CR-19002.1 Jand A_Redacted.pdf

J&A #: CR-19002.1

Code: WXP P.R. Number: N0016419RWP53

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

The Naval Sea Systems Command, Naval Surface Warfare Center Crane Division (NSWC Crane), Radar Technologies Contracting Branch (Code 0241).

2. Description of the Action Being Approved

Award of a firm fixed price, indefinite delivery, indefinite quantity (IDIQ), supply contract with an ordering period of five years on a sole source basis for the repair, upgrade, and/or manufacture of Solid State High Voltage Switches (SSHVS) and 2kV Bias Power Supplies (BPS), in support of AN/SPS-49A(V)1 series of radar systems to Polarity, Inc., 11294 Sunshine Park Drive, Rancho Cordova, CA 95742. Authority to act under this J&A expires 18 October 2024.

3. Description of Supplies/Services

The requirement is for repair, upgrade, and/or manufacture of SSHVS and 2kV BPS. The SSHVS and 2kV BPS are used in a Solid-State Modulator (SSM) for the AN/SPS-49A(V)1 series of radar systems to manufacture the existing switch tube modulator design used to pulse modulate a Varian/CPI VA-889F Klystron. The SSMs are part of Field Change Kit (FC5) for installation aboard Navy ships.

This addendum requests approval for an expansion in the scope to include Engineering Services to support Engineering Investigations and redesign efforts for replacement of Diminishing Manufacturing Sources and Material Shortages (DMSMS) components. It is anticipated that this would be a CPFF CLIN; however, the preponderance of the contract would remain a firm fixed priced supply contract. During the Solicitation phase, it was determined during exchanges between Contracting personnel, the Technical Community, and the sole source contractor, Polarity, Inc., that the addition of Engineering Services would be beneficial for the Government in mitigating obsolescence issues. This determination was based upon changes in the industrial

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

CRANE DIVISION

300 HIGHWAY 361

CRANE INDIANA 47522-5001

IN REPLY REFER TO:

CR-19002.1

base that enables repair of the SSHVS and the BPS by supporting parts and materials to Polarity, Inc. The total value remains at $5,500,000, as no increase in ceiling of J&A is expected with the addition of these Engineering Services.

In addition, this addendum corrects “Contracts Operations Division, CXM” within Paragraph 1.

Contracting Activity to “Radar Technologies Contracting Branch (Code 0241)” and removes “CLASS” ahead of “JUSTIFICATION” within the title and “C” ahead of “J&A” within Paragraph 2. Description of the Action Being Approved, as this is not a Class Justification and Approval (CJ&A).

Award of a 5-year supply FFP IDIQ contract is intended. This IDIQ will be for a maximum of $5,500,000 over a 5-year period and will be funded with appropriations from Navy Working Capital Funds (WCF), Operations and Maintenance Navy Funds (OM&N), and Foreign Military Sales (FMS). An estimate of the proposed contract utilization is listed in the following table.

Minimum and maximum quantities are estimated as follows:

SSHVS Evaluation: 1 Min 70 Max Bias Power Supply Evaluation: 1 Min 75 Max SSHVS Repair: 1 Min 70 Max Bias Power Supply Repair: 0 Min 75 Max SSHVS Manufacture: 0 Min 20 Max Bias Power Supply Manufacture: 0 Min 20 Max

Estimated Dollar Value

4. Statutory Authority Permitting Other Than Full and Open Competition

10 U.S.C. 2304(c) (1), as implemented by FAR 6.302-1, only one responsible source or only a limited number of responsible sources and no other type of property will satisfy the needs of the agency.

5. Rationale Justifying Use of Cited Statutory Authority

The Government has a requirement to repair failed SSHVSs and repair and/or upgrade (Engineering Change Proposal (ECP) 0049-065) 2kV BPS within the SSM of the AN/SPS-49 Radar System. The Government also has a requirement to manufacture the failed SSHVSs and 2kV BPS when repair efforts fail in order to maintain the capability of the AN/SPS-49 Radar System within the US Navy’s Fleet.

The Government previously issued three separate contracts with two different vendors, DTI Incorporated and Raytheon Electronic Systems, to develop SSHVSs and 2kV BPS that meet the Government's requirements. DTI was tasked to deliver a prototype solid state modulator under

FY 19 FY 20 FY 21 FY 22 FY 23 TOTAL

Supply WCF $ 959,000.00 $ 809,000.00 $ 836,500.00 $1,364,000.00 $ 891,500.00 $4,860,000.00

OM&N $ - $ 60,000.00 $ 60,000.00 $ 60,000.00 $ 60,000.00 $ 240,000.00

FMS $ - $ 100,000.00 $ 100,000.00 $ 100,000.00 $ 100,000.00 $ 400,000.00

Total $ 959,000.00 $ 969,000.00 $ 996,500.00 $1,524,000.00 $1,051,500.00 $5,500,000.00 phase II SBIR contract N00014-99-C-0234 and two (2) pre-production kits under N00164-02-C- 6002. Raytheon was tasked to build an SSM kit (FC 5) under contract N00024-01-C-5254. Both companies failed to provide an acceptable product.

After those failures, NSWC Crane, Code WXP tasked Technology Service Corporation (TSC) to pursue this effort under engineering support contract, N00164-01-D-0039. TSC subcontracted to Polarity, Inc. to design/develop a switch and bias supply that would meet the Government's requirements. Polarity developed engineering developmental models (EDMs) that passed engineering design verification testing and acceptance testing, and was subsequently awarded a onetime, sole-source production contract for the SSHVSs and 2kV BPS, N00164-07-D-8916.

Polarity was awarded a second sole-source contract, N00164-13-R-GR23, to continue repair and manufacturing SSHVS and BPS.

Requirements have arisen for the procurement of new production units, as well as the capability to repair and upgrade the SSM units that were not originally accounted for on contract N00164- 13-R-GR23. The original production units have been installed in 31 ships in the Fleet, as well as six land based sites. Due to the high operational tempo of the radar system running 24 hours a day/7 days a week at high temperatures, these switches and bias supplies are beginning to fail, and require repair and/or replacement by newly manufactured units. These units are made with multiple electronic components that will reach the end of their life cycle due to its continuous operation within the AN/SPS-49 Radar System.

Utilizing any source other than Polarity for repair or manufacture efforts, would result in substantial duplication of cost. Functionality of the SSHVSs and 2kV BPS within the SSM is a requirement. The data rights to the Solid State High Voltage Switches and 2kV Bias Power Supplies are proprietary to Polarity Inc., which is not willing to sell or license these data rights to the Government. The Government tried to procure the data rights under contract N00164-07-D- 8916, but was unable to reach an agreement with Polarity, Inc. It is estimated that the development of another source would create a delay of 18 -24 months, which would cost the Government, at a minimum, an additional $2,910,283. Failure to provide a SSHVS or 2kV BPS in the most expedient way will leave these ships without a functioning AN/SPS 49 Radar System which would jeopardize the defense of the ship. Due to funding constraints, developing an alternative source cannot be economically or technically supported. A summary of the estimated cost for developing a new source is as follows:

• Design Engineering – $538,226

• Prototype Test Set Development - $100,130

• Testing, Evaluation, Qualification Program Manager - $350,387

• Second Source Development cost - $2,910,983.00

Additionally, the investment the Navy has already made (over $5M on contracts N00164-01-D- 0039, N00164-07-D-8916 and N00164-13-R-GR23) towards development and production of the SSHVSs and 2kV BPS that are currently installed or scheduled for installation on 33 U.S. Navy Ships, would not be recouped through competition. At the present time there are 11 remaining installs on U.S. Navy Ships. The first of the 11 installs is scheduled to begin during Fiscal Year 2020.

Utilizing any source other than Polarity would also result in unacceptable delays in the agency’s requirements in accordance with 10 U.S.C. 2304(d) (1). Based on the Fleet costs that would be incurred during the time involved to re-qualify and perform compatibility testing on a competitor’s product, it would not be in the best interest of the Government to duplicate this effort. Such a delay in schedule and cost would result in increased risks and seriously jeopardize the US Navy’s Fleet.

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

The Government has attempted to repair SSHVS and BPS on a limited basis with the approval of the In-Service Engineering Agent (ISEA). These efforts were similar to reverse engineering efforts. The Government was unsuccessful in reverse engineering both the SSHVS and BPS, and without a detailed Technical Data Package (TDP), there is nothing for other vendors to base their proposals on. Furthermore, companies performing similar repairs were contacted during market research but stated that without a complete TDP, they would not be able to perform the required manufacturing and repairs.

In accordance with DFARS 205.205-71 the proposed contract was synopsized on the Government Point of Entry (GPE) Federal Business Opportunities (FEDBIZOPS) website on 25 October 2018. To date, no interested parties have expressed interest or provided feedback concerning this requirement.

7. Determination of Fair and Reasonable Costs

The Contracting Officer will use cost and price analysis to determine a fair and reasonable price.

Comparisons to prior contracts for the same or similar items and the Independent Government Estimate may be used as necessary. Assistance from the Defense Contract Management Agency (DCMA) will be utilized to analyze, evaluate, and negotiate based upon detailed cost or pricing data, which will be certified by Polarity, Inc. at the conclusion of negotiations.

8. Actions to Remove Barriers to Competition

For the reasons set forth in Section 5 and Section 6, NSWC Crane has no plans at this time to compete future contracts for the types of supplies covered by this contract. Market conditions are continuously being monitored, and if another potential source emerges, NSWC Crane will assess whether competition for a future requirement is feasible.