CGC BERTHOLF #2 MAIN PROPULSION DIESEL ENGINE REPAIRS

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION 10 U.S.C. 2304(e)(2) Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by FAR Subpart 6.3 and in accordance with the requirements of FAR 6.303-1, the justification for the use of the statutory authority under FAR Subpart 6.3 is justified by the following facts and rationale required under FAR 6.303-2 as follows: l. Agency and Contracting Activity. The United States Coast Guard, (USCG) Surfaces Forces Logistics Center, LRE-Product Line, proposes to enter into a contract on a basis other than full and open competition; 2. Nature andlor description of the action heing approved. The USCG has a requirement to perform and overhaul, and return to service USCGC BERTHOLF's #2 Main Propulsion Diesel Engine (MPDE) cylinder heads at an estimated cost of $134.000. Proposed Contractor: MTU Detroit Diesel Incorporated 13400 Outer Drive West Detroit, M1482339 MTU Detroit Diesel is a subsidiary of: MTU Aero Engines GmbH Daehauer Str. 665 80995 Miinehen Germany Tel. +49 891489-0 Fax +49 89 1489-5500 MTU Detroit Diesel Incorporated is the sole authorized representative of MTU Aero Engines GmbH for this engine in the United States. 3. Description of Supplies/Services. The requirement is to conduct removal of and overhaul and tinal re-assembly of the 20 cylinder heads on to the #2 MPDE in order to return it to service in the USCGC BERTHOLF at an estimated cost of$134,000. Thcse repair stems from the catastrophic casualty suffered to the # I MPDE on 22 August 2009 during BERTHOLF's last deployment. (CASREP INITIAL-09055CAT 3)). Because MTU Dctroit Diesel, Inc., the representativc ofMTU Acro Engines GmbH, the Original Equipment Manufacturcr (OEM), is the only known U. S. company that has the requircd information and tcchnical knowlcdge of this MTU engine design, a Sole Source contract (HSCG85-1 O-C-P45207) was awarded to thcm to tcar down and repair this engine. In the eourse of this work all the cylinder heads were removed from the # I MPDE. Upon inspection it was found that all had suffered degradation, such as cracked exhaust valves, corrosive damage on valve shafts, pit corrosion on valve heads, and corrosive build up on cylinder heads, all as more fully described in Condition Found Report 002 to the referenced contract. Bt.'Cause of the extensive damage to the cylinder heads on the #1 MPDE, it was detcnnined that it would be prudent to inspect thc #2 MPDE cylinder heads. This inspection revealed that thc cylinder heads on this engine also showed the same conditions. It is necessary to begin the immediatc removal and overhaul of all #2 MPDE cylinder heads to insure that this engine can be returned to sClVice within the time frame provided to repair and return to selViee the #1 MPDE. A CAT 3 CASREP (INITIAL-99999) has been released on this engine. 4. Identification of Statutory Authority Permitting Other Than Full and Open Competition. The statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c)(2) implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302-2 entitled "Unusual and compelling urgency". 5. Demonstration That the Nature of the Acquisition Require Use of the Authority Cited. This requiremcnt is to remove all 20 cylinder heads from the #2 MPDE, remove them from the ship and take them to an appropriate facility where they can be further disassembled and rebuilt. MTU-DD has identified approximately $83,000 in parts that must be replaced. Many ofthesc parts must be ordered from the factory in Gcnnany and some have lead time of at least weeks. In addition these parts must pass through U. S. Customs, which may entail additional delays. USCGC BERTHOLF is currently in-port in Alameda, CA undergoing extensive modification to upgrade its operational capability. USCGC BERTHOLF is scheduled to get undcf....ay on or about I February 201 0 for an operational patrol. MTU Detroit Diesel has provided a detailed disassembly and overhaul schedule. This schedule, based on placing the necessary order for parts by 20 November 2009, shows that the earliest estimated completion datc of these repairs is IS January 201 O. Without proceeding with thcse repairs on a sole~souree basis there is a very strong possibility that USCGC BERTHOLF will not be ablc to get undcfvay for its assigned operations on the date specified by it Operational Commander. The failure of USCGC BERTHOLF to execute its required mission will adversely affect the defense posture of the United States. This is considered unacceptable. 6. Dcscription of cfforts madc to ensurc that offers arc solicited from as many potential sources as is practicablc. No FcdBizOpps notice was or will be publicized, as required by FAR Subpart 5.1 02(a)(6) and 5.2. The exception under FAR 5.202 that applies is FAR 5.202(a)(2). 7. Detcrmination by the Contracting Officcr that the Anticipated Cost to the Government will be Fair and Reasonable. A pricc analysis will be pcrfonned to insure that a fair and reasonable price is negotiated in accordance with FAR 15.404. 8. Description of Market Research. Market Research is required by FAR Part 10. The internet was scarcht.-'d for firms that could provide parts for and/or repair the MTU 1163 series MOPE. Only MTU Aero Engines Gmbll and MTU Detroit Diesel Incorporated (for companies located in the U. S.) have any postings regarding servicing these engines. There appear to be no other companies capable of making these repairs, nor could any other company have access to the critically required parts faster than MTU-Detroit Diesel. 9. Any Otbcr Facts Supporting the Use of Other Than FuU and Open Competition. The #1 MPDE is a MTU Model 1163 series engine is a high perfonnance engine that was specifically modified for usc in the Coast Guard's new National Security Cutter class of ships. Its marine application in the U. S. is therefore new. This application is currently only installed in two Coast Guard Cullers (USCGC BERTHOLF and USCGC WAESCHE, which has not yet been delivered to the Coast Guard), and to the best knowledge of the Coast Guard is not uscd in any other marine application in the United States. Therefore, the infonnation, teclmical knowledge, and experience required to conduct Ihese repairs is not available from anyone within the United States other than MTU Detroit Diesellneorporated and its parent company. (0. A I.isting of the Sources, if Any, That Expressed, in Vriting, an Interest in the Acquisition. one II. A Statement of the Actions, if An}', the Agency May Take to Remove or Overcome Any Barriers to Competition Before Any Subsequent Acquisition for Supplies or Services Required. Market research indicates thai there currently does not exist any viable alternative to MTU Aero Engines GmbH, as the OEM, and MTU Detroit Diesel Incorporated, as its authorized service reprcscntative in the U. S. for these engines. Currently only extensive training of the USCGC BERTHOLF crew will allow the Coast Guard to have organic capability to repair these engines. As the Coast Guard gains more experience and acquires technical expertise it may be able to identify other repair options. 12. Contracting Officer's Certification. I certify that the data supporting thc recommended use of other than full and open competition is accurate and complete to the best ofmy knowledge and belief; and 13. Technical/Requirements PersonncJ Certification. I certify that this requirement mccts the Government's minimum need and that the supporting data, which forms a basis for this justification, is complete and accurate. 1&~(~~ Date APPROVAL: GB;d:n~ Contracting Officer: Date II 11'3/oj