(S1.4d) HICKORY_MRG_Justification and Approval_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

For Certain Commercial Items for Procurements Exceeding the Simplified Acquisition

Threshold pursuant Authority of 41 USC 1901 and 10 USC 3205 by FAR Subpart 6.302, Including Brand Name

Solicitation Number 70Z08524QIBCT0020

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.3, the following facts and rationale justify the use of such authority:

1. Agency and Contracting Activity. The Department of Homeland Security, United States

Coast Guard (USCG), Surface Forces Logistics Center (SFLC) and Contract &

Procurement Division 2 (C&PD2), located at 300 E. Main Street, Norfolk, VA 23540

2. Nature and/or Description of the Action being Approved.

(a) Nature of the action: SFLC has a requirement, on a sole source basis, to overhaul and repair the marine reduction on Coast Guard Cutter (CGC)

HICKORY (WLB 212) due to a catastrophic failure of the Philadelphia

Gear Marine Reduction Gear rendering CGC HICKORY (WLB 212) not mission capable and cannot return to homeport Apra Harbor, Guam.

(b) Name and address of the contractor: Philadelphia Gear by Timken

Gears and Services Inc. 935 First Avenue, Suite 200, King of Prussia, PA., 19406.

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

(d) Estimated total value (including options):

(e) Type of funding: Surface Operations Funds

(f) Year of funding: Fiscal Year 2024

(g) Solicitation number: 70Z08524QIBCT0020

(h) Background information about the requirement: The government intends to have Philadelphia Gear by Timken overhaul and repair the marine reduction gear on CGC HICKORY to restore to mission capability.

3. Description of Supplies/Services. (1) dissemble the reduction gear and associated attachments in place, (2) Inspect all components and drives, (3) Provide condition found report, (4) Clean, recondition and provide parts. (5) Renew bearings, (6) Conduct contact testing and adjustments.

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

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

41 USC 1901 and 10 USC 3205 as implemented by FAR 13.501(a)(1)(iii), Simplified

Procedures for Certain Commercial Items, unusual and compelling urgency.

5. Identification of Exception to the Buy American Act. The USCG has not identified any necessary exception to the Buy American Act or Trade Agreements Act.

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; Only One Responsible Source and No Supplies or Services Will Satisfy Agency Requirements to overhaul and repair CGC HICKORY’s Philadelphia Gear Marine Reduction Gear. CGC HICKORY has been in a maintenance repair availability at Coast Guard (CG) Yard since 15 July 2022 and was scheduled to leave for homeport Apra Harbor, Guam 15 November 2023 when several cascading failures led to the delayed departure and ultimately discovering the claustrophobic failure of the reduction gear based on manufacturer inspection on 29 April 2024 requiring in place overhaul and repair. Philadelphia Gear by Timken is the only source of manufacture technical representation, parts, proprietary drawings, and technical data to repair the reduction gear.

(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; When conducting dock and sea trials fluctuations in the propulsion shaft speed and thruster generator frequency were discovered when the reduction gear was clutched in with one or both main diesel engines were online. Unusual noises and vibrations were found coming from the reduction gears and the engine output speeds were steady and unchanging. The filters were inspected and metal shavings were discovered indicating improper alignment and failing bearings.

(c) Summarize alternatives considered and why they will not work: Coast Guard Yard and Coast Guard Industrial resources expertise were considered and could not work due to limited resources and lack of proprietary information which only Philadelphia Gear by Timken maintains and will not share resulting in an inadequate and unreliable repair.

(d) Impact to the mission that would result if the J&A is not approved and, consequently, the product or service not provided. The inability to repair CGC

HICKORY will result in further loss of mission and security in the region and will continue to negatively impact the crew bye extended their away from homeport days indefinitely.

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 Contract Opportunities, provide the date of publication. In accordance with FAR 5.2 a sources sought notice was posted to SAM.gov on 21 June 2024 and closed on 1 July 2024. This noticed requested that interested sources provide information demonstrating their ability to satisfy the government’s requirement based on the provided specification. All responsible sources were encouraged to respond to this requirement and provide a positive statement of their intent to submit a proposal for this requirement as a prime contractor.

On 3 June 2024, Timken Gears and Services sent a letter confirming that they and its Philadelphia Gear brand are the Original Equipment Manufacturer (OEM) for the 225’ Juniper Class Bouy Tender Main Reduction Gear and will not release technical data rights to the USCG.

(b) If an announcement is being planned for posting in Contract Opportunities, provide the estimated date of publication. An intent to sole source requirement and the redacted J&A will be posted to SAM on/about 10 July. The solicitation will be issued directly to the OEM.

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

Government will be Fair and Reasonable. The Contracting Officer will determine that the anticipated price(s) will be fair and reasonable based on price analysis, comparison with the

Independent Government Cost Estimate (IGCE), historical pricing, and price negotiations.

Also, if necessary, the Contracting Officer will obtain and analyze other than certified cost and pricing data from the vendors.

9. Description of Market Research.

(a) Describe the market research techniques used, results, date when the market research was conducted, and how it was used by the contracting officer to determine price reasonableness. APFS F2024066690 was published on 25 June

2024. Market research was conducted between 20 June 2024 – 1 July 2024 through an Sources Sought Notice. See paragraph 11 for vendors that replied to Sources

Sought Notice.

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 descriptions are not suitable for full and open competition.

The U.S. Coast Guard does not possess technical expertise, nor did they purchase the data rights as part of the initial system acquisition for the main reduction gear system to foster a competitive procurement effort. Complete specifications and drawings are not available to the Coast Guard as stated by the OEM letter. As a result, it would be difficult to foster competition, as the Coast Guard does not have adequate technical descriptions of the manufacturing, performance, and acceptance data for the main reduction gear system.

(b) Discuss why your requirement cannot be modified to enhance competition.

Philadelphia Gear by Timken possesses all access to required parts, services and proprietary information for the Coast Guard’ WLB fleet of 225- foot buoy tenders and as such Philadelphia Gear by Timken is the only known source to affect expedient and reliable repairs to allow for CGC HICKORY to complete the Major

Maintenance availability and return to her homeport of Apra Harbor, Guam and reconvene the Aids to Navigation mission.

(c) For a proposed contract subject to the restrictions of FAR 6.302-1 for follow-on acquisitions as described in 6.302(a)(2)(iii), provide an estimate of the cost to the Government that would be duplicated and detailed information on how the estimate was derived. N/A

(d) For a proposed contract subject to the restrictions of FAR 6.302-2(d) or

HSAR 3006.302270 and where FAR 6.302-2 is cited as the authority, describe the exceptional circumstances allowing for an award for a period of performance more than the one-year limitation (applicable to all federal agencies) or the DHS-specific statutory 150-day limitation. N/A

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

Acquisition.

(a) Timken Gears and Services Inc.- Philadelphia Gear – UEI FZPYZ11SFNA6

935 First Avenue, Suite 200

King of Prussia, PA., 19406.

(b) Oilkleen LLC – UEI R4S8VME25J37

123 Poplar Pointe Dr., Unit G

Mooresville, NC 28117

(c) BHPE LLC – UEI UPDJHPJUYQ71

901 S Spring Lane

Blanchard, OK. 73010-9689

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.?

The necessity to obtain the Only Known Source of Service and nature of the situation prevents full and open competition for this one-time procurement.

Additional attempts for soliciting will cause unnecessary and significant delays as identified herein. Market research shows that there is only one company that will be able to compete for this requirement with the approval of the justification. The

Coast Guard will continue its attempt to obtain proprietary data rights and to conduct market research in accordance with FAR Part 10.