JA N00174-18-G-0001 BOA Ceiling Increase Final 06072021_AGJ-redacted_Redacted.pdf

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

INDIAN HEAD DIVISION

4081 N Jackson Road

INDIAN HEAD, MD 20640-5150

CJ&A Number FY20-Aug13-19 Code: 022

“SOURCE SELECTION INFORMATION – SEE FAR 2.101 and 3.104”

CLASS JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity.

Naval Surface Warfare Center Indian Head Division (NSWC IHD), Contracts Division 022

2. Description of the Action Being Approved.

Award of a modification to increase the ceiling of Basic Ordering Agreement (BOA) N00174-18-G-0001 from $67,682,829 by $24,420,800 to $92,103,629. Under this BOA, BAE Systems furnishes materials and services to support the MK 38 Machine Gun System (MGS) and associated equipment. No change to the ordering period will result from this action.

Authority to act under this CJ&A expires 30 September 2022

3. Description of Supplies/Services.

The MK 38 MOD 3 Machine Gun System (MGS) is an upgrade to the MK 38 MOD 2 MGS, which consists of a gun mount, a M242 Cannon, a two-axis stabilization sub-system, a remote controlled on-mount day/night electro-optical suite along with an eye-safe laser range finder, a remote operator display and control unit, and the capability to remotely operate and fire a 7.62mm automatic gun. The MK 38 MOD 3 MGS is intended for installation and operation onboard the U.S. Navy

This BOA is to procure necessary services to open, inspect, test, determine repair requirements, maintain, repair, refurbish, overhaul, and/or alter (including ORDALT installations) components, parts, sub-assemblies, assemblies, tools and test equipment;

provide installation, checkout, testing, and training; provide engineering services (field or otherwise); develop engineering change proposals (ECPs); maintenance and overhaul; and logistics support products. This BOA is also intended to be used to procure MK 38 equipment that includes engineering improvement kits, components, and spares to provide lifecycle support. The requested ceiling increase provides the uninterrupted supply of material and services required to support the MK 38 MGS for the original ordering period.

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

“SOURCE SELECTION INFORMATION – SEE FAR 2.101 and 3.104”

Estimated Dollar Value ($K)

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

10 U.S.C. 2304(c)(1) as implemented by Federal Acquisition Regulation (FAR) 6.302-1 (a)(2), only one responsible source and no other supplies or services will satisfy the agency’s requirements.

5. Rationale Justifying Use of Cited Statutory Authority.

FAR 6.302-1(a)(2)(ii)(A) states that supplies may be deemed to be available from the original source for follow-on efforts for the development of highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition and unacceptable delays in fulfilling the requirement.

FAR 6.302-1(a)(2)(iii)(B) states that services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in unacceptable delays in fulfilling the requirement.

FAR 6.302-1(b)(2) states that the existence of limited rights in data, patent rights, copyrights, or secret processes; the control of basic raw material; or similar circumstances, make the supplies and services available from only one source (however, the mere existence of such rights or circumstances does not in and of itself justify the use of these authorities).

The original BOA budget only accounted for a limited procurement of the Coaxial Automatic Gun Ordnance Alteration (COAX ORDALT) kits through BAE Land and Armament Systems (BAE) in the first year. The acquisition strategy for follow-on COAX ORDALT kits consisted of a separate procurement directly. Most items were to be procured competitively and a select few items would be procured via sole source contracts. Delays in adjudication of data rights resulted in the need to procure the COAX ORDALT for FY19 on this BOA; which were not included in the original ceiling. In addition, engineering support and acquisitions

Starting in FY20, BAE was awarded an order to transition the MK 38 MGS

As of March 2021, 93% ($63.1M of the $67.7.M) of the BOA’s ceiling is awarded. In addition, $11.8M in FY21 actions (Engineering Services, CUAS/Mod3 Conversion Kits) are required in FY21. We do not have sufficient ceiling to meet the FY21 requirements, let alone through FY22 that are planned for this BOA. Without the requested ceiling increase, those FY20-FY22 requirements will be delayed at least 1 year, causing an adverse impact to the operational readiness of USN and USCG

As this is an increase to the existing BOA N00174-G-18-0001, it will continue to be a sole source with BAE Systems. The contractor has been providing parts and engineering/technical services related to the MK 38 MGS since the system was initially acquired by the U.S. Navy in 2004. BAE Systems is the only viable source to manufacture MK 38 MGS components and to provide engineering/technical services related to the MK 38 MGS.

Approximately of the gun mounts in the MK 38 MGS Program of Record have already been installed and are currently operational. Specifically, the MK 38 MGS is currently in use on the U.S. Navy

Government does not have the required technical data with which to compete the services and supplies requirements to continue support of these gun mounts. RAFAEL Advanced Defense Systems (RAFAEL) is the original equipment manufacturer for the MK 38 MGS, and they own the associated technical data rights. They have a teaming agreement with BAE, which creates an exclusive relationship with respect to the sharing of MK 38 technical data or sale of technical services and components. In a letter dated 8 May 2013, BAE and subcontractor RAFAEL officially declined the Government’s request to purchase the technical data package and obtain the rights for a competitive procurement of specialized services and parts.

Based on the above, BAE and subcontractor RAFAEL’s ownership of MK 38 technical data preclude any other company from performing the required services or manufacturing the MK 38 associated equipment other than BAE (with Rafael as the subcontractor). They are the only qualified source with the requisite knowledge, technical experience, and production capability necessary to satisfy the requirements to manufacture the required MK 38 spares and other associated equipment and provide specialized engineering, technical, and logistics services related to the MK 38. In order to acquire spares or utilize specialized engineering and logistics services from competing sources, the government would have to introduce another gun weapon system and replace all fielded MK 38 gun mounts.

Award for the MK 38 MOD 3 to any sources other than BAE Systems would result in unacceptable delays in fulfilling the agency’s requirements, as this would require acquisition of a new machine gun system. Introducing a new system that is produced by a different manufacturer would add a minimum of three (3) years to the fielding schedule. It will require

36 months for qualification testing/evaluation/certification, causing a delay to all planned ship installations of this critical capability. This effort would add an unacceptable amount of time to the current schedule. The MK 38 MOD 3 MGS is the only system capable of meeting fielding requirements, and BAE Systems is the only qualified source with the requisite knowledge, technical experience, and production capability to source it.

Based on the above, qualifying and certifying another gun weapon system in order to compete the procurement of spares and specialized services is not achievable. The government must continue to acquire MK 38 spares and specialized engineering, technical, and logistics services from BAE.

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

Individual or classes of orders issued under this BOA will continue to be published on the FedBizOpps website in order to meet the requirements of FAR 5.201 and to assist in determining if other sources have emerged.

A pre-solicitation notice was posted on FedBizOpps on 03 April 2020 until 20 April 2020. No responses were received.

7. Determination of Fair and Reasonable Cost.

The Contracting Officer has determined the anticipated cost to the Government of the supplies/services covered by this J&A will be fair and reasonable.

8. Actions to Remove Barriers to Future Competition.

A procurement data package has been submitted to the contract office for the competitive procurement of parts to be included in the COAX ORDALT kits. This package follows the original plan to procure all items for which the Government has unlimited data rights. It presently envisions that these parts will be procured as a small business set aside.

In parallel, the adjudication of the remaining data rights was pursued and completed. The result was that 4 items of the COAX ORDALT remain proprietary. Those items will be procured on sole source contracts with the appropriate supplier.

For the reasons set forth in Paragraph 5, Naval Surface Warfare Center Indian Head Explosive Division (NSWC IHD) has no plans at this time to compete future contracts for the types of supplies/services covered by this document, other than the items listed above in the previous 2 paragraphs. If another potential source emerges, NSWC IHD will assess whether competition for future requirements is feasible.

CERTIFICATIONS AND APPROVAL

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, including Acquisition Plan No. AP 17-008 Rev 1_, except as noted herein, are complete and accurate to the best of my knowledge and belief.

COMBINED TECHNICAL AND REQUIREMENTS COGNIZANCE:

Date

LEGAL SUFFICIENCY REVIEW (NMCARS 5206.303(90))

I have determined this justification is legally sufficient.

CONTRACTING OFFICER CERTIFICATION (FAR 6.303-2(b)(12))

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

APPROVAL BLOCK (FAR 6.304 for Approving Official)

Upon the basis of the above justification, I hereby approve, as Designee of the Head of the Procuring Activity, 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).

DESIGNEE OF THE HEAD OF THE PROCURING ACTIVITY

A. Johnson (NSWC IHD TD) Date

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JOHNSON.ASHLEY.GR

ANT.1228699426

Digitally signed by

JOHNSON.ASHLEY.GRANT.1228699426

Date: 2021.06.10 14:43:34 -04'00'