E16- Redacted JA 0231-21-232-00.pdf

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

PHILADELPHIA DIVISION

5001 SOUTH BROAD STREET

PHILADELPHIA PA 19112-1403

IN REPLY REFER TO:

J&A Number: 0231-21-232-00 Code: 0244 PR Number: 21-AVR-117

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, Philadelphia Division (NSWCPD), Code 0244.

2. Description of Action Being Approved

Award of a firm-fixed-price (FFP) indefinite-delivery-indefinite-quantity (IDIQ) contract on a sole source basis to Component Repair Technologies, Inc. (CRT) for the procurement of repair and upgrade services on US Navy LM2500 Gas Turbine Government Furnished Material

(GFM).

3. Description of the Supplies or Services

The proposed acquisition will provide for repair and upgrade services of five (5) LM2500 Sub-assembly components required to avoid broader US Navy gas turbine obsolescence and compatibility issues. The need for these services became apparent when the LM2500 Original Equipment Manufacturer (OEM), General Electric (GE) Aircraft Engines, began providing upgraded engines to new US Navy surface combatants. Legacy configuration engine assemblies are no longer compatible with the new production engine assemblies that the Navy is currently receiving. In order to support the upgraded engines being delivered to the fleet, existing assemblies must be upgraded for compatibility purposes. Without these assembly upgrades, the Navy would be at risk of not being able to support a rapidly growing population of propulsion engines already installed on surface combatants.

The scope of this contract will include the repair and upgrade services of the following five (5) component types:

Component Type Legacy Configurations New Configuration

Titanium Compressor Cases

9686M82G53, 9686M82G54, L24067G01, L24067G02, L24067G07, L24067G09, L24067G14, L24067G16 L24067G21

Steel Compressor Cases L24067G16 L24067G18

Compressor Rear Frames

(CRF)

9103M30G24, 9103M30G26, 9103M30G30, 9103M30G37, 1822M21G01, 1822M21G02, 1822M21G03 L21370G22

Power Turbine Cases L21754G13 L21754G15

Turbine Rear Frames

(TRF)

L16727G14, L16727G17, L16727G21, L16727G20, L16727G24, L16727G25, L16727G26, L16727G27 L47407G01

The repair and upgrade services required for this acquisition will also include the inspection, cleaning, and testing of the above listed LM2500 Sub-assembly components in accordance with the statement of work (SOW). The legacy sub-assembly components will be provided to the Contractor by the US Navy on a per-year basis, based on NAVSEA 05 and OPNAV N86 LM2500 sparing requirements. The Contractor will be expected to make any/all repairs and upgrades necessary to return the components to the US Navy in the new configurations.

The total annual maximum quantity per component will be five (5), for a maximum of 125 repairs and upgrades completed throughout the term of the contract. The Government’s minimum needs have been verified by the certifying technical and requirements personnel.

MOPAS Acquisition Strategy Plan # 0231-21-232-00.2 covers this acquisition.

The ordering period for this effort will be five (5) years with a period of performance (PoP) of six (6) years from date of award. The total estimated dollar value of this contract is $21,454,369 as indicated in the below chart. The Government intends to use Operation & Maintenance, Navy funds in support of this requirement.

Part/Assembly

Years/ Ordering Periods

Estimated Total Qty

Estimated Unit Cost Total Estimated Cost

Titanium Compressor Casings Years 1-5 25 $105,208 $2,630,201 Steel Compressor Casings Years 1-5 25 $104,987 $2,624,675 Compressor Rear Frame Years 1-5 25 $265,109 $6,627,718 Power Turbine Stator Casings Years 1-5 25 $248,101 $6,202,521 Turbine Rear Frame Years 1-5 25 $134,770 $3,369,254

125 $21,454,369 Note: Summation inconsistencies due to rounding.

4. Statutory Authority Permitting Other Than Full and Open Competition

10 U.S.C. 2304(c)(1), Only One Responsible Source and No Other Sources and 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 2015, the Navy began receiving a new configuration of LM2500 engines aboard its ships.

This LM2500, designated as LM2500 Industrial Common (LM2500IC) configuration, introduced a number of design revisions to the engines which eliminated interchangeability with previous engine configurations. NAVSEA determined that rather than procuring new spare LM2500IC configuration engines, NSWCPD would upgrade the configuration of multiple engine components to the new IC structure for incorporation on Navy engines during the overhaul process. By upgrading these components, targeted engines going through the overhaul process can be upgraded to support the newer engine configuration, which is already installed on DDG 113, LCS 6 and LHA 8. This growing population of engines will require spare asset coverage as part of the NSWCPD 2SCOG support role to the fleet.

CRT is a Federal Aviation Administration (FAA) certified vendor that performs repairs and upgrades for both flight and aero-derivative gas turbine engine customers. CRT has unique repair and upgrade capabilities for specific LM2500 components that cannot be provided by another vendor. These abilities are unmatched in the gas turbine repair industry, even matching/exceeding the initial production level/standards of the OEM, GE Aircraft Engines.

Entirely at their own private expense, CRT has developed proprietary repair and upgrade capabilities that support the Navy’s need to transition from its legacy LM2500 model to its future sparing need for LM2500IC configuration. These CRT proprietary upgrades are introduced while individual components are also transitioning through the repair processes defined by the OEM’s LM2500 technical manual (GEK). As such, Navy provided GFM components for uninstalled engines would be both repaired and upgraded under this requirement. The upgraded GFM will establish a rotatable pool of these components for future introduction in the engine repair process, to upgrade engine assemblies to the new IC standard.

These engines will comprise the spare asset support for the future Navy ships.

CRT is the only vendor with the support capabilities to meet the Navy’s requirement. They are GE Aircraft Engines certified and an approved LM2500 component repair vendor. As such, CRT has access to LM2500 drawings and repair standards defined in the LM2500 Industrial Technical Manuals known as GEK manuals. CRT is specifically authorized, by the OEM, to perform upgrades to existing LM2500 engine components. No other repair activity possesses the OEM authorizations, proprietary procedures, and capabilities required to repair and upgrade the US Navy LM2500 assemblies. The US Navy did not pay for, or help to develop, the new IC engine and its associated upgrades. GE Aircraft Engines owns the rights and intellectual property pertaining to these upgrades. GE Aircraft Engines upgraded the engine configuration for military and commercial customers, this IC configuration represents GE Aircraft Engines’ standard production configuration.

CRT’s expertise in executing the required US Navy work comes from years of experience performing proprietary repair procedures as a certified GE Aircraft Engines repair activity for both marine and flight engines. OEM approval and certification is required to guarantee warranty, form fit and function, and the ability to procure OEM material and tooling needed to perform the specified repairs and upgrades. CRT is the only OEM approved vendor able to perform the required repairs and upgrades. GE Aircraft Engines, the OEM, has approved CRT, and only CRT, to perform these specific LM2500 assembly repairs and upgrades.

An alternate vendor would need to complete the tasks listed in the chart below prior to being considered for such work:

Events Duration

Obtain a GE Aircraft Engines Repair Activity Certification 1-3 Years

Obtain all Required Tooling and Fixtures (proprietary & non-proprietary equipment) 2-4 Years

Develop OEM Approved Advanced Repair and Welding Techniques Required for US Navy Specific Engine Configuration Upgrades

1-3 Years

Establish and Perform Adequate Testing of Repaired/Upgraded Assemblies to Verify Efficacy

2-5 Years

Total Time 6-15 Years Note: Events listed above cannot occur concurrently.

The labor time that would be required to obtain and establish the facilities, tooling, procedures, and certifications needed to execute the SOW create a threat to fleet availability required to support scheduled missions and deployments. There is not a sufficient amount of time available for a potential competitor to establish themselves as a viable alternative option without sacrificing mission requirements. Currently, there is a lack of US Navy LM2500 IC configuration engine spares and there is a growing number of IC configured engines operating in the US Navy fleet. In order to meet program and fleet requirements, the US Navy cannot wait for a repair activity to procure and build special tooling, develop proprietary repair procedures, and obtain the required OEM certifications to perform these engine assembly upgrades. If the US

Navy were to wait 6-15 years for an alternative vendor to meet the stated requirements, the fleet would be at risk of not being able to provide compatible engines to ships in times of need.

Wartime sparing requirements would not be met, thus putting the fleet in a vulnerable position.

Award of this work to any other repair activity other than CRT would therefore result in unacceptable delays and potential US Navy fleet liabilities

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

On 22 February 2021, a Sources Sought notice was posted to Beta.SAM.Gov with a closing date of 08 March 2021. No responses were received to the notice. On 25 March 2021, a synopsis of this procurement describing the Government’s intent to procure on a sole source basis was published on the Beta.SAM.Gov web page with a closing date of 09 April 2021. No responses were received to the synopsis. In addition, market research conducted by the technical and requirements personnel and the Contract Specialist revealed no additional sources with the capability to perform the required services.

7. Determination of Fair and Reasonable Costs

The Contracting Officer has determined that the anticipated costs to the Government for the services covered by the J&A will be fair and reasonable. The contractor will submit a formal price proposal with other than certified cost or pricing data and sufficient information to support the accuracy and reliability of the estimate. Experienced technical analysts and contract specialists with the aid of necessary field pricing support will review the contractor’s proposal.

The Contracting Officer will use cost and pricing analysis as the basis for negotiating a fair and reasonable price.

8. Actions to Remove Barriers to Competition

All orders issued will be reviewed annually by the Procuring Contracting Officer to ensure that CRT is still the only vendor that can satisfy agency requirements. Orders will only be placed to support LM2500 repair and upgrade services provided by CRT. NSWCPD will continue to monitor the marketplace and identify potential sources of the services identified in this Justification. Any sources discovered that could potentially satisfy this specific procurement will be taken into account for any future requirements.

E16- JA Signature Page - TD Approval Combined Technical_Redacted