EFO_Sgnd_Redacted_Final.pdf

HNC-15-160520

FOR OFFICIAL USE ONLY IAW FAR 3.104

Justification Review Document For

Exception to Fair Opportunity (EFO) UMCS-IV, Contract W912DY-15-D-0006-TBD

Controls Upgrades and Refurbishment

Requirement: The Controls upgrades and refurbishments for operated by the

Authority: Federal Acquisition Regulation (FAR) 16.505(b)(2)(i)(B) “only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.”

Amount: $5,000,000.00

Prepared By:

Title: Phone:

Name: Date:

E-mail:

Contracting Officer:

Title: Contracting Officer Phone: 256-895-1137 Name: Susan L. Parsons Date:

E-mail: Susan.l.parsons@usace.army.mil

Technical Engineer Representative:

Title: Phone:

Name: Date:

E-mail:

Requirements Representative:

Title: Phone:

Name: Date:

E-mail:

Reviews: I have reviewed this justification and find it adequate to support a Task Order that only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.

Program Manager:

Name: Phone:

Signature: Date:

Center Counsel:

Name: Phone: 2 Signature: Date:

PARC-WIN CONCURRENCE:

HQ USACE Small Business:

Name: Phone:

Signature: Date:

HQ USACE Technical

Name: Phone:

Signature: Date:

HQ Legal Counsel:

Name: Phone:

Signature: Date:

Exception to Fair Opportunity (EFO) UMCS-IV, Contract W912DY-15-D-0006-TBD

Controls Upgrades and Refurbishment

1. Contracting Activity: U.S. Army Corps of Engineers, Huntsville Engineering and Support Center (CEHNC) located at 4820 University Square, Huntsville, AL 35816-1822.

2. Description of Action: This action contemplates the award of a new firm-fixed price (FFP) task order (TO) under Contract W912DY-15-D-0006 to Siemens Government Technologies (SGT), Inc. This will provide proprietary upgrade and refurbishment of the Siemens on for three tasks. Task 1 is composed of upgrades to Task 2 is composed of upgrades to ; and Task 3 is composed of upgrades to ; all in the operated by the ). The work consists of furnishing all site investigation, evaluation, design, field verification, plant, labor, equipment, instruments, materials, transportation, testing, and incidentals required to perform the scope of work delineated herein. The Contractor shall provide a fully functional and complete working system in compliance with activity specific requirements itemized in the Performance Work Satement (PWS). An upgrade and refurbishment solution shall be developed, based upon SGT’s proprietary sub-systems, which will exchange the regulation and controls components from the existing analog systems to a modern, parts supported digital controls system, utilizing the Utility Monitoring and Control Systems-IV (UMCS-IV) Unrestricted Contracts Pool. There is sufficient capacity available for this contract action. The UMCS-IV Multiple Award Task Order Contract (MATOC) unrestricted suite of contracts was awarded in January 2015 with a combined total capacity of $2,500,000,000.00. The North American Industry Classification Code (NAICS) for this contract action is 541512, Computer Systems Design Services, with a Small Business Size Standard of $27,500,000.00. The current capacity is estimated to be $2,490,000,000.00 available. The anticipated award value for this task order is $5,000,000.00.

The IGE was developed from the PWS and technical data submittal for a similar system to the one that would be utilized in this effort. The technical submittal provides insight into the type of equipment that could be used in this effort. These items were researched to find potential pricing for this equipment which was used to develop the IGE.

The Huntsville Center currently has a Single Award Task Order Contract (SATOC) to SGT.

Currently, there is no capacity available under W912DY-10-D-0034 and the follow-on contract action is currently in the pre-award stage.

3. Description of Supplies/Services: This task order shall provide support to the to upgrade and refurbish the Controls for four

The purpose of this acquisition is to only upgrade the obsolete Control System which is integrated with the and the r Section. Only certain components of the Siemens system (not the entire system) are being refurbished or replaced. The which are manufactured and designed by Siemens are not being replaced.

The entire System is not required to be replaced, only a newly designed Siemens system is required. The system will:

4. Authority Cited: Federal Acquisition Regulation (FAR) 16.505(b)(2)(i)(B) “Only one awardee is capable of providing the supplies or services required at the level of quality required, because the supplies or services ordered are unique or highly specialized.”

5. Reason for Authority Cited:

The existing System on the

The purpose of this acquisition is to only upgrade the obsolete System

A competitor does not have access to all interconnections required to guarantee no risk to the system and the system. Using a different supplier besides the Original Equipment Manufacturer

(OEM) to integrate with the original Siemens equipment is a potential safety risk if something is missed, and damage to the could occur. The liability of not using Siemens is as follows:

. Siemens made the original Controls A competitor could not seamlessly capture all required interconnects and interlocks.

. Siemens knows the safeties required since it is their original system. Major damage could occur if a competitor misses something. This could leave the

. Only Siemens knows the proprietary issues with converting from the System and integrating to existing equipment they designed. Another competitor’s system could not seamlessly interface with other systems already installed

6. Efforts to Obtain Competition: Due to the existing proprietary SGT Systems installed in these , SGT is the only contractor currently capable of performing these efforts. Moreover, offerors who proposed and subsequently received awards under these subject MATOC pools were informed via the solicitation and in the post-award debriefings that the Contracting Officer may award one or more contractors more work than the other awardees. Specifically, contractors were informed that each order for services exceeding $3,000.00 must be made on a competitive basis, unless the Contracting Officer waives the requirement on the basis of a written determination that one of the circumstances described at FAR 16.505(b) (2) (i) through (ii) applies to the order; or if a statute expressly authorizes or requires that the purchase be made from a specified source.

7. Actions to Increase Competition: Utility Monitoring and Control Systems utilize software to display graphical information such as status of equipment, temperatures of spaces, etc. These software systems are generally called “Head-End” or “Front-End” systems. Each name is synonymous and describes the same software. Most manufacturers’ legacy head-end UMCS systems remain proprietary throughout the industry, (including private and Government installed systems). For many years, each manufacturer utilized unique software “twists” (usually done via network protocols) that required the end user to return to the original installer to expand or alter the system, thus making them fully proprietary. Open systems were later developed to prevent the end user (in this case, the Government) from being forced to return to the original installer, thus allowing a more “Open System”. The UMCS Corps of Engineers, Mandatory Center of Expertise (UMCS-MCX) leaders have been working with industry to move toward an open LonWorks Operating Network (LON) system at the building level controllers and head end systems. In 2004, the U.S. Army Corps of Engineers (USACE) published Unified Facilities Guide Specifications (UFGS) 25-10-10, Utility Monitoring and Control System, and UFGS 23-09-23, Direct Digital Controls for Heating, Ventilation, and Air Conditioning (HVAC) and other building control systems. When implemented, these specifications will create an control systems in concert with the overall vision of USACE to encourage competition and systems. All new construction projects funded by Military Construction (MILCON) are urged to utilize these specifications.

The Corps of Engineers, Mandatory Center of Expertise (MCX) published a revised UFGS 25 10 10, Utility Monitoring and Control System (UMCS) Front End and Integration in November 2012.

The inclusion of these additional major control protocols greatly increased the competitive pool of acceptable vendors for front ends.

UFC 3-470-01, Utility Monitoring and Control System (UMCS), was published in May 2012. This document supersedes UFC 3-401-01FA and provides the criteria for the industry standard communications protocol that permits communications data exchange between different manufacturers’ control systems.

USACE is currently writing an “Open” BACnet specification for use at the building control level.

This will be published in January 2016. Additionally, we are developing a protocol agnostic instrumentation specification that will be used in concert with any Open controls implementation.

UFGS 23 09 23 was revised and published in May 2011. It still requires only the use of LonWorks technology to ensure an open system. However, once the new “Open” BACnet specification is published, stakeholders can choose either LonWorks or BACnet and integrate into a front end if installed in accordance with (IAW) UFGS 25 10 10. As long as all the proprietary configuration tools are provided as required, the Government is now free from further need of the original installing controls vendor for any expansions, modifications, or updates.

The UMCS Product Delivery Team (PDT) closely scrutinizes each of our customer’s requirements to determine how much of any given requirement is truly proprietary; e.g. how much is related to proprietary UMCS and how much is related to general requirements. As such, we make determinations on a case by case basis as to whether we can separate a requirement between proprietary and competitive requirements. If the preponderance of a requirement can be competed, then we will make every effort to compete the acquisition, highlighting those portions of a PWS that may need to be subcontracted to a proprietary provider. However, if the preponderance of a requirement is proprietary, then we will seek justification from the customer to enter into a sole-source contract. The requirements in the PWS for this requirement fall into the latter category, whereas the preponderance, if not all of these integration and maintenance activities are tied directly to the “ Systems proprietary SGT system. Therefore, due to the proprietary nature of the system configurations described in paragraph 5 above, the Government will not take additional action to increase competition for this requirement.

8. Market Research: Strategic market research is continually performed in order to identify any additional sources that could fulfill the Government’s requirement to interface to SGT’s proprietary system. Several methods of market research (detailed in paragraphs below) are utilized by the UMCS PDT to search for break-out businesses that have the expertise, capability, and access to SGT’s UMCS proprietary systems, and necessary personnel to maintain that system. The Government reviewed online industry catalogs and other generally available product literature published by manufacturers, distributors, and dealers. The team reviewed content on general business content sites such as WSJ.com and FinancialTimes.com, social media industry pages on sites such as Facebook.com and LinkedIn.com as well as industry content aggregation sites such as ESMagazine.com and AutomatedBuildings.com.

Each of these properties offered not only a wealth of information on UMCS Services, but confirmed the market position of the “ Systems and SGT as the sole provider of “ Systems.

This acquisition requires the contractor to upgrade components of the system from analog to direct digital controls. The upgrade is estimated at a cost of $1,250,000.00 . The replacement cost of the entire system is estimated to be greater than $6M . This estimate is based on historical data provide by when they installed an analog system in a in 2007 under contract In addition to the cost savings of procuring a new system, the schedule to procure an entire system is estimated at 18 months. UMCS is expecting to have the task order awarded by the end of FY’15 allowing the customer to meet the overhaul and repair time currently scheduled.

In accordance with FAR 10.002(b) (2), the following market research methods were utilized in order to determine availability of sources capable of performing these services:

a. Knowledgeable Government Personnel - The Government contacted knowledgeable Government employees (CEHNC UMCS-MCX Engineers) who have had experience with this requirement and were involved in previous acquisitions for UMCS contracts.

UMCS-MCX Technical Manager US Corps of Engineers – Huntsville Center:

UMCS-MCX Program Engineer Team Lead

UMCS-MCX Engineering Branch Chief

The UMCS-MCX for the Corps of Engineers is located at CEHNC. The UMCS-MCX maintains a staff of engineers whose daily work is on UMCS projects. Each engineer is regularly involved in the testing of installed systems and understands the operations and interface restrictions of these systems. The UMCS-MCX team has updated and maintained the UMCS specifications since they were issued. New generations of UMCS systems have come and gone; each with its own proprietary requirement. The Technical Deputy

CEHNC-ME-U) of HNC’s UMCS-MCX, is presently serving on the LonMark International Board of Directors, an organization made up of many of the worlds’ UMCS manufacturers, for the promotion and expansion of open UMCS systems. This board is involved in the promotion of open protocols such as , which has revolutionized the UMCS industry, particularly at the field level. However, there still remains the proprietary nature of each manufacturer’s equipment. They are working together in an attempt to reach a more open system approach. On a continuing basis, each member of the UMCS-MCX staff attends trade shows, technical presentations, web seminars, and other data gathering opportunities to stay current on the latest technologies of each manufacturer’s systems to see if this has been accomplished. However, at the current time there is not a single UMCS that can interface to another UMCS without degradation of functions.

b. In addition to canvassing knowledgeable Government employees, product capabilities from the following UMCS-IV MATOC contracts were reviewed (see Table 1); results of this review reveal that only SGT has the capabilities to meet the Government’s requirements.

Due to the proprietary nature of the system, all other MATOC pool contractors do not have capability to successfully interface with SGT Systems without partnering with SGT.

Table 1: List of UMCS-IV Action Unrestricted & Restricted Pool Contractors and Contract Numbers

Contractor Name Contract Number Business Type Spectrum Solutions, Inc. W912DY-15-D-0012 Small SEI Group, Inc. W912DY-15-D-0011 Small Infotec Systems Corporation W912DY-15-D-0010 Small EPC Service, Inc. W912DY-15-D-0009 Small Evergreen Fire Alarms, LLC W912DY-14-D-0051 Small Williams Electric Company, Inc. W912DY-15-D-0008 Large Secure Mission Solutions, LLC W912DY-15-D-0007 Large Schneider Electric Buildings Americas W912DY-15-D-0005 Large Honeywell Technology Solutions, Inc. W912DY-15-D-0004 Large Eaton Corporation W912DY-15-D-0003 Large exp Federal, Inc. W912DY-14-D-0052 Large Johnson Controls Building Automation Systems W912DY-14-D-0050 Large

c. Publicizing Contract Actions - Pursuant to FAR 5.202(a)(6), transmittal of a notice of this proposed contract action through the Government-wide Point of Entry (GPE) is not required for task orders. However, in accordance with FAR 16.505(b)(2)(ii)(D), this EFO will be posted to Federal Business Opportunities (FedBizOpps) within fourteen (14) days after award.

9. Interested Sources: Based upon ongoing strategic market research, and validation of current market conditions through tactical market research, no other known sources other than SGT are available to fulfill this requirement, due to the proprietary nature of the Systems currently installed . See paragraphs 7, 8a and 8c for more information regarding efforts to increase competition for future acquisitions.

10. Other Facts:

a. Procurement History. has installed shaft generator systems containing proprietary SGT UMCS control systems that required upgrade and refurbishment. However, this is a first-time requirement to provide an upgrade and refurbishment solution to be developed, and will exchange the regulation and controls components from the existing analog systems to a modern, parts supported digital controls system.

b. Acquisition data availability. Technical data packages, specifications, engineering descriptions, performance work statements or purchase descriptions suitable for full and open competition are not available for this proprietary system. Although market research is ongoing as described in paragraph eight above, the industry continues to manufacture and market proprietary systems, which do not interface with each other.

c. Unusual and compelling urgency. Not applicable

d. Subcontracting competition. The Contracting Officer will ensure that the contractor will maximize competition for subcontracts to the maximum extent practicable in accordance with FAR Clause 52.244-5.

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.”

Date

12. Requirements Certification: “I certify that the supporting data under my cognizance which are included in the Exception to Fair Opportunity 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 for this action will be fair and reasonable. Cost reasonableness will be determined by price/cost and the Independent Government Estimate.

14. Contracting Officer Certification: I certify that this justification is accurate and complete to

Signature Date

Approval

Based on the foregoing justification, I hereby approve the procurement of this requirement for $5M for the on an other than full-and-open competition basis pursuant to the authority of FAR 16.505(b)(2)(i)(B), “Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.”

Name: John H. Teetsov Title: Special Competition Advocate