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RFP # HSCG23-12-R-OPC001
Brand Name J&A for Ship Classification by the ABS
(5) Demonstration That the Nature of the Acquisition Requires Use of the Authority Cited.
The governing statute is the Coast Guard Authorization Act of 2010 (H.R. 3619 of the 111th U.S. Congress),
Title IV, Section 402, Chapter 15, Subchapter II, Section 573(c)(3)(A) (codified at 14 US Code 537). This
statute requires that the Commandant shall cause each cutter, other than a National Security Cutter, acquired
by the Coast Guard and delivered after the date of enactment of the Coast Guard Authorization Act of 2010 to
be classed by the American Bureau of Shipping before final acceptance. The Coast Guard Authorization Act
can be found here: http://www.gpo.gov/fdsys/pkg/PLAW-111publ281/pdf/PLAW-111publ281.pdf.
To implement the Acts requirements, Section C.9 of the OPC RFP states that The Contractor shall deliver the
ship(s) in class by the American Bureau of Shipping (ABS).
(6) Description of efforts made to ensure that offers are solicited from as many potential
sources as is practicable.
As previously noted in Section (5), the Coast Guard Authorization Act of 2010, 14 US Code 537 requires all
USCG cutters (other than National Security Cutters) to be classed by ABS. As only ABS itself can provide ABS
certification, there are no other potential sources until U.S. statute changes to allow for ship classification by
organizations other than ABS. The USCG will continue to monitor future congressional legislation for changes
to the requirement.
(7) Determination by the Contracting Officer that the Anticipated Cost to the Government
will be Fair and Reasonable:
The OPC Contracting Officer has determined that the anticipated prices for ABSs classification services will
be fair and reasonable based on the information below.
To establish the basis for determining that the ABS prices will be fair and reasonable, USCG obtained the 2012
ABS fee schedules from the ABS Manager of Government Programs. These fee schedules included the labor
category rates which will be used by ABS during the OPC classification process. The ABS rates were then
compared to the rates of three GSA Schedule contractors with similar labor categories that had similar scopes of
work.
Each of the GSA Schedule labor rates were reasonably close to the ABS rates, as the rates were typically within
10% of each other. Based on this analysis, the OPC Contracting Officer determined that the 2012 ABS labor
rates are fair and reasonable.
The ABS labor rates for future years have not been determined, as rates are determined annually in December at
an ABS board meeting. For the past decade the yearly escalation rate for each ABS labor category has been
roughly in line with the average U.S. inflation rate. Based on the historical escalation rates, the OPC
Contracting Officer anticipates that future ABS labor rates will remain fair and reasonable.
To further establish that ABS prices would be fair and reasonable, the USCG examined the ABS classification
prices in the Coast Guard contract for the production of up to thirty-four Fast Response Cutters (FRCs). The
ABS classification costs for each FRC ship are roughly 2% of the expected individual ship cost, which is about
the same percentage of the expected per ship cost that will be paid to classify each OPC.
The USCG also compared the classification prices estimated by the OPC technical authority to the expected
ABS prices. USCG verified with ABS that the expected classification for vessels range from 0.5% to 2.0% of
the total cost per ship. ABS uses a cost range because classification costs of a ship vary based upon the ships
size and complexity. As the OPC ships will be larger and more complex than many smaller boats or ships, the
OPC classification costs will be roughly 2.0% per ship. This estimate is in line with the costs projected by the
OPC technical authority, who estimated the classification costs at about 2.0% of the total cost per ship.
Finally, as ABS has no capital stock, pays no dividends, and is a non-profit per 26 U.S. Code 501(c)(3), the risk
of paying an unreasonable total price is diminished due to ABS not being able to distribute any profits to
shareholders or individuals.
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RFP # HSCG23-12-R-OPC001
Brand Name J&A for Ship Classification by the ABS
(8) Description of Market Research:
Not applicable.
(9) Any Other Facts Supporting the Use of Other Than Full and Open Brand Name Competition.
Not applicable.
(10) A Listing of the Sources, if Any, That Expressed, in Writing, an Interest in the Acquisition.
The draft OPC RFP (which contained the ABS classification requirement) was published on Friday, June 15th,
2012, and a notification was posted to FedBizOpps (FBO) here:
https://www.fbo.gov/index?s=opportunity&mode=form&id=689836cb4a9a3d53f0474dc3085aec8f&tab=core&
tabmode=list&= . Although the solicitation has been made publicly available, no companies have expressed a
written interest in providing the same sort of ship classification services provided by ABS. Additionally, until
U.S. statute changes, no other entity is legally allowed to classify USCG cutters besides ABS.
(11) A Statement of the Actions, if Any, the Agency May Take to Remove or Overcome Any Barriers to
Competition Before Any Subsequent Acquisition for Supplies or Services Required.
As long as it is mandated by statute, the USCG will be required to use ABS to classify vessels. The USCG will
continue to monitor future congressional legislation for changes that will allow for competition of vessel
classification services in the future.
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RFP # HSCG23-12-R-OPC001
Brand Name J&A for Ship Classification by the ABS
(12) Technical/Requirements Personnel Certification.
I certify that this requirement meets the governments minimum need and that the supporting
data, which forms a basis for the justification, is complete and accurate.
_____________________________
XXXXXXXXXX
Deputy Ship Design Manager (CG-459)
___________
Date
_____________________________
XXXXXXXXXX
Division Chief / Contracting Officer (CG-9125)
___________
Date
_____________________________
XXXXXXXXXX
Surface and Aviation Asset Team Lead Attorney (CG-0949)
___________
Date
(15) Approval.
I have reviewed this justification and recommend approval.
_________________________________
XXXXXXXXXX
Chief of the Contracting Office (COCO) (CG-912)
___________
Date
_________________________________
XXXXXXXXXX
Senior Procuring Activity Competition Advocate (CG-9)
___________
Date
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