410-036 JA HVAC Extension_Redacted.pdf

NCH 53.6-2

DEPARTMENT OF THE NAVY

PORTSMOUTH NAVAL SHIPYARD

PORTSMOUTH NH 03804-5000 IN REPLY REFER TO:

Ser 410/036

10 NOV 2023

J&A Number: PL-2200

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity

The Naval Sea Systems Command Contracting Division (Code 410), Portsmouth Naval Shipyard, Kittery, ME.

2. Description of the Action Being Approved

The Navy intends to award a modification to extend the performance period of Purchase Order N39040-22-C-0004 awarded to United Rentals, Inc. for the rental of a temporary HVAC and Exhaust System to support the repair of the at Portsmouth Naval Shipyard.

This modification will extend the performance period for fifty-two weeks (i.e., 08 December 2023 to 05 December 2024) with an option to extend an additional twelve weeks (06 December 2023 to 27 February 2025), at an estimated total value of $1,354,816.18. The Navy intends to extend the existing contract on a sole source basis to United Rentals because the temporary HVAC and Exhaust system is non-severable equipment resulting in the current contractor being the only source capable of satisfying the Navy�s immediate needs.

3. Description of Supplies/Services

a. On 18 April 2022, the Navy awarded Purchase Order N39040-22-C- 0004 to United Rentals, Inc. for the rental of a temporary HVAC and Exhaust System to support the repair of at Portsmouth Naval Shipyard. The purpose and components in the system were identified in the Statement of Work:

This system is intended to provide continuous tempered air to an industrial work environment, to provide fresh outside air exchanges, to provide exhaust for scavenging effluent fumes from industrial processes, and to maintain positive pressurization with respect to the external environment of the conditioned space. The system must include multiple HVAC Units, Industrial Exhaust Blowers, two Chillers, Chilled Water Pumps, chilled water hose manifolds, hose assemblies as well as the associated onboard controls to operate both the chilled water system, HVAC units and exhaust blowers. All equipment conveying air to and from the industrial space must be pre-wired with remote E-Stop capability in order to provide a means to secure airflow in the event of an

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emergency response. The intent of the chillers, pumps, hose assemblies, manifolds and ancillary components is to establish two separate temporary chilled water systems serving all of the HVAC cooling coils.

b. The contract included a one-year base period (18 April 2022 to 13 April 2023) with options that extend the rental period to 07 December 2023.

c. To date, the existing option period(s) have all been exercised leaving this non-severable contract set to expire 07 December 2023.

d. The total award amount for the proposed modification is $1,354,816.18.

e. On 25 August 2023, the customer confirmed with the COR that the HVAC equipment was going to be needed through

03 December 2024

f. The Navy intends to extend the rental period for the same equipment for fifty-two weeks (i.e., 08 December 2023 to 05 December 2024) with an option to extend an additional twelve weeks (06 December 2023 to 27 February 2025).

4. Statutory Authority.

The statutory for limiting competition is 10 U. S. C. 2304(c)(1), as implemented by FAR Part 13.5.

5. Rationale Justifying Use of Cited Statutory Authority.

The Navy intends to extend the existing contract on a sole source basis because United Rentals� temporary HVAC and Exhaust system is the only source capable of satisfying the Navy�s immediate needs and awarding to another vendor would result in equipment disruptions and delay the project schedule.

In April 2022, when the Navy awarded Purchase Order N39040-22-C-0004 to United Rentals, it anticipated a need to rent the temporary HVAC and Exhaust System for approximately 20 months (April 2022 to December 2023) in order to support repair work . Since then, the Navy has experienced several unplanned events that have interrupted work. These events include, but are not limited to, working through challenges of completing a refueling with limited, inexperienced personnel; an unanticipated increase in the number of repairs necessary for the boat to be refueled; a work stoppage followed by a work slowdown to address safety issues that have injured personnel, damaged government property and required re-performance of work; significant material and personnel shortages.

Currently, the Navy estimates that these collective events have delayed the project by approximately 1 year, NCH 53.6-2 3 which creates the need to extend the rental of the existing temporary HVAC and Exhaust System.

Market Research indicates that the temporary HVAC and Exhaust system is generally available in the commercial marketplace, however, there has been some difficulty in obtaining all required equipment for the requirement. For the existing contract, a Sources Sought Notice was posted to SAM.gov on 18 August 2021 with responses due no later than 27 August 2021. There was one response, from United Rentals, Inc., a large business. In an effort to increase competition, solicitation ID N3904022R0012 was posted to SAM.gov as full and open on 04 January 2022 with responses due no later than 24 January 2022 at 1200 EST.

One quote was received, from United Rentals, Inc. which contained exceptions for equipment they could not provide immediately. An amended solicitation was posted to obtain the remaining equipment with no responses. Ultimately, the quote from United Rentals, Inc., with the exception of the long-lead time equipment, was submitted and found technically acceptable. The Contract Specialist utilized historical pricing and invoices from industry to determine the pricing fair and reasonable and award the contract.

Despite that general availability, the Navy considers United Rentals� system the only source that is capable of satisfying the Navy�s needs because it is in-place, operational and currently supporting the repair work. The Navy cannot award the follow-on extension to another vendor without creating substantial risks that could further disrupt and delay the project schedule. Under the existing contract, the contractor is responsible for delivering the individual components to Portsmouth Naval Shipyard; Navy personnel then assemble and install the system. That process would take approximately 27 days to remove the existing system and install the new one because of the size and the number of equipment pieces involved, the limited laydown space available and limited manpower (nine pipefitters and electricians) available to perform these tasks. During that transition period, the Navy would have to shut the system down, at least intermittently.

Any delay affecting the temporary HVAC and Exhaust System has immediate and long-term impacts. The Navy cannot allow repair work onboard a submarine�s enclosed environment to continue without violating occupational health and safety standards and exposing workers to hazardous substances and conditions. Delays in performing repairs affects the overall project schedule and the availability of to perform operational missions. If the Navy competed and awarded the follow-on extension, that process would take about six months and then require another month to transition from one contractor�s system to another. That approach is not realistic because of the significant operational risks and impacts to the Navy�s operations.

6. Description of Efforts Made to Solicit Offers

The Navy conducted extensive market research for the existing contract, but has not conducted market research focused solely on the ability of other companies to perform the follow-on extension.

Existence of that capability is presumed to exist in the market place

NCH 53.6-2 4

based on the prior market research results. Extending the current contract is necessary here because of the unforeseen delays mentioned above, the need to ensure continuation of these essential services and to avoid the operational risks associated with transitioning to another contract.

7. Determination of Fair and Reasonable Cost

Currently, the vendor is honoring the current rates within the contract. However, if the proposed extension is not processed prior to the contract expiring, United Rentals, Inc. stated in their response email that they will increase pricing The current rates were considered fair and reasonable on the base contract through the use of historical pricing and invoices from industry, therefore, the current rates are still considered fair and reasonable.

8. Actions to Remove Barriers to Competition

Actions to remove barriers: No direct actions have been taken to remove any barriers as this requirement is directly related to the re-baselining of the schedule of the boat. This requirement typically is competitive and is anticipated to be competitive for the next availability. This occurrence is directly tied to unforeseen delays.

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CERTIFICATIONS AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION

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

TECHNICAL/REQUIRING COGNIZANCE:

LEGAL SUFFICIENCY REVIEW

I have determined this justification is legally sufficient.

CONTRACTING OFFICER CERTIFICATION

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

APPROVAL BLOCK (Sole Source Acquisition of Commercial Products and Commercial Services Pursuant to FAR 13.5) Upon the basis of the above justification, I hereby approve the solicitation of the proposed procurement(s) described herein using other than full and open competition, pursuant to the authority of FAR 13.501(a), Sole source (including brand name) acquisitions.