JA Redacted.pdf

J&A Number: 0233-20-006-00.1

Code: 0233

P.R. Number: 20-SMW-030

LIMITED SOURCES 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 0233.

2. Description of Action Being Approved

Award of a firm-fixed-price purchase order on a limited sources basis for General Electric (GE) Level IV licensed maintenance and overhaul provider, for the procurement of depot-level overhaul services of US

Navy LM2500+ Gas Generators.

3. Description of the Supplies or Services

The proposed acquisition will provide for depot-level overhaul and repair of one (1) US Navy LM2500+

Gas Generator IAW LM2500+ GEK technical manual 109982. The total estimated cost for this service is

$2,737,591.

Estimated Dollar Value ($K)

FUNDS Description Total

OMN Depot-Level Overhaul and Repair $2,737,591

This procurement will use FY20, Operations and Maintenance (OMN) funding to fully fund at the time of award. The Government’s minimum needs have been verified by the certifying technical and requirements personnel. The Period of Performance (POP) for this effort will be one (1) year from date of award.

NSWCPD is a Department of Defense entity responsible for research, development, test and evaluation, engineering, and fleet support for US Navy ships, submarines, military watercraft and unmanned vehicles.

NSWCPD Code 42 is the In-Service Engineering Agent (ISEA) for Marine Gas Turbine (MGT) main propulsion systems installed on surface ships, submarines, and assault crafts. There are over 1,200 gas turbine engines installed aboard naval vessels.

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

PHILADELPHIA DIVISION

5001 SOUTH BROAD STREET

PHILADELPHIA PA 19112-1403

IN REPLY REFER TO:

NSWCPD Code 423 manages the 2SCOG Program for the US Navy. The 2SCOG program manages the rotatable pool and repair pipeline for US Navy non-nuclear propulsion assets, which includes Marine Gas

Turbines used for propulsion, power generation, and auxiliary power on various US Navy surface and amphibious platforms. MGTs are maintained on a condition basis such that an engine is only removed from service after it has failed. The 2SCOG Program provides funds to overhaul gas turbine engines after they are removed from service.

This proposed acquisition is for depot level overhaul of one (1) US Navy LM2500+ Gas Generator. This engine is used as the main propulsion driver on the LHA-6 and LHD-8 Class of amphibious assault ships.

4. Statutory Authority Permitting Other Than Full and Open Competition

10 U.S.C.2304(c)(1) as implemented by FAR 6.302-1, Only one responsible source and no other supplies or services will satisfy agency requirements, or for DoD, from only one or a limited number of responsible sources

5. Rationale Justifying Use of Cited Statutory Authority

GE is the Original Equipment Manufacturer (OEM) of the aero-derivative LM2500+ Gas Generator.

Contractors are required to possess a valid GE Level IV Maintenance and Overhaul Facility licensing agreement in order to service the new OEM parts for the US Navy LM2500+ Gas Generator. Each

Contractor must have a valid GE Level IV licensing agreement with the OEM, so they are able to procure required marine gas turbine components that have been found to be not repairable following the complete teardown and inspection of the gas generator by the Contractor. The US Navy requires that no aftermarket or non-OEM marine gas turbine components be installed in US Navy gas generators, nor will the OEM make them available to non-GE Level IV licensed Contractors. The Navy has the capability to verify OEM genuine parts by validating those parts using an Illustrated Parts Breakdown (IPB) Manual issued by the OEM. The manual provides a comprehensive listing of all original parts used in the engine, along with GE part numbers, part history, quantities and detailed graphics of where the part is used. In addition, GE is the only vendor possessing all the proprietary rights and design details to produce the engine components used in the LM2500+ gas turbine. Thus, GE only makes these parts available to its

Level IV licensed facilities for engine repairs. If the proposed acquisition is awarded to a non-GE Level

IV maintenance and overhaul commercial depot resulting in aftermarket parts being installed on US Navy

LM2500+ gas generators, it brings into question the legitimacy and functionality of the parts being installed which can have a direct result in diminished performance and reliability of the engines being overhauled and thereby reducing the Fleet’s capability. Use of non-OEM material or components introduces risk into the propulsion gas turbine engines used throughout the Fleet.

In addition to parts availability, the GE Level IV licensing agreement ensures that the Contractor utilizes only OEM approved repair specifications, repair manuals, service bulletins, and Quality Assurance procedures. The US Navy does not possess organizational or depot level technical manuals for the overhaul or repair of US Navy LM2500+ gas generators. The GE Level IV licensing agreement also assures that the Contractor repairs the LM2500+ Gas Generator to the standards that are used to manufacture the engines and provides traceability of the pedigree of new parts, repair procedures and performance testing. The OEM, GE, is the only entity that possesses the requisite intellectual property to manufacture or repair these engines. The US Navy does not own rights to this intellectual property.

The Government does not have sufficient technical data to independently certify overhaul Contractors in support of this effort, therefore the MGT NAVSEA Technical Warrant Holder considers only authorized

GE aero-derivative service providers as the only commercial Contractors technically acceptable as depot overhaul points for the US Navy LM2500+ Gas Generator.

Awarding this procurement to a gas turbine repair depot facility entity other than a GE licensed facility will lead to significantly higher costs associated with the vendor to develop the necessary knowledge base to conduct gas turbine repairs, development of tooling and engine test facility. This effort is estimated to be approximately $100M, and these costs would not be expected to be recovered through competition.

This would add substantial risk to the mission readiness of the U.S. Navy Fleet since there are currently no Ready-For-Issue (RFI) LM2500+ gas generators for replacement in the event of an engine failure. Of note, all naval platforms carrying this engine model are deployed or will be deployed in the near future.

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

A synopsis notice was posted to beta.SAM.gov on 08 April 2020, with a response date of 23 April 2020.

No responses were received.

A Request for Information (RFI) was posted to beta.SAM.gov on 04 June 2020 and received several inquiries from the following vendors: StandardAero, FW Marsh, Liburdi and MTU. On 19 June 2020 the posting closed on the website and the information was forwarded to the technical code. Upon review, the technical code determined all vendors are technically acceptable to bid except FW Marsh since that vendor did not specify they can work on the complex engine required for the repair.

All acceptable GE licenses holders will be solicited which include: MTU Berlin-Brandenburg GmbH, Hanwha Techwin Co, StandardAero and Liburdi.

7. Determination of Fair and Reasonable Costs

The Contracting Officer has determined that the anticipated costs to the Government for the supplies covered by the J&A will be fair and reasonable. The acquisition is anticipated to receive multiple offers and allow adequate price competition to justify the price as fair and reasonable. The Subject Matter Expert

(SME) and the Contract Specialist will review the Contractors’ proposals. The Contracting Officer will utilize cost and pricing analysis as the basis for negotiating a fair and reasonable price, with the submission of a formal price proposal, as necessary if adequate price competition is not obtained.

8. Actions to Remove Barriers to Competition

The Contracting Officer will continue to ensure that GE Level IV licensed maintenance and overhaul providers are still the only companies that can satisfy agency requirements. Contracts will only be placed for repair and overhaul of US Navy LM2500+ Gas Generators to GE Level IV licensed maintenance and overhaul providers. NSWCPD will continue to monitor the marketplace for any additional sources that are qualified under the GE Level IV maintenance and overhaul licensing agreement. Any sources discovered that can potentially satisfy this specific procurement will be taken into account for any future requirements.

TECHNICAL AND REQUIREMENTS CERTIFICATION - (FAR 6.303-2(b))

I certify that the facts and representations under my cognizance, that are included in this justification and its supporting data, including MOPAS No. 0233-20-006-00, except as noted herein, are complete and accurate to the best of my knowledge and belief.

COMBINED TECHNICAL AND REQUIREMENTS COGNIZANCE:

Karen Dunlevy Miller (215) 897-8507

Signature Department Head (Code 40) Phone No. Date

LEGAL SUFFICIENCY REVIEW (NMCAR 5206.303(90))

I have determined that this justification is legally sufficient.

Paul Scheck (215) 897-3057

Signature Office of Counsel (Code 00L) Phone No. Date

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

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

Jillian Randazzo (215) 897-2235

Signature Contracting Officer (0233) Phone No. Date

APPROVAL BLOCK (FAR 6.304 for Approving Official):

Upon the basis of the above justification, I hereby approve, as Competition Advocate for the Procuring

Activity, the solicitation of the proposed procurement(s) using other than full and open competition, pursuant to the authority of 10 U.S.C.2304(c)(1).

CHIEF OF THE CONTRACTING OFFICE

Signature Karen Gutmaker Date

Chief of the Contracting Office (Code 02)