Redacted JandA - 70Z03824QB0000375.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

41 U.S.C. § 1901 Only One Responsible Source and No Other Supplies or Services Will

Satisfy Agency Requirements Repair of Tail Rotor Drive Shafts

Solicitation No.: 70Z03824QB0000375

In compliance with Federal Acquisition Regulation (FAR) 13.501(a)(i)(ii), this justification uses the format at FAR 6.303-2 and is modified to state that the procedures in FAR subpart 13.5 are used.

1. Agency and Contracting Activity.

The Department of Homeland Security, United States Coast Guard (USCG), Aviation

Logistics Center (ALC), Short Range Recovery (SRR) Division, prepared this justification for other than full and open competition.

2. Nature and/or description of the action being approved.

(a) Nature of this action: The SRR Procurement Branch requests approval to solicit and award, on a sole source basis, a contract for the repair of tail rotor drive shafts in support of the MH-65 aircraft.

(b) Name and address of the contractor:

Western Aerospace, Inc.

3366 E. Kuna Mora Road

Kuna, ID 83634-2502

Cage Code: 1YSJ8

(c) Type of action: Firm Fixed-Price Indefinite Delivery Requirements Contract

(d) Estimated total value (including options): $3,877,611, broken down as follows:

Period Length of Period Total

Base 12 Months $660,964

Option One 12 Months $713,841

Option Two 12 Months $770,948

Option Three 12 Months $832,624

Option Four 12 Months $899,234

Total $3,877,611

Note: The previous contract was solicited as full and open competition, it produced four (4) offerors; however, only one (1) was found technically acceptable and awarded to Western Aerodynamics, Inc., a small business, under contract 70Z03818DB2000025 with a period of performance ending on July 23, 2023. SRR Contracting will issue purchase orders to cover the gap until the contract is awarded.

(e) Type of funding: The components will be purchased with Operations and

Support (OS) funds.

(f) Year of funding: The appropriate funds will be obligated on individual task orders between Fiscal Year 2024-2029.

(g) Solicitation number: 70Z03824QB0000375

(h) Background information about the requirement: As the Aviation Inventory Control

Point (AICP), ALC is required to provide effective supply support for all USCG

Aviation Units and for Program Depot Maintenance (PDM) support. The tail rotor drive shafts are required for outfitting the USCG aircraft with the latest designed/drawing revision authorized on the MH-65 model and are essential to avoid grounding of the aircraft. The vendor will provide all specifications, data, test equipment, and tooling required to repair this component which is proprietary to

Airbus Helicopter France, the Original Equipment Manufacturer (OEM). Extensive market research has determined that Western Aerodynamics, Inc., is the only known

North American vendor capable of providing the required repair of the tail rotor drive shafts. However, Western Aerodynamics, Inc will be transferring the repair service, tooling, and intellectual property rights to Western Aerospace, Inc. by June 30, 2024.

This has been verified via correspondence with both vendors and is provided in the attached documentation labeled “Attachment 1”.

3. Description of Supplies/Services. The Tail Rotor Drive Shaft is a vital part of the tail rotor drive system. The tail rotor drive system is used to maintain direction of the aircraft in flight and in hover.

The USCG currently operates ninety-eight (98) MH-65 aircraft. This specialized, high demand aircraft currently enables the USCG to perform missions such as search and rescue, law enforcement, international ice patrol, marine environmental protection, and marine resource conservation. With a demanding operational tempo, aircraft condition and availability are essential to mission success. This requirement is for the repair of the tail rotor drive shaft completed by the maintenance repair and overhaul facility approved by

SRR Engineering Officer (EO), Western Aerospace, Inc., for use on the MH-65 aircraft.

This requirement will provide replacement ready-for-issue spares for the fleet and programmed depot maintenance program.

The following are the part numbers included in this J&A:

365A34-4510-00 365A34-6102-01 365A34-4530-00

365A34-6502-01 365A34-6502-0101 365A34-6502-02

365A34-6202-05

4. Identification of Statutory Authority Permitting Other Than Full and Open

Competition. The statutory authority permitting other than full and open competition is 41

U.S.C. 1901(e)(2) as implemented by the FAR 13.501(a) “Sole Source Acquisition.”

5. Identification of Exception to the Buy American Act. The requirement is for the repair of the tail rotor drive shaft where the Buy American Act is not applicable.

6. Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition require use of the authority cited:

(a) Rationale for using the authority cited in section 4 of the J&A: The specifications, manufacturing drawings, data, test equipment, and tooling required to repair these components are proprietary to the OEM, Airbus Helicopter France. The USCG did not purchase rights to the proprietary data required to foster a competitive environment, as part of any original provisioning for use on the MH-65 aircraft and the costs to purchase rights to this proprietary data would be cost prohibitive. No acceptable alternate vendors have been identified. See Attachment 2.

(b) Details covering what events lead to the situation requiring use of other than full and open competition procedures including whether any portion of the work can be segregated to allow for competition: As cited in 6a, the OEM was contacted regarding the release or sale of their proprietary technology. Per correspondence with Airbus Helicopters, France, they do not approve the release or sale of their proprietary technology and through extensive market research there are no other known OEM authorized vendors other than Western Aerospace, Inc. Given this information, no portion of the work can be segregated to allow for competition as

Airbus Helicopters, France is the OEM and there are no authorized and/or known capable vendors besides Western Aerospace, Inc.

(c) Summarize alternatives considered and why they will not work: USCG may only consider certified sources of support for the MH-65 aircraft components. The OEM does not have any repair processes in place and no authorized distributors and has communicated that their proprietary technology is not for release or sale.

Responsible vendors are limited to ALC SRR Engineering approval, and all repairs shall be performed in accordance with (IAW) USCG statement of work. There are no alternative that may be considered. See Attachment 2.

(d) Impact to the mission that would result if the J&A is not approved and, consequently, the product or service not provided: Failure to approve this sole source

J&A will jeopardize the performance of the USCG’s mission due to grounding of aircraft as a result of no stock being available as tail rotor drive shafts are required.

(e) Rationale for use of the nonavailability exception to the Buy American statue, including detailed information explaining why the particular articles, materials, or supplies, of the class or kind to be acquired, either as end items or components, are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities and of a satisfactory quality: The requirement for the procurement of the repair of the tail rotor drive shaft does not take an exception to the Buy American Act.

7. Description of Efforts Made to Ensure that Offers are Solicited from as Many

Potential Sources as is Practicable.

(a) If an announcement has already been made in SAM.gov, provide the date of publication: An announcement has not been made in SAM.

(b) If an announcement is being planned for posting in SAM.gov, provide the estimated date of publication: A Request for Quote Notice 70Z03824QB0000375 will be posted to the Government-wide Point of Entry (GPE) via https://sam.gov/ on or before June

24, 2024 with an estimated response date of July 15, 2024. Market research confirmed Airbus Helicopter France is the OEM and Western Aerospace, Inc. is the only approved source to repair the tail rotor drive shaft. A copy of the approved J&A on a sole source basis will be uploaded with the notice. Any capability statement, proposal or quotation received in response to the notice will be considered prior to award.

(c) If an announcement will not be published, identify the applicable exception under

FAR 5.202: There are no applicable exceptions and an announcement will be published.

8. Determination by the Contracting Officer that the Anticipated Cost to the

Government will be Fair and Reasonable. The Contracting Officer determines that the anticipated price(s) will be fair and reasonable based on pricing information collected from market research and the previous paid contracted prices which were used in the development of the Independent Government Coast Estimate (IGCE) for this requirement.

The current Producer Price Index escalation rate was applied to the IGCE and will be reviewed prior to award. The determination of fair and reasonable prices will be based on comparison of proposed prices with prices found reasonable on previous purchases (FAR

Part 13-106-3(a)(2)(ii), comparison with similar items in a related industry (FAR Part

13.106-3(a)(2)(iv)), and comparison to the Independent Government Cost Estimate

(IGCE) (FAR Part 13.106-3(a)(2)(vi)).

9. Description of Market Research. IAW FAR Part 10, various methods of market research were used.

(a) Describe the market research techniques utilized, the specific results of the market research, the date when the market research was conducted, and how the market research was used by the contracting officer to determine price reasonableness:

Market research was conducted IAW FAR Part 10, from January 2023 through

January 2024. Refresher market research was conducted in May 2024. This procurement forecast is posted as DHS-Acquisition Planning Forecast System

(APFS) No. F2024064922 on http://apfs.dhs.gov. There have been no responses in regard to this post. This procurement was included in the DHS Forecast of Small

Business Opportunities. In addition, a Sources Sought Notices

(70Z03824IB0000009) was posted in SAM.gov on 2/13/2024.

https://sam.gov/ http://apfs.dhs.gov/

Only (1) one response was received. In addition, a follow-up via an e-mail was sent to (3) three previously potential vendors who shown interest on the last solicitation for the same requirement. None of the three vendors responded back to the e-mail. Furthermore, a review of the Asset Maintenance Management

Information System (AMMIS) database history was conducted. Government databases such as General Services Administration (GSA), and Federal Logistics repository (FEDLOG) were all reviewed as part of market research. Existing DHS-wide and multi-component contract vehicles with DHS Strategic Sourcing

Program Office and/or on the DHS Enterprise-Wide Contract Vehicle Portal were reviewed and were determined out of scope for this procurement. The OEM was contacted and market research confirmed Western Aerospace, Inc. is the only approved source to repair the tail rotor draft shafts. The tail rotor draft shafts are commercial in nature and prevalent in private and commercial aviation and are used on other military aviation models. All terms and conditions are not expected to differ from customary terms and conditions in the marketplace or standard

Government practices. Contract financing is not applicable to this requirement.

The Buy American Act is not applicable to this requirement. This is a sole source acquisition justified in accordance with FAR 13.501(a); therefore, in accordance with FAR 25.401(a)(5), the Trade Agreement Act is not applicable to this requirement. Market research results support the determination that the tail rotor drive shafts are available in the commercial marketplace.

(b) Describe the market research results that support the determination that the items are non-available: This J&A requirement does not include the exceptions at FAR

25.103(b)(2) or FAR 25.202(a)(2).

(c) If market research was not conducted, a reason for its absence must be cited here:

Market research was conducted IAW FAR Part 10 from January 2023 through

January 2024. Refresher market research was conducted in May 2024.

(d) If patents, copyrights, and/or intellectual property are applicable to the acquisition, describe the circumstances for acquiring a patented or copyrighted product on the representation of the intellectual property holder that has not been licensed for resale: Patents, copyrights, and/or intellectual property are not applicable to this acquisition.

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

(a) An explanation why technical data packages, specifications, statement of work, or purchase description are not suitable for full and open competition: Western

Aerospace, Inc. is the only approved source for the repair of the tail rotor drive shafts; therefore, the acquisition is not suitable for full and open competition.

Inquiries were made on January 2024 to determine if Airbus Helicopters France would sell the intellectual property data rights for the tail rotor drive shafts.

Airbus Helicopters France stated that their will not release drawings or data rights.

See Attachment 2.

(b) Discuss why your requirement cannot be modified to enhance competition: This requirement cannot be modified to enhance competition because the components and the subsequent technological data are not available from any vendor other than the OEM and their only authorized repair vendor, Western Aerospace, Inc.

11. A Listing of the Sources, if Any, that Expressed, in Writing, an Interest in the

Acquisition.

A combined synopsis/solicitation will be issued through Contract Opportunities on

SAM website upon approval of this document. Once the Justification and Approval for

Other than Full and Open Competition has been posted on SAM, all offerors will be considered. To date, there have been no inquiries for this procurement.

12. A Statement of the Actions, if Any, the Agency May Take to Remove or

Overcome Any Barriers to Competition Before Any Subsequent Acquisition for

Supplies or Services Required.

(a) Will the Government revise overly technical specifications, acquire data rights, etc.? There is only one (1) responsible source approved to repair the tail rotor drive shafts to the latest configurations, which is Western Aerospace, Inc. The

USCG did not purchase rights to the proprietary technology required to foster a competitive environment as part of any original provisioning for use on the

MH-65 aircraft. The proprietary technology and data rights are not for sale, per correspondence with Airbus Helicopters France. Every reasonable effort will be made to remove barriers to competition for future requirements. These efforts will include continuing to identify additional sources to provide the required repair services for the tail rotor drive shaft.

(b) Extensive internet database research is conducted and requirements are advertised on

Contract Opportunities on the SAM website. ALC SRR Engineering makes every effort to search for alternate sources of supply/services and alternate acceptable products. Engineering, Contracting, and Supply representatives continuously conduct market research to ensure that companies interested in doing business with the USCG are given every opportunity to compete for requirements. ALC SRR is also continuously exploring avenues of reverse engineering for some the hard to find expensive repair items, which should further encourage competition, however, this process is lengthy, costly and labor intensive.

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.

Luis Mojica, Contracting Officer Date

Short Range Recovery (SRR) Division, ACL USCG

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.

Heather D. O’Connor, Item Manager Date

Reviews:

Kristen R. Copeland, Supervisory Contracting Officer Date

David S. Burgess, Date

Chief of the Contracting Office, ALC USCG

APPROVAL:

Frederick Steward Date

The Procuring Activity Advocate for Competition (PAAC)