MPES_Redacted.pdf

J&A Number: 0222-22-423-00 Code: 0223 P.R. Number: TBD

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 0223.

2. Description of Action Being Approved

Award of a Cost-Plus-Fixed-Fee (CPFF) Indefinite-Delivery Indefinite-Quantity (IDIQ) contract on a sole source basis to SPD Electrical Systems, Inc. (SPD), 13500 Roosevelt Blvd, Philadelphia, PA 1911-4201 (a division of L3 Harris) for engineering and technical services related to obsolescence management, redesign and qualification of circuit protection and switchboard products.

3. Description of the Supplies or Services

The planned acquisition will provide engineering and technical services required for obsolescence management of circuit protection and switchboard products on Navy ship classes, which include aircraft carriers, submarines and surface ships. The circuit protection and switchboard products covered under this acquisition were developed and are provided on a sole source basis from SPD, and no other manufacturer possess the knowledge or necessary data rights to provide the required services. Tasking, products and deliverables will include:

- Reports on manufactured components and systems to project obsolescence risks for a 5-year timeframe (including critical subcomponent vendor health), with costed options to address risks

- Selection of replacement components, or redesign of systems, to address identified obsolete components

- Research & design (R&D) and testing efforts to verify feasibility of any replacement components or redesigns

- Engineering analysis and testing of products and subcomponents in providing supporting objective quality evidence (OQE) for qualification and waiver recommendations

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

PHILADELPHIA DIVISION

5001 SOUTH BROAD STREET

PHILADELPHIA PA 19112-1403

IN REPLY REFER TO:

- Execution of engineering efforts to design and implement technical changes to address obsolescence

- Resolve technical discrepancies discovered during qualification testing or in fielded shipboard products

MOPAS Acquisition Strategy Plan No. 0222-22-423-00.1 covers this acquisition.

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

The total estimated dollar value of the proposed acquisition is $11,502,840. Funding amounts for this estimated cost are as such:

Table 1 – Acquisition Appropriation Schedule Estimated Dollar Value Appropriation FY22 FY23 FY24 FY25 FY26 Total Percent

OM&N $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $5,000,000 43%

SCN $1,220,568 $1,220,568 $1,220,568 $1,220,568 $1,220,568 $6,102,840 53%

RDT&E $80,000 $80,000 $80,000 $80,000 $80,000 $400,000 4%

Total $2,300,568 $2,300,568 $2,300,568 $2,300,568 $2,300,568 $11,502,840 100%

The Period of Performance (POP) for this effort will be seventy-two (72) months with a sixty (60) month ordering period.

4. Statutory Authority Permitting Other Than Full and Open Competition

10 U.S.C. 2304(c)(1), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements, as implemented by Federal Acquisition Regulation (FAR) Subpart 6.302-1.

5. Rationale Justifying Use of Cited Statutory Authority

This requirement is for obsolescence management including analysis and reporting, as well as design and manufacturing services to address obsolescence. SPD is the designer and Original Equipment Manufacturer (OEM) for a number of ACB and AQB type circuit breakers to be addressed by this contract. AQB and ACB type circuit breakers that are manufactured by SPD are designed to meet the requirements of MIL-DTL-17361 and MIL-DTL-17587 respectively and satisfactorily pass testing to be included in the Qualified Products List (QPL) databases. AQB and ACB type circuit breakers are used to protect equipment and personnel from overcurrent situations on all surface ship and submarine classes.

There are no form or fit substitutes manufactured by any other vendor other than SPD for all SPD ACB type including 5 kilovolt circuit breakers, as well as the AQB-LF252, AQB-A252, AQB- A400/402, AQB-A800/802 and AQB-A1600/1604 circuit breakers, and CVN 68, DDG, and Virginia class switchgear. Additionally, SPD is the sole manufacturer of these aforementioned breakers. SPD has an extensive corporate history as the supplier of circuit protection products and services for nuclear and non-nuclear Navy applications by providing unique and specialized technical capabilities. SPD’s ability to leverage existing qualified circuit breaker designs offers significant benefits to NSWCPD’s efforts to provide safe and qualified circuit breaker designs to the Fleet.

SPD, as the OEM, developed the technical documentation required to repair and maintain their circuit breakers to design requirements at private expense. SPD also provides proprietary field technical services and parts support for these circuit breaker types throughout their lifecycle. As such, SPD owns the rights to the proprietary design, fabrication and assembly drawings that support these circuit breaker types, as well as proprietary processes and procedures for the fabrication of circuit breaker parts and sub-assemblies for the accomplishment of troubleshooting, maintenance and repair actions. SPD is the only authorized facility that can perform repairs on the ACB and AQB circuit breaker types they manufacture.

Proprietary information such as design dimensional data (measurements, tolerances, clearances, etc.), component surface finish, internal microprocessor programming, material composition, manufacturing procedures, component wear limits, repair specifications is the sole property of SPD and is not available to the Government. Though the Navy does possess limited organic capability to maintain and repair the items mentioned above, problems arise periodically that cannot be properly diagnosed or repaired due to the Government’s lack of specialized knowledge and expertise with these breakers. In addition to owning the rights to the proprietary information, SPD has developed unique and highly specialized repair procedures and tooling. This information is also considered the proprietary property of SPD. NSWCPD contacted SPD to inquire about the Government obtaining the proprietary data rights in an email sent on 14 October 2021. Jonathan Ewashko, from SPD, responded to that email on 14 October 2021 stating that SPD would not be interested in selling the data rights to the Government.

The Government does own and has access to certain technical documentation related to the various SPD circuit breaker types (i.e., technical manuals, maintenance procedures, logistics provisioning information), and does possess limited capability to troubleshoot and maintain the equipment over its lifecycle. However, current Navy programs, specifically the needs of the CVN and Submarine Fleet require the development of complex repair and maintenance processes and procedures as identified by the Circuit Protection Technical Advisory Board (CPTAB). Without access to the proprietary information detailed above, the Navy cannot develop these processes and procedures with the requisite level of detail and precision necessary to execute program initiatives.

Additionally, current Navy technical and logistics support documentation is lacking in sufficient detail, accuracy and comprehensiveness necessary to support effective lifecycle maintenance on the impacted equipment. The Navy’s ability to improve and expand on existing technical and logistics support documentation is significantly restricted by the lack of access to applicable proprietary information and data. Finally, the Navy’s capacity to develop and execute lifecycle product improvement strategies is negatively impacted by limited access to proprietary design information. Design upgrades and product improvements related to obsolescence and technology insertion are impractical without full access to information currently owned by and available exclusively to SPD.

Furthermore, neither a new source or the Government have access to the proprietary technical data and information related to SPD’s circuit breaker lines necessary for the effective, accurate and efficient execution of anticipated tasking under this contract related to engineering and technical support. A previous requirement for similar services was not competed due to the reasoning stated above. A Justification and Approval (J&A) was approved (J&A No. 0223-21-203-00) on 12 May 2021, which resulted in Contract No. N64498-21-C-4006 being awarded on 31 August 2021.

In order to award this effort to a new contractor, new switchgear, circuit breakers and bus components would have to be designed, developed, qualified, procured, manufactured, installed and tested, all at Government expense. If the Government were to pursue this option in order to pursue full and open completion, the estimated cost and schedule impact to design and qualify a new circuit breaker is presented Table 1. These estimates were developed from extrapolating the cost of design, development, qualification, and procurement efforts for circuit protection under Contract No. N64498-19-C-4000.

TABLE 1

Events Duration Cost

Design alternate switchgear, CBs & bus 3-5 years $12,240,000 Develop alternate switchgear, CBs & bus 2-3 years

Qualification 1-2 years $800,000

Procurement of new switchgear, CBs & bus components for applicable ship classes* 2-3 years

$24,000,000

Manufacture new switchgear, CBs & bus 2-3 years Installation & testing of new switchgear, CBs & bus components on applicable ship classes* 3-5 years

Total Time 11-18 years $37,040,000 *Tasks expected to occur concurrently

Current and future Navy ships, including Columbia-class submarines under construction, require immediate solutions for life cycle support and obsolescence management of their circuit breakers.

The need date for Columbia class is October 2022 to meet the design and construction schedule.

As such, award to any other source would result in unacceptable delays and excessive cost in fulfilling the agency’s requirements that is not expected to be recovered through competition.

Considering all of the above, SPD, the original designer and manufacture of the switchgear, circuit breakers and bus components to be addressed under this contract, is the only responsible source available that is capable of providing the required services in an acceptable time to fulfill the agency’s requirement for ship readiness and mission for the duration of the 60 month ordering period.

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

A Request for Information/Sources Sought was posted to Beta.SAM.Gov on 14 October 2021 with a closing date of 25 October 2021. Additionally, a synopsis of this procurement was published to Beta.SAM.Gov on 14 October 2021 with a closing date of 29 October 2021. By the closing date, no contractors had responded to either posting. No additional market research was conducted because it is not practicable, for the reasons discussed in paragraph 5 above, for any other contractor than SPD to provide the required services.

7. Determination of Fair and Reasonable Costs

The Procuring Contracting Officer (PCO) has determined that the anticipated cost to the Government for the services covered by the J&A will be fair and reasonable. The contractor will be required to submit a formal cost proposal with certified costs or pricing data and sufficient information to support the accuracy and reliability of the proposal. Experienced technical personnel and the contract specialist, with the aid of necessary field pricing support, will review the contractor’s proposal. The PCO will use cost and pricing analysis as the basis for negotiating a fair and reasonable price.

8. Actions to Remove Barriers to Competition

For the reasons set forth in paragraph 5, NSWCPD has no plans at this time to compete future contracts for the services covered by this justification. The IDIQ will be reviewed annually by the PCO to ensure that SPD is the only company that can satisfy agency requirements. Orders will only be placed to support obsolescence mitigation and avoidance efforts by SPD on their impacted systems and components. The technical team and the PCO will assess any potential future sources that may be discovered to determine whether competition for future requirements is feasible.