N00024_53355.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: 53,355 Code: 0253

P.R. Number: N0002421NR43607

CLASS JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

The Naval Sea Systems (NAVSEA) Command, Surface Systems Contracts Division (SEA 025).

2. Description of the Action Being Approved

Award of contract modifications for the procurement of MK 110 Mod 0 Gun Mounts (GMs) and related equipment on a sole source basis to BAE Systems Land & Armaments L.P. of Minneapolis, MN.

The Government intends to contract for an additional two (2) years of supply requirements under contract N0002420C5300.

Authority to act under this Class J&A expires 30 September 2022.

3. Description of Supplies/Services

The MK 110 GM is a multi-purpose, medium caliber gun that delivers high rates of fire with extreme accuracy against surface and air threats.

The Government intends to procure approximately systems and related equipment (or such quantities that are authorized by Congress) for the United States Coast Guard (USCG) Cutters Maritime Security, Medium (WMSM) and the United States Navy (USN) Frigates (FFG(X)) spanning from Fiscal Year (FY) 2021 through FY 2022. The Government’s minimum needs have been verified by the certifying technical and requirements personnel. The estimated funding required to support this procurement effort is as follows:

J&A Number: 53,355

4. Statutory Authority Permitting Other Than Full and Open

Competition

10 U.S.C. 2304(c)(1), the property or services needed by the agency are available from only one responsible source or only from a limited number of responsible sources and no other type of property or services will satisfy the needs of the agency.

5. Rationale Justifying Use of Cited Statutory Authority

Pursuant to FAR 6.302-1(a)(2)(ii)(B), BAE Systems is the only responsible source capable of satisfying the Navy’s requirements for the MK 110 GM production without unacceptable delays in fulfilling the agency requirements.

The original contract was awarded to BAE Systems on a sole source basis, and the current contract, N00024-20-C-5300, was awarded to BAE Systems under the authority of J&A 53,308 approved on 12 April 2019. BAE Systems Bofors AB (Bofors), a Swedish subsidiary of BAE Systems, is the original designer, developer, and manufacturer of the MK 110 GM. BAE Systems obtains parts directly from Bofors in order to manufacture and assemble the MK 110 GM.

The Government currently possesses limited rights to the MK 110 Technical Data Package (TDP). The Government has access to Bofors drawings but requires permission to use any of them outside of the US Government. The Government has requested BAE Systems to provide a cost estimate to procure a Level III TDP that could be used for competition. However, Bofors has not been willing to provide the Government with any enhanced rights, and therefore has not provided a formal cost estimate. Even if the Government were able to procure a Level III TDP from BAE Systems/Bofors, it would require an estimated 36 months for the Government to validate the TDP and award a competitive production contract, as summarized in the table below.

Task Estimated Time Award Contract to Procure Drawings 6 Months Develop Drawings 12 Months Conduct Technical Review and Physical Audit 6 Months Award Competitive Production Contract 12 Months Total 36 Months

Based on this timeline, award to a new contractor would be expected in March 2024, and the first gun would deliver May 2026 due to the 26-month production lead time (PLT). The in-yard need date (INYD) of the first ship is , a projected delay of . This substantial schedule delay is unacceptable because the Navy would not be able to achieve the required IYND.

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

Offerors as Practicable

In accordance with DFARS PGI 206.302-1, NAVSEA released a synopsis on the governmentwide point of entry, Beta.sam.gov, on 23 February 2021, requesting additional sources in addition to providing a presolicitation notice, in accordance with FAR 5.204. Interested vendors were requested to submit responses by 10 March 2021. No responses were received to this notice and no additional market research was conducted because it is not practicable, for the reasons discussed in paragraph 5 above, for any company other than BAE Systems to provide the required supplies.

7. Determination of Fair and Reasonable Costs

In accordance with FAR 15.402, the Contracting Officer has determined that the anticipated cost to the Government for the supplies covered by the CJ&A will be fair and reasonable.

The Contractor will be required to submit a formal proposal with certified cost or pricing data and sufficient information to support the accuracy and reliability of the total price. The Contractor’s proposal will be reviewed by experienced technical and cost analysts, and Contract Specialists, with the aid of field pricing support from the Defense Contract Audit Agency (DCAA) and the Defense Contract Management Agency (DCMA).

The Contracting Officer will utilize incurred cost actuals from the previous and current MK 110 production contracts (N0002412C5316, N0002417C5375, and N0002420C5300) to conduct cost and price 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, NAVSEA has no plans at this time to compete future contracts for the types of supplies covered by this document. There are no current opportunities to procure a Level III TDP or to obtain enhanced rights as the contractor has not been willing to provide any price estimate. The MK 110 GM is a non-developmental item and the Government’s only investment has been for the integration of the GM into the various platforms and qualification for use as a Navy Type, Navy Owned asset.

NAVSEA will continue to pursue enhanced rights and a Level III TDP, conduct market research to determine if any other potential sources emerge, and assess whether competition for future requirements is feasible.