JA FEC 0003 Yoko WWTP Redacted.pdf

DEPARTMENTOF THE NAVY

NAVAL FACILITIES ENGINEERING SYSTEMS COMMAND FAR EAST

PSC 473 BOX 13

FPO AP 96349

Justification and Approval Number 26-JA-FECON-0003

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity.

Naval Facilities Engineering Systems Command (NAVFAC) Far East, Resident Officer in Charge of Constriction (ROICC), Yokosuka, Japan.

2. Description of the Action Being Approved.

This Justification and Approval (J&A) seeks approval to award a contract modification to increase the maximum Not-to-Exceed (NTE) capacity of Indefinite-Delivery Indefinite-Quantity (IDIQ) contract N40084-20-D-0402 for Non-Recurring Work (CLIN 0012) by $20M to Nikken Sogyo Co. Ltd. on a sole source basis.

3. Description of Supplies/Services.

The Wastewater Treatment Plant (WWTP) operations and maintenance contract N40084-20-D- 0402 was originally awarded on May 28,2020, based on full and open competition for one (1) I 2-month base period and four (4) 12-month option periods. A source-source bridge contract was awarded on June 1, 2025 for a 12-month period to maintain operations during the follow-on procurement cycle.

The contract provides all labor, management, supervision, tools, material, equipment facilities, transportation, and any incidental related work to perform the operation of the wastewater treatment plants along with preventative maintenance, repair, and alteration for the wastewater treatment plants, incinerator plants, weight scales, potable water tanks, and related equipment at various U.S. Naval Installations in Kanto Plains, Japan.

The requested ordering capacity increase of $20M under CLIN 0012 (Non-Recurring Work) will support the execution of critical utility projects according to the ROJCC Yokosuka's Fiscal Year 2026 (FY26) Maintenance Execution Plan (MEP), as well as unforeseen non-recurring task order modifications and unanticipated repairs exceeding the standard service order threshold.

Funding for the non-recurring services will utilize FY26 Operations and Maintenance, Navy (O&MN) appropriations and will be detailed on each order.

4. Statutory Authority Permitting Other Than Full and Open Competition.

10 U.S.C. §3204(a)(1), Only one responsible source and no other supplies or services will satisfy agency requirements.

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5. Rational Justifying Use of Cited Statutory Authority.

The first bridge of Contract No. N4008420D0402 expires on 31 May 2026. A competitive follow-on contract is in process, but due to acquisition timeline complexities, it will not be awarded in time to prevent a lapse in service. Based on the current Plan of Action and Milestones (POAM), the target contract award date is 29 January 2027. Therefore, an inmiediate capacity increase is required on the existing contract to maintain continuous and uninterrupted wastewater operations and execute the command's FY26 EMP.

The Performance Work Statement (PWS) for this requirement mandates that the prime contractor personally hold several specific, non-transferable licenses issued by the Government of Japan (GOJ). These include a Special Construction License (for Machinery, Piping, and Electrical) and multiple local prefectural permits for industrial waste disposal. These strict requirements are based on the legal and operational realities of performing construction and waste management within Japan.

The foundation of this legal requirement is the GOJ Construction Business Act (Act No. 100 of 1949), specifically Article 3, Paragraph 1, which legally requires any entity performing construction work to obtain a valid license from the Japanese government. Critically, this license can only be obtained by an entity that is legally registered and established within Japan, such as a Japanese subsidiary or a registered Japan branch office.

Furthermore, the license is legally essential for fulfilling waste disposal obligations. Under Japan's Act on Waste Management and Public Cleaning Article 21-3, Paragraph 1, the Prime Contractor-not the U.S. Government-is legally designated the "waste emitter." This obligates the contractor to enter into direct contracts with GOJ-licensed waste disposal firms. As a standard and non-negotiable business practice to mitigate their own legal risk, these disposal firms refuse to contract with any entity that does not hold a valid Construction Business License, as the license serves as proof that the contractor is the legitimate, legally recognized prime contractor.

Consequently, a contractor without a registered Japanese entity and the required license faces two insurmountable barriers: (1) they cannot legally perform the construction work itself, and (2) they cannot legally dispose of the waste generated. This statutory and operational reality effectively disqualifies any firm that is not a fully licensed and established entity under Japanese law. Award of this $20M capacity modification to any other source would result in a substantial duplication of cost approximately $3M that is not expected to be removed through competition.

This estimate is derived from the administrative, legal, and mobilization costs required for a new contractor to establish a registered branch office in Japan, hire qualified Japanese engineering staff, and obtain necessary GOJ licenses.

Additionally, competing this immediate capacity requirement would result in unacceptable delays of 4 to 6 months, the minimum time required for an external firm to secure the necessary GOJ environmental and construction permits. This delay would cause an immediate, catastrophic lapse in wastewater treatment operations at critical Kanto Plains naval installations, impacting U.S. Navy operational readiness and violating local environmental laws.

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NIKKEN SOGYO CO., LTD. is the oniy contractor that possesses all mandatory Japanese licenses, demonstrated capability based on successful performance under the existing contract, and the immediate mobilization capability to perform this critical requirement without a causing a lapse in service.

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

In accordance with DFARS PGI 206.302-1, a sources sought was published on SAM.gov on 26 February 2026, seeking potential capable contractors of performing the stated requirement. Only NIKKEN SOGYO CO, LTD expressed interest and provided a response.

Additional market research was determined not to be practicable for the reasons discussed in section 5 above.

7. Determination of Fair and Reasonable Cost.

The Contracting Officer has determined the anticipated cost to the Government of the services covered by this J&A will be fair and reasonable. In addition, NIKKEN SOGYO CO, LTD is currently performing the subject services under Contract N4008420D0402. As such, there is a reasonable expectation that a fair and reasonable cost can be determined for the subject requirement.

Specifically, the Contracting Officer will compare the proposed rates against historical labor and material rates under Contract N40084-20-D-0402, and the Independent Government Estimate.

8. Actions to Remove Barriers to Future Competition.

The follow-on contract action will be solicited using competitive procedures with a target award scheduled prior the second quarter FY27.

J&A No. 26-JA-FECON-0003

CERTIFICATIONS AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION

I certify that the facts and representations under my cognizance which are included in this Justification and its supporting acquisition planning documents, except as noted herein are complete and accurate to the best of my knowledge and belief.

315-243-6935 ?7o LC14k Jonathan Kim Phone No. Date Support Contracts Branch Manager

LEGAL SUFFICIENCY REVIEW

I have determined this Justification is legally sufficient.

315-243-5319 1T7 David Kelly Phone No. Date Associate Counsel

CONTRACTING OFFICER CERTIFICATION:

I certify that this justification is accurate and complete to the best of my knowledge and belief

' 1

DateJee E Blanton Phone No

ECH IV COMMANDING OFFICER APPROVAL

Upon the basis of the above justification, I hereby approve the proposed procurement described herein using other than full and open competition, pursuant to the authority of 10 U.S.C.

3204(a)(1) Only one responsible source and no other supplies or services will satisfy agency requirements.

D'ateM.L. 1ULHUK1

Captain, CEC, U. S. Navy Commanding Officer NAVFAC Far East

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