P03-J and A Heat and Power Generator PM Service Signed Redacted.pdf

PM Part 813.5 SAP for Certain Commercial Items Original Date: 08/30/17 Revision 03 Date: 02/11/2021

DEPARTMENT OF VETERANS AFFAIRS

SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR

CERTAIN COMMERCIAL ITEMS IN ACCORDANCE WITH FAR 13.5

Acquisition Plan Action ID: 36C249-21-AP-3226

1. Contracting Activity: Department of Veterans Affairs, Veterans Integrated Services Network 9, Tennessee Valley Healthcare System (TVHS), Murfreesboro Campus, 1639 Medical Center Parkway, Suite 400, Murfreesboro, TN 37129. (Murfreesboro Campus Veterans Affairs Medical Center (VAMC), Purchase Request:

2. Nature and/or Description of the Action Being Processed: This procurement is for a new firm-fixed price service contract on the Caterpillar Model G3520C, Serial #GZL00146 Combined Heat and Power (CHP) Generator Set located in Building 16 at the Murfreesboro Campus in accordance with FAR 13.5 Simplified Procedures for Certain Commercial Items and specifically FAR 13.501 Special Documentation Requirements, where acquisitions conducted under Simplified Acquisition Procedures are exempt from the requirements of FAR Part 6, but still require a justification using the format of FAR 6.303-2. The contractor for this requirement needs to perform the software support and hardware maintenance services as outlined in the original equipment manufacturer’s (OEM) service manual, SEBU7681-16 dated November 2010 and the specifications found in the Caterpillar CHP statement of work. This contract action will be awarded on a firm-fixed-price services contract with a base period plus four one-year option periods.

3. Description of Supplies/Services Required to Meet the Agency’s Needs:

This procurement will be awarded as a new service contract which is to provide software support and hardware maintenance. This contract will provide services to maintain the Caterpillar CHP located in Building 16. The OEM has outlined the services that must be completed such as routine preventative and corrective maintenance to ensure the optimal working conditions and lessen the likelihood of downtime for the generator system. The maintenance is of utmost importance for reduced operational cost and to ensure the longevity of the generator set’s life expectancy as the original cost of the system was over $5 million.

The beginning date of the period of performance for the “base period” is derived from a projected date given by the Caterpillar Project Manager since the generator is taken out of commission in the middle of November for the major overhaul that is completed every five years based on the OEM service manual, SEBU7681-16 dated November 2010. While the mini-rebuilds occur on the alternating option years but do not have the system down for such an extended amount of time.

The periods of performance and costs of the base period and subsequent option years of the contract are as follows:

Base Period: 10 February 2022 – 30 November 2022, Option Year One: 1 December 2022 – 30 November 2023, Option Year Two: 1 December 2023 – 30 November 2024, Revision 03 Date: 02/11/2021

Option Year Three: 1 December 2024 – 30 November 2025, Option Year Four: 1 December 2025 – 30 November 2026, The total contract value is $1,354,597.35

4. Statutory Authority Permitting Restricted Competition:

FAR 13.5 Simplified Procedures for Certain Commercial Items. The statutory authority for applying the Simplified Procedures for Commercial Items of FAR 13.5 is 41 U.S.C. § 1901 and is implemented by FAR 13.106-1(b)(2) for restricting competition on this procurement.

Competition is restricted on this procurement for the reason below:

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

( ) Unusual and Compelling Urgency ( ) Industrial Mobilization, Engineering, Developmental or Research Capability or

Expert Services ( ) International Agreement ( ) Authorized or Required by Statute ( ) National Security ( ) Public Interest

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

Acquisition Requires the Use of the Authority Cited Above (applicability of authority): The OEM for the Caterpillar CHP Generator Model G3520C, Serial #GZL00146 is Caterpillar, Inc. with Thompson Machinery Commerce Corporation Caterpillar as the only factory authorized source for sales, service, and parts for Caterpillar equipment in Tennessee and the region. In addition, all Caterpillar Inc. software for engine controls and emissions adjustments are proprietary products. Caterpillar will only allow authorized dealers access to their network to download the firmware and software updates and view the current OEM service manual. The OEM and SOW requires only authorized and certified technicians to perform the maintenance on the Caterpillar patented equipment per the OEM service manual, SEBU7681-16 dated November 2010. There is no longer a warranty on the equipment, but the services performed by authorized and certified technicians that are trained by Caterpillar is warrantied and is only the members of the work force that has the skillset to complete the requirement. The authorized dealer is the only source for the replacement parts for this very complex piece of natural gas fueled equipment that generates 80% of the electricity for the Murfreesboro VA Campus.

Caterpillar, Inc. does not have any other mid- range or second level dealerships for the commercial engine in the State of Tennessee. A replacement cost for a comparable system is within the $5 million to $7 million range according to our engineers. Therefore, Thompson Machinery Commerce Corporation Caterpillar is the only vendor that can perform the software support and hardware maintenance for the Caterpillar CHP Generator Set with the proprietary nature of this contract action.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable:

Previous and current procurement actions included sources sought notices and notices of intent to sole source. The notices were posted in Contract Opportunities on the internet

Revision 03 Date: 02/11/2021 website Beta.Sam.Gov to inform the public of the Department of Veterans Affairs procurement intent. For this procurement, an intent to sole source 36C24921Q05030 was posted on Beta.Sam.Gov on 11 August 2021, closed on 27 August 2021 at 5 pm central time and with no responses received.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable:

The previous service contract for the full-service maintenance and rebuild was awarded on 1 December 2016 to Thompson Machinery Commerce Corporation Caterpillar on contract VA249-17-C-0025 purchase order 626C70177 with the period of performance of 1 December 2016 through 30 November 2021 in the amount of A similar contract for this type of services was awarded to another federal agency on contract N32205-17-D- 2002 in the amount of

The contracting activity may request other pricing information from the contractor for the services, if necessary. Price reasonableness is based on the comparison of quoted prices for the same or similar services and the Independent Government Cost Estimate as previously noted. Both the validity of the comparisons and basis for the price reasonableness found in historical award prices has been established. The contracting officer will use a combination of these price analysis techniques to negotiate with the contractor before award and obtain fair and reasonable pricing for the Government.

8. Description of the Market Research Conducted and the Results, or a Statement of the

Reasons Market Research Was Not Conducted:

A Vendor Information Pages search was conducted on the Small Business Administration website using North American Industry Classification System Code 811310 and keywords “Caterpillar, combined, heat, generator”. 28 Service-Disabled Veteran Owned Small Businesses and Veteran-Owned Small Businesses were returned on the search, however due to the proprietary nature of the software and hardware, the vendors returned on the search would not be able to provide the services, parts, or have access to the software and firmware updates. Additionally, an intent to sole source, 36C24921Q0503 was posted to Beta.Sam.Gov on 11 August 2021 and closed on 27 August with no responses from the posting. Caterpillar, Inc. is the OEM and Thompson Machinery Commerce Corporation Caterpillar is the only authorized service provider in the State of Tennessee and region.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition:

This procurement for preventative software support and hardware maintenance services provided only by Thompson Machinery Commerce Corporation Caterpillar will adhere to the mandated software and hardware maintenance standards found in the OEM service manual, SEBU7681-16 dated November 2010.

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition:

Thompson Machinery Commerce Corporation Caterpillar, Revision 03 Date: 02/11/2021

11. A Statement of the Actions, if any, the Agency May Take to Remove or Overcome any Barriers to Competition before Making subsequent acquisitions for the supplies or services required:

There is currently only one source for the required software support and hardware maintenance. The contracting officer will continue to conduct market research and synopsize future requirements for the same service to see if any additional vendors can provide the services to the Government.

12. Requirements Certification: I certify that the requirement outlined in this justification is a Bona Fide Need of the Department of Veterans Affairs and that the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

Steven M. Burton Title: Electrical/COR Facility: TVHS, Murfreesboro Campus