Justification and Approval_Redacted.pdf

NCH 53.6-2

DEPARTMENT OF THE NAVY

PORTSMOUTH NAVAL SHIPYARD

PORTSMOUTH, NH 03804-5000

IN REPLY REFER

J&A Number: PL-2090 Ser 410-053 P.R. Number: N3904022RC20177

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

Unusual and Compelling Urgency (FAR) 6.302-2

JUSTIFICATION

1. Contracting Activity

The Naval Sea Systems Command Contracting Division (Code 410), Portsmouth Naval Shipyard (PNS), Kittery, ME.

2. Description of the Action Being Approved

The nature of this action is to award a sole source contract for inspection and repair of approximately 125 hydraulic control valves, to support the full Ship's Service System flush on USS Texas. This action will require the first set of control valves to be shipped to the vendor on February 26, 2022 with the return of the valves needing to be received at PNS by April 22, 2022.

Subsequent valves will be sent in the months of March, May, June, and July with the last set of valves needing to be returned to PNS by August 24, 2022.

The total estimated life cycle value of this requirement is

Fiscal Year 2022 Operations and Maintenance funds will be utilized to fund this effort. Funding document was provided to fund this effort. The applicable North American Industry Classification code is 332912, Fluid Power Valve and Hose Fitting Manufacturing, with a size standard of 1,000 employees.

3. Description of Supplies/Services

During overhaul of the USS Texas hydraulic system, it was found to be contaminated with metal shavings due to a failure on one of the power plant pumps. The failure of the power plant pump resulted in contamination being pumped throughout the hydraulic system during normal system operation. To resolve the contamination being pumped throughout, the USS Texas project is required to flush the entire hydraulic system in order to restore system cleanliness. Restoration of the hydraulic system is critical to completion of the overhaul and maintenance of the USS Texas. The unanticipated flushing of the hydraulic system is projected to cause a delay in completion of the USS Texas overhaul by a minimum of four (4) months. An integral part of this hydraulic system flushing is the inspection, repair, and recertification of all associated hydraulic valves.

Initial market research conducted identified two vendors, Sargent and Oceaneering International. It was identified through communication with Sargent, that they would not be able to completed inspection and repair of the valves in accordance with (IAW) the Statement of Work (SOW) timelines. Oceaneering International identified that they could meet the timelines identified in the SOW.

The estimated value of this work for the entire PoP (February 26, 2022 through August 24, 2022), is

Estimated Dollar Value

Total Hydraulic Control Valves – Inspect/Repair

4. Statutory Authority Permitting Other Than Full and Open

Competition

a. This acquisition is conducted under the regulatory authority of FAR 6.302-2, unusual and compelling urgency. The repair of the hydraulic control valves was an unanticipated repair on the USS Texas that occurred because of contamination being unintentionally pumped through the boats hydraulic system.

b. The market research conducted identified two vendors, Sargent and Oceaneering International that could complete the inspection and repair if the hydraulic control valves. Further communication with the two vendors identified that only Oceaneering International could complete the inspection and repair of the hydraulic control valves to meet the delivery schedule outlined in the SOW.

5. Rationale Justifying Use of Cited Statutory Authority

The impact the unanticipated hydraulic system flushing will cause presents a direct financial impact but also a total overall impact in returning the USS Texas back to the United States Navy to continue the overall Navy Mission. The minimum four (4) month delay the hydraulic system flushing will cause will result in significant cost increases due to an extended overhaul schedule.

The extended over haul schedule results in many temporary systems and services that are rented during an overhaul to be extended beyond the initial anticipated timeframe by at least four (4) months. This results in unexpected costs that were not originally anticipated prior to the USS Texas arrival at Portsmouth Naval Shipyard (PNS). In addition, the overall Navy mission is dependent on use of a fully operational submarine fleet. This unanticipated delay directly impacts the timely return of a nuclear submarine to support the overall Navy mission. This presents the possibility of global security risks as this results in one less submarine available to the Navy that was scheduled to have been overhauled by a much sooner date.

Awarding a sole source contract to Oceaneering International, whom has been identified as being able to complete the work and meet the delivery schedule, provides the best-case scenario for minimizing the impact of these unanticipated repairs. A sole source award to Oceaneering international will maximize efficiency of the contracting process without any additional impact to the current hydraulic flush repair procedures. This will ensure the current timeline for control valve inspection and repairs will be met.

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

Offerors as Practicable

Based on current market research two vendors were identified, Sargent and Oceaneering International, as being able to complete the inspection and repair of the hydraulic contract valves.

Communication was completed between the two vendors to determine each vendor’s capability to not only complete the work IAW the SOW, but meet the delivery timeline. It was determined that only Oceaneering International could meet the delivery timeline.

Meeting the delivery timeline is the most crucial aspect of this requirement. Furthering efforts through posting request for information (RFI) notices would delay the contracting process and impact the award schedule which would subsequently make the possibility of a vendor meeting the delivery schedule even more unlikely. The Government does not believe any substantial cost saving would be realized through promotion of additional competition as delaying of the award through increased competition could in fact have an even greater negative financial impact for the Navy by further delaying the hydraulic system flush greater than four (4) months. Furthermore, there is no assurance that a vendor that could provide financial savings could also meet the timelines outlined in the SOW. The Government has determined that meeting the delivery timelines is of a much greater importance to the Government than total overall cost savings.

7. Determination of Fair and Reasonable Cost

The Contracting Officer has determined that the anticipated cost to the Government will be determine fair and reasonable using historical invoices from the vendor, historical contracts for like and similar items, forward rate pricing agreements, and any additional information to determine the total overall cost fair and reasonable.

The Government anticipates that there will be a premium price paid due to the urgency of this requirement and expects this premium to be reflected in the total overall quote. The Government will verify the costs associated with any premium prices to ensure the vendor is not incorporating any unnecessary or unrelated charges.

8. Actions to Remove Barriers to Competition

Actions to remove barriers: No direct actions have been taken to remove any barriers to competition as this requirement was directly related to unanticipated repairs of significant impact to the USS Texas overhaul schedule and is a one-time requirement.

With a critical timeline to complete the control valve inspection and repairs, normal competition procedures would directly impact the award timeline and possibly lead to a winning vendor not being able to meet the original timeline for inspecting and repairing the control valves. Not meeting the timeline would cause a directly financial impact and even greater scheduling impact that is already being impacted by four (4) months. The determination

CERTIFICATIONS AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION

I certify that the facts and representations under my cognizance, which are included in this justification are complete and accurate to the best of my knowledge and belief.

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LEGAL SUFFICIENCY REVIEW

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CONTRACTING OFFICER CERTIFICATION

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APPROVAL BLOCK (FAR 6.302-2 for Approving Official)

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