W9127821R0051 JA for Trane HVAC Chillers at Airman Leadership School Eglin AFB FL (Final)_Redacted.pdf

Control# 21-0004

FAR Part 6 Justification and Approval for Other than Full and Open Competition

1. Contracting Activity: U.S. Army Corps of Engineers (USACE), Mobile District (CESAM), Contracting Division 109 Saint Joseph Street, Mobile, AL 36602

2. Description of Action: This Justification and Approval (J&A) is requested to specify a make of Heating, Ventilation and Air Conditioning (HVAC) equipment for the Airmen Leadership School construction project that will be executed at Eglin AFB, FL. In accordance with mandatory standardization decisions made by the Air Force in accordance with their Category Management (CM) Program, HVAC equipment is being standardized throughout the Air Force on an installation basis and Trane is the make or brand name specified for Eglin AFB. The government will not purchase the Trane equipment directly, but rather the requirement to utilize Trane equipment will be included in the solicitations that will lead to the new construction contracts for the Airmen Leadership School at Eglin

AFB.

3. Description of Supplies/Services: USACE has received mission to design and construct the approximately $5,500,000.00 Facility. As part of the design and construction effort, new HVAC chillers will be installed in this building and the Air Force has standardized use of Trane, Inc.

equipment as a result of its CM determination. This J&A supports new HVAC chiller unit to be incorporated into the construction contracts at Eglin AFB solicited from the approval date of this J&A.

Periods of performance is specified at 540 days. The Government will not purchase these items directly, but will require the construction contracts to provide and install the following:

ITEM PROPOSED MAKE ESTIMATED

AMOUNT

HVAC Chillers Trane Inc. HVAC $240,000.00

4. Authority Cited: The statutory authority permitting acquisition of the requirement by other than full and open competition is 10 United States Code (U.S.C) 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2), only one responsible source and no other supplies or services will satisfy agency requirements.

5. Reason for Authority Cited: As set forth in FAR 6.302-1(a)(2), when the supplies or services required by the agency are available only from one responsible source, or for DoD, NASA and the Coast Guard, from only one or a limited number of responsible sources, and no other types of supplies or services will satisfy agency requirements, full and open competition need not be provided for. This J&A applies the Only One Responsible Source authority using the application of FAR 6.302-1(b)(4), which indicates that use of FAR 6.302-1 is appropriate "When the agency head has determined in accordance with the agency's standardization program that only specified makes and models of technical equipment and parts will satisfy the agency's needs for additional units or replacement items, and only one source is available."

a. Background:

(1) The Air Force Civil Engineer Center Director (AFCEC/CL) serves as the Airforce Category Manager (CM) for the Facilities and Construction Category and has mandated the standardization of HVAC chiller systems to a single manufacturer at the installation level.

(2) USACE will be the servicing agency for the construction at Eglin AFB. Concurrent with the Acquisition Planning for this effort, the Air Force established standardization requirements for the replacement of HVAC equipment across all Air Force installations. The Air Force Senior Procurement Executive approved a J&A on 7 August 2019 that requires AF procurements to utilize specific makes of HVAC equipment in all their requirements through 2024. The J&A included a spreadsheet that identifies the HVAC makes specified for each of the 77 Air Force installations, and Trane is the make specified for Eglin. The AF J&A is valued at $370M and states that "The Air Force is required to use the brand name exception to CICA because the nature of the acquisition as a strategic vehicle for Category Management requires a pre-planned brand name approach to acquiring HVAC chillers." The J&A speaks to estimated cost savings in training expenses and efficiency improvements in mission performance.

(3) FAR 17.503(d)(1) states that if a J&A or a D&F is required by law or regulation, the servicing agency shall execute and issue the J&A or D&F, though the requesting agency shall furnish the servicing agency any information needed to make the J&A or D&F. Therefore, USACE, as the servicing agency concluded that J&As in support of Eglin AFB work and other Air Force projects must be executed by Army.

b. Justification:

(1) FAR 6.302-1(b)(4) permits use of the Only One Responsible Source authority when the agency head has determined in accordance with the agency's standardization program that only specified makes and models of technical equipment and parts will satisfy the agency's needs for additional units or replacement items, and only one source is available.

(2) In a memorandum signed on 22 June 2017, the Under Secretary of the Air Force appointed the Deputy Under Secretary of the Air Force, Management and Deputy Chief Management Officer as the AF Category Management Accountable Official. On 14 July 2017, the Deputy Under Secretary of the Air Force, Management and Deputy Chief Management Officer, appointed the Civil Engineer Center Director (AFCEC/CL) as the Air Force Category Manager for the Facilities and Construction Category. On 16 May 2019, the AFCEC/CL directed the mandatory standardization of HVAC chiller systems and delegated manufacturer selection to the AFCEC Operations Director (AFCEC/CO).

(3) On 3 May 2019, the AFCEC/CO executed a memorandum, Subject: HVAC Chiller System Standardization, Single Manufacturer Selection, which set forth the AFCEC/CL intent to standardize HVAC chiller systems to a single manufacturer at the installation level. The memorandum explained that standardization of all HVAC chiller systems allows the Air Force to significantly reduce the total cost of ownership which includes the initial procurement, subsequent maintenance, and associated training costs to operate the system over its lifecycle. The memorandum went on to provide guidance for the evaluation, recommendation, and subsequent approval of a single manufacturer for HVAC chiller systems at each installation and stated that Base Civil Engineers (BCEs) were to request and provide justification for the recommended single HVAC chiller manufacturer. The memorandum concluded with a requirement to repeat the analysis after five years from the date of AFCEC/CO approval for a single manufacturer. The purpose of this secondary analysis is to document the installation's progress in standardizing HVAC chiller systems, consider any changes in the decision facts, and confirm no external factors exist that may drive a reconsideration of the approved single manufacturer.

(4) On 16 May 2019, the AFCEC/CL signed a memorandum, Subject: Mandatory Standardization of HVAC Chiller Systems. The memorandum directed the mandatory standardization of HVAC chiller systems to a single manufacturer at the installation level and reiterated the process laid out in the above referenced 3 May 2019 guidance. The memorandum also delegated the AFCEC/CL’s approval authority to the AFCEC/CO for the selection of a single manufacturer for HVAC chiller systems.

(5) In a memorandum dated 10 September 2019, Subject: HVAC Chiller System Standardization, Single Manufacturer Selection, the AFCEC/CO approved the selection of Trane, Inc.

as the single manufacturer for Eglin AFB, along with selections for other installations. This selection, supported by the other memorandums summarized above, satisfies the FAR 6.302-1(b)(4) application of the Only One Responsible Source authority, as the Agency Head (delegee) has determined in accordance with the agency's standardization program that only specified makes and models of technical equipment and parts will satisfy the agency's needs for additional units or replacement items, and only one source is available.

c. Alternatives: The standardization determination executed by the Air Force compels USACE to include the requirement for Trane HVAC chillers in solicitations for construction work at Eglin AFB. There is no alternative product that meets the AF’s need to standardize this equipment for Eglin AFB. The only alternative considered that would differ from the terms of this J&A was to purchase the HVAC equipment separately and provide it to the construction contractor as government furnished equipment (GFE). This alternative would still involve the purchase of the Trane equipment on a sole source basis. Further, the effort associated with purchasing, storing, conveying, and managing the GFE was determined to be both inefficient and uneconomical. No other feasible alternatives were identified.

d. Impact: If this J&A is not approved, USACE’s construction contracts will not be executed in accordance with the Air Force CM decision. USACE will be unable to implement the Air Force’s standardization program in the missions at Eglin AFB. If the HVAC equipment is not standardized, the Air Force will not be able to realize the efficiencies and reduction of costs that have been targeted in the category management analysis. Anticipated advantages include reduced training costs for Air Force maintenance personnel, efficiencies in obtaining and storing spare parts, and decreased disruption to mission by rapid resolution of any HVAC system failures.

6. Efforts to Obtain Competition: The Contracting Officer published the notices required by FAR 5.201, as described below. All solicitations for the Airmen Leadership School construction project at Eglin AFB will be issued competitively. While the brand name HVAC equipment specification will be included within the solicitation, this is a small component of the larger construction project. The majority of the construction requirement, in both effort and total dollars for each project, will not be subject to limits to competition. This J&A will be posted with the solicitation. Potential contractors will be made aware that specifications for subsequent projects will require the installation of Trane HVAC Chillers. This coordination alerts them to engage subcontractors that are certified in installing this item. Though the use of specified makes of items cannot be considered competitive regardless of the number of suppliers available, it is anticipated that multiple vendors will be available to provide and install Trane HVAC chillers at the subcontracting level; this sole source will not affect the overall competition for the construction requirements.

7. Actions to Increase Competition: IAW FAR Part 5.2, Synopses of Proposed Contract Action, a Notice of Intent (NOI) under NAICS 236220, Commercial and Institutional Building Construction, to include the brand name for HVAC chillers, Trane U.S. Inc. was posted to beta.SAM.gov on 14 April 2021 and requested responses by 23 April 2021. Two responses were received from and both provided overall construction experience and no objection to the NOI to sole source HVAC Chillers in construction contracts. Based on responses received, it is apparent that there are adequate numbers of suppliers available to provide the required items and no alternative sources were identified for HVAC equipment that would meet the government’s requirements. The Air Force requirement to use one type of HVAC chillers at each installation means that only the standard chillers will be required. Due to this standardization requirement, there are no planned actions to increase competition for the requirement.

8. Market Research: Market research indicated that competition among authorized suppliers for the brand name product, Trane HVAC chillers, will exist since they are readily available in the commercial marketplace and there are multiple companies that are licensed to sell the products.

Because there are multiple sources, it is reasonable to expect that a fair and reasonable price will result from adequate competition at the subcontracting level.

In addition to the above, in accordance with FAR 5.201, the Air Force posted a Notice of Proposed Contract Action/Special Notice, 238220, HVAC Chillers to FedBizOpps (FBO) on 15 March 2019 when efforts were underway to prepare their J&A. This AF J&A included standardization to Trane, Inc, for the requirements of Eglin AFB. The posting remained open for 15 days. A description of the requirement was included in the FBO notice and advised any interested responsible party that believed it was equally or otherwise uniquely capable of meeting the requirements to submit a capability statement. Two sources expressed interest in the published notice, but neither were chiller manufacturers.

9. Interested Sources: Two responses were received in response to the NOI as detailed above.

This J&A will be posted with the issuance of the solicitation in accordance with FAR 5.102(a)(6).

10. Other Facts: Reasonable efforts were made to retrieve other facts from computer records, contract files, and other sources to support the use of other than full and open competition as follows:

a. Prior to the recent standardization efforts launched by the Air Force, there is no known history of sole source procurement of HVAC equipment on an Air Force installation-wide basis.

b. As previously stated, the Air Force Senior Procurement Executive approved a J&A on 7 August 2019 that requires use of brand name HVAC equipment in all requirements procured directly by the Air Force through 2024. The J&A encompassed all Air Force installations and specified that Trane is the designated single manufacturer for Eglin AFB. The Air Force followed up with a formal HVAC Chiller System Standardization, Single Manufacturer Selection determination on 10 September 2019. This J&A implements the Air Force standardization determination for all construction projects executed at Eglin AFB through 2024.

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

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

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost orprice to the Government for this contract action will be fair, reasonable, and realistic based on an analysis that includes comparison with the Government Estimate. In accordance with FAR 15.403(b)(l), Certified Cost & Pricing Data will not be required for this action.

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

Approval

Based on the foregoing justification, I hereby approve the procurement of Trane HV AC Chillers for the estimated amount of $240K on an other than full and open competition basis pursuant to the authority of 10 U.S.C.2304(c)(l) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements subject to availability of funds, and provided that the services or property herein described have otherwise been authorized for acquisition.

Approved By: