Justfication and Approval SPMYM121Q0046_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

SOLICITATION: SPMYM1-21-Q-0046

[ X ] ORIGINAL

1. The Defense Logistics Agency, DLA Maritime Norfolk, is the contracting activity.

2. The action being approved is the acquisition of supplies on other than a full and open competition basis. The procedures in FAR subpart 13.5 will be used in accordance with 41 U.S.C. 1901.

3. The supplies required to meet the using activity’s needs are described as follows:

CLIN DESCRIPTION P/N QTY EST. UNIT

PRICE

EST. TOTAL

VALUE

0001 Array Probe .490 Diameter, Low Frequency

CXB4-022 10 EA

0002 Array Probe .480 Diameter Low Frequency CXB4-033 2 EA

0003 Array Probe .490 Diameter Mid-Range Frequency CXB4-024 15 EA

0004 Array Probe .480 Diameter Mid-Range Frequency CXB4-032 4 EA

0005 Array Probe .570 Diameter Low Frequency CXB4-012 5 EA

0006 Array Probe .560 Diameter Low Frequency CXB4-023 2 EA

Bobbin Probe .490 Diameter (Mag Biased Chamfered Barnacle Scraper) Low Frequency

MCBS-003 3 EA

0008 Bobbin Probe .530 Diameter Low Frequency 10024329 5 EA

0009 Bobbin Probe .440 Diameter Mid-Range Frequency 10024332 10 EA

0010 Bobbin Probe .440 Diameter Low Frequency BJF-026 5 EA

Bobbin Probe .490 Diameter (Chamfered Barnacle Scraper) Low Frequency

10026123 10 EA

EST. TOTAL AMOUNT

The subject requirement is for the procurement of the various array and bobbin probes identified in the table above. The array and bobbin probes are sole source and proprietary to the Original Equipment Manufacturer (OEM), Zetec Incorporated (CAGE Code – 51327).

ESTIMATED BASE VALUE:

ESTIMATED TOTAL VALUE (BASE + OPTIONS): Not Applicable

MAXIMUM CONTRACT VALUE:

4. The statutory authority permitting other than full and open competition is:

10 U.S.C. 2304(c)(1) - Available from only one responsible source and no other type of property or services will satisfy the needs of the agency.

5. If restricted to the only source(s) of supply, include source(s) and CAGE code:

Zetec Incorporated, Cage Code - 51327.

The subject requirement is for the procurement of Eddy Current Inspection probes to support required Eddy Current Inspections (ECIs) at Norfolk Naval Shipyard (NNSY). Eddy Current tubing inspections are part of a required maintenance package at NNSY to determine the health of condenser and heat exchanger tubing on nuclear sub-surface craft as well as integral nuclear surface ship components. The Eddy Current Array inspection system (MIZ-200) is solely manufactured by the Original Equipment Manufacturer (OEM), Zetec Incorporated (CAGE Code – 51327). Subject requirement is for various array and bobbin probes which are solely manufactured by Zetec Incorporated (Zetec). Only the Zetec array and bobbin probes will interface with the existing MIZ-200 inspection system equipment currently in use at NNSY. This equipment is used to inspect condenser tubes to find circumferential cracks and other indications of flaws or failures in heat exchangers.

Per NAVSEA Technical Publication T9074-AT-GIB-010/2032, “Eddy Current Inspection of Heat Exchanger Tubing on Ships of the United States Navy,” Zetec is the only approved manufacturing source of the array and bobbin probes for use on Naval ships. Section C.4.1.3.1 of the NAVSEA Technical Publication states, “Primary Probes Zetec CXB4 or XP12 shall be utilized as the primary probe.” Additionally, Section C.4.1.4 also states; “Calibration Standards for inspection shall be obtained from Zetec.”

These probes have proprietary restriction designs rights, which are owned by Zetec, and will not be released for duplication purposes. The use of any other brand or product would be incompatible with the existing equipment on hand. At this time, there is no other known source of supply capable of providing the required probes that would be compatible with the proprietary design and existing equipment already in use. Utilizing a different brand of array and bobbin probes would require a technical review of any alternative probes, thereby initiating another demonstration to determine efficacy. In addition, the NAVSEA Technical Publication would require an amendment which would most certainly cause delays.

This would result in a substantial duplication of resources, cost, and time to the Government that would not be recovered through competition. Failure to procure requested Zetec manufactured array and bobbin probes, which are the only probes compatible with the existing Zetec equipment in use, would result in costly damage to the inspection equipment and render the equipment inoperable to perform the required inspections during the ship’s scheduled maintenance availability. Ultimately, this would create serious mission degradation to NNSY support functions, as well as mission decrement to the Navy’s fleet.

6. Efforts to ensure that offers are solicited from as many sources as practicable are:

The acquisition will be solicited on beta.SAM.gov to encourage potential supplier participation. Any interested party that requests a copy of the solicitation will be provided one. The Government will continue to conduct market research to see if changes occur in the marketplace that would enable future actions for these items to be competitive.

7. I hereby determine that the anticipated cost to the Government will be fair and reasonable.

In accordance with FAR 13.106-3(a), the Contracting Officer will make a determination that the proposed price is fair and reasonable based upon comparison of the proposed price with prices found fair and reasonable on previous purchases, as well as other cost, price, and buyer analysis. Information from market research, governmental sources, and Producer Price Index Industry (PPI) Data will also be used to help establish price reasonableness when needed.

8. Market Research/Efforts to Obtain Competition:

A Sources Sought notice was posted to beta.SAM.gov on 10 May 2021 with a closing date of 15 May 2021. One (1) response was received as a result of this notice. Jess W. Jackson & Associates, Inc. (Cage Code - 0DLY2), responded to the Sources Sought notice. Jess W. Jackson & Associates, Inc. is a small business concern representing Zetec Inc. products, which is based in Buford, GA. After further review of the response received, Jess W. Jackson & Associates, Inc. has demonstrated the capability to provide the requested probes. The Acquisition Specialist was also informed by a Zetec Government Sales Representative that they have authorized Channel Partners (or resellers) of Zetec products which are assigned by regions. Jess W. Jackson & Associates, Inc. is a confirmed authorized Channel Partner source for Zetec products.

Prior purchase history for the same and similar material was located during market research. The same material was identified by the same manufacturer and part numbers. Similar item determination was based off size, manufacturer part number, and salient characteristics. DLA Maritime Norfolk awarded a contract on 14 April 2021 for three of the same array and bobbin probes as the current requirement.

Contract number SPMYM1-21-P-0970 was awarded as a 100% set-aside in the amount of $218,515.00 to Jess W. Jackson & Associates, Inc. (Cage Code - 0DLY2). DLA Maritime Puget Sound awarded a contract on 31 January 2020 for the same and similar material as the current requirement. Contract number SPMYM2-20-C-0004, was awarded on an unrestricted basis, in the total amount of $487,225.00 to Jess W. Jackson & Associates, Inc. (Cage Code - 0DLY2). In accordance with DFARS PGI 206-303- 2, a copy of the previous justification and approval (J&A) for solicitation number SPMYM2-20-Q-0865, resultant contract SPMYM2-20-C-0004, is attached. (See Attachment 1, Previous J&A). It is important to note that there is a typographical error in the title of the referenced J&A attached. The previous J&A pertains to solicitation number SPMYM2-20-Q-0865 and resulting contract SPMYM2-20-C-0004.

However, the J&A title references solicitation number “SPMYM220Q0885” which is incorrect.

The Norfolk Naval Shipyard, Defense Logistics Agency (DLA), and numerous other Department of Defense activities have also done business with Zetec Inc. Supporting information was located by querying Government databases that provide information relevant to agency acquisitions to include EDA and the Navy contracting system utilized by DLA Maritime Norfolk, Standard Procurement System (SPS). Catalogs and other generally available published product literature available via the internet were also reviewed. Zetec is active in the System for Award Management (SAM) database, with no exclusions indicating history of debarment or suspension. The Acquisition Specialist contacted knowledgeable individuals within the Government regarding market capabilities, published a Sources Sought Notice via beta.SAM, analyzed same and similar past procurement history requirements, queried

Government-wide databases, and also reviewed catalogs and other product information available on the internet.

Based on the information above and outlined herein; there is no indication or reasonable expectation that any other business concern would have the capability or resources available to support this requirement.

Therefore, the Acquisition Specialist has determined Zetec Inc as the only manufacturing source capable of providing the required items approved by Norfolk Naval Shipyard (NNSY) at this time.

Information received regarding the commerciality of the item(s):

In accordance with FAR 10.002(b), market research has been conducted to determine if commercial items or non-developmental items are available to meet the Government’s needs or could be modified to meet the Government’s needs. Internet market research reflects that the Zetec array and bobbin probes are available in the commercial marketplace and offered for sale to the general public. Prior sales history includes customers in the aerospace, automotive, military and defense, oil and gas, railway, and transportation industries. tank industry, commercial exteriors, rail car facilities, water towers, waste or water treatment facilities, and general maintenance. In addition, the Acquisition Specialist requested copies of previous invoices from the manufacturer to further confirm prior sales history to the general public. Zetec supplied a total of five (5) commercial invoices dated from January 2021 through April 2021. The invoices reflect various array and bobbin probes that were similar in size and frequency. The companies that the vendor submitted invoices from include Curtiss-Wright Flow Control Company, Arizona Public service, Master-Lee Energy Services Corp, and the Merrick group. Based on the results of the market research conducted, the Acquisition Specialist has determined that both the array probe and bobbin probe meet the FAR 2.101(1)(i) definition of a commercial item.

[ X ] A market survey was not conducted due to:

Based on the results received from multiple other market research techniques used, a formal market survey was not conducted. The Acquisition Specialist contacted knowledgeable individuals within the Government regarding market capabilities, published a Sources Sought Notice via beta.SAM.gov, analyzed same and similar past procurement history requirements, queried Government-wide databases, and also reviewed catalogs and other product information available on the internet.

9. A listing of sources, if any, indicating an interest in the acquisition is:

Zetec Incorporated (Cage Code – 51327) and Jess W. Jackson & Associates, Inc. (Cage Code - 0DLY2)

10. The following actions are being taken to identify additional sources:

The Acquisition Specialist has been in contact with the requirement originator, , to be prepared to assist with identifying other recommended sources, if required. Should the solicitation result with an alternate offer identifying another manufacturing source of supply of a different brand of probes, the interested parties will be invited to the Norfolk Naval Shipyard to provide a demonstration of the product’s compatibility and prior successful history of the product use. If the determination is made that there is another possible manufacturing source of the probes, future acquisitions will allow and provide for manufacturer competition. The Government will also continue to conduct market research, to see if changes occur in the marketplace that would enable future actions for these items to be competitive.

Additionally, Sources Sought notices will continue to be posted to Government Point of Entry (GPE) prior to any future solicitations.

A review of the previous J&A (See Attachment 1) for solicitation number SPMYM2-20-Q-0886, resultant contract SPMYM2-20-C-0004, reveals that a Sources Sought notice was posted to beta.SAM.gov on 06 December 2019 with a response date of 12 December 2019. Only one (1) interested source responded. Jess W. Jackson & Associates, Inc. (Cage Code - 0DLY2) was the only response received as a result of the notice. The OEM, Zetec Incorporated, was the other known source identified. In May 2018, the previous contract was awarded to Zetec on a sole source basis. Reference previous contract number SPMYM2-18-C-0027. Planned actions to remove any barriers to competition cited on the previous justification include that the Government will assess whether competition for future requirements is feasible should another potential source emerge. Until the Government determines that the probes and associated hardware no longer meet the required NAVSEA standards for accomplishing the Eddy Current Inspections, only the OEM (Zetec) or their distributors are expected to respond to the solicitation.

Prior to publicizing and posting the solicitation (SPMYM1-21-Q-0046) for the current requirement; a Sources Sought notice was posted to beta.SAM.gov to beta.SAM.gov on 10 May 2021 with a closing date of 15 May 2021. One (1) response was received as a result of this notice. An authorized Zetec distributor, Jess W. Jackson & Associates, Inc. (Cage Code - 0DLY2), responded to the sources sought notice. The Acquisition Specialist also contacted knowledgeable individuals within the Government regarding market capabilities, reviewed prior procurement history requirements, queried Government-wide databases, and also reviewed catalogs and other product information available on the internet.

Based on the results of the market research conducted, there is no reasonable expectation or indication that any other potential source of supply would be capable of, or have the resources available to, support this requirement. The NAVSEA standards for accomplishing the Eddy Current Inspections are still required and Zetec remains as the only known and approved manufacturing source. Therefore, future competition is still not feasible. No other potential sources of supply have been identified or expressed interest in supporting this requirement. The Government does not have a planned action to complete on this non-competitive follow-on requirement. The determination is made that the requirement/guidance in PGI 206.304 have been addressed.

Referenced Attachments:

1.) Attachment 1, Previous J&A

APPROVAL/CERTIFICATION

I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief. If not exceeding $700,000, this signature serves as the approval.

7/8/2021 Contracting Officer Date

SPENN.AMAND

A.R.128371509

Digitally signed by

SPENN.AMANDA.R.128371

Date: 2021.07.08 10:49:58 -04'00'

I have reviewed and find this justification to be legally sufficient:

DLA General Counsel Date Signature

APPROVAL REQUIREMENTS

[ X ] Up to $700,000 Contracting Officer

[ ] $700,000 to $13,500,000 Competition Advocate

[ ] $13,500,000 to $93,000,000 Head of Contracting Activity (HCA)

[ ] over $93,000,000 Senior Procurement Executive (AQ) (DLA General Counsel signature line required when sending to AQ)