S1.4d JOTFOC Furuno SINS I_final.v1 REDACTED.doc

SOLE SOURCE JUSTIFICATION

For Certain Commercial Items for Procurements Exceeding the Simplified Acquisition Threshold pursuant to FAR Subpart 13.5, Including Brand Name

Solicitation 70Z04020Q55072B00 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 (DHS), United States Coast Guard (USCG) Surface Forces Logistics Center (SFLC), Small Boat Product Line (SBPL), and Contract & Procurement Division 3 (C&P3), located at 2401 Hawkins Point Road, Baltimore, MD 21226.

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

The U.S. Coast Guard has a requirement, on a sole source basis, to obtain overhauled Original Equipment Manufacturer (OEM) Scalable Integrated Navigation System (SINS) equipment, select OEM communications equipment and to purchase new parts in order to support over 1,700 Coast Guard surface assets. These assets include, but are not limited to the following boats: 24’ Special Purpose Craft (SPC-SW), 25’ Response Boat (RB-S), 25’ Transportable Port Security Boat (TPSB), 26’ Trailorable Aids to Navigation Boat (TANB), 29’ RB-S, 32’ TPSB, 33’ SPC-LE, 42’ SPC-NLB, 45’ RB-M, 47’ Motor Life Boat (MLB), 52’ MLB, 55’ Aids to Navigation Boat (ANB), and 64’ ANB. The government intends to award a requirements type contract, with firm fixed price delivery orders, consisting of one base year and four option years to Geodesicx, Inc., with an estimated price: $3,652,051.08. It is intended that individual orders issued under this contract will be funded with Operating Expenses (OE) 42 funds with the year of funding to be determined based upon the time of order placement.

Original Equipment Manufacturer (OEM):

Furuno USA, Inc. (hereafter referred to as Furuno)

4400 NW Pacific Rim Blvd

Camas, WA 98607-9408

DUNS No.: 044001865 Only distributor with the capability to overhaul SINS I units:

Geodesicx, Inc.

616 Innovation Drive

Chesapeake, VA 23320

3. Description of Supplies/Services This requirement is for the purchase of new Furuno SINS I parts as outlined in Attachment 1, as well as the overhaul of SINS I electronics and communication equipment. All parts shall be authentic Furuno parts and will support over 1,700 Coast Guard surface assets. This requirement is designated as a supply because the primary purpose of the requirement is to furnish an end item of supply. These overhauls and parts are considered commercial items and were previously purchased under SFLC contract vehicle HSCG40-14-D-52001. The overhauled units and OEM parts of the SINS I navigation system 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.

The Independent Government Estimate (IGE) for this requirement is: (Purchase and Overhaul)

*The IGE is derived from Market Research of current labor rates and practices, material pricing and contract history. Actual pricing data was extracted from NESSS using previous contracts and current Simplified Acquisition Procedures (SAP) acquisitions. Previous formal contract history is based off of the last two (2) contracts equaling 10 years of historical data. To adjust for inflation across option years, a standard 3% escalation rate is applied to the IGE, which includes mandatory parts, shipping, packaging, and bar coding.

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 as implemented by FAR 13.5, Simplified Procedures for Certain Commercial Items.

5. Demonstration that the Nature of the Acquisition Require Use of the Authority Cited.

Furuno SINS I equipment is installed on over 1,700 Coast Guard surface assets. This equipment provides critical navigational and communications capabilities for the boat classes mentioned above. These boats perform a wide range of duties from Search and Rescue and Drug Interdiction to Aids to Navigation and waterways management. Fully functioning navigational and communications equipment are essential to the safe operation of these boats. Non-functioning navigational or communications equipment puts the crews as well as the public at risk.

The use of unauthorized parts that are not manufactured in accordance with original configuration, specifications, materials, tolerances, etc., or the use of unauthorized repair facilities, could cause equipment failure, rendering these boats unable to complete critical mission requirements. The Coast Guard does not possess the technical data required to evaluate non-Furuno parts or overhauls. Compatibility with current equipment can only be guaranteed if parts are obtained through the OEM or their authorized parts dealers/distributors.

6. Description of Efforts Made to Ensure that Offers are Solicited from as Many Potential Sources as is Practicable.

In accordance with FAR Subpart 5.2, in an effort to solicit as many potential sources as practical, a sources sought notice 70Z04019S55072B00 was posted to FBO.gov from 7/29/2019 through 8/12/2019 seeking possible sources. The notice advised industry that it is the Government’s belief that the required parts are manufactured specifically for Furuno systems and further that the proprietary rights are held only by Furuno USA, Inc. possible sources were given fifteen calendar days to respond and provide their capabilities to overhaul these parts to OEM specifications. Market research yielded that the OEM has two authorized dealers, Mackay Communications and Mid-Shore Electronics and also identified Geodesicx, as an authorized dealer/distributor/repair facility of Furuno products. All three distributors to include the OEM were made aware of the notice via email the same date of the posting.

Only Geodesicx, Inc. responded to the sources sought notice.

7. 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 includes Contract HSCG40-14-D-52001 (expired in 2019) and various simplified acquisitions. These contract vehicles have adequate data for evaluation the reasonableness of the prices by comparing the proposed prices to historical prices paid by the USCG for the same or similar items.

8. Description of Market Research The Contracting Officer’s Representative (COR) and the Contract Specialist (KS) conducted extensive market research as prescribed in FAR Part 10. Market research was conducted by reviewing several Internet websites and Government databases between November 2017 and December 2019 for a list of contractors that possessed the necessary technical data, drawings, manufacturing data, specifications and overhaul tolerances, and that could provide OEM parts. Furuno and their authorized dealers/distributors were the only sources identified. Furthermore, authorized repair facilities that are capable of overhauling legacy Furuno will be limited due to the age and obsolescence of these units. Via email on 9/6/2019, the OEM stated that it is their belief that only Geodesicx, Inc. has the capability to overhaul such old SINS I units. As a result, the Government then followed up with Mid-shore Electronics and Mackay Communication Marine for details regarding their capabilities regarding this requirement. The replies from both companies, Mid-Shore on 10/02/2019 and Mackay on 12/11/2019, provided evidence that they are incapable of providing the overhauled navigation units necessary under this requirement. Both Mid-Shore Electronics and Mackay Communication Marine were contacted on 1/28/2020 to confirm that their capabilities have not changed, they were given until close of business (COB) on 1/28/2020. Neither company responded, therefore, rendering Geodesicx as the sole source capable of providing the requirements.

This contract is a follow on to expiring contract HSCG40-14-D-52001.

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

None

10. A Listing of the Sources, if Any That Expressed, in Writing, an Interest in the Acquisition.

Only one company responded to the sources sought notice published on FBO.gov.

Geodesicx, Inc.

616 Innovation Drive

Chesapeake, VA 23320

(Authorized Distributor)

11. 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.

Furuno has not responded to the government’s requests to acquire their technical data rights, but has declined such requests in the past. The USCG originally contacted the OEM on August 13, 2019, and again on October 17, 2019. The USCG does not own the rights to Furuno’s technical data and, therefore, cannot share that data with commercial companies. Furthermore, the USCG does not have the resources necessary to reverse engineer the parts that make up the navigation systems in order to determine their dimensions or tolerances. The USCG will continue to engage Furuno for release of proprietary data prior to any subsequent requirement.

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