DF for SAM_Redacted.pdf

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SOURCE SELECTION INFORMATION � SEE FAR 2.101 and FAR 3.104

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

PHILADELPHIA DIVISION

5001 SOUTH BROAD STREET

PHILADELPHIA PA 191112-1403

I N R E P L Y R E F E R T O

D&F No. 0232-26-037-00 Code 0232

DETERMINATION AND FINDINGS

AUTHORITY TO CONSOLIDATE CONTRACT REQUIREMENTS

Upon the basis of the following findings, pursuant to 15 U.S.C. § 657q, as implemented in Revolutionary Federal Acquisition Regulation (FAR) Overhaul (RFO) Subpart 7.107 and the Navy Marine Corps Acquisition Regulation Supplement (NMCARS) Subpart 5207.107, it is hereby determined that the Naval Sea Systems Command (NAVSEA), Naval Surface Warfare Center, Philadelphia Division (NSWCPD), Naval Foundry and Propeller Center (NFPC) Columbia (CLB) Inconel and K-Monel fastener and shear pin requirements may be consolidated.

FINDINGS

1. Identification of Requiring Agency and Contracting Activity

This Determination and Findings (D&F) has been prepared by NSWCPD Contracts Department, Code 02.

2. Nature/Description of Action

NSWCPD is planning to issue a single solicitation for the procurement of Inconel and K-Monel fasteners and shear pins for the NFPC to support CLB Class Propulsors. NFPC is a detachment of the Norfolk Naval Shipyard with the primary mission to design, manufacture, and repair of Propulsors and related components for the U.S. Navy. To support manufacturing operation at NFPC, the Government requires the manufacturing of various Inconel 718 and K-Monel fasteners and shear pins.

This procurement action will consolidate multiple requirements which had been previously contracted separately by three (3) Contractors: Calspan Systems Corporation, Supply Solutions International, and General Manufacturing, LLC under individual Purchase Orders as detailed below.

a. K-Monel Component Procurement

On 13 September 2022, Purchase Order No. N6449822P0002 was competitively awarded to Calspan Systems Corporation for $879,100 for the procurement of various K-Monel fasteners to support CLB Propulsor manufacturing and assembly. This Purchase Order expires on 13 May 2027.

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b. Precision Machined Shear Pins Procurement

On 26 July 2022, Purchase Order No. N6449822P5198 was competitively awarded to Supply Solutions International for $112,200 for the procurement of various Inconel Shear Pins to support CLB Propulsor manufacturing and assembly. This Purchase Order expired on 26 August 2022.

c. Inconel 718 Fasteners Procurement

On 05 April 2024, Purchase Order No. N6449824P5137 was competitively awarded to General Manufacturing, LLC for $195,770 for the procurement of various Inconel fasteners and shear pins to support CLB Propulsor manufacturing and assembly. This Purchase Order expired on 05 July 2024.

The combined value of the three (3) Purchase Orders is $1,187,070. After consolidation and adding an increased ordering period, the combined efforts will have an estimated value of and will be competed as a Small Business Set-Aside as an Indefinite Delivery, Indefinity (IDIQ) contract with a 60-month ordering period. The original Purchase Orders procured a lower quantity to reduce risk of design changes as they were intended for lead ship production. The difference between the aggregate value of the prior three (3) Purchase Orders ($1,187,070) and the follow-on consolidated procurement value of is due to several factors including a change in strategy from standalone 1-year purchase orders (N6449822P5198 and N6449824P5137) to a 5-year IDIQ type vehicle; transition to full rate production; increase in fastener quantity to account for spares and flexible program scheduling;

and several years of escalation from FY22 and FY24 awards. Due to the flexibility of an IDIQ contract, the maximum quantity of fasteners per year was increased to allow the ability to order up to three shipsets per year, significantly higher than the original purchase orders of one shipset per year.

3. Results of Market Research

As discussed in detail below, market research indicates that there are seven (7) Small Businesses (SB) and three (3) Other Than Small Businesses (OTSB) that appear technically capable of providing the required products at fair market prices.

Planning: A Request for Information (RFI) was issued for the NFPC fasteners Statement of Work (SOW). The RFI was posted on SAM.gov on 17 July 2024 for fifteen (15) days and was posted with the North American Industry Classification System (NAICS) Code 332722, Bolt, Nut, Screw, Rivet, and Washer Manufacturing. The RFI�s objective was to determine the competitive landscape for consolidating the NFPC requirements. In addition to the RFI, market research was completed by the Acquisition Manager and Subject Matter Expert to specifically identify capable vendors.

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c. Inconel 718 Fasteners Procurement (N6449824P5137)

In 2024, when this requirement was competed, there were two (2) offers received in response to the solicitation (General Manufacturing LLC and Black Olives); however, Black Olives was not certified as a small business and therefore the quote was not evaluated.

Small Business Impacts: NSWCPD has considered the potential impacts of this consolidation to Small Businesses. It is anticipated that consolidation of these contracts will enhance competition among Small Businesses, as five (5) Small Businesses have expressed interest in this requirement where only two (2) Small Businesses previously submitted quotes for each of the incumbent purchase orders. As noted above, market research indicates a reasonable expectation of obtaining offers from two (2) or more responsible Small Business concerns that are competitive in terms of fair market prices, quality, and delivery. Therefore, in accordance with RFO 19.104-1, this requirement shall be set-aside for Small Businesses. Thus, in accordance with 15 U.S.C. § 657q(c)(1)(D) and RFO 7.107-1(a)(4), NSWCPD has found that this consolidation in-and-of-itself will ultimately have minimal impacts on contracting with Small Business concerns. This consolidation determination has received concurrence from NSWCPD�s Office of Small Business Programs (00K) on 29 January 2026.

4. Benefits of Planned Consolidation

Consolidating the requirements of Purchase Order No. N6449822P0002, N6449822P5198, and N6449824P5137 into one (1) contract directly aligns with NAVSEA�s and NSWCPD�s missions, as it is expected to improve quality and schedule of the product.

Ultimately, to solicit and award separate contracts for supplies that are very similar in scope is inefficient. This approach would lead to higher contract costs, higher potential for the slippage of milestones and schedules, quality control redundancies, and an overall less efficient use of the workforce.

a. Reduce Costs:

A single contract provides cost savings for the following reasons:

1. Reduction in Acquisition Costs and Cycle Times:

Duplication of processes and document requirements is a significant strain on acquisition productivity. The proposed consolidation drastically reduces the documentation required to acquire the desired supplies thereby reducing the technical, contractual, and administrative burden of conducting multiple simultaneous competitions. There is significant benefit in consolidating these contract requirements, such as the removal of duplicative acquisition steps (i.e., solicitation, business clearance drafting and approval, completion of negotiations, etc.) will reduce

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acquisition personnel support by at least nine (9) months from the alternative acquisition strategies leading to an estimated $200,0001 in savings. This estimate is based on the average time to conduct multiple commercial simplified acquisition competitions combined with the average manpower required to evaluate multiple quotes for each solicitation. Consolidation reduces acquisition, program management, contracts, and legal manpower requirements. Consolidating these requirements creates efficiencies through the reduction of Government pre-award solicitation development and proposal evaluation, as well as post-award monitoring, administration, and closeout.

2. Reduction in Delivery Orders:

Individual contracts require delivery orders to order supplies and services, and therefore, in the previous method, a single delivery order could not include Inconel 718 and K-monel Fasteners at the same time since they were on separate contracts.

Per the assumed production schedule of one ship per year, combining the contracts allows for delivery orders to be reduced from three per year to one per year. This reduces documentation, time, and effort for contracting, project management, and finance, estimated to be about a $10,8402 savings per year.

3. Reduction in Material & Material Shipping Costs:

K-monel and Inconel 718 Fasteners and shear pins have similar material requirements. The material for the finished fasteners and shear pins is partly procured by the vendor and partly supplied by the government. A combined contract would allow for vendor cost savings as the vendor could buy in bulk, and government cost savings as the government could ship in bulk. Each contract requires multiple bars of specialty bar stock to be sent from Philadelphia to the location of the respective vendor. Per the assumed production schedule of one ship per year, the government savings in shipping and labor are estimated to be around $7,5473 per year.

4. Reduction in Subcontractor Costs:

K-monel and Inconel 718 Fasteners have very similar testing and manufacturing requirements. Both types of fasteners require fluorescent penetrant testing and proof load testing. Typically, vendors subcontract this testing with an outside laboratory and send fasteners in bulk for testing. Using a conservative estimate of 5% savings due to economies of scale, testing in bulk would save $4844 per year.

1 Estimate based on competitive large procurement source selections. Reference D&F No. 0232-24-014-00.

2 Estimate based on an approximate savings of 55 labor hours per delivery order between Project Management, Contracting, Procurement, and Finance spread across corresponding labor rates.

3 Estimate based on an approximate savings of six labor hours between Project Management, Engineering, and Material Handling per applicable labor rates, and the cost of three Less Than Truckloads (LTL) shipping 13� bar stock vs. the cost of one Full Truckload (FTL) shipping 13� bar stock from Philadelphia to Chicago.

4 Penetrant testing and proof load testing costs were calculated using one ship set of fasteners with lab costs from contract N6449825D5001 scaled for 2026. EDM costs were calculated using one ship set of fasteners and EDM costs per fastener from a previous service order scaled for 2026. The 5% cost savings were estimated due to the reduced paperwork and

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Due to the complexities of the fasteners, both Kmonel and Inconel 718 fasteners typically require Electrical Discharge Machining (EDM) along with machining on mills and lathes. Typically, vendors subcontract EDM with an outside laboratory and send fasteners in bulk for EDM operations. Using a conservative estimate of 5% savings due to economies of scale, EDM in bulk would save $3,7224 per year.

Combining the Kmonel and Inconel 718 Fasteners into one contract also allows both types of fasteners to be sent to subcontractors as a single group reducing the amount of shipment and administrative effort of the vendor estimated around $7,8724 per year.

5. Reduction in Scheduled Site Visits:

Due to the complexity of the required certifications and fasteners, the government requires an in-person inspection of the fasteners, shear pins, packaging, and documentation prior to shipping the fasteners from the location of the vendor. The site visit typically includes quality assurance, engineering, and project management and may last from a couple days to over a week. From previous site visits, the average cost for travel, meals, and labor was $22,073 per site visit. Per the assumed production schedule of one ship per year, the government savings in reducing the amount of site visits from three to one is estimated to be around $44,1655 per year.

6. Reduction in Program Management:

Due to the large number of CLINs per each contract and strict certification requirements of the fasteners, these contracts historically have required significant interaction between the government and the vendor to ensure schedule and quality is maintained throughout the process. This interaction often includes getting updates, answering questions, document review, and at times, in-person meetings. Reducing the contracts from having three points of contact (one per contract) to a single point of contact at a single location could significantly reduce the amount of program management between the government and the vendor. Between engineering, quality assurance, procurement, and project management, there�s an estimated cost savings of $41,8506 in labor per year.

Between the reduction in delivery orders, material costs, testing costs, site visits, and program management, there�s an estimated savings of $116,460 per year when consolidating the three movement of parts. Shipping savings were calculated based on rates to ship fasteners in crates via FedEx with a destination less than 1.5 hours away from point of origin in Philadelphia and 6 less shipments per year.

5 Labor estimates are based on four government employees on site for five days and one government employee available as needed virtually. Travel and meal expenses are based on a previous site visit with employees flying from Philadelphia to Chicago.

6 Savings were calculated based on an approximate savings of 60 less labor hours between engineering and project management, 24 less virtual meetings, and two less in-person site visits by the program manager per year using applicable labor rates and a previous year�s site visit travel costs.

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contracts into one. Using a 3% escalation to account for inflation and adding the $200,000 reduction in acquisition costs, consolidating the contracts leads to an estimated $818,303 cost savings (11.6%) over five (5) years.

b. Increase in Quality & Schedule:

In addition to the cost savings, consolidation will increase the quality of the supplies and services provided by:

� Having one (1) contract with standardized terms and conditions;

� Having a single Procuring Contracting Officer, Contract Specialist, Contracting Officer�s

Representative, and Contract Program Manager for contract administration and execution;

� Having a single Point of Contact at the vendor;

� Promoting consistency and accountability in the execution of the SOW; and � Having reduced paperwork due to the potential to decrease the number of delivery orders, material shipments, test requests, movement between subcontractors, meetings, and document review.

It is imperative that the fasteners and shear pins are manufactured, tested, and documented properly. Due to the long lead time of material procurement and fastener production, incorrect fasteners and shear pins could set back the program up to an estimated four years and potentially cause production stoppages for the entire CLB propulsor program as several machining and assembly operations cannot be performed without the K-monel and Inconel 718 fasteners and shear pins.

c. Increase Productivity and Bandwidth of Workforce:

As shown in the cost section, several areas of the government would have less redundant activities when consolidating the proposed contracts into a single contract. Applicable groups include but are not limited to finance, procurement, shipping and handling, project management, and quality assurance. Removing the redundancies opens more time for each department to focus on other critical tasks related to the CLB program. Due to the priority and schedule of CLB, it is imperative that time is used efficiently.

5. Alternate Acquisition Strategies

The alternative approaches considered were to maintain the status quo and continue issuing separate competitively awarded contracts for each requirement and to award separate contracts. This was determined to not be in the best interest of the Government for the reasons detailed above.