N00024_21424.pdf

DEPARTMENT OF THE NAVY

NAVAL SEA SYSTEMS COMMAND

1333 ISAAC HULL AVE SE

WASHINGTON NAVY YARD DC 20376-0001 IN REPLY REFER TO

J&A Number: 21,424 Code: SEA 02241 P.R. Number: N0002420NR57661

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

The Naval Sea Systems Command Shipbuilding Contracts Division

(SEA 022).

2. Description of the Action Being Approved

Award on a sole source basis to Huntington Ingalls Incorporated, acting through its Ingalls Shipbuilding Division (Ingalls), 1000 Access Road, Pascagoula, MS 39567, for the Long Lead Time Material (LLTM) and other related advance procurement (AP) efforts, pre-fabrication activities, and Detail Design and Construction (DD&C) of LHA 9, an Amphibious Assault Ship Replacement (LHA(R)) America Class Flight 1 Amphibious Assault Ship. LHA 9 is the fourth LHA(R) ship and will be the second Flight 1 variant, a follow-on ship to LHA 8.

3. Description of Supplies/Services

The proposed contract action will provide for the AP and DD&C of one (1) LHA(R) Flight 1 ship including but not limited to:

onboard spares and repair parts, major shore based spares, engineering and industrial services, special studies, emergent material and service, technical manuals, Coordinated Shipboard Allowance List (COSAL) material and crew familiarization. The contemplated contract action may also contain an ordering provision for material to support this effort.

Naval forces will continue to require amphibious ship capabilities to support Marine Air-Ground Task Force operations across the full range of military operations from forward presence, engagement, humanitarian assistance/disaster relief to forcible entry and major combat operations. Major Flight 1 features include: a reduced island to allow more useable area on the flight deck, re-

J&A Number: 21,424 incorporation of the well deck to increase vehicle stowage and to provide surface connector lift capability to increase overall operational flexibility, and maintenance of the Flight 0 aviation capability to the maximum extent possible.

The LHA(R) Flight 1 makes only those trades necessary to accommodate a well deck within the existing hull form in accordance with LHA(R) Flight 1 Capabilities Development Document (CDD) update approved on 26 February 2014.

The LHA 9 period of performance will be from base contract award through FY 2031 including a minimum twelve-month guaranty period after preliminary acceptance. The Government's minimum needs have been verified by the certifying technical and requirements personnel.

The estimated total program value is This amount covers the cost of LLTM, DD&C, Government Furnished Equipment (GFE), and programmatic support for LHA 9. Congress authorized and granted the Navy incremental funding authority (Public Law 116-92) to enter into a DD&C contract. The table below depicts estimated dollar value for the anticipated sole source contract portion of the total program value based on the notional FY2021 Budget Estimate Submission P-5 exhibit elements of cost: Basic Construction/Conversion, Plans, and Change Orders.

Estimated Dollar Value Base Year

SCN AP

Follow Year

Incremental

SCN

Follow Year Incremental

SCN

Follow Year Incremental

SCN

First Year Incremental

SCN

Second Year Incremental

SCN

Total

FY2019

4. Statutory Authority Permitting Other Than Full and Open Competition

10 U.S.C. 2304(c)(1) as implemented in Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(ii), “Only one responsible source and no other supplies or services will satisfy agency requirements” wherein supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued production 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 Agency’s requirements.

5. Rationale Justifying Use of Cited Statutory Authority

LHA 9 is the fourth ship of the LHA(R) Program and second ship of the LHA(R) Flight 1 variant. LHA 8, the lead ship of the Flight 1 variant, was awarded under the authority of 10 U.S.C. 2304 (c)(3) Industrial Mobilization; Engineering, Developmental, or Research Capability Other Than Full and Open Competition permitted under; or Expert Services) awarded in a limited competition to Ingalls. Ingalls competed with General Dynamics, National Steel and Shipbuilding Company (NASSCO), the only other qualified U.S. Shipbuilder capable of new construction of LHA(R) Class ships. Both shipbuilders competed for workload allocation between the LHA 8 and T-AO 205 Class Fleet Replenishment Oiler DD&C contracts.

The competition validated that a new source for LHA(R) ships would require substantial time and cost in order to gain familiarity with the LHA(R) requirements and to establish an experienced supplier base. Further, since the limited LHA 8/T-AO competition, the industrial base workload has significantly evolved as NASSCO has become the sole source for two additional T-AO ships (T-AOs 211 and 212) under procurement authority 10 U.S.C. 2304(c)(1) via Justification and Approval (J&A) Number 21,344 approved by the Milestone Decision Authority (MDA) on 18 December 2018.

The duplication of cost to the Government to pursue a second source for LHA 9 is not expected to be recovered through competition and will result in unacceptable delays in fulfilling the Navy and Marine Corps’ amphibious lift requirements capability. For the LHA 8 competition, a three

Other considerations for this follow-on LHA(R) sole source strategy include:

The FY 2019 appropriations provided SCN (AP) funding to support procurement of LHA 9. The shipbuilding industrial base is experiencing longer lead times than the historical average for many critical components. In order to support an FY2023 ship the FY2019 advance procurement funding will be obligated to procure LLTM starting in FY2020. This industrial base dynamic precludes the ability of other Shipbuilders to become capable of producing LHA 9 in a timely manner.

Budget estimates for LHA 9 are based on follow ship procurement with negligible non-recurring engineering costs. This precludes other Shipbuilders from being price competitive as substantial non-recurring engineering costs would be required to allow them to be production capable of the LHA 9.

Ingalls has significant historical and recent experience in the design and construction of LHA/LHD ships which affords them significant competitive advantages over any other potential LHA(R) shipbuilders, as follows:

- More than 30 years of design and construction experience with amphibious assault ship classes.

- Sole source award of five recent LHD/A ships:

LHDs 6-8 and LHA(R) Flight 0 ships LHA 6-7.

- LHA(R) Flight 1 detail design 3D modeling and manufacturing processes in place, which would be costly for another source to develop given the time constraints.

- Fully experienced engineering, trade, and management workforce familiar with design/construction of these ships.

- Established build strategy for LHA(R) vessels.

- Ingalls’ Shipyard of the Future (SYoF) Capital Expenditure (CAPEX) projects optimizes the construction of LHA(R) vessels.

- An established and experienced supplier base that will be costly for another competitor to develop and will likely be accompanied by significant cost and technical risk.

- The existence of a full set of manufacturing tooling, fixtures, and machine tool manufacturing software, which would be costly for another competitor to develop and produce.

- Familiarity with specific LHA(R) ship self-defense, propulsion, and electric plant designs.

Such specialized experience with those hull, mechanical, and electrical (HM&E) systems does not exist with other contractors.

An expeditious LHA 9 contract award is critical to maintain the supplier base. The timeliness of LHA 9 contract award will provide for optimal shipyard planning and production efficiency for the LHA(R) class as well as maintain the broader supplier base supporting amphibious and surface warfare ships. With a sole source approach, the Government will minimize cost, schedule, and quality risks to the LHA(R) program.

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

PMS377 completed an Industrial Base Assessment (IBA) in FY2012 to evaluate industry’s capability to construct LHA Class ships. Ingalls was deemed fully capable of transitioning from LHA(R) Flight 0 to LHA(R) Flight 1, and is currently under contract to design and construct LHA 8, the first of the LHA(R) Flight 1 ships. As discussed in paragraph 5, NASSCO was also deemed capable of constructing and launching LHA(R) vessels from its inclined ways and competed for the LHA 8 DD&C contract.

Per Defense Federal Acquisition Regulations Supplement (DFARS) and Procedures, Guidance, and Information (PGI) 206.302-1, the Contracting Officer performed market research by issuing a thirty day Request for Information (RFI) Sources Sought, from 03 July 2019 to 02 August 2019, on Federal Business Opportunities (FedBizOpps) requesting a capability statement demonstrating the contractor’s ability and facilities to perform the activities required for LHA 9.

Ingalls provided the sole response to this RFI with no other responses, including NASSCO.

In accordance with FAR 5.203(a), LHA 9 proposed LLTM, advanced pre-fabrication, and DD&C actions was synopsized on the Beta System for Award Management (https://beta.sam.gov) on 31 January 2020 with no responses received during the fifteen day notice period. The synopsis is intended to function as a market survey for subcontracting opportunities. However, it allows for additional sources to submit capability statements, proposals, or quotations.

7. Determination of Fair and Reasonable Costs

The Contracting Officer has determined that the anticipated cost to the Government for the supplies/services covered by the J&A will be fair and reasonable. Similar LHA (R) vessels have been procured from Ingalls in the recent past and cost/pricing information was received on those past procurements. This information will support the fair and reasonable cost determination of this procurement. The contractor will submit cost and pricing data in accordance with FAR 15.403-4. Analysis of the proposals will be performed by technical analysts and the contract specialist, with the assistance of Supervisor of Shipbuilding Gulf Coast analysts and Defense Contract Audit Agency auditors. The Contracting Officer will use cost and price analysis to determine that the final price is fair and reasonable.

Further, the contractor will certify that the cost and pricing data is current, accurate, and complete as of the time of settlement of negotiations.

8. Actions to Remove Barriers to Competition

For reasons set forth in paragraph 5, the Naval Sea Systems Command, Shipbuilding Contracts Division (SEA 022) has no plans at this time to compete future contracts for the types of supplies/services covered by this document. If another potential source emerges, SEA 022 will assess whether competition for future requirements is feasible.

9. Notification of Acquisition Strategy

The forthcoming Acquisition Strategy for LHA 9 will be approved subsequent to sole source award of LLTM portion of this procurement. However, the procurement shall adhere to statutory authority prescribed under 10 U.S.C. 2431a.