20-MDN-018 JARedacted 15 APR 2020.pdf

J&A Number: 0232-20-223-00 Code: 0232 P.R. Number: 20-MDN-018

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

The Naval Sea Systems Command, Naval Surface Warfare Center, Philadelphia Division (NSWCPD), Code 0232

2. Description of Action Being Approved

Award of a Firm-Fixed-Price (FFP), Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract on a sole source basis to Howell Laboratories Inc. (HLI), 188 Harrison Road, Bridgton, Maine to provide installation support, troubleshooting and repairs, and engineering support services for equipment manufactured by HLI.

3. Description of the Supplies or Services

The planned acquisition will provide engineering and technical services required for the design, development, fabrication, test, repair, and fleet implementation of equipment where HLI is the Original Equipment Manufacturer (OEM) and maintains data rights for the equipment. This acquisition will also provide purchase ability for specified equipment where HLI is the OEM.

Equipment for which HLI is the OEM includes shipboard chlorine generators, and air dehydrator equipment.

The Government’s minimum needs have been verified by the certifying technical and requirements personnel.

MOPAS Acquisition Strategy Plan No. 0232-20-223-00.1 covers this acquisition.

The total estimated dollar value of this procurement is as indicated below.

Estimated Dollar Value ($K)

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

PHILADELPHIA DIVISION

5001 SOUTH BROAD STREET

PHILADELPHIA PA 19112-1403

IN REPLY REFER TO:

The ordering period for this effort will be five (5) years from the date of award.

4. Statutory Authority Permitting Other Than Full and Open Competition

10 U.S.C. 2304(c)(1), Only One Responsible Source and No Other Sources and Services Will Satisfy Agency Requirements, as implemented by Federal Acquisition Regulation (FAR) Subpart 6.302-1.

5. Rationale Justifying Use of Cited Statutory Authority

A) In accordance with FAR 6.302-1(b)(2), HLI retains limited rights in data for equipment used by the DoD. Equipment was purchased by the DoD, and verified to meet purchase specifications; however, HLI developed their equipment at their own expense. HLI maintains data rights on all non-logistics related documents, including equipment drawings. These drawings are required to perform modifications to HLI equipment without a redevelopment effort. The Navy owns the Technical Manual and Allowance Parts Lists, as they were provided and published by the Navy. However, the services on this effort will include work beyond the scope of what is covered in the Technical Manual that cannot be performed by ship’s force. The services and material provided through this effort will be performed only on equipment for which HLI retains data rights.

B) HLI is the only company with the requisite engineering expertise, qualified sources and design, production and support capabilities that can provide these services on equipment designed and manufactured by Howell Laboratories Inc. to meet the Navy’s requirements.

Award to a source other than Howell Laboratories Inc. would cause substantial duplication of costs to the Government that are not likely to be recovered through competition. This is a follow-on procurement as described in FAR 6.302-1(a)(2)(ii) and FAR 6.302-1(a)(2)(iii).

HLI has previously provided this support under N64498-16-D-0016.

HLI’s expertise comes from being the OEM for chlorination and air dehydrator equipment. As the OEM, HLI has invested in the training of experts with specialized knowledge related to their equipment, development of facilities to support fabrication and testing of their equipment, and developed testing techniques to identify and improve on existing equipment.

During market research, the Government discussed the possibility of purchasing the data rights from HLI. HLI stated that they were not interested in selling the data rights to the Government at this time. If the Government were to pursue establishing an alternative source with data rights, the effort would require significant effort and resources. Development of the specialized technology from scratch, development of equipment that will interface this technology to the system it supports, qualification testing of the devices, and fielding of the devices to replace the current installed devices would all be required. Development of an alternative source to replace Howell Laboratories Inc. is estimated to cost $15.3 million and take five (5) years prior to the work of this effort. The estimated cost is based on the historical costs associated with development and integration of Howell laboratories Inc. equipment required to be supported under this contract. In order to support the on-going production configuration and product improvements, a new source would have to:

1. Establish facilities (office space, labs, storage, production) for execution of the development, manufacturing, integration, qualification, and analysis tasks required for production, development, in-service support, and product improvement projects. Due to the previous and on-going efforts, Howell Laboratories Incorporated currently maintains laboratory and office space supporting both the development builds and the production baselines across each of their product lines. The non-recurring cost impact associated with the allocation of facilities is estimated to be $2 million.

2. Develop, design, and manufacture setup to support chlorination and air dehydration system development, integration and testing. Configuration would require establishment of the design for baselines testing. Hardware, test tools, and software components required for testing would need to be developed. The non-recurring cost impact associated with equipment to establish each baseline is estimated at $2 million.

3. Develop system and technology expertise. Howell Laboratories Inc. currently has 15 years of corporate experience in design, development, and support of water chlorination and air dehydration equipment for DoD use. It is estimated that it would take a minimum of three (3) experienced engineers, a computer programmer, a manager, and a technician five (5) full time years to reach a level of sufficiency to approach Howell Laboratories Inc. current level of sufficiency. This investment is estimated to be a cost of $1 million.

4. The cost to field developed devices through an alternative manufacturer with full data rights would cost an estimated $9.6 million. This estimate shows what it would cost to replace all currently fielded HLI equipment.

Table 1: Government cost to develop OEM equipment and support capability

Table 2: Replacement Cost of Fielded Equipment

6. Description of Efforts Made to Solicit Offers from as Many Offerors as Practicable

A Sources Sought Notice was posted to the BETA.SAM.GOV web page on 02 March 2020.

Additionally, a synopsis of this procurement was published on BETA.SAM.GOV on 12 March 2020. No contractors have responded to date to either posting. No additional market research was conducted because it is not practicable, for the reasons discussed in paragraph 5 above, for any other contractor than Howell Laboratories Inc. to provide the required supplies and services.

7. Determination of Fair and Reasonable Costs

The Contracting Officer will make a determination that the price negotiated under the proposed contract is fair and reasonable pursuant to FAR Part 15. The contractor’s proposal will be reviewed by experienced technical and cost/price analysts with the aid of necessary field pricing support. Assistance from the Defense Contract Audit Agency (DCAA) and the Defense Contract Management Agency (DCMA) will be utilized to analyze, evaluate, and assist in negotiations based upon detailed cost and pricing data, which will be certified by the Contractor at the conclusion of negotiations. Services and equipment similar to those in this solicitation were procured previously from HLI. Cost/pricing information will be requested as part of the Request for Proposal (RFP) and should prove sufficient to lend further support to the fair and reasonable price determination of this procurement.

8. Actions to Remove Barriers to Competition

All orders issued will be reviewed annually by the Procuring Contracting Officer to ensure that HLI is still the only company that can satisfy agency requirements. Orders will only be placed to support equipment manufactured by HLI. NSWCPD will continue to monitor the marketplace and identify potential sources of the supplies identified in this Justification. Any sources discovered that could potentially satisfy this specific procurement will be taken into account for any future requirements.

TECHNICAL AND REQUIREMENTS CERTIFICATION - (FAR 6.303-2(c))

I certify that the facts and representations under my cognizance, that are included in this justification and its supporting data, including MOPAS No. 0232-20-223-00.1, except as noted herein, are complete and accurate to the best of my knowledge and belief.

COMBINED TECHNICAL AND REQUIREMENTS COGNIZANCE:

Signature Date

LEGAL SUFFICIENCY REVIEW (NMCAR 5206.303-90)

I have determined that this justification is legally sufficient.

L)

CONTRACTING OFFICER CERTIFICATION - FAR 6.303-2(b)(12)

I certify that this justification is accurate and complete to the best of my knowledge and belief.

APPROVAL BLOCK (FAR 6.304 for Approving Official):

Upon the basis of the above justification, I hereby approve, as Competition Advocate, the solicitation of the proposed procurement(s) using other than full and open competition, pursuant to the authority of 10 U.S.C. 2304(c)(1).

CHIEF OF THE CONTRACTING OFFICE

Signature Karen Gutmaker 215-897-1562 Date Chief of the Contracting Office (Code 02)