III.F. PR1300857175 JA _Redacted.pdf

Action #:208394 P.R. Number: 1300857175

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

UNDER FAR 13.5, SIMPLIFIED PROCEDURES FOR

CERTAIN COMMERCIAL ITEMS

JUSTIFICATION

1. Contracting Activity

The Naval Sea Systems Command (NAVSEA), Naval Undersea Warfare Center Division, Newport (NUWCDIVNPT), Contracts Department, Code 02.

2. Description of the Action Being Approved

Request approval to solicit and award a Firm Fixed Price (FFP) contract on a sole source basis to HBD/Thermoid, Inc., a subsidary of HBD Industries, Inc., at 5200 Upper Metro Place, Dublin, OH 43017-5378. This requirement is for the procurement of HBD/Thermoid, Inc.’s Intellectual Property (IP), in the form of build specifications, hose drawings, compound formulation, fabric specifications, and testing procedures related to various towed array vibration isolation modules (VIM) and towflex hoses.

3. Description of Supplies/Services

The estimated dollar value of this action is $500,000.

Service Cost Center funds will be provided for this requirement with anticipated award occurring in fiscal year 2020.

The Government requires HBD/Thermoid, Inc.’s IP to manufacture and repair the following towed array VIMs and towflex hoses:

The IP being procured includes

The Government’s minimum needs have been verified by the certifying technical and requirements personnel.

4. Statutory Authority Permitting Other Than Full and Open Competition

In accordance with 10 U.S.C. 2304(c)(1), as implemented in Federal Acquisition Regulation (FAR) 6.302-1: Only one responsible source and no other type of supplies or services will satisfy agency requirements.

5. Rationale Justifying Use of Cited Statutory Authority

The NUWCDIVNPT Sensors and Array Division, Code 15, is tasked by the NAVSEA Submarine Acoustic Systems Program Office (PMS 401), Maritime Surveillance Systems Program Office (PMS 485), and the Program Executive Office (PEO) Integrated Warfare Systems (IWS5A) to provide repairs and refurbishments to towed array fleet assets at the Naval Array Technical Support Center (NATSC) facility. The NATSC supports

9. All of these towed array models require vibration isolation and towflex hoses for proper operation during deployment.

The Source Control Drawings establish the specific requirements and dimensions for these hoses. HBD/Thermoid, Inc. is the single NAVSEA approved source of supply for the required hoses as identified in drawing numbers

The vibration isolation hoses developed and designed underwent extensive testing and qualification through the use of both land based testing as well as towed sea trials. At that time, HBD/Thermoid, Inc. was the only approved source of supply for these hoses.

HBD/Thermoid, Inc. is the sole owner/proprietor of the IP related to manufacturing these hoses. These hoses have been utilized by the Government in excess and are deployed in different towed systems across both the US and foreign Navies. The Government orders approximately hoses per year to support

The Government’s need for the hoses will continue for a minimum of in order to sustain towed array systems for the Fleet.

HBD/Thermoid, Inc. is the only company with the proprietary IP necessary to successfully manufacture the required hoses. HBD’s Salisbury, NC, plant ceased operations on 31 March 2020 and discontinued the production of these items. HBD made a business decision not to transition production of these products to any of its other facilities, which leaves the Government with no source to obtain these critical parts. The Government’s need for the required hoses is on-going and continuous. It would take the Government a minimum of three years to design, prototype, build, and test various versions of these hoses to find an acceptable replacement for the hoses manufactured by HBD and utilized by the Government for the past

The testing alone required to qualify a new supplier would take a minimum of one year and would require the removal of a functioning towed array from service for use in these tests, which is unacceptable as all towed arrays are required to be in service in support of the Navy’s mission. Removal of a towed array for a year would be detrimental to the inventory of the fleet and cause potential missions to be aborted due to the lack of fielded assets.

In addition to the significant amount of time it would take for a new source to be approved, it would cost the Government an estimated to validate other products, as detailed in the table below. This estimate is based on the required prototyping, in laboratory testing, in water tow testing with Fleet assets, data collection and analysis to verify performance of each hose type/design.

Requirement Estimated Cost Prototyping In Laboratory Testing In Water Tow Testing Total $

The cost of procuring four samples of each of the nine (9) hose variants (thirty-six (36) samples), terminating the samples, and then building them up into full modules for testing is estimated to cost This estimate is based on the historical unit prices paid, provided in the table below, and the average cost for each module repair at NATSC of which is comparable to terminating the samples and then building them up into full modules (historical unit prices paid for thirty-six variants) (thirty-six variants x ) =

Towed Array

Hose Type Hose Part Number

Historical Unit Cost

Unit Price X Four (4)

Date Last Purchased

TL-29A Vibration Isolation Module

TB-

29A/C

Vibration Isolation Module

Current Engineer labor rates and historical test requirements were used to estimate the rates and required hours for each test iteration and type. Based on this, the environmental and mechanical testing (in laboratory testing) for all samples are estimated to cost a total of . One week of in water tow testing will cost approximately , including data analysis. Each hose variant will require a minimum of 2 in water tests to complete verification for a total of 18 tests and an estimated total cost of

As detailed above HBD/Thermoid, Inc. is the only source for the IP and it is in the best interest of the Government to procure the IP from HBD on a sole source basis due to the negative impacts to the Fleet detailed above.

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

A combined synopsis and solicitation notice will be published on the beta.SAM website. The notice will state the intention of NUWCDIVNPT to award a contract on a sole source basis to HBD and it will invite all responsible sources to submit a capability statement for the consideration of the Government. No additional market research was conducted because it is not practicable, for the reasons discussed in paragraph 5 above, for any company other than HBD to fulfill the requirement. If a responsible source submits a capability statement for consideration by the Government prior to contract award, it will be brought to the attention of the Approving Official.

7. Determination of Fair and Reasonable Costs

The Contracting Officer has determined that the anticipated cost to the Government for HBD/Thermoid Inc.’s IP, covered by this J&A, will be fair and reasonable. The Government will conduct price and/or cost analysis using FAR Part 15.404-1(b) and 15.404-1(c) methods, in accordance with FAR 13.003(g .

8. Actions to Remove Barriers to Competition

Procuring HBD/Thermoid, Inc.’s IP will remove the current barrier to competition as only HBD/Thermoid, Inc. can currently manufacture the required hoses. The Government will incorporate the IP information into the existing towed array hose specification technical data package (TDP) which will allow the Government to competitively procure the required isolation vibration and towflex hoses in the future.

CERTIFICATIONS AND APPROVAL

CONTRACTING NEGOTIATOR IDENTIFICATION:

Teresa Michael, Contracting Officer 0222 401-832-5434 Name and Title (Code) Phone No.

TECHNICAL/REQUIREMENTS CERTIFICATION (FAR 6.303-2(c)) I certify that the facts and representations under my cognizance, which are included in this justification and its supporting acquisition planning data, are complete and accurate to the best of my knowledge and belief.

TECHNICAL COGNIZANCE:

Signature and Date

Name and Title (Code) Phone No.

REQUIREMENTS COGNIZANCE:

Signature and Date

(Code) Phone No.

APPROVAL BLOCK (FAR 13.501(a)(2) for Approving Official) As Contracting Officer, I certify that this justification is accurate and complete to the best of my knowledge and belief, and upon the basis of the above justification, I hereby approve, as Contracting Officer, the solicitation of the proposed procurement(s) described herein using other than full and open competition, pursuant to the authority of 10 U.S.C. 2304(c)(1).

Signature and Date

Teresa Michael, Contracting Officer 0222 401-832-5434 Name and Title (Code) Phone No.