SoleSourceJustificationApproval.doc

Control No. 09-26

Justification Review Document

For Other Than Full and Open Competition

(REDACTED VERSION)

Program/Equipment: Windlift Kite Engine

Authority: 10 U.S.C. 2304(c)(1) as implemented by FAR 6.302-1 Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

Amount: $972,000

Prepared By:

Typed Name:

Commercial:

Title:

Date:

Procuring Contracting Officer:

Title: Contracting Officer

Date Reviewed:

Technical Representative:

Office:

Date Reviewed:

Requirements Representative:

Commercial: 703-697-6573

Office:

Date Reviewed:

REVIEWS: I have reviewed this justification and find it adequate to support other than full and open competition.

Legal Counsel

Signature: ____________________________ Date: ___________________________

Justification and Approvals (J&A) for Other Than Full and Open Competition

1. Contracting Agency – US Army RDECOM Acquisition Center

Adelphi Contracting Division

CCRD-AD-WS

White Sands Missile Range, NM 88002-5501

2. Description of Action: This is a requirement for a firm fixed price – level of effort contract. Funding will be provided by the Office of the Secretary of Defense (OSD) Research and Engineering utilizing Stimulus R&D funds. The contractor is Windlift, LLC, 3825 S Roxboro ST, STE 136-251, Durham, NC 27713-2799.

3. Description of Supplies/Services: The WindLift Kite Engine is an “alternative wind turbine.”

This project supports:

· President Obama’s increased emphasis on Afghanistan, especially with regard to an increased emphasis on “winning hearts and minds”

· Developing renewable power technologies that have the potential to reduce the Nation’s dependence on foreign oil

The overall objective of this demonstration R&D project is to provide a renewable power capability to remote villages in Afghanistan. For military forces confronting an insurgency, it is a matter of military necessity to ensure that civic action projects are undertaken to cultivate popular support and increase force protection – also known as “winning hearts and minds.” The work of Provincial Reconstruction Teams (PRTs) and Civil Affairs (CA) units address this need with the mission of empowering local government, promoting and enhancing security, facilitating humanitarian relief and supporting reconstruction operations. Fulfilling this mission requires access to sustainable technologies that can meet the needs of local populations. One of the most pressing needs of local populations is access to reliable, affordable power to improve economic opportunities and enhance quality of life. The WindLift Kite Engine can provide renewable power at an affordable price to communities where access to power does not currently exist or where there is unreliable access to grid-based power or fuel. WindLift produces power using a tethered airfoil and a proprietary base station to harness the force of the wind and convert that force into usable power. The WindLift engine can produce an average of 7,000kWh each year in Class 2 winds and 70,000kWh each year in Class 7 winds. This power can be used to perform mechanical work, such as pumping water for drinking/irrigation, or to generate electricity for a small village – or both.

The WindLift Kite Engine is ideally suited for providing off-grid power at remote locations where fuel supply is inconsistent or prohibitively expensive. Currently, diesel generators are the most wide-spread solution for providing power in off-grid situations as they are a reliable and mature technology. But a lack of reliability and affordability of fuel renders the diesel generator an undependable source of power. By contrast, the power generating capability of the WindLift Kite Engine, when appropriately sited, will not be subject to a shortage of fuel.

This small R&D investment, if successfully demonstrated, has significant upside potential, not just for Afghanistan, but for other third world scenarios. At this time, there is no vision to develop the WindLift Kite Engine project for military units. The OSD Power Surety Task Force (PSTF) has initiated coordination with USAID, which is the Other Government Organization (OGA) partnered with DoD on the PRT organization and mission. The contract (SOW) directs the vendor what he must do in order to improve reliability and durability prior to a 6-month deployment to Afghanistan + the integration with battery-inverter “back end."

This project is an early prototype, so there is potential that the durability and reliability may need improvement before further spiral development and full-scale production. An aggressive deployment scenario is envisioned to stress the prototype system. and find any durability and reliability issues. However, to mitigate the risk, The WindLift Kite Engine “front end” is paired with a proven battery-inverter “back end.” The Kite Engine produces the power, which is stored in the “back end” 50kWh batteries, which power some of the most energy efficient lights, refrigerators and fans commercially available. Sacred Power Corporation, an 8(a) vendor, will be the sub-vendor, responsible to furnish the “back end. Sacred Power Corporation is an experienced vendor that has performed similar work for the US Government – designing, manufacturing and installing over 300 similar systems for Native American homes in remote Tribal lands for the Rural Electrification program. Further, there is future potential to integrate proven solar panel technology with the Kite Engine to provide two sources of renewable power.

Contributing objectives include: (1) showing the feasibility of integration and assembly process for a “back end” deployable battery-inverter sub-system; (2) validating training to Afghani villagers; (3) the lessons learned during the 6-month deployment will be valuable to likely further development and ultimately a low-cost solution that will have value in many places in the world.

4. Authority Cited: The authority cited for this action is 10 U.S.C. 2304(c)(1) as implemented by FAR 6.302-1 Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

5. Reason for Authority Cited: The WindLift Kite Engine is a new and unique concept (see para 8, Market Research). OSD PSTF meets with several vendors each month and met with WindLift in January, 2009. OSDT PSTF briefed this as a potential Stimulus project. OSD approved this small American Recovery and Reinvestment Act (ARRA – a.k.a. Stimulus) project because it is a unique idea with significant upside potential that justified any potential risk.

WindLift, LLC has taken steps to protect their Intellectual Property (IP); the company was founded around an exclusive license agreement with Omnific Ltd for their patent, "Renewable Energy System Using Long-Stroke Open-Channel Reciprocating Engines", patent number 6555931. The Omnific Ltd i patent is the concept that makes kite energy possible in a reliable and economical manner. In Claim 1 of this patent Omnific Ltd i describes a machine that is "cyclically switchable from a low force mode to a high force mode and vice-versa to extract energy from fluid flow engaging said at least one tethered flow engaging element". Since then WindLift, has invested nearly $250,000 refining Omnific’s idea into a working prototype. ; said differently, it is one thing to file a patent but another thing to turn the concept into a working prototype. WindLift has also filed a provisional patent application, "Tethered Airfoil Methods and Systems", that is now at the patent office as US National Entry App. No 12/300,577. The company plans to file 3 - 4 more patents around technology they have developed for the next generation machines. The Long-Stroke Open-Channel Reciprocating Engine and the Kite itself become one inseparable system (which we have been referring to as the WindLift Kite Engine) which uses the difference in the tension of the kite tether to produce electrical power or mechanical work.

Contained in the following URL is a 2-minutes long video clip that shows WindLift’s early prototype. This demonstration contract is required in order to improve reliability and durability prior to a 6-month deployment to Afghanistan plus the integration with inverter-battery "back end."

http://video.google.com/videoplay?docid=5043887099436123071

6. Efforts to Obtain Competition: WindLift, LLC is the only company that can demonstrate this capability and fulfill contract requirements. No other sources were involved in this small prototype development and demonstration effort. The exclusive license agreement between, Omnific Ltd, and WindLift allows WindLift to mass produce an unlimited number of products in the future (separate from this limited prototype development and demonstration effort) excluding any possible competitors from using this approach until the patent expires in 2021. The significant investment of time and resources by WindLift (prior to this development/demonstration contract) has also resulted in a number of trade secrets and planned patent filings.

7. Actions to Increase Competition: If this demonstration contract is a success, then the Government may order production models. Any production buy will be competed. The Government will have firm requirements learned from the limited, prototype contract that can be used in a larger, competitive contract. Special care will be required to protect WindLift’s IP but generic requirements could be competed which might include other “front-end” sources of power, such as commercial solar or a combination of the Kite Engine system with commercial solar. Due to the development nature of this contract, it is not advisable to co-mingle solar with the Kite Engine system to be able to segregate the results. .

8. Market Research: There are a number of vendors developing systems to use kites to harness the energy of the wind and produce power. These vendors are pursuing larger kW scale projects that are not compatible with the objectives of this project, which is a small kW scale project suitable for a remote, off-grid village. Five vendors were found developing products to capture the power of the wind using lighter than air technology; Makani, in California, KiteGen in Italy, Delft University of Technology in the Netherlands, Skysails in Germany and Magenn in Canada. Three of these organizations, KiteGen, Makani, and the Delft University of Technology, are pursuing large kW power generation systems, producing between 100MW – 1000MW of power, to compete with traditional power plants supplying the electric grid in developed economies. Development efforts for all of these organizations are targeted at solutions for capturing high altitude winds, at between 3,000-30,000 feet. Skysails has pursued the shipping industry and is developing kites as a towing propulsion system for cargo vessels to limit trans-oceanic fuel costs. Magenn Power is proposing to provide power to off-grid locations. However, Magenn’s system is not actually a kite, it is a tethered, helium filled Wind Turbine which is estimated to produce 100kW. Given the direction of their technology development, the size of their systems and the cost of their systems, none of these organizations could deliver on the scope, schedule and cost of this project. WindLift, LLC is the only company that is developing small kW scale kite technology to produce a durable, reliable engine that can deliver power to off-grid, remote locations at a reasonable price.

9. Interested Sources: “On June 22 2009, a notice is to be submitted to FedBizOps indicating the Government’s intent to procure with Windlift, LCC. To date, no other sources have expressed an interest in writing. However, as required by FAR 5.201, any other bids or proposals received shall be forwarded to the approving official for consideration.

10. Other Facts:

a. Procurement History: None

b. Acquisition Data Available: None

c. Unusual and Compelling Urgency: Not applicable

d. Subcontracting competition: The subcontractor, Sacred Power Corporation, 2401 12th St., NW, Albuquerque, NM 87104 is a certified 8(a) vendor (#110493)

e. Follow-on Contracts: To be determined based on the results of this effort.

11. Technical Certification:

I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

Typed Name: Gloria Lovett Title: Program Analyst

Signature: See below signature page

12. Requirements Certification:

I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

Type Name: Gloria Lovett Title: Program Analyst

Signature: See below signature page

13. Fair and Reasonable Cost Determination:

I hereby determine that the anticipated cost for this contract action will be fair and reasonable. Actions anticipated to ensure cost/price reasonableness will be accomplished in accordance with procedures and criteria contained in the Federal Acquisition Regulation as supplemented and the Armed Services Pricing Manual. Detailed documentation and justification of cost/price reasonableness will be disclosed in the official contract file.

Signature: ________________

Organization:

Title: Contracting Officer

DSN:

14. Procuring Contracting Officer Certification: I certify that the facts and representations under my cognizance, which are included in this J&A, are accurate and complete to the best of my knowledge and belief

Signature: ________________

Organization:

Title:

DSN:

15. APPROVAL

Based on the foregoing justification, I hereby approve the procurement of (state equipment/services being procured) on an other than full and open competition basis pursuant to the authority of 10 U.S.C.2304(c)(insert authority), subject to availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition.

Signature:

Date: ________

Special Competition Advocate