REDACTED JA Sole Source Eaton UPS 2020.pdf

Control No. 2020-WHS-0198

JUSTIFICATION FOR

OTHER THAN FULL AND OPEN COMPETITION (JOFOC)

UNDER FEDERAL ACQUISITION REGULATION FAR SUBPART 6.3

1. AGENCY AND CONTRACTING ACTIVITY: The Department of Defense, Washington Headquarters Services, Acquisition Directorate, Enterprise Facilities and Construction Division.

2. DESCRIPTION OF ACTION: This justification is to support a new contract for follow-on services with the manufacturer, Eaton Corporation. The requiring office, Raven Rock Mountain Complex (RRMC) requires Preventive Maintenance, Unscheduled/Emergency Visits, and Corrective Maintenance services for the mission critical equipment of Uninterruptable Power Systems (UPS) units. The contract type shall be a firm fixed price, simplified acquisition procedures contract award. The type of funds to be used are Pentagon Reservation Maintenance Revolving Fund certified on purchase requisition HQ0642044993.

3. DESCRIPTION OF SUPPLIES/SERVICES: Required services are for the UPS units at the RRMC the Preventive Maintenance, unscheduled/emergency repairs, and corrective maintenance services, with 24/7 accessibility with an eight-hour response time for repairs of the electronic portion of the UPS to include all necessary parts replacement (except for certain wear parts including batteries and capacitors), adjustments, and travel expenses. There are currently thirteen UPS units that require these preventive maintenance services. The performance periods and estimated total value, with option periods, are delineated in the table below.

Performance Periods Performance Period Dates Amount

Base Period September 23, 2020 – September 22, 2021 $80,803.43 Option Period I September 23, 2021 – September 22, 2022 $98,818.97 Option Period II September 23, 2022 – September 22, 2023 $103,759.92 Option Period III September 23, 2023 – September 22, 2024 $108,947.91 Option Period IV September 23, 2024 – September 22, 2025 $114,395.31 6 month extension

IAW FAR 52.217-8

September 23, 2025 – March 22, 2026 $57,197.66

Base + All Options $563,923.20

4. AUTHORITY CITED: This action is authorized under provisions of 10 U.S.C. 2304(c)(1) as implemented by Federal Acquisition Regulation (FAR) 6.302-1 Only one responsible source and no other supplies or services will satisfy agency requirements.

5. REASON FOR AUTHORITY CITED:

a. Background information about the requirement: The requiring office has thirteen (13) Uninterruptable Power Systems (UPS) units that need preventive maintenance, unscheduled/emergency repairs, and corrective maintenance services in order support mission critical equipment that is required to be serviced and maintained with minimal downtime. These preventive maintenance services have been procured via previous WHS/AD contracts (HQ003414F0224 and HQ003415C0098) with Eaton Corporation.

Eaton Corporation is the original equipment manufacturer (OEM) and Eaton does not hire or subcontract any of its UPS service work due to the proprietary nature of the units, and the required firmware/software and factory calibrated parts. Although, there are Eaton-authorized service representatives (ASR) that can supply parts, these ASRs are not authorized to provide these support services. Only Eaton-employed field service personnel would be authorized and capable to service the units effectively, without voiding the OEM’s warranty.

b. Details covering what events lead to the situation requiring use of other than full and open competition procedures: Due to liability concerns, Eaton will only validate the UPS units when they are maintained by Eaton-employed field service personnel. This necessitates a direct award to Eaton Corporation. While a third-party (ASR) contract award may be capable of providing some services to the UPS units such as, replacing the batteries and performing minor fixes; if a repair becomes complex, this would require Eaton proprietary software, engineering, or technical support. Based on previous instances, preventive maintenance and emergency repairs often require the expertise of Eaton-employed field service personnel, and ready-access to factory parts should the units require immediate repair. Therefore, in the event of doing business with a third-party source to perform limited services to the UPS units, a separate award would, nonetheless, be required between the Government and Eaton Corporation directly for preventive maintenance services. This supplemental contract would result in an unacceptable delay in resolving technical issues leading to catastrophic degradation to the mission. Consequently, if a third-party (ASR) contractor is awarded a preventive maintenance contract, they would have to subcontract with Eaton Corporation for the performance of the work, passing the additional costs of overhead and profit to the Government. Therefore, the need to award to Eaton Corporation directly is required to mitigate potentially additional costs that would be incurred, and to ensure no loss of power to the critical mission at the RRMC.

c. Why considered alternatives will not work. Eaton Corporation has confirmed they do not hire or subcontract any of its UPS service work due to the proprietary nature of the units, and the required firmware/software and factory calibrated parts. Only Eaton employed field service personnel are authorized and capable to service the units effectively. The Eaton-employed field service personnel have access to proprietary software and tools to troubleshoot, repair, calibrate, and upgrade the three-phase UPS units. Permitting another technician to perform these tasks puts the warranty at risk and ultimately voided.

d. Which authority applies and why1; The authority of FAR 6.302-1(c)(1) only one responsible source and no other supplies or services will satisfy the agency requirements and the brand-name description applies to the Original Equipment Manufacturer (OEM). The required services are peculiar to one manufacturer and this justification covers this portion of the requirement. Due to liability concerns and proprietary equipment information, the Eaton Corporation will only continue to warrant and validate the UPS units when they are maintained by Eaton-employed field service personnel as there are no factory-authorized service representatives that are not employed by Eaton with authorized permission to service its equipment. There requires a close coordination between UPS units and components, to which when serviced by Easton-trained engineers, the equipment performance is warranted and maintained for peak performance.

e. Results of Request for Information or Sources Sought Notice (IAW PGI 206-303-2): The special notice was posted on Beta.Sam.Gov on July 10, 2020 and closed July 27, 2020.

There were four interested firms that responded to this requirement. Based on research, all four firms would be able to provide supply equipment parts and products directly to the Government; however, this requirement is for preventive maintenance services and any required product or parts would be ancillary to the Eaton-employed field service personnel performing repairs to units. Two of the four firms indicated they are Eaton-authorized service representatives (ASR) capable of rendering preventive maintenance services, however, upon further queries, responses to which the sources would either "send Eaton-badged employees" or "will partner with Eaton for service delivery" were provided indicating on-call or subcontracted service would be the maintenance service plan. There is no benefit found with respect to an uncertainty of customer-dedicated field engineers, reasonable costs and/or time expended for coordinated service-calls, to directly award to an ASR service/parts provider for the ASF having to subcontract the effort to Eaton Corporation, as a pass-through of efforts.

There is no benefit for the Government, with regards to costs and/or time expended, to award a contract to an ASR. This rationale supports the applicability of issuing a direct, sole source award to the original equipment manufacturer, Eaton Corporation.

f. Explain the impact to the mission that would result if the J&A is not approved and, consequently, the product or service not provided. These UPS units are mission critical equipment that supports mission-efforts of the RRMC complex, the response time and reliability of an Eaton-employed field service personnel would minimize any unscheduled downtime to its fullest extent. If this J&A is not approved as a direct sole source acquisition to Eaton Corporation there will be the potential for exposing these systems

1 If FAR 6.302-1 is the cited authority for the JOFOC and the requirement is (1) about to be or is currently being competed or (2) was competed and the award is protested, be sure to not include any information that makes it appear that the competition for the follow on services is biased towards incumbent contractor.

to untimely repairs, being in a condition of a prolonged un-calibrated status, extended troubleshooting efforts, and having the equipment in a longer than normal vulnerability state. Thereby potentially increasing repair and maintenance costs.

6. EFFORTS TO OBTAIN COMPETITION: A special notice indicating intent to sole source a follow-on contract with Eaton Corporation was posted to Beta.Sam.Gov on July 10, 2020 and closed July 27, 2020 and complies with FAR 5.201 and the results are explained in para. 5.e.

7. FAIR AND REASONABLE COST DETERMINATION: I hereby determine that the anticipated price for this contract action will be fair and reasonable. The techniques identified at FAR 15.404-1(b)(2) be used to ensure award will be at fair and reasonable prices. Certified Cost and Pricing Data will not be obtained.

8. MARKET RESEARCH: Market research was conducted via Beta.Sam.Gov and yielded four interested firms, but they were found not capable to provide these preventive maintenance services and additional research results are explained in para. 10.

9. OTHER FACTS: N/A

10. INTERESTED SOURCES: There were four interested firms that responded to the special notice posting on Beta.Sam.Gov.

(a) Chesapeake Mission Critical (CMC) Submitted an Eaton authorized service provider and battery replacement provider letter from the Eaton Corporation. The letter is dated January 9, 2020. This letter specifically states, “Eaton employs a robust staff of factory-trained field engineers to perform preventive and remedial UPS services.” and “…training is not made available to technicians who are not direct Eaton employees…” This means any firm, even if they are an authorized partner/reseller, will need to subcontract with Eaton to provide the preventive and remedial services that encompass this requirement. This firm could not meet the needs of this requirement, without subcontracting these services to Eaton Corporation.

(b) Pergravia Pergravia stated they are a small business and an Eaton Power Quality Federal Partner, and anticipated submitting a quote on Eaton’s behalf. Their Strategic Service Account Manager also stated, “…will partner with Eaton for service delivery and guarantee factory trained, authorized and certified Eaton technicians will be performing the work.” Again, this effort would be subcontracted with Eaton Corporation to perform. This firm could not meet the needs of this requirement, without subcontracting these services to Eaton Corporation.

(c) Weissco Power The Weissco Power representative requested more details than were posted on the special notice.

The response back reiterated that no bid/work details were included because the notice was to inform industry of the intent to award a follow-on contact to Eaton Corporation. They did not ask other questions upon receiving this reply. This firm could not meet the needs of this requirement, based on what has been learned from other responses.

(d) CER Cables The CER Cables representative requested the UPS model number and quantity of units, as well as battery information. It was reiterated that this information was not provided to industry, the requirement is for preventive maintenance services and not to provide supplies. This firm could not meet the needs of this requirement, as they only requested information about the UPS units in order to provide a quote for parts and capabilities.

11. ACTIONS TO INCREASE COMPETITION: It is the intent to continue to search for alternative sources for future requirements, and further, to make recurring inquiries with Eaton Corporation as to any newly established authorized-service provider partnerships. At this time, no known alternative is available.

12. Is this acquisition for a non-competitive follow-on acquisition previously awarded on a non-competitive basis?

☒Yes. A copy of the previous justification is attached2. The actions to remove any barriers to competition cited on the previous justification were completed: a special notice was posted on Beta.Sam.Gov and the responses from interested parties did not yield new information that changed the outcome. The original equipment manufacturer’s response also supported the same outcome – there are no other sources that can provide these preventive maintenance services directly.

☐Yes.

☐No3 [Must include explanation of why the answer is “no”.]

☐No.

2 IAW PGI 206.303-2(b)(i)(B).

3 If no, then the approval of the J&A shall be IAW PGI 206.304(a)(ii).