A27 SSJ Industrial Servo -Redacted.doc

21 March 2022

MEMORANDUM

Subj:

SOLE SOURCE MEMORANUM TO ACQUIRE AMCM SERVO VALVE (PN: 240-113D) Rework FROM INDUSTRIAL SERVO HYDRAULICS (Purchase Request 1300994244)

Identification of the agency and the contracting activity, and specific identification of the document as a "Sole Source Justification."

This is a sole source justification. Contracting activity is the Naval Sea Systems Command, Naval Surface Warfare Center, Panama City Division (NSWC PCD), 110 Vernon Avenue, Panama City, FL 32407-7001 (Contracts Department Code 02).

Nature and/or description of the action being approved.

This action will award a firm fixed price purchase order pursuant to FAR 19.1506(b) to Industrial Servo Hydraulics, 17650 Malyn Blvd, Fraser, MI. 48026 to rework the Airborne Mine Countermeasures (AMCM) Winch Servo Valves (PN: 240-113D). The Servo Valves are integral components which control winch systems necessary for AMCM operations.

A description of the supplies or services required to meet the agency's needs (including the estimated value).

The following item is being acquired:

Item Rework and test of AMCM Servo Valves Unit Fee $1,100.00 Qty

NSWCPCD requests

This acquisition will be conducted using simplified acquisition procedures with a total estimated value of $44,000. The Government's minimum needs have been verified by the certifying technical and requirements personnel. This memo does not authorize acquisition for other requirements. This purchase will be funded with FY22 CNAL funds.

Identification of the justification rationale and, if applicable, a demonstration of the proposed contractor's unique qualifications to provide the required supply or service. 10 U.S.C. 2304(c)(l), 10 U.S.C. 2304(d)(l)(B). Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements FAR 6.302-l(a)(2)(iii)(B).

Industrial Servo Hydraulics Incorporated (ISHI) is the only source of repair for the following reasons. ISHI is the only company that has proven capabilities and capacities to perform the rework of the servos. NSWCPCD has a Source Control Drawing, 20485 Rev F, with which to purchase the valve from Atchley Controls, Inc., but no complete set of drawings for rework of the servo valves. The Atchley servo valve PN: 240-113D is now obsolete and rework is no longer performed by Atchley. Industrial Servo Hydraulics has created their own proprietary processes for reworking the servo valves and have reworked the valves previously. The government does not, as of yet, have a process created, nor available, on how to accomplish a rework of the valves to send to another vendor. The cost to create the processes would be approximately $11,360.00 in addition to the servo rework.

As such, the Government does not expect significant savings through competition and does expect significant and unacceptable delays that will negatively impact this requirement.

Therefore, it is in the Governments' best interest to award on a sole source basis to Industrial Servo Hydraulics, Inc., on a SB basis as the price is determine fair based on scope.

Furthermore, fast turnaround is requested for the servo valves because they are a work stoppage item. The current amount of RFI servo valves is not sufficient to meet the required delivery dates. Therefore, it is imperative that this procurement is awarded to Industrial Servo Hydraulics Incorporated as soon as possible to meet AMCM program needs and schedules.

A determination by the ordering activity contracting officer that the order represents the best value consistent with FAR 13.106-l(b).

The Contracting Officer has determined that the order represents the best value and results in the lowest overall cost alternative (considering price, special features, administrative costs, etc.) to meet the Government's needs.

A description of the market research conducted among schedule holders and the results or a statement of the reason market research was not conducted.

For the reasons specified in paragraph 4 above, Industrial Servo Hydraulics, Inc. is the only known company that currently has the in-house resident knowledge, facilities, and experience the Government's needs.

Any other facts supporting the justification.

The previous company to win the bid to rework the servo valves did not provide adequate documentation of services completed to each servo. Also each servo valve reworked from them, has required some adjustment to the pressure. This has not been required after rework from Industrial Servo Hydraulics, Inc.

A statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for the supplies or services is made.

As stated in paragraph 4 above, Industrial Servo Hydraulics, Inc. is the only known company that currently has the in-house resident knowledge, facilities, and experience the Government's needs.

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