Redacted Justification Approval (JA)_Redacted.pdf

Solicitation Number: 70Z080-20-Q-16002B00

SOLE SOURCE JUSTIFICATION

For Certain Commercial Items for Procurements Exceeding the Simplified Acquisition

Threshold pursuant to FAR Subpart 13.5, Including Brand Name

RFQ Number: 70Z080-20-Q-1602B00

Pursuant to the authority of 41 U.S.C. 1901 as implemented by Federal Acquisition Regulation

(FAR) Subpart 13.501 and consistent with the content requirements of FAR 6.303-2, the following facts and rationale support this justification.

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, Maryland 21226.

2. Nature and/or Description of the Action being Approved: The Surface Forces

Logistic Center (SFLC) anticipates awarding a Requirements type contract, on a brand name basis, to obtain approximately 586 overhauled components and 19,095 Original Equipment

Manufacturer (OEM) parts over the course of five years, which support the operation and maintenance of the Motoren- und Turbinen-Union (MTU) 20V4000M93L series main diesel engines (MDEs) installed on the USCG 154’ Sentinel Class Patrol Boat, also known as the Fast

Response Cutter (FRC). The current USCG fleet consists of thirty-three (33) FRC cutters with an expectation of accepting four (4) additional cutters per year with options to purchase up to 64 cutters; each cutter has two (2) MDEs.

The period of performance will be in effect for five years from date of award with five (5), twelve (12) month ordering periods with an estimated cost of . A breakdown of the estimated total value is provided below. The USCG intends to award a Requirements type contract with firm, fixed-priced delivery orders. Delivery orders issued against the contract propose to use annual Operations and Support funds for the particular fiscal year of the order.

The proposed contract is expected to be awarded to one of the MTU authorized distributors that has shown an interest in this requirement, utilizing the procedures established under FAR part 12

Acquisition of Commercial Items in conjunction with FAR Part 13.5 Simplified Procedures for

Certain Commercial Items.

Independent Government Estimate:

154’ FRC MTU Parts and Components Overhaul

DESCRIPTION

Ordering

Period 1

Ordering

Period 2

Ordering

Period 3

Ordering

Period 4

Ordering

Period 5

Parts

Components

TOTAL

TOTAL ESTIMATED CONTRACT AMOUNT

70Z080-20-Q-16002B00

USCG 154’ FRC MTU COMPONENT OVERHAULS & PARTS PURCHASE

*Based on DHS J&A Guide dtd 7/30/2019 – Version 3.1 Page 2 of 4

The Government estimate was developed from historical pricing data combining an average cost of scheduled maintenance parts per engine hour, and adding an estimated cost of unscheduled parts per engine for each ordering period. Component overhauls costs reflect the estimated number of maintenance components requiring overhaul per ordering period. Note. Ordering period 3 costs are lower due to the cyclic maintenance demand. escalation rate was calculated based on inflation. Due to large quantity changes over the course of the ordering period, the total amount calculated However, the IGE’s individual cost elements . The quantity of parts and components to be overhauled reflect the fleet size increase of four (4) cutters per ordering period.

3. Description of Supplies/Services: This requirement has been designated as a supply because the primary purpose of the requirement is to furnish an end item of supply. These overhauled OEM components and parts of the MTU model 20V4000M93L series diesel engines are considered commercial items. The overhauled OEM components and parts will be shipped to the SFLC Warehouse for storage and ready issue to the fleet or will be direct shipped to various USCG cutters and units when required.

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 implemented by FAR Subpart 13.5, Simplified Procedures for Certain Commercial

Items.

5. Identification of Exception to the Buy American Statute: In accordance, with FAR

25.103 (b)(1) Nonavailability, Exceptions to the Buy American statute permitting the purchase of articles that are not domestic end products and in accordance with FAR 25.104(a) Class

Determination of Nonavailable articles, these are 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 requires use of the authority cited: The FRCs were procured in two Phases with the intent to standardize the hull form, general arrangements, and a number of systems and associated design data contained in the Re-procurement Data and License Package (RDLP).

During Phase I of the FRC propulsion plant standardization, the MTU engines were competitively proposed by the shipbuilder and were already being used on Coast Guard Coastal

Patrol Boats (WPB), Response Boat-Medium (RB-M) and National Security Cutters (WMSL).

The Coast Guard and shipbuilder completed a significant amount of design and integration work to ensure the propulsion plant system meets performance requirements, weight constraints, and engine room volume constraints. Standardization of the Phase I Propulsion Plant equipment installed onboard the 154’ ensured logistics supportability and consistency among both Phase I and Phase II cutters while reducing schedule risk and promoting cost avoidance. The

20V4000M93L MDE was included as part of the propulsion plant components, so the continued sustainment of these engines was anticipated from the design to implementation stages of the life for the 154’.

The 20V4000M93L MDEs are critical to the safe and efficient operation of the 154’ FRC cutters.

The FRCs operate independently, in remote areas of the world, on missions of homeland

*Based on DHS J&A Guide dtd 7/30/2019 – Version 3.1 Page 3 of 4 security, search and rescue, Alien Immigration Migration Operations (AIMO), drug interdiction and fisheries patrol. Based on market research it is also not expected that other companies will be able to overhaul the MTU 20V4000M93L series diesel engine components and provide new

OEM parts without access to MTU proprietary information.

Using other than OEM components and parts would be an extremely high risk because the

MDEs are critical to the maneuverability of the FRCs. A malfunction or failure of MDEs would cause loss of maneuverability and the mission would be severely impacted.

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

Potential Sources as is Practicable: In accordance with FAR Subpart 5.203, in an effort to solicit as many potential sources as practicable, a Sources Sought Notice was posted on the

Federal Business Opportunities (FBO) website October 4, 2019 – October 9, 2019. The notice informed the industry of the USCG’s intent to purchase overhauled components and OEM parts for the model 20V4000M93L diesel engine manufactured by MTU. Other businesses having the expertise and required capabilities to provide these parts were invited to submit information on their companies within five (5) days after the posting date.

. Any responsible vendor may submit a proposal/quote. If any responses are received as a result of the solicitation, the file will be documented accordingly and the requirement competed among the eligible offerors.

The 154’ FRC requirement was published in the Acquisition Planning Forecast System (hereafter

APFS) on January 28, 2020. The APFS number is F2019045228. No inquires received from industry for APFS F2019045228.

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

Government Will Be Fair and Reasonable: The Contracting Officer (KO) will determine that the anticipated prices are fair and reasonable based on comparisons with the IGE, market research, previous acquisition history, price competition among authorized distributors and, if necessary, require the offeror to submit other than certified pricing data. Previous history for the purchase of 154’ parts and comparable 87’ component overhauls are available from various simplified acquisitions and previous and ongoing 87’ MTU contracts.

9. Description of Market Research: Extensive market research was conducted by the

Contracting Officer’s Representative (COR) and Contract Specialist (KS), from August 2015 –

October 2019 in an effort to identify companies that can provide the overhaul components and new OEM parts. Market research was conducted by identifying various companies on the internet, through searching General Services Administration (GSA) Advantage and Department of Homeland Security’s Strategic Sourcing Vehicles.

Market research revealed that the OEM has a network of distributors within the

U.S.

*Based on DHS J&A Guide dtd 7/30/2019 – Version 3.1 Page 4 of 4

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

None.

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:

All of the companies listed above have distribution agreements with MTU and are authorized to service MTU 20V4000M93L engine components.

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 are Required: MTU has declined to sell their technical data rights upon repeated requests over the years from the USCG. The most recent request to purchase the data rights was on February

5, 2019. MTU responded stating that, “the data rights will not be for sale in the foreseeable future.” USCG does not own the rights to MTU’s technical data. The USCG will continue to engage MTU for release of proprietary data prior to any subsequent requirement.

*Based on DHS J&A Guide dtd 7/30/2019 – Version 3.1 Page 5 of 5

13.

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

14.

I certify this requirement meets the Government’s minimum need and that the supporting data, which forms a basis for this justification, is complete and accurate.

15.

APPROVAL: