20RGP66_Redacted_non-comp.pdf

NCH 53.6-2 (Apr 2019)

CRANE DIVISION

NAVAL SURFACE WARFARE CENTER

300 HIGHWAY 361

J&A Number: CR-19307

Code: GXPM P.R. Number: N0016420RGP66

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

Naval Sea Systems Command, Naval Surface Warfare Center, Crane Division (NSWC-CR), Global Department Contracts Branch, Code 0221.

2. Description of the Action Being Approved

Award of a Firm Fixed Price (FFP), Indefinite Delivery, Indefinite Quantity (IDIQ), supply contract on sole source basis to EDO Western Corporation, Salt Lake City, UT 84115 (Cage Code 24338) to procure Hydrophone Ceramic Elements for the U.S. Navy Strategic Systems Program (SSP), SP24 Navigation Subsystem's TR-333 Hydrophone Program, to include Foreign Military Sales (FMS).

3. Description of Supplies/Services

The supplies to be acquired are TR-333 Hydrophone Ceramic Elements. The elements are used in the manufacturing of TR- 333 Hydrophones at NSWC-CR. The TR-333 Hydrophones are installed onto US Navy and United Kingdom SSBN submarines as part of the Navigation Subsystem Sonar. For the five-year ordering period, the Government estimates requirements for a minimum of 3,000 and a maximum of 27,000 Hydrophone Ceramic Elements.

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

The chart below provides estimated dollar values per fiscal year and appropriation. The total es ximum dollar value for the procurement action is .

IN REPLY REFER TO:

J&A Number: CR-19307

Estimated Dollar Value

OMN

FMS

Total

4. Statutory Authority Permitting Other Than Full and Open

Competition

10 U.S.C. 2304(c)(1), Only one responsible source and no other supply or services will satisfy agency requirements as implemented in FAR 6.302-1(a)(2)(ii).

5. Rationale Justifying Use of Cited Statutory Authority

As set forth below, EDO Western Corporation (hereinafter referred to as “EDO”) is the only responsible source capable of providing the required supplies. Award to a source other than EDO is likely to result in substantial duplication of cost to the Government that is not expected to be recovered through competition and unacceptable delays in fulfilling the agency’s requirements.

In accordance with FAR 6.302-1(a)(2)(ii), supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued production of highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in (A)Substantial duplication of cost to the Government that is not expected to be recovered through competition or (B) Unacceptable delays in fulfilling the agency’s requirements.

EDO is the original equipment manufacturer (OEM) of the TR- 333 Hydrophone Ceramic Elements. The Government previously acquired the ceramic elements from EDO as follows:

• N00164-03-C-6511 – Awarded: 28 February 2003 - Initial contract for first 1,000 ceramic elements with options and qualifications.

• N00164-07-C-6540 – Awarded: 26 June 2007 - Subsequent award to fulfill fleet requirements for 21,000 US Navy assets.

• N00164-11-P-0893 – Awarded: 15 September 2011 - Small purchase of 1,999 US Navy assets and 461 FMS assets

• N00164-12-C-GP46 – Awarded: 26 June 2012 - Award to fulfill fleet requirements for 10,000 units and 3,000 FMS.

• N00164-16-D-GP20 – Awarded: 27 September 2016 - Current award to fulfill fleet requirements for 15,000 units and 5,000 FMS; last delivery was March 2019.

Currently, EDO is the only certified source to build the hydrophone ceramic elements for the TR-333 Hydrophone. The SP24 program requires critical component suppliers to go through an extensive certification plan that costs approximately $3,820,815 and requires an estimated 36 months to complete. The ceramic elements have to meet certification at three levels of testing – Phase One Unit Testing, Phase Two Next Level Assembly (TR-333 hydrophone) Testing, and Phase Three Operations Testing at sea.

As indicated in Section 8 below, the Government has worked through Simplified Acquisition Procedures (SAP) to procure units for testing purposes (the first of the three level testing process) from two potential new sources in order to promote competition and to improve technical readiness in the event that the current source is not available. To date, however, the potential new sources have failed the initial inspection phase of the unit testing requirement. Since the potential new sources failed the inspection phase, they are not viable second sources. Due to these failures, the Government is unable to proceed to the second phase of testing (next level assembly). Without passing Phase One testing, these potential sources cannot be verified and are therefore not viable sources. The table below illustrates the costs to certify a new vendor.

Description of Cost Total Cost to Certify New V

Approximate Months to Complete

a. Material Costs – Ceramic Elements

b. Inspection – Ceramic Elements – Phase 1 Test

c. First Article Testing – Phase 1 Test

d. Certification Hydrophones – Phase 2 Test

e. Operation Testing – Phase 3 Test

f. Documentation/Travel for Certification

New Vendor Certification Totals 36

Item a. contains the cost and schedule impacts for another vendor to produce ceramic elements for the inspection and first article testing. Estimated costs for item a. above are based on market research data from EDO in March 2019 and pricing from previous attempts to establish secondary estimate is based on at a price of . The estimated 18 mon ete item a. is time that EDO and the l source attempt vendors took to make .

Item b. contains the cost and schedule impacts for the Government to perform initial inspection before the ceramic elements proceed to first article testing. Inspection costs and schedule are based on previous inspection costs and inspection procedures. The estimates for the inspection requirements include the costs associated with source inspection, workmanship, dimensional verification, surface finish, material verification, and electrical testing. To date, all attempts to promote a second source have failed this phase of testing and there is no reason to believe a second source will be able to pass this phase of testing within the budgetary and time constraints associated with this procurement.

Item c. contains the cost and schedule impacts associated with First Article Testing (FAT) of the 400 ceramic elements. The testing ensures elements are produced and performed in accordance with Government requirements. The estimated cost and schedule impacts are based on 25 years of experience of the technical activity in performing FAT Testing of Hydrophone ceramic elements. EDO is the only vendor to pass this phase of testing.

Item d contains the cost e associated with the building and testing of TR-333 Hydrophones for Operational Testing. NSW rates the successful ceramic elements into the fully produced TR-333 Hydrophones for future testing. The cost and schedule estimates are based on an engineering estimate for the performance testing IAW SSP OD 62 s TR-333 Hydrophones assembled at NSWC-CR cost , which includes parts, testing, and parts ins associated labor, and take approximately three months to complete. EDO is the only vendor to pass this phase of testing.

Item e. contains costs associated with Operation Testing, which are based on previous testing costs provide shipyards and Lockheed Martin on research vessel .

The previous testing costs include manning a rese and su e at ted to . al cost for is e , which is to operate the ship each month. The Operational Testing costs include all new vendor parts being tested together.

The Operational Testing (item e.) takes three mo ue to the timing and availability of the test ship to do an installation of the test units, the tes estimated to take 12 months. EDO is the only vendor to pass this phase of testing.

Item f. above provides the estimated additional costs and schedule to certify a new vendor for preparation and coordination of test plan approval, engineering investigation of any failures, material analysis, and generating formal test reports. These additional costs include submission of Engineering Change Requests to make appropriate changes to controlled drawings, and travel expenses associated with technical briefings with the SP24 Program Office and the new supplier. These costs include the annual salary of one Lead Engineer for the thirty-six month period, travel for Government representatives to the new vendor’s facilities, and documentation and reviews associated with the certification process.

Additional funds are not available to accomplish certification of new sources at this time nor has any potential vendor successfully passed Phase One of the certification process. Competition would not offset the estimated $3,820,815 certification costs that would be incurred if the Government procured ceramic elements from a source other than EDO. Furthermore, competition would not guarantee successful completion of Phase One testing by a new vendor, as two have failed in the past. Nevertheless, if a new source is successful in passing the initial inspection (item b in the chart above) the Government would then seek to secure additional funding for the purpose of performing additional testing with the goal that an additional source becomes certified. Since no new sources have passed the initial inspection of Phase One, current funds have not yet been earmarked for the purpose of certifying a new source.

More information about the other sources that have delivered units but failed initial inspection is provided in Section 8 below.

Additionally, the thirty-six (36) month schedule to certify a new vendor will greatly impact Fleet readiness and would jeopardize the SSBN TRIDENT Submarine Fleet overhaul schedules. The Fleet stock will need replenishing to maintain satisfactory safety levels. If the SSBN TRIDENT Submarine Fleet cannot deploy per the mission requirements the United States will be without one of its nuclear deterrents.

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

Offerors as Practicable

The Strategic Systems Guidance, Navigation and Control Division, Code GXP, performed market research to include their own knowledge of the industry. Although several vendors were identified who manufacture the same or similar supplies, no additional vendors were found who have completed the Government testing and certification requirements for these ceramic elements and to date, all that have tried (other than EDO) have failed.

In accordance with DFARS Procedures, Guidance, and Information (PGI) 206.302-1, a Request for Information (RFI)/Sources Sought was issued on fedbizopps on August 16, 2019 with a closing date of September 6, 2019. It stated that the Government was accepting information from companies potentially capable of meeting TR-333 Hydrophone Ceramic Elements and provided access to the drawings. There were no responses received.

7. Determination of Fair and Reasonable Costs

The Contracting Officer has determined that the anticipated cost to the Government for the supplies covered by this J&A will be fair and reasonable. As required, DCMA pricing assistance will be requested along with a certification of current cost and pricing to support the fair and reasonable determination of the costs. All available information will be utilized to support the fair and reasonable cost determination.

8. Actions to Remove Barriers to Competition

For the reasons set forth in Paragraph 5, NSWC-CR is not pursuing competition on this procurement, but has pursued multiple sources for potential competition in the past and rs verable ose sources have failed the required Phase One testing and NSWC-CR is not pursuing the certification process any further with these two sources due to the failures in Phase One.

Even though two companies have recently failed the certification process, the Government intends to continue pursuing a second source in an attempt to promote competition and to have multiple sources of supply available. For these reasons, the Government is currently pursuing a third vendor as an additional potential source for the ceramic elements. However, current funding is not available for the certification process vendor. Funding may become available in to begin the certification process through e third vendor passes Phase One testing, additional funds would be required to pursue Phases Two and Three testing as outline in Pa . Therefore, if funding is available in , and based on the production and testing l sed in Paragraph 5 herein, the of a second source availability would be . In the event that a second source becomes performance of the contract with EDO, the

Government will make a determination at that time whether to immediately pursue a new, competitive contract action.

CERTIFICATIONS AND APPROVAL

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

I certify that the facts and representations under my cognizance, which are included in this justification and its supporting acquisition planning data are complete and accurate to the best of my knowledge and belief.

TECHNICAL COGNIZANCE:

Signature Name (Print) and Title (Code) Phone No. Date

REQUIREMENTS COGNIZANCE:

Signature Name (Print) and Title (Code) Phone No. Date

LEGAL SUFFICIENCY REVIEW (NMCARS 5206.303(90))

I have determined this justification is legally sufficient.

Signature Name (Print) and Title (Code) Phone No. Date

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.

Signature Name (Print) and Title (Code) Phone No. Date

APPROVAL BLOCK (FAR 6.304 for Approving Official)

Upon the basis of the above justification, I hereby approve, as Competition Advocate for the Contracting Activity, the solicitation of the proposed procurement described herein 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 Name (Print) Date

I have determin

Signature N

SIFFIN.M.KELLY.1230322321 Digitally signed by SIFFIN.M.KELLY.

________________________________________________________________Date: 2019.12.13 09:31:13 -05'00' _