ANNEX 1- Justification and Approval N0024421C0003 _Redacted.pdf

Navy Marine Corps Acquisition Regulation Supplement APRIL 2018 (Change 18-24)

5. Rationale Justifying Use of Cited Statutory Authority.

FAR 6.302-1(a)(2)(iii)(B) allows an agency to restrict competition when it is likely that an award to any other source would result in unacceptable delays in fulfilling the agency�s requirements. At this time, restricting competition is deemed necessary because the incumbent contractor United Support Services, Inc., is the only contractor with the required resources and staffing available to perform the Barges-Level-O Maintenance contract without unacceptable delays.

Continuous, uninterrupted Organizational-Level (O-Level) maintenance is required to sustain the operational readiness, safety compliance, and crew quality-of-life aboard Navy barges throughout the Pacific Fleet region. The current contract ceiling has been exhausted due to an unprecedented volume of urgent and emergent repair actions. The demand for routine services and emergency services has gradually increased throughout the life of contract, necessitating the contractor to respond to an overwhelming number of emergencies and urgent repair requests in different regions to keep compliant with maritime regulations.

This year alone the contractor responded to over 129 shipyard tasks on an urgent basis. The contractor is expected to work continuously without interruption and arrest the emergency conditions before departing any job site (e.g., shut off water, close gas valve, temporarily patch, etc.). To prevent severe operational degradation, crew quality-of-life crises, and high-level leadership intervention, we must eliminate all gaps in O-Level Barge Maintenance Team contract coverage. Any lapse in scheduled daily and weekly maintenance triggers immediate, compounding system failures. In YRBM-58 (Guam), an unexpected incident involved frozen bearing, systemic pressure loss, and a complete system shutdown. Which resulted in damages requiring major overhaul, which negatively impacted military crew living conditions, and required immediate elevation to the Vice Admiral level for emergency resolution.

Also, a combination of funding constraints and the increase in ship Chief of Naval Operations (CNO) availabilities resulting in high demand for the Barges, lack of original parts to make long-term repairs, and the advanced age of these assets (some exceeding 80 years of age) has placed an immense demand on the systems and equipment. Ultimately, to support the CNO�s Quality of Life and Quality of Sailors initiatives, overtime is inevitable to keep these barges habitable and safe during ship force occupancy. Operational requirements necessitated overtime to prevent work stoppages and ensure mission-critical timelines were met.

Previous formal notifications which were provided to the Government in a timely manner from the contractor, indicated that labor expenditures were rapidly exceeding the 75% cost threshold due to these operational demands. Upon receiving the contractor�s timely 75% cost limitation notifications (prompted by the surge in emergent repairs and urgent travel), the Government immediately took proactive actions to control expenditures. First, SWRMC initiated weekly expenditure reviews, implementing weekly burn-rate tracking and technical reviews of labor and travel expenditures to closely monitor cost accumulation.

Second, the Contracting Officer�s Representative (COR) implemented a strict overtime pre-approval protocol, enforcing a case-by-case authorization process for all overtime labor and limiting it exclusively to emergency work that directly impacted barge habitability, safety, or vessel safety compliance. Third, the COR established a rigorous travel validation process that required the contractor to exhaust all local support options before deploying personnel from other sites, thereby controlling travel cost growth. Collectively, these active government management efforts successfully restricted expenditures to only the most critical, mission-essential tasks and minimized unnecessary cost growth.

In addition, Travel requirements associated to unforeseen operational needs have increased on specialized training requirements. The Barge APL-69 had to be relocated from San Diego, CA to Portland, OR to support the CNO Availability for the USS Emory S. Land (AS 39). This was because there is no permanent ship's force assigned to this Barge, the contractor must frequently travel to the Portland site to perform these continuous, hands-on maintenance tasks in accordance with section 3.2.2 of the PWS. Meeting the strict

Navy Marine Corps Acquisition Regulation Supplement APRIL 2018 (Change 18-24) response windows require immediate, unscheduled travel. As result, adequate travel funding is vital to guarantee that qualified contractor personnel can deploy immediately and arrive on-site within these mandated timeframes. In order to maintain the Barge in a full-mission capable status and strictly adhere to mandatory response times, the adjustment to travel to accurately reflect actual operational demands.

The Contractor�s expertise and knowledge gained while performing these services make them the most efficient and qualified to continue performance. Any transition period to a new contractor would incur additional costs and significant mission delays. A historical pricing analysis of the labor baseline was conducted. In May of 2021, CLIN 4001 (Labor) was originally awarded to USS for The Contract Specialist utilized the Consumer Price Index (CPI) Inflation Calculator to project what this same baseline scale of labor would cost in today�s economic climate, which indicated that the baseline scale of labor would equate to an inflation-adjusted value of in the current market. This represents a cost difference of , indicating a percentage escalation of . If the Government were to compete this requirement or transition the services to a new contractor, any new source would price their labor based on current market rates. This would subject the Government to an estimated labor cost premium of up to to procure the exact same baseline level of service already secured under the existing contract terms. Increasing the ceiling of the subject contract is required to allow continuation of labor of services. Specifically, increasing the ceiling for labor to properly accommodate necessary work aboard the barges.

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

This requirement was awarded as 8(a) competitive set-aside accepted by the SBA in accordance with FAR 19.804-3 and was posted to the Government Point of Entry (GPE). At the time of closing, two offers were received.

A synopsis of the proposed action will be published on the Systems for Award Management (SAM.gov) website in accordance with FAR 5.201. Stating the Government�s intent to solicit and negotiation with only one source under authority of FAR 6.302-1. A logical competitive follow-on procurement package is currently being worked on to allow for competition in the new long-term contract for these services.

7. Determination of Fair and Reasonable Cost.

A determination of fair and reasonable cost proposed to increase ceiling on Labor and Travel will be based on analysis of the contractor�s proposal in accordance with FAR 15.404-1.

8. Actions to Remove Barriers to Future Competition.

Future acquisitions will be evaluated on a case-by-case basis and, whenever feasible, NAVSUP FLC San Diego will issue competitive solicitation by FY27. .