B1 - 0222-21-232-00 JA REDACTED w sig page 6May21.pdf

J&A Number: 0222-21-323-00

Code: 0222

P.R. Number: 21-JNS-029

CLASS JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity

Naval Sea Systems Command (NAVSEA) Naval Surface Warfare Center, Philadelphia Division

(NSWCPD), Contracts Division Code 0222.

2. Description of Action Being Approved

Award of a Basic Ordering Agreement (BOA) on a sole source basis for the procurement of

Original Equipment Manufacturer (OEM) equipment to Northrop Grumman Corporation. OEM hardware components, technical refresh packages, and ship sets supported include Electronic

Charting, Display and Information System – Navy (ECDIS-N), Integrated Bridge System (IBS), Ship Control Systems (SCS), and Machinery Control Systems (MCS) for CG, CVN, DDG, FFG, LCC, LCS, LHA, LHD, LPD, LSD, and PC ship classes. Authority to act under this Class

Justification and Approval (CJ&A) expires five years after issuance of the BOA master agreement.

3. Description of Supplies/Services

The planned acquisition provides for the procurement of ECDIS-N, IBS, SCS, and MCS hardware components, technical refresh packages, and ship sets as applicable for each ship class.

The estimated total value for these procurements is $43,371,440. There are no option quantities or periods. Per Federal Acquisition Regulation (FAR) Subpart 16.703(a), the underlying BOA is not a contract; future delivery orders will be funded at issuance.

The Government's minimum needs have been verified by the certifying technical and requirements personnel in accordance with FAR 6.303-2(b).

The table below shows the estimated breakdown of funding, by appropriation type, per year for the duration of this BOA.

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

PHILADELPHIA DIVISION

5001 SOUTH BROAD STREET

PHILADELPHIA PA 19112-1403

IN REPLY REFER TO:

FY22 FY23 FY24 FY25 FY26 Totals

OPN $1,647,953

(40%)

$6,781,008

(68%)

$5,450,756

(73%)

$8,184,364

(75%)

$7,653,767

(70%)

$29,717,849

(69%)

SCN $2,460,000

(60%)

$3,131,400

(32%)

$1,971,048

(27%)

$2,747,488

(25%)

$3,343,654

(30%)

$13,653,590

(31%)

Total $4,107,953 $9,912,408 $7,421,804 $10,931,852 $10,997,421 $43,371,440

The resultant contract will have a five-year ordering period from the date of award.

4. Statutory Authority Permitting Other Than Full and Open Competition

10 U.S. C. 2304 (c) (1), “Only One Responsible Source and No Other Supplies or Services Will

Satisfy Agency Requirements,” as implemented by Federal Acquisition Regulation (FAR)

Subpart 6.302-1.

5. Rationale Justifying Use of Cited Statutory Authority

In accordance with FAR Subpart 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 development or production of a major system or 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. (See 10 U.S.C.

2304(d)(1)(B) or 41 U.S.C. 3304(b)(2).)

Northrop Grumman was the selected Original Equipment Manufacturer (OEM) by various shipbuilders (such as Newport News Shipbuilding, Ingalls Shipbuilding, and General Dynamics

Bath Iron Works) for navigation and integrated bridge control systems on board new construction DDG 51, CVN 78, LPD 17, LCS 1, and LCS 2 ship classes. As these hulls transitioned from new construction to in-service, Northrop Grumman has continued to supply highly specialized lifecycle engineering and support services, most recently under N64498-20-

D4026. Under that contract, Northrop Grumman continued to provide software engineering services and new compatible design engineering for the steering and navigation systems in which they were the primary designer and producer of the equipment during the new construction phase of ship acquisition programs. Northrop Grumman was also previously awarded a sole source cost-plus-fixed-fee contract for compatible hardware procurement, which also included life cycle engineering and support (LCE&S) services for multiple ship class navigation and control systems by NSWCPD under IDIQ Contract No. N65540-14-D-0002 on 1 May 2014. Under that contract, Northrop Grumman provided engineering services and compatible replacement hardware systems for the steering and navigation systems in which they were the primary designer and producer of the equipment during the new construction phase of ship acquisition programs. Northrop Grumman’s sole access to the proprietary technical data package for these operational systems, combined with the hardware meeting all military environmental qualifications, makes it uniquely qualified to provide these highly specialized supplies. As the hulls covered in this CJ&A transitioned from new construction to in-service, NAVSEA program offices IWS 6, PMS 407, PMS 329, PMS 317, PMS 377, PMS 500, PMS 515, PMS 312, and

PMS 443, have tasked NSWCPD for In-Service Engineering Agent responsibilities and Northrop

Grumman’ proprietary hardware and software solutions to continue lifecycle engineering and support services.

Northrop Grumman, as the OEM is the only vendor with access to the complete proprietary technical data to manufacture the required hardware. Upon delivery of the aforementioned systems to the Navy under contract N65540-14-D-0002, the government did not receive the complete technical data package due to the inclusion of proprietary equipment drawings, as further explained above. Due to the lack of sufficient technical data, it is impossible to ensure hardware obtained from any other source would possess the essential interoperable design and functional properties necessary to meet current requirements of the aforementioned systems.

Additionally, unique Northrop Grumman equipment is required for commonality of system operations. No other vendor possesses the complete proprietary technical data. Northrop

Grumman has the requisite knowledge, technical data and qualified hardware, and can continue to provide the required supplies with no associated non-recurring engineering efforts and can maintain the systems fielded on operational hulls with no disruption in material procurement support.

The cost and delay to the Government to acquire an alternative source to provide material procurement support contained in this requirement would adversely impact the mission readiness and/or mission capability of the CG, CVN, DDG, FFG, LCC, LCS, LHA, LHD, LPD, LSD, and

PC ship classes. Utilizing a new vendor to supply this highly specialized hardware for all these ship classes and unique systems would result in a substantial cost, estimated to be $25.6M and an estimated minimum 43-month delay in fulfilling the agency’s requirements. The estimated cost is based on the historical costs of previous ECDIS support contracts associated with development, integration and lifecycle support of the Scalable Integrated Bridge System and

Ship Control Systems.

The highly specialized systems listed above, have undergone and passed extensive tests and received certifications by the Navy. The tests include environmental qualification testing (shock, vibration, and electromagnetic interference), ECDIS-N approval and authorization, and Ship

Control System testing. Deviating from these certified systems would require re-certification efforts and redesign of the Ship Control Systems and Machinery Control Systems, estimated at a cost of $1.1 mil per ship configuration after implementing hardware commonality to the extent possible through the 24 configurations. This cost impact would be directly related to the additional funding required to procure, test and certify new hardware equipment, integrate and test software, conduct interface testing, as well as the time and effort expended to develop and qualify any other component parts. Any new hardware equipment certified would also have a significant amount of non-recurring engineering cost to retest the system interface and software.

In addition, it is estimated that the time required for another contractor to produce products that meet the required certifications is at least 43 months, which is unacceptable to meet Navy ship installation schedules. The table below shows the breakdown of the costs and timeframes mentioned above.

Failure to award this contract to Northrop Grumman would jeopardize the lifecycle supportability of currently fielded systems and thereby degrade the mission readiness and capability of ECDIS-N, IBS, SCS, and MCS installed on CG, CVN, DDG, FFG, LCC, LCS, LHA, LHD, LPD, LSD, and PC ship classes.

Thus, these highly specialized supplies are deemed to be available only from Northrop

Grumman, the original source, as award to any other source would result in substantial costs to the Government associated with designing and fielding new systems. This cost is not expected to be recovered through competition and would result in unacceptable delays in fulfilling the agency’s requirements.

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

In accordance with DFARS PGI 206.302-1, a request for information was posted to the beta.sam.gov website on 7 January 2021. No responses were received. No additional market research was conducted because it is not practicable, for the reasons discussed in Paragraph 5 above, for any company other than Northrop Grumman to provide the required equipment.

A synopsis was posted to the beta.sam.gov website on 21 January 2021 and closed on 22

February 2021. No responses were received.

7. Determination of Fair and Reasonable Costs

Phase Schedule Cost

Requirements Analysis

-Hardware Requirements

½ Man Year each (24 different system configurations) $3,000,000

Prototype Equipment Procurement 12 months for 10 HW configurations $4,000,000

Configure Lab/Familiarization

1 Man Year each (6 ECDIS and 4

SCS unique system configurations)

$2,500,000

Environmental Qualification Tests 8 months

(Avg $350k / system) $3,500,000

Shipboard Test and Evaluation for

Navy Certification

8 Months, estimating

300k/system $3,000,000

Installation 3 Months (Avg SRA) $9,600,000

Total Duration / Cost 43 months $25,600,000

The Contracting Officer has determined that the anticipated cost to the Government for the supplies/services covered by the CJ&A will be fair and reasonable. Similar quantities of this requirement have been purchased from this company in the past and cost/pricing information was received on those past procurements. This information should be sufficient to support the fair and reasonable cost determination of this procurement. The Contractor will be required to submit a formal price proposal and sufficient information to support the accuracy and reliability of the estimate for each solicitation issued under this BOA. Technical analysts and contract specialists will perform analysis of the proposal, with assistance, as needed, from the Defense

Contract Management Agency and Defense Contract Audit Agency. Experienced technical analysts and contract specialists with the aid of field pricing support, if necessary, will review the

Contractor’s proposal. The Contracting Officer will use the results of this price analysis as the basis determining a fair and reasonable price.

8. Actions to Remove Barriers to Competition

This requirement will be reviewed annually by the Contracting Officer to ensure that Northrop

Grumman is still the only company that can satisfy agency requirements. NSWCPD will continue to monitor the marketplace and identify potential sources of the supplies identified in this Justification. Any sources discovered that could potentially satisfy this specific procurement will be taken into account for any future requirements. An effort to obtain Government Purpose

Rights (GPR) of Northrop Grumman hardware technical data packages is ongoing. NSWCPD previously developed a requirements specification for contractor development into a government owned ECDIS-N hardware design to be used for open competition, which the program sponsor did not fund. The ECDIS-N program office instead requested we integrate virtually with

Common Computing Infrastructure (CCI), which is a virtualized system being developed as a government owned design with NSWC Dahlgren as ISEA. NSWCPD has started investigating integration by filling out a survey of system ECDIS-N requirements, and touring the CCI lab.

Timeline to field CCI is TBD. NSWCPD intends to investigate CCI server hardware for ECDIS-

N use in existing Northrop Grumman hardware equipment racks when available, until CCI can be widely fielded with ECDIS-N integrated.

Many of the Ship Control Systems (SCS) architecture configurations are well into their in-service lifecycle management phase. Therefore, there are regular requests to NSWCPD to source replacement hardware due to obsolescence and tech refresh efforts. NSWCPD will look for opportunities to replace component parts with commercially available material where technically feasible, cost-effective, and schedule efficient to do so. By sourcing replacements at or below the designated Lowest Replaceable Unit (LRU) for in-service lifecycle obsolescence mitigation efforts, NSWCPD, ensure that barriers to competition are reduced for SCS.

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