information rights to produce replacement parts and service these engines. In sum, the engineering, construction drawings, and technical characteristics for the ALCO 251 manufactured parts and related repair services techniques are proprietary to FME, making them the only known source. The Government did not acquire rights in the above-described matters.

Rationale. FME provides OEM parts and technical data/drawings as required by the United States Coast Guard (USCG) and American Bureau of Shipping (ABS) regulations. This mandatory regimen maintains all OEM warranties, ensures equipment reliability, and ensures crew safety, therefore precluding consideration of non-OEM parts and non-OEM authorized technical representative services. Safety Management Systems (SMS) number 10.4-001-ALL Revision 2.2 requires that the vessel equipment be maintained in accordance with OEM recommendations, MSC policy, and regulatory body requirements. SMS number 10.6-002-ALL lists the diesel generators as critical equipment. Failure of the SSDGs would restrict the ship to port and it would not be able to perform its required national defense mission. Safe vessel operations require proper refurbishment and maintenance of the SSDGs in accordance with USCG, ABS, and MSC requirements.

b. Colt Pielstick PC4.2 (Main Propulsion Diesel Engine)

Basis. There are currently fifteen (15) active T-AOs in the MSC fleet with two (2) MAN Diesel – SEMT Pielstick PC4.2 Main Propulsion Diesel Engines (MPDE) per hull for a total of thirty (30) class wide. MPDEs provide ship propulsion and shipboard power. The original OEM for this equipment was MAN Diesel - Societe d’Etudes de Machines Thermiques (SEMT) Pielstick of Nazaire, France. FME entered into a license agreement in the late 1960s with SEMT Pielstick to manufacture and sell its Pielstick engines in the United States. In 2006, MAN Diesel and Turbo (MAN Diesel) acquired SEMT Pielstick, and the existing licensing agreement is maintained to date. This licensing agreement provides subject matter expert (SME) agents access to proprietary information to properly manufacture these engines, replacement parts, and provide authorized technical representative services. The engineering, construction drawings, and technical characteristics for the manufactured parts for these engines are proprietary to MAN Diesel – SEMT Pielstick and its authorized OEM license agreement holders. The Government did not acquire rights in this data. Further, FME is the only license agreement holder to build engines for the United States Naval and Military markets. Licensed builders provide parts and services for the engines they build. For engines operating outside of the United States and its territorial waters globally, the local MAN Diesel Primeserv location provides parts and services for these engines.

Rationale. MAN Diesel and FME as the OEM factory-authorized agent provide parts and technical data/drawings as required by the USCG and ABS regulations. This mandatory regimen maintains all OEM warranties, ensures equipment reliability, and ensures crew safety, therefore precluding consideration of non-OEM parts and non-OEM authorized technical representative services. MSC SMS Number 10.6-002-ALL lists all MPDEs as critical equipment. Failure of one (1) MPDE will force a ship to reduce speed. The reduction of speed can pose a hazard to the crew due to limited ship maneuverability. The loss of two (2) engines puts a ship in a Casualty Reporting (CASREP) category four (4) status, thus becoming unable to perform its primary national defense mission.

c. Fairbanks Morse 38D 8-1/8 (Emergency Diesel Generator)

Basis. There are currently two (2) active ASs in the MSC fleet with one

(1) Fairbanks Morse 38D 8-1/8 E Emergency Diesel Generator (EDG) per vessel. EDGs provide emergency electrical capacity onboard the vessel.

The OEM for this equipment is FME. FME is the only source with access to the design information to engineer, manufacture, and service this equipment as they own the proprietary drawings, technical manuals, and design information for this equipment. Parts and services provided by the OEM maintains all OEM warranties, ensures equipment reliability, and ensures crew safety, therefore precluding consideration of non-OEM parts and non-OEM authorized technical representative services. The engineering, construction drawings, and technical characteristics for the manufactured parts for these engines are proprietary to FME and the Government did not acquire rights in this data.

Rationale. FME as the OEM provides parts and technical data/drawings as required by the USCG and ABS regulations. This mandatory regimen maintains all OEM warranties, ensures equipment reliability, and ensures crew safety, therefore precluding consideration of non-OEM parts and non- OEM authorized technical representative services. Safety Management Systems (SMS) number 10.4-001-ALL Revision 2.2 ensures that the vessel equipment is maintained in accordance with OEM recommendations, MSC policy, and regulatory body requirements. SMS number 10.6-002-ALL lists the diesel generators as critical equipment. Failure of the EDGs would restrict the ship to port and it would not be able to perform its required national defense mission. Proper refurbishment and maintenance of the EDGs are critical to the safe operations of the vessels.

d. MAN 48/60 (Diesel Engines)

This paragraph covers the diesel engines stated in paragraphs (3)(d) through

(g) above, as all engines are considered 48/60 four-stroke turbocharged diesel engines and possess the same manufacturing relationship. The differences are generally in the controls and fuel systems of these engines.

Basis. There are currently fourteen (14) active T-AKEs in the MSC fleet with two (2) MAN 8L 48/60 and two (2) 9L 48/60 four-stroke turbocharged diesel engines per vessel, There is one (1) active T-ESB and one (1) scheduled to come online in February 2018, and two (2) active T-ESDs in the MSC fleet, with four (4) MAN 6L 48/60 four-stroke turbocharged diesel engines per vessel. In addition, there are up to six (6) USNS JOHN LEWIS Class Oilers, T-AO Xs to be added to the MSC fleet during the course of this contract, with a total of seventeen (17) planned. These will each have two (2) MAN 12V 48/60CR four-stroke turbocharged diesel engines. Four-stroke turbocharged diesel engines provide ship propulsion and ship power.

The OEM for this equipment is MAN Diesel. MAN and FME entered into a license agreement in 1995 for medium-speed diesel engines for the military market. Under this license agreement, FME manufactures and sells engines and parts for the MAN 48/60 engines. FME now has exclusive rights from the OEM for the proprietary data/drawing and manufacturing and repair procedures rights to produce replacement parts and service these engines. The engineering, construction drawings, and technical characteristics for the manufactured parts for these engines are proprietary to MAN Diesel and its authorized OEM license agreement holders. The

Government did not acquire rights in this data. Further, FME is the only license agreement holder to build engines for the United States Naval and Military markets. Licensed builders provide parts and services for the engines they build. For engines operating outside of the United States and its territorial waters globally, the local MAN Diesel Primeserv location provides parts and services for these engines.

Rationale. Proper refurbishment and maintenance of the engines are critical to the safe operation of the vessels. MAN Diesel and FME, as the OEM factory-authorized agent, provide parts and technical data/drawings as required by the USCG and ABS regulations. This mandatory regimen maintains all OEM warranties, ensures equipment reliability, and ensures crew safety, therefore precluding consideration of non-OEM parts and non- OEM authorized technical representative services. MSC SMS Number 10.6-002-ALL lists all MPDEs as critical equipment. Failure of one MPDE will force a ship to reduce speed. The reduction of speed can pose a hazard to the crew due to limited ship maneuverability. The loss of two engines puts a ship in a Casualty Report (CASREP) Category 4 status, thus becoming unable to perform its primary national defense mission.

6. Description of Efforts made to Solicit Offers from as Many Potential Sources as Practical:

a. For all systems/items identified in paragraph 5, and in accordance with FAR 5.201(b)(1)(i), MSC intends to issue a synopsis of proposed contract action (solicitation) on the Federal Business Opportunities (FBO) web portal. The stated intent will be to award at least one (1) IDIQ contract with firm fixed price task and/or delivery orders. With one (1) exception further described below, no additional responses have been received in response to the sources sought notice described in section 8. MSC will continue to work with its contracting, engineering support, and program manager offices to identify potential manufacturing and authorized service providers. Further, MSC constantly communicat s with the industrial base to assure that all potential alternatives are identified and receive consideration for these requirements. In sum, manufacturing facilities have been found to be capable of the manufacturing and servicing the systems/items, however these are limited to the OEM and OEM-authorized sources described in paragraph 5.

b. MSC does not have manufacturing and technical information required to evaluate and determine whether non-OEM systems/items potentially offered as equivalent to the OEM components and replacement parts are technically acceptable. These systems/items require special tools, specialized repair parts and technical expertise unique to these engines;

only approved OEM parts are authorized to be installed for this highly sophisticated equipment. The OEM/ OEM representative and its authorized parts providers and service technicians have access to provide parts and technical data / drawings for manufacture, and as required to properly repair and maintain the equipment. All OEM repair parts are therefore to be in compliance with USCG, ABS, and International Maritime Organization (IMO) regulatory requirements.

7. Determination of Fair and Reasonable Cost:

The IDIQ contract will include pre-negotiated part prices, as well as pre-negotiated labor category prices. A fair-and-reasonable determination will be made using the techniques described in FAR 15.404-1. The Contracting Officer has surveyed the history of acquisitions for the above engines, for which fair-and-reasonable prices have been individually determined. The Contracting Officer will ensure that the base contract as well as any applicable task or delivery orders utilizing non-prenegotiated pricing are commensurate with the earlier pricing, adjusted for changed market conditions and inflation. In this way the Contracting Officer will determine that the price to the Government for the parts and services covered under this J&A will be fair and reasonable.

8. Actions to Removed Barriers to Future Competition:

For reasons set forth in Paragraph 5, MSC has no plans at this time to engage in full-and-open competition for this requirement. If another potential source emerges, with authorization from the OEM to provide parts and services for an engine, MSC Norfolk will assess whether additional competition for future requirements is feasible. A sources sought notice was posted to FedBizOpps (FBO) from 06 October 2016 through 09 November 2016 requesting market research information from industry, including interested and capable sources, as well as suggested solutions to maintain these engines. To date, two responses were received. One respondent, FME, demonstrated their capability to provide systems/items and services as an authorized OEM and/or OEM- technical representative. FME’s unique capabilities are discussed above in paragraph 5. The other respondent, Motor-Services Hugo Stamps, Inc. (MSHS) stated that they were not able to support all of these engines. However, the evidence is they cannot support any of the systems/items. There is no evidence MSHS has the requisite access to proprietary data/drawing and manufacturing and repair process rights to produce replacement parts and service any of these systems/items as MSHS’s service partner authorization was terminated with MAN in June 2015 and MSHS does not have any relevant agreement in place with FME. However, should MSHS or any other firm acquire authorization from the OEM to provide parts and services for an engine, MSC Norfolk will evaluate this source accordingly. The engineering, construction drawings, and technical characteristics for the above-described systems manufactured systems/items and related repair services techniques are proprietary to FME and MAN Diesel, making them unique and the only sources. Again, the Government did not acquire rights in the above-described matters. The Government will continue to monitor the market and conduct market research to identify additional authorized sources and solutions. Any additional timely sources will be afforded an opportunity to respond to this related Request for Proposals (RFP).

9. A Listing of the Sources, if any, that Expressed, in writing, an Interest in the Acquisition:

To date, no additional sources other than FME and MSHS, mentioned in paragraph 8 above, have expressed interest. However, this requirement will be synopsized and solicited via the Government Point of Entry, the FBO website, to afford maximum visibility and competition.

CERTIFICATION AND APPROVALS

TECHNICAL AND REQUIREMENTS CERTIFICATION

I certify that the facts and representations under my cognizance which are included in this justification and its supporting acquisition planning documents, except as noted herein are complete and accurate to the best of my knowledge and belief.

TECHNICAL/REQUIREMENTS COGNIZANCE:

Signature Name (Printed) Phone No. Date

LEGAL SUFFICIENTLY REVIEW:

I have determined this Justification is legally sufficient.

Signature Name (Printed) Phone No. Date

CONTRACTING OFFICER CERTIFICATION:

I certify that this justification is accurate and complete to the best of my knowledge and belief

Signature Name (Printed) Phone No. Date

Date: 2016.12.21 08:25:38 -05'00'

Date: 2016.12.21 12:37:14 -05'00'

2016.12.21 17:33:51 -05'00'