J A SRI CONTRACT W912P610C0007.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS

PRINCIPAL ASSISTANT RESPONSIBLE FOR CONTRACTING - ATLANTA

60 Forsyth Street, S.W., Room 10M35

ATlANTA, GA 30303-8801

CECT-ATL 23 March 2010

MEMORANDUM FOR ChIcago District Contracting Division, Attn: Regina Blair, 111 N. Canal Street, Suite 600, Chicago, IL 60606-7206

SUBJECT: Justification and Approval (J&A) for patent elements and associated equipment of the Dispersal Barrier lIB electronic systems at the Chicago Sanitary and Ship Canal Aquatic Nuisance Species Dispersal Barrier lIB Building, Romeoville, IL.

1. Subject J&A has been approved by the Alternate Special Competition Advocate and is enclosed for your file.

2. You are reminded that all documents supporting the justification and approval of contracts awarded with limited competition shall be posted at the Government wide Point ofEntry (GPE) (w'vw.fedbizopps.gov). The documents shall be posted to FedBizOpps within 14 days of contract award, except those justified by unusual and compelling urgency shall be posted within 30 days. However. this new requirement does not compel the disclosure of infonnation that would otherwise be exempt from disclosure under the Freedom ofInfonnation Act (FOIA). The Federal Acquisition Regulation (FAR) 6.305 describes the basic requirement to publish the information with the GPE. Contracting officers shall carefully screen all J&As for contractor proprietary data and remove all such data, and such references and citations as are necessary to protect the proprietary data, before making the justification available for public inspection.

Contracting officers shall also be guided by the exemptions to disclosure ofinfonnation ' contained in the FOIA and FAR Part 24. Your District Counsel should be consulted for review and screening of the J&A for proprietary data and infonnation exempt from disclosure under FOIA prior to posting.

4. A copy of the FedBizOpps posting must be provided to our office for file retention within two working days ofthe actual posting. Ifadditional infonnation is needed you may contact Ms.

Kimberly A. Marshall at (404)562-5053.

Enc1 as http:w'vw.fedbizopps.gov

'ill< ...

\.J JUSTIFICM.'ION REVIEW DOCUHEN'l' O!.r.HE'R THAN FULL AND OPEN COMPETITION

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PROVEcr/BgoIPHENT: Sole source follow-on acqui~ltion under a newly estabiished firm-fIxea price supply contract for the acquisition of uniquely designed and highly specialized pulse generators, including the major components thereof, to enable the intricate elect't'onic .systems inside of Building IIB at the Chicago Sanitary and Ship Canal Aquatic Nuisance Species Electric Dispersal Barrier Site, located in Romeoville, Illinois.

AUtAORIty: 10 u,s.C. 2304 (C) (1) AMOUNt; $3 •dbo. doll: On:

$4,560,000.00

INAHE 1DATE

I?REPMmD (Anita R. Simpkins I BY IContract Specialist I

ITELEPHONE NO. 312-846-5371 Ie March 2010

INAME IDA'!'E

Technical IJoseph J. Schmidt, P.E. ( ITELEPHONE NO. 312-846-M10 /8 March 2010

IN1'>ME DAB

Requi:rement:. (Shamel Abou-El-Seoud, .P.E. I lTELEPHONE NO. 312-846-5410 18 March 2010

SIGNA!t'URES ~ 'REQUIRED BELOW:

(SIGN~ • _ ,

Deputy for IN~HE~ a¥a~v....J._Small Buaine.s

Il?risc111a Abeyta-Perez

Project Manage:.::

District Counael

District

Contracting Chief

Fi&ld Competition Advooate

Di:recto:r I !, PARe : SIGNATURE IDATE:e;:;:Q J;:tJ.:i..~ M,t...A. .201C Counsel INAME: lTELEPHONE NO.

I I http:4,560,000.00

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JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. CONTRACTING ACTIVITY: U.S. Army Corps of Engineers, Chicago District (CELRC-PM-CT - National Contracting Organization). 111 North Canal Street, Suite 600, Chicago, Illinois 60606-7205

2. DESCRIPTION OF ACTION: The Chicago District is seeking approval to enter into a sole source acquisition with Smith-Root, Incorporated (SRI) to acquire uniquely designed and specialized patented electronic components to be installed inside the second barrier equipment building (Building 2B) wherein construction for this particular building is currently underway by EP Doyle. Purchasing of these items will allow for the most updated technological deterrence features to be utilized in unison with the existing equipment purchased under a previous sole source contract with SRI.

a. The District is proposing to accomplish this procurement by way of a newly established finn-fIxed-price supply contract, without the Inclusion of options.

b. The required items have been previously purchased under a sole source contract (Contract Number DACW23-03-C-(013) with SRI for Building 2A, which is adjacent to Building 2B where the required items are necessary via this acquisition. Thus, the requested items under this new contract will ensure continuity and standardization of electrical systems at the Electric Dispersal Barrier.

c. The type of funds that have been committed for this acquisition is American Recovery and Reinvestment Act and will be used to fully fund the resulting contract,.

3. DESCRIPTION OF SUPPLIES/SERVICES: The Chicago District proposes to procure uniquely designed L .~ and highly specialized pulse generators. including the major components thereof, to enable the intricate ~ electronic systems inside of Building liB at the Chicago Sanitary and Ship Canal Aquatic Nuisance Species . Electric Dispersal Barrier site, located In Romeoville, Illinois. In detail, seamless operability of the system will demand the acquisition of a complete set of pulse generators and associated equipment, a water cooling system, DC power supplies, one backup generator, bus bars to all arrays, fiber optiCS and test wires, and a link to transfer power to the second set of arrays if the first set fails will be necessary to enable the electronic system. Notably, SRI has been used in the past to provide and install these items and has been selected for this procurement to achieve the same optimal outcome.

a. The estimated value of the contract is $4,560,000.00.

b. SRI will be required to complete the contract by 30 September 2010, which includes the time for fabrication, installation and final testing.

d. The major components are covered by SRI's patent 4750451. The newly installed patented elements will be controlled by the Fish Barrier Telemetry Control System (FBTCS, whIch is Smith-Root furnished , software), which allows remote monitoring and control. The FBTeS will also control the cooling system, the entire chilled water system and building security from the Chicago District Operations and Maintenance office and Smith-Root's Vancouver office. The Patented Elements systems can be controlled from within the building, but remote control is preferred because of excessively high electric fields inside the building and the ever· present danger of explosion and fire that could be caused by an equipment fault.

http:4,560,000.00

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4. AUTHORITY CITED: 10 U.S.C. 2304(c)(1). as implemented by FAR 6.302-1, and DFARS 206.302-1, Only one responsjble source and no other supplies or services will satisfy agency requirements.

5, REASONS FOR AUTHQRITY CITED: The District must contract for the continued proviSion of the unique and highly specialized supplies and services from SRI because it will incur a substantial duplication of cost that is not expected to be recovered through competition. Essentially, the combined acquisition costs for the Electric Dispersal Barriers are in excess of $10M that would have been spent ineffectively and could not be recovered if the proposed procurement were awarded to other than SRI, A new contractor would not have established the necessary R&D for Asian carp deterrence systems. In conjunction, it would not have developed a design for the electrical systems needed to operate the Electric Dispersal Barrier or setup a networking group to address the various intra-related system aspects with the Great Lakes Fisheries Board.

The duplication of cost for infrastructure, design, testing, operation and maintenance and the execution would result in excess of several million dollars. This estimate is based on the previous contract work with SRI and the independent USACE studies and testing. Based on previous experience, it is estimated that the design analysis, research, recommendations and execution consistent with USACE policies would take approximately 2 years or more to achieve SRI's current level of technology in Asian carp fish deterrence, which is time the govemment does not have for this critical project.

Under the previously awarded sale source contract with SRI, it was responsible for designing both equipment buildings and purchasing the long lead time electrical components to be installed therein. Because the antiCipated funding to complete the design efforts didn't materialize prior to the completion of the contract. the design efforts were remolded to implement a design of "FB2A" and conceptualized building "FB2B." As a means to further the design aspects of FB2B, SRI would work in concert with the District under a different contract. In said prevIous contract, SRI completed the purchasing of the long lead items for the buildings, but the key electrical components, which are patented and licensed to only SRI, were not acquired due to the funding issue.

~ As the original source provider of the previous procurement, SRI's applied its innovative carp deterrence technology, which is the only one of its kind using an electrified deterrence array, to manufacture the Aquatic Nuisance Species Electric Dispersal Barriers for the purpose of deterring Asian carp populations from reaching the Great Lakes. This technology encompasses the use of electric pulses, which has been implemented by SRI's patented design.

In the performance of this follow on contract, SRI will be responsible for implementing the same technology to house the necessary electronic systems for building 2B. SRI will need to assemble (customize) and install these key components, using its highly skilled workforce, which is equipped with the intimate knowledge of the Barrier's mechanical and electronic systems. These items require in-depth understanding of the patented technology to properly select and acquire components that will match the system performance expectations.

Under their previously awarded sole source contract {DACW23-03-C-0013), SRI performed at an optimal level.

as its labor force demonstrated its capabilities to properly assemble their patented components. and remain on schedule to meet the critical timeframes imposed by the tight overall project schedule.

Moreover, all intellectual property rights pertaining to these unique components belong exclusively to SRI, including, but not limited to copyrights, patents and trademarks which are expressly reserved to SRI and covered by their Patent 4750451. To reiterate, the government has not acquired any rights or licenses from SRI with respect to its patented electrical components. With SRI having the relevant R&D, proprietary arts, trade secret technology not open to the public that they use in fish barrier designs and components therein;

SRI is the only source capable of supplying the components, coupled with the ability to properly install the units into the equipment building, which was designed by it. Since SRI will not license its components to other vendors, it's not possible to contract with a new vendor for the units or installation of them. In order for the Electrical Dispersal Barrier to properly fUnction and for the existing equipment to work in unison. SRI must continue to supply its patented electrical components. Of special note, correspondence to this District, dated

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December 22,2009. SRI has communicated that its patented elements and all supporting systems are "their intellectual property or intertwined to the extent that they are not separable." Due to the patents involved. "SRI reserVeS the right to purchase parts, build and test part,al assemblies at their Vancouver plant."

To continue an agile operation of the Barrier without disruption and to avoid a substantial duplication of cost «$10M) that is not expected to be recovered by way of competition, this District cannot afford to jeopardize the current infrastructure and electrical systems at the Electrical Dispersal Barrier by competing and awarding this requirement to a different source provider. The entire project could not afford the insurmountable damages that would result or sustain any delays In fulfilling the agency's requirements since the Barrier itself protects the ecosystem from two species of Asian carp. The massive and voracious fish, which can grow to 4 feet long and weigh 100 pounds, are known for their ability to leap up to 8 feet out of the water as motor boats speed by, injuring fishermen. Scientists fear that the fish. which can eat the equivalent of 40 percent of their body weight every day. could damage the ecosystem of the Great Lakes, which is the largest fresh water system on earth.

Therefore, if this acquisition isn't moved forward as proposed, we would be severely impacting this navigable waterway and impeding the combating of carp progress. Every year more than 50,000 vessels and 900,000 passengers pass through this waterway system and more than $16 Billion worth of goods are transported annually in and out via barges.

6. EFFORTS TO OBTAIN COMPETITION: Market research shows that SRI is the only producer of the innovative carp deterrence technology and the only firm capable of providing the required electronic components. Additionally, there are no other manufacturers of Electric Fish Barriers, distributors or dealers to distribute SRI's products/electronic components. However. the District has continuously posted FBO notices, advising the public of the District's intent to sole source contracts to SRI for work on the Barrier project. From such notices, no proposals, responses or challenges have been received.

7. ACTIONS TO INCREASE COMPETITION: The original requirement was announced in"the Commerce Ii... .J Business Daily, which indicated that the District was sole sourcing to SRI; from that announcement, no .,. responses resulted. As noted in the above paragraph 6, the only producer, distributers and dealers of said components is SRI; therefore, competition for this procurement is not feasible.

,8. MARKET RESEARCH: To ensure that market research efforts would provide comprehensive acquisition management information, our search focused on identifying commercial sources of carp deterrenctdechnology and Electric Fish Barrier manufacturers. distributors and dealers, via published and onlline resources.

Because SRI has their own unique design and patents on their products, there were no other producers of such technology or products. These particular patents are licensed to SRI for the next several years.

9. IN'rERESTED SOURCES - As required by FAR 5.201, a notice was published in FBO. The notice was posted on 30 December 2009, with a closing date for responses of 15 January 2010. As a condition of the notice, any interested concerns were required to submit statements of their qualifications to accomplish the requirements. In the notice, interested vendors were informed that their qualifications would be considered and evaluated. By the date of the J&A, which is the latter from the closing period of the notice, no proposals have been received or interest expressed from other sources.

10. OTHER FACTORS:

Acquisition History: This District acquired the proposed requirements under a previously awarded contract to SRI. The previous contract resulted in a sole source contract to SRI, as it is the only designer and producer of the required components. Under the $2.4M contract, SRI was responsible for providing the customized pulse generators that use one-of-a kind electronic components, Power Rectifier Transformers (Spangs), Polarity Switches, Bus Bars, associated systems that delivered electrical pulses to submerged electrode arrays. At that time and at present. Smith"Root holds the patents for the key components and has proprietary arts, trade secret technology not open to the public that they use in fish barrier designs.

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.... .. Design Aspects: SRI designs the electrodes, and custom builds the circuit boards to control the operation of

...,. these devices. This makes direct competition in their specialty area very unattractive and no others have chosen to develop competing technology. SRI ·vigorously enforces· their patented methods and equipment and trade secret technology, Subcontracting Opportunities: The proposed contractor's business size is small; therefore. a 5B Subcontracting Plan will not be required. However. the District will encourage the contractor to use other small businesses to the maximum extent possible.

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11. TECHNICAl. CERTIFICAnON:

I certify that the supporting data under my cognaance which are included in the J&A are accurate and complete to the bast of my knowledge and belief. •

Nam.: JoseRb Sobmldl Date: ~~ Title: Chief. De!i9n Branph Signature: ___________

12. REQUIREMENTS CERTIFICATION:

I certify that the supporting data under my cognizance which are Included In the J&A are accurate and complete to the best of my knowledge and belief.

Name: §bamelfibou EI-Segyd Date: a /t!//0

Title: Chjef. Con-OD8 s~natuW~

13. FAIR AND REASONABLE COST DETERMINATION;

Based upon a comparison of the proposed prices, the current price and an Independent Government estimate.

I hereby determine that the anticipated cost for tols ¢!.:K1tract action will be fair and reasonable. A s provided by

FAR 15.403-4. a Certificate of Cost or Pricing Data will be required upon completion of negotiations.

Name: RegiEi' G, Wair Dat!9: 8 Marth 2010

Signature: .~~-•."" Title: Chief, CQntrectiD9 Br~ncb

14. stPNIRACTING OFFICER CERTIFICATION:

I certify that this J&A Is accurate and com plete to the best of my knowledge and belief.

Name: Beglna G. BlaIr Date: eMarch 2Q10

-"" Tifle: Chief. Contracting Branch Signature: ~

Approval

Based on the foregoingjustification, I hereby approve the award ofa sole source firm-fixed price supply contract for Patented Elements and Associated Equipment of the Dispersal Barrier lIB electronic systems at the Chicago Sanitary and Ship Canal Aquatic Nuisance Species Electric Dispersal Barrier 1m Building, Romeoville, lllinois in the total amount of $4,560,000 on an other than full and open competition basis pursuant to the authority of 10 U.S.C.2304{c){1) and FAR 6.302-1(a)(2)(ii), subject to availability 0 funds, and provided that ~~ ~ces and property herein descnOed have oth b~rized. e been fo acqulsltmn. . ~ /

~ Date: dJJ!-M d('O/i) , ~~