JA_Sole_Source_for_Fluidized_Bed_Version_19DEC2018_Final_Redacted_Redacted.pdf

CMO Control No: 2019 - 018

DEPARTMENT OF THE ARMY

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: Army Contracting Command-Warren (ACC-WRN) Red River Army Depot (RRAD) is the procuring activity for this action.

2. Description of Action: ACC-WRN RRAD proposes to award a new, Firm-Fixed

Price (FFP) five year service contract to Dinamec Systems, LLC, of Acworth, Georgia, for preventative maintenance and repair of the Fluidized Bed Rubber Denuding System (FBRDS). Funding is anticipated to be Army Working Capital Funds (AWCF).

3. Description of Supplies and Services: Dinamec Systems will provide preventative maintenance, repair and supplies required to maintain the FBRDS, which consists of two independent fluidization beds, two quench tanks, two pollution abatement systems, a common control room, and associated ancillary equipment. There are eight categories of items associated with this requirement:

Level IV Maintenance, Level III Maintenance, Air Quench Replacement of Cone/Liner, Fluidized Bed Sand, Gas Stream Lime Additive, Spare Parts Replacement, and Emergency System Repair Response. All the work is associated with the requirements of the Air Emissions Operating Permit Number 17973 and PSD-TX-1112, issued to Red River Army Depot (RRAD) by the Texas Commission on Environmental Quality (TCEQ) of the Texas Natural Resources Conservation Commission (TNRCC) in 2013. The estimated dollar value of this requirement is $3,883,277.

4. Authority Cited: The statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c) (1), as implemented by FAR 6.302-1(a) (2) (iii), “Only one responsible source and no other supplies or services will satisfy agency requirements”. Specifically, supplies or services may be deemed available only from the original source, in a follow-on contract for the continued development or production of a major system or highly specialized equipment. This would include major components thereof, or for the continued provision of highly specialized services when it is likely that award to any other source would result in “substantial duplication of cost to the Government that is not expected to be recovered through competition”.

5. Reason for Authority Cited: As authorized by FAR 6.302-(1), procurement by other than full and open competition is necessary, based on the following information:

a. RRAD contains the only CONUS Qualified (Qualification by U.S. Army Tank

Automotive Command) Government Owned and Government Operated (GOGO) Combat Vehicle Track Shoe and Roadwheel Rebuild Facility. The FBRDS used by RRAD, is the only available method to denude (remove) rubber from metal track shoes. It is also used to denude rubber from some types of roadwheels and to restore correct material temper.

b. The system was originally designed by Keppel-Seghers, and was subsequently acquired by Dinamec Systems in 2014. Dinamec Systems now owns the complete engineering Technical Data Package and associated Intellectual Property Rights. The equipment and process used to denude rubber from Military Tracked Vehicle Components and Roadwheels is unique,

c. Only the OEM is capable of providing comprehensive certification training to

RRAD personnel, which is a requirement of the Air permit. Dinamec Systems is the only contractor fully capable of determining whether RRAD personnel are trained to an acceptable level to operate and troubleshoot the specialized equipment because they own the TDP. Since the OEM maintains a corporate staff of trained field engineers, their appraisals are the most relevant regarding certification and training. There is no other contractor possessing the experience and expertise of Dinamec Systems to ensure the certification requirement of the FBRDS is completed satisfactorily. Dinamec Systems has shown no interest in releasing or selling the Technical Data Package to the Government.

d. Due to Dinamec’s proprietorship of the engineering Technical Data Package and associated Intellectual Property Rights, another contractor could not effectively provide the services to the FBRDS without the Government incurring a substantial duplication of cost to replace the system. The original cost of the FBRDS in 2004, was $7,800,000. The estimated cost the Government would incur to replace the FBRDS using a 1.75 percent rate of inflation over 14 years, would be $9,711,000. The calculated cost to replace the system is more than double the anticipated cost of this sole source action. In addition, all costs associated with the construction of a new building site would be incurred by the Government to allow the current FBRDS to stay operational, to maintain production with no time loss during the procurement and construction of the replacement FBRDS.

6. Efforts to Obtain Competition:

a. Effective Competition: The Government will not pursue additional competition for this action due to the reasons stated in paragraph 5 above.

b. Subcontracting Competition: The proposed contract will contain FAR 52.244-5

Competition in Subcontracting to ensure the prime contractor awards subcontracts competitively to the maximum extent practicable.This action will be advertised as required by the notices in FAR 5.201.

7. Actions to Increase Competition: The Government is taking no further action to increase competition at the prime contractor level for this procurement. In the past, the FBRDS maintenance requirements received no other interested sources from the synopsis posted on FedBizOpps.

8. Market Research: A sources sought was posted on FBO.gov from 30 Aug 2018 to 17 Sep 2018. Dinamec Systems, LLC was the only interested party to respond.

To the best of the Government’s knowledge, Dinamec Systems, LLC is the only maintenance provider for both the Greek and American denuding facilities. As discussed in section 5 above, since the Greek and American systems are technically different from the Korean facility, there are no other contractors that totally understand the system software program, component setting, and overall operation of the system process design. Without in-house engineering understanding of the system, a meaningful contractor evaluation cannot be conducted to determine if in fact the company is able to successfully complete the work.

9. Interested sources: No other sources have responded to a previous announcement for this requirement posted on FBO.gov 30 Aug 2018. Dinamec Systems, LLC was the only interested party to respond.

10. Other Facts: Other facts pertaining to this acquisition which support the use of other than full and open competition are as follows:

a. Procurement History:

Contract: W911RQ-06-P-0241 Contractor: KEPPEL-SEGHERS Technology, Inc. USA Date: 28 Jul 2006 Competitive Status: Sole Source J&A Authority Cited: FAR 6.302-1

Contract: W911RQ-08-P-0027 Contractor: KEPPEL-SEGHERS Technology, Inc. USA Date: 28 Nov 2007 Competitive Status: Sole Source J&A Authority Cited: FAR 6.302-1

Contract: W911RQ-11-C-0006 Contractor: Dinamec Systems, LLC Date: 9 Dec 2010 Competitive Status: Sole Source J&A Authority Cited: FAR 6.302-1

Contract: W911RQ-14-C-0011 Contractor: Dinamec Systems, LLC Date: 1 Feb 2014 Competitive Status: Sole Source J&A Authority Cited: FAR 6.302-1

The Government took no action to increase competition for the J&A approved to support Contract W911RQ-14-C-0011. Dinamec Systems, LLC owns the technical data package, and is the only vendor with the knowledge and expertise to support the maintenance and repair of the FBRDS system. No significant changes have been made to the procurement.

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

Typed Name: Kipling S. Browning Date: 19 December 2018 Title: Chief, Production Engineering Division Signature: //KSB//

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

Typed Name: James Bass Date: 25 October 2018 Title: Director for Logistics Signature: //JB//

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost to the Government for this contract action will be fair and reasonable. RRAD will use other than certified cost price data to determine that the price is fair and reasonable certified cost or pricing data will not be required due to the commercial exemption in FAR Subpart 15.403.

Typed Name: Robyn E. James Date: 5 November 2018 Title: Contracting Officer Signature: //REJ//

14. Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Typed Name: Jeffrey W. Edens Date: 26 November 2018 Title: Chief of Contracting Office, ACC-Warren (RRAD) Signature: //JWE//

Approval

Based on the foregoing justification, I hereby approve the procurement of a Fixed Price contract for the repair, maintenance, supply, and service for the continued operation of the Fluidized Bed Rubber Denuding System and acquisition of operating materials and supplies in the amount of $3,883,277, on an other than full and open competition basis pursuant to the authority of 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,” subject to the availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition.

12/19/2018

X Rachel Capaldi Rachel Capaldi Alternate Competition Advocate Signed by: CAPALDI.RACHEL.ANN.