20260911 MSSP Norfolk Consolidation CDF FINAL_Redacted.pdf

DEPARTMENT OF THE NAVY

PORTFOLIO ACQUISITION EXECUTIVE MARITIME

1333 ISAAC HULL AVE SE

WASHINGTON NAVY YARD DC 20376

IN REPLY REFER TO

SOURCE SELECTION INFORMATION – SEE FAR 2.101 and FAR 3.104

CD&F Number: 43,191

Code: PAEM 025

CLASS DETERMINATION AND FINDINGS

Upon the basis of the following findings, pursuant to 15 U.S.C. § 657q as implemented in Federal

Acquisition Regulation (FAR) 7.107-2 and Navy Marine Corps Acquisition Regulation Supplement

(NMCARS) 5207.107-2, I, as the Executive Director of Acquisition & Contracts, Portfolio

Acquisition Executive Maritime (PAEM), hereby determine that the consolidation of the requirements to complete Fleet Maintenance Availabilities and Incremental Selected Restricted

Availabilities (ISRA) on DDG-51 class ships homeported in Norfolk, VA is necessary, justified, and in the best interest of the Government.

FINDINGS

1. Identification of Agency and Contracting Activity

Portfolio Acquisition Executive Maritime, Modernization & Sustainment Contracts Division, Maritime 025

2. Nature/Description of Action

This action seeks approval to consolidate Fleet Maintenance Availabilities and ISRAs on DDG-51 class ships homeported in Norfolk, VA under the critical and non-critical lots of the Norfolk homeport Indefinite Delivery Indefinite Quantity Multiple Award Contracts (IDIQ-MACs) with a series of Single Award IDIQ Multi-Ship Sustainment Partnership (MSSP) contracts.

Under the Multiple Award IDIQs, Fleet Maintenance Availabilities and ISRAs are procured under separately competed delivery orders performed by multiple small and large business contractors under the critical and non-critical lots. The Government intends to consolidate these requirements into Single Award IDIQ MSSP contracts utilizing Facilitized and Non-Facilitized Lots, wherein the contractors will be responsible for all maintenance, modernization and repair scope required for their specific DDG-51 class ships over the MSSP’s period of performance.

• Facilitized Lot includes Fleet Maintenance Availabilities and Chief of Naval Operations

(CNO) scheduled ISRAs, to be completed on specific DDG-51 class ships that are scheduled to complete ISRAs over the MSSP period of performance. The scope of this lot includes all efforts necessary to support continuous coordination, planning and preparation between contractor and government to complete Fleet Maintenance Availabilities and

ISRAs including, but not limited to, inter-availability preparation and administration (IAPA) support, inspections & assessments, engineering & design support, specification and other government furnished information reviews, and material procurement and logistics support.

Unless otherwise specified in a Delivery Order Solicitation, all delivery orders for Fleet

Maintenance Availabilities will be performed at the Government’s facility and all ISRAs will be performed in-plant at a Contactor-provided facility. The Navy intends to award up to https://www.law.cornell.edu/uscode/text/15/657q

D&F Number: 43,191 three (3) Facilitized Lot contracts in each homeport. The number will be determined at contract award based on the number of acceptable proposals received.

• Non-Facilitized Lot includes Fleet Maintenance Availabilities only, to be completed on specific DDG-51 class ships that are not scheduled to complete ISRAs over the MSSP period of performance. The scope of this contract includes all efforts necessary to support continuous coordination, planning and preparation between contractor and government to complete Fleet Maintenance Availabilities including, but not limited to, IAPA support, inspections & assessments, engineering & design support, specification and other government furnished information reviews, and material procurement and logistics support.

Unless otherwise specified in a Delivery Order Solicitation, all delivery orders will be performed at the Government’s facility. The Navy intends to award up to three (3) Non-

Facilitized Lot contracts in each homeport. The number will be determined at contract award based on the number of acceptable proposals received.

The Single Award IDIQs are planned for Fiscal Year (FY) 2027 and will consist of three (3) one (1) year ordering periods with an estimated value of

3. Identification of Statutory/Regulatory Authority

This Determination and Findings is executed pursuant to the requirements of 15 U.S.C. 657q, FAR

7.107-2, and NMCARS 5207.107-2.

4. Justification of Determination

The Facilitized Lot includes ISRAs and Fleet Maintenance Availabilities. Contractors must have the capabilities to complete the most complex delivery orders expected to be ordered, which for the

Facilitized Lot are the scheduled ISRAs. ISRAs are depot level maintenance windows that are scheduled considering the approved representative intervals, durations, maintenance cycles, modernization requirements and repair man-days. ISRAs require a highly capable contractor holding a Tier I Master Ship Repair Agreement (MSRA) in accordance with the requirements of

CNRMCINST 4280.1 B dated 30 May 2025. To obtain this agreement, contractors must demonstrate:

• Proven past performance to meet cost, schedule and performance metrics to meet Navy operational requirements.

• Substantial facility and human resources capability of completing, coordinating and integrating multiple areas of ship maintenance, repair and modernization.

• Facilities required include ownership or dedicated access to a waterfront shipyard with the piers, shops and associated facilities necessary to complete a DDG-51 ISRA.

The Non-Facilitized lot includes Fleet Maintenance Availabilities only. Contractors must have the capabilities to complete the most complex delivery orders expected to be ordered, which for the

Non-Facilitized Lot are the scheduled and unscheduled Fleet Maintenance Availabilities which could be executed on any shipboard system, potentially with a high degree of urgency. Fleet

Maintenance Availabilities require a highly capable contractor holding a Tier I or Tier II MSRA in accordance with the requirements of CNRMCINST 4280.1 B dated 30 May 2025. To obtain this agreement, contractors must demonstrate:

• Proven past performance to meet cost, schedule and performance metrics to meet Navy operational requirements.

• Substantial facility and human resources capability of completing, coordinating and integrating multiple areas of ship maintenance, repair and modernization.

• Facilities required include ownership or dedicated access to a waterfront shipyard with the shops and associated facilities necessary to complete DDG-51 Fleet Maintenance

Availabilities at the Naval Station.

Results of Market Research

As discussed in detail below, market research indicates that there is robust competition for the contemplated contracts, and the consolidated contracts will still be suitable for performance by a small business. Additionally, while the current IDIQ-MAC strategy may maintain an increased level of competition and have some benefits in comparison to the MSSP contracts, these benefits are outweighed by the substantial benefits of consolidation.

a. Flag/SES oversight board (FSOB) and executive working group (EWG). In May 2024, SEA 21 program office established an acquisition and contracting strategy Flag/SES oversight board (FSOB) and executive working group (EWG) to “determine acquisition and contracting methods and tools to foster continuous contractor improvement and a strong ship repair industrial base (…) to enable on-time completion of non-nuclear surface ship availabilities”. In addition to representatives from all Navy stakeholders, the EWG included subject matter experts from industry shipbuilding and ship repair associations, incorporated to ensure continuous engagement with the Navy’s industrial partners. These subject matter experts included representatives from:

i. Shipbuilder’s Council of America (SCA) - National trade association representing

U.S. shipyards engaged in the building and repairing of military and other government vessels, commercial vessels, and those companies providing goods and services to the industry.

ii. Virginia Ship Repair Association (VSRA) - Regional industry association representing companies engaged in, or supporting, ship repair in Virginia and the

Mid-Atlantic region.

iii. Port of San Diego Ship Repair Association (PSDSRA) - Coalition of more than

150 companies in the San Diego region specializing in ship repair, conversion, overhaul, and modernization.

b. Industry Days. The Navy held multiple industry days to provide an overview and solicit actionable feedback on the Navy’s MSSP acquisition strategy. These industry days were on

15 August 2025, 22 August 2025 and 28 May 2026.

c. Sources Sought Notice. The Navy also released a Sources Sought Notice on 23 January

2026 to determine industry capability and bid interest and solicit actionable feedback on the

Navy’s MSSP acquisition strategy.

Market research revealed a strong and diverse pool of contractors, including a broad range of large and small businesses with varying levels of capability, capacity and facilities, interested in completing for MSSP requirements in the Norfolk, VA homeport. This diverse mix of contractors demonstrated extensive experience with both ISRAs and Fleet Maintenance Availabilities across various surface ship classes. Many respondents currently support the Navy’s non-nuclear ship repair requirements under existing IDIQ-MAC contracts, reflecting a well-established local industrial base with proven capabilities to meet technical and management requirements.

PAE Maritime received the following responses to the DDG-51 Norfolk MSSP market research:

i.

ii.

d. Program History.

The Navy’s non-nuclear surface ship modernization and maintenance/repair contracting strategy implements a suite of contracts to maximize competition and the use of fixed pricing. This approach leverages multiple types of contracts, right sized to best complete each type of ship availability, reflecting the specifics of the work and the industrial base in each port. This approach improves cost control, schedule adherence and quality of workmanship while maintaining an appropriate level of flexibility and responsiveness to the Fleet. The strategy directly aligns with and supports the NAVSEA Campaign Plan 3.0 and the mission priorities of “On-Time Delivery of Ships &

Submarines” and an overarching “Culture of Affordability”.

Prior to the implementation of this strategy, the Navy implemented the Multi-Ship, Multi-Option

(MSMO) contract strategy from FY2006 through FY2018 to plan and execute non-nuclear surface ship maintenance, modernization and repair. Each MSMO contract was competitively awarded

(based on a price and technical proposals to complete a notional work package) to complete the specification planning and production execution of a maintenance, modernization and repair on a specific ship class within a single homeport. The MSMO concept was intended to create a continuous and reliable maintenance delivery process by grouping a ship class into a single contract within the homeport, which allowed for a consolidation of requirements into a smaller set of supply chains. These contracts were Cost Plus Award Fee (CPAF) for Spiral 1 contracts and Cost-Plus

Award Fee and Incentive Fee (CPAF/IF) for Spiral 2 contracts. MSMO contracts typically covered a five-year period of performance. The last remaining MSMO contract expired in FY2018.

From FY2015, SEA 21 evolved its contracting strategy to prioritize competition for the Navy’s non-nuclear surface maintenance, repair and modernization planning and execution requirements;

replacing MSMO with Specification Development and Availability Execution Support (SDAES) contracts, IDIQ-MACs, within a ship’s homeport for short-term Availabilities and stand-alone long-term Availabilities that are required by law to be competed beyond the vessel’s homeport on a coast-wide basis.

The IDIQ-MAC Critical System Lot, awarded through full and open competition, includes Chief of

Naval Operations (CNO) Availabilities (typically completed at private sector facilities) and Fleet

Maintenance Availabilities that include work on critical systems (typically completed at the Naval

Station). The IDIQ-MAC Non-Critical System Lot, awarded through a small business set aside, is intended for Fleet Maintenance Availabilities that do not include work on critical systems (typically completed at the Naval Station). Awardees for the IDIQ-MAC contracts in the Norfolk, VA homeport are provided in Table 2.

Table 2: Norfolk Homeport IDIQ-MACs Awardees Awardee Size Status Description/Lot Type

BAE Systems Large Business Critical System Lot

Colonna's Shipyard Small Business Critical & Non-Critical System Lot

East Coast Repair & Fabrication Small Business Critical & Non-Critical System Lot

Epsilon Systems Solutions Inc. Small Business Critical & Non-Critical System Lot

Marine Hydraulics International Large Business Critical System Lot

General Dynamics - NASSCO Large Business Critical System Lot

Advanced Integrated Technologies Small Business Non-Critical System Lot

Auxiliary Systems Small Business Non-Critical System Lot

Bay Metals & Fabrication Small Business Non-Critical System Lot

Colonna's Shipyard Small Business Non-Critical System Lot

Continental Tide Defense Systems Small Business Non-Critical System Lot

Fairlead Boatworks Small Business Non-Critical System Lot

Gulf Copper & Manufacturing Small Business Non-Critical System Lot

Lyon Shipyard Small Business Non-Critical System Lot

Southcoast Welding & Manufacturing Small Business Non-Critical System Lot

TECNICO Small Business Non-Critical System Lot

Transtecs Small Business Non-Critical System Lot

Walashek Industrial & Marine Small Business Non-Critical System Lot

e. Small Business Impacts. PAE Maritime has considered the potential impacts of this consolidation to small businesses. The small business industrial base has competed for and executed Fleet Maintenance Availability and ISRA requirements to be included within the

MSSP contract under both the Norfolk IDIQ-MAC Critical System and Non-Critical System lots. Fleet Maintenance Availabilities including work on non-critical systems were typically set aside for small businesses under the Non-Critical System Lot. Under the MSSP strategy, the resulting contracts (both Facilitized and Non-Facilitized) will still be suitable for performance by a small business.

Not all of the small business contractors with the managerial and technical capabilities to complete the typical Fleet Maintenance Availability (non-critical systems work only / typically valued less than $1M) have the capabilities to complete them on high dollar value

Fleet Maintenance Availabilities including work on critical systems. Therefore, while small businesses will be able to bid for both lots, and the Non-Facilitized lot will be set aside for small businesses, consolidation will reduce the pool of potential small business prime contractors. PAE Maritime has ensured that steps will be taken to include small business participation and has encouraged it to the maximum extent practicable via small business subcontracting plans. The Navy intends to incorporate an award fee pool to incentivize contractor performance. In order to ensure other than small business primes subcontract to small businesses in a manner that supports the overall ship repair industrial base, the award fee pool available to be earned will be adjusted to the extent that they subcontract scope to both MSRA Tier III (or higher) small businesses and small businesses overall. Failure to meet these small business goals will result in a proportionate reduction in the contractor’s award fee pool. Additionally, other-than-small business offerors will be required to submit a preliminary small business subcontracting plan which will be reviewed for overall small business strategy and compliance with PAE Maritime’s small business guidelines. The small business plan will be reviewed to determine that the plan achieves the minimum subcontracting requirements for small business and socio-economic categories and complies with FAR 19.109. This consolidation determination has been coordinated with PAE

Maritime’s Office of Small Business Programs (SEA00K).

Alternate Acquisition Strategies

Prior to settling on the proposed contracting strategy, PAE Maritime considered alternative contracting approaches that would have involved a lesser degree of consolidation.

The principal alternative considered was continuing to compete each Fleet Maintenance

Availability and ISRA as separate delivery orders among existing or follow-on IDIQ-MAC contract holders. This approach is the least consolidated approach and provides the strongest recurring order-level price competition. It maximizes the number of opportunities for large and small business firms holding the relevant IDIQ-MAC and permits the Government to select a different contractor for each availability based upon the needs of the immediate work package.

A secondary alternative would be an MSSP contract structure wherein contractors would be awarded long-term contracts to complete specific types of work, but not necessarily with long-term continuity on specific DDG-51 class ships.

The principal disadvantage to these approaches is that they deprive the Navy of the desired long-term relationship between a contractor and a specific DDG-51 class ship that enables enhanced understanding of the vessel’s material condition, long term availability preparation, responsiveness to emergent requirements, and work scope management between CNO Availabilities and Fleet

Maintenance Availabilities to minimize growth and new work and maximize operational availability.

While these alternative approaches have some merit, they do not provide the same continuity, preparation time, recurring mobilization avoidance, task-menu efficiency, or long-horizon supply-chain benefits as MSSP. Any alternative to the MSSP structure would sever the long-term relationship between a contractor and a specific DDG-51 class ship. PAE Maritime therefore rejected exclusive reliance on the current model or the modified MSSP structure discussed above.

Benefits of Planned Consolidation

In accordance with 15 U.S.C. § 657(c)(3) and FAR 7.107-2(c) and (d), the consolidation of Fleet

Maintenance Availabilities and ISRAs into a series of Single Award IDIQ contracts would result in the following benefits:

a. Long-Term Relationships - The long-term relationship provided by the Single Award IDIQ contracts will allow increased collaboration between the Navy and industry, improving mutual understanding of their shared vessels’ material condition. The long-term relationship will allow contractors to better prepare for their projects, completing continuous ship checks and assessments to ensure specifications better reflect each vessel’s material condition

(reducing the growth and new work that increases costs during availability execution). The continuous long-term relationship will also facilitate the movement of depot level scope typically completed during CNO Availabilities into Fleet Maintenance Availability windows of opportunity. This movement will reduce time in depot and enable significant cost avoidance on CNO Availability costs that run with time. It will also help minimize the operational availability of highly expensive DDG-51 class ships lost to depot maintenance downtime.

b. Increased Competitive Pressure – The MSSP contracts are much larger and provide a much more stable and predictable workload than the individual awards they are intended to replace. Furthermore, the single competition for the MSSP contracts replaces dozens of individual competitions under the IDIQ-MAC strategy. As a result, the value and importance of the MSSP competition is much greater than the individual competitions under the IDIQ-MAC strategy. The Navy expects that offerors will bid very aggressively on the maintenance task menu, labor and material burden rates, and other pricing factors to win the

MSSP contracts.

c. Recurring Footprint Mobilization Cost Avoidance - The principal place of performance for the DDG-51 Fleet maintenance availabilities covered under these contracts is Norfolk Naval

Station. Within the current IDIQ-MAC contract structure, each fleet maintenance availability is solicited and awarded as a separate delivery order with a typical period of performance of one (1) to three (3) months. As each of these short availabilities is awarded separately, contractors typically must mobilize and de-mobilize their on-base footprint for each availability. Awarding a collection of fleet maintenance availabilities to a single contractor over an extended period of performance would allow the awarded contractor to maintain a more permanent on-base footprint and allow the Navy to avoid non-recurring mobilization and de-mobilization costs.

d. Economic Order Quantity Improvements - On-going world-wide supply chain issues have made some material unavailable or highly price erratic. The longer-term relationship provided by the Single Award IDIQ contracts will allow Industry to establish teaming arrangements with Original Equipment Manufacturers (OEMs) and critical suppliers to better ensure the responsive provision of subcontracted labor, technical representatives and material. Furthermore, the long-term relationship will facilitate industrial learning and improvement on repeated tasks and processes, enabling efficiencies that would drive cost savings and schedule improvement.

e. Increased Administrative Efficiencies – The Navy expects that awarding availabilities using the single award IDIQ contract’s competitively pre-priced task menu may, under some circumstances, take less time than the currently competitive process within the IDIQ-MACs.

Currently, the Navy requires up to 100 days to run competitive source selections for individual continuous maintenance availabilities. The proposed process awards most Fleet

Maintenance Availabilities only 20 days prior to their start. The Navy expects that most

Fleet Maintenance Availability requirements under the Single Award IDIQ contracts will be awarded by ordering directly off the pre-priced menu with minimal negotiation. This substantially less time-consuming process will provide more time for pre-award scope definition and post award contractor preparation, improving readiness and on-time delivery.

5. CD&F Expiration Date

The authority under this CD&F expires 31 December 2027, which affords sufficient time to award the Single Award IDIQ MSSP contracts for the Norfolk homeport.

DETERMINATION

On the basis of the above findings, in accordance with 15 U.S.C. § 657q(c)(2)(A) and FAR 7.107-2, I hereby determine that the proposed consolidation is necessary, justified and in the Government’s best interest because the benefits of the consolidated acquisition substantially exceed the benefits that would be derived from each of the alternative contracting approaches.

APPROVAL BLOCK

Cristina Covalt Date

Executive Director of Acquisition & Contracts

Portfolio Acquisition Executive Maritime

9/11/2026