N00024_52,134_FBO.pdf

DEPARTMENT OF THE NAVY

NAVAL SEA SYSTEMS COMMAND

1333 ISAAC HULL AVE, SE

WASHINGTON NAVY YARD, DC 20376-0001 IN REPLY TO

CJ&A Number: 52,134 Code: 02521 P.R. Number: N00024-15-MR-46114

CLASS JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

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

2. Description of the Action Being Approved

NAVSEA 025 will use other than full and open competition to award contracts for repairs, overhauls, refurbishment, and maintenance of Cooperative Engagement Capability (CEC) equipment to DRS Laurel Technologies (DRS) and Raytheon Integrated Defense Systems (Raytheon). Authority to act under this Class Justification and Approval (CJ&A) expires 30 July 2017.

3. Description of Supplies/Services

The proposed actions are for the provision of repairs, including emergency repairs, overhauls, refurbishment, and maintenance of CEC equipment and associated equipment, including all material and services incidental to such work, such as repair parts;

components; accessories; related documentation; associated tools; packing; packaging and marking; and any necessary system testing in support of the CEC program. This includes repair of installation and checkout (INCO) spares and material management services and operation of a CEC stock point. The primary function of the stock point is to provide a supply support infrastructure for the CEC systems and equipment fielded by the CEC Program. This includes the necessary acquisition or fabrication of material to effect the required repair or maintenance; and services for installation, checkout and testing, of the required repair or maintenance effort. This effort will include studies, analysis, evaluation, testing, and/or provide recommended updates of related documentation (e.g. drawings, work instructions and engineering changes) for material inducted for repair, maintenance or upgrade.

CJ&A Number 52,134

Two sole source contracts will be awarded as a result of this CJ&A, one contract to DRS Laurel Technologies providing the aforementioned services for current production CEC units (identified as the “Bravo” series) and one contract to Raytheon who will provide the aforementioned services for “Legacy” CEC units.

Current production CEC systems are defined as those systems or major components thereof, bearing the AN/USG – ‘X’B or “Bravo” designation. Legacy CEC systems are defined as those systems or major components thereof, bearing the AN/USG – ‘X’ and AN/USG – ‘X’A designations or “Legacy” designation. Each contract will include a base award and priced options which if exercised would provide a period of performance through the end of fiscal year

(FY) 2020.

The estimated dollar value by fiscal year and appropriation is provided in the below table. The estimated dollar value of each contract with DRS and Raytheon is

In accordance with Federal Acquisition regulation (FAR) 6.303- 2(b), the Government’s minimum needs have been verified by the certifying technical and requirements personnel.

4. Statutory Authority Permitting Other Than Full and Open Competition

10 U.S.C. 2304(c)(1). Full and open competition need not be provided for when the supplies or services required are available from only one or a limited number of responsible sources, and no other type of supplies or services will satisfy agency requirements.

5. Rationale Justifying the Use of Cited Statutory Authority

The procurement of the systems, supplies, and support described above using other than full and open competition is appropriate because, in accordance with the Federal Acquisition Regulation (FAR) 6.302-1 (a)(2)(ii), the CEC system, and the major components thereof are highly specialized mission essential equipment. As such utilizing full and open competition would introduce unacceptable delays in fulfilling Fleet requirements.

As the current CEC Bravo manufacturer, DRS is uniquely familiar with the AN/USG – ‘X’B vendor and supply chain. The complexity of the CEC system, combined with the highly dynamic nature of the current vendor and supply chain makes the current Bravo equipment manufacturer (DRS) the only qualified source for managing the material and vendors of Bravo production repair work. The supply chain for the CEC equipment has been proven to be very volatile and dynamic. As such the vendors and availability of necessary materials change rapidly and continuously. Only the current manufacturer is able to effectively manage this environment. It would take 12 to 18 months for a new source to review the Technical Data Package (TDP), translate the TDP into Bill of Materials (BOMs), work and test instructions, establish relationships with the vendors in the supply chain and lay in long lead time materials.

Any source other than DRS would also require facility qualification, a process that involves demonstration the facility meets particular criteria, and involves multiple site visits by a Government team. This process would introduce an additional 6 to 9 month delay which would incur unacceptable delays to the repair schedules required by the Fleet.

Also, the new contractor would also be required to establish the testing procedures to confirm adequate repairs had been made.

It is estimated these testing procedures would take an additional 3 to 6 months to establish and implement after the TDP and supply chain issues were resolved and the facility was qualified. Finally, the new contractor would require another month delay due to the need for Government certification of the procedure. Resulting in a 22 to 34 month delay if the production remains static.

However, the CEC Bravo manufacturer is engaged in a continually changing production process. These changes result from obsolescence, class II changes, produceablity improvements, etc.

and are not included in the TDP. Although the production contractor is required to produce updated TDP documentations based on these changes, further delay would be experienced if a separate contractor were performing the repairs and had to subsequently incorporate the production changes into its repair process. Therefore, the incumbent CEC production contractor (DRS) would have the requisite knowledge to ensure that the repair of Bravo equipment aligned with the same technical baseline as the Bravo production units being delivered under Contract N00024-15-C-5228. This changing TDP coupled with the delays outlined above would result in unacceptable delay causing the Government to be unable to support the operational repair demands of Navy Ships, Aircraft, and United State Marine Corps (USMC) land assets.

Raytheon was the CEC equipment manufacture for the Legacy CEC equipment. The Legacy CEC equipment is highly complex and in many cases the technology contained in the two variants of the Legacy systems, AN/USG – ‘X’ and the AN/USG – ‘X’A, is outdated and obsolete. Since Raytheon was the equipment manufacture and the Design Agent for Legacy CEC systems, they are uniquely qualified for repair of Legacy equipment. Raytheon has an intimate knowledge of the Legacy systems, testing requirements, and functionality of Legacy equipment. Raytheon is also the only contractor that has the specialized tools, and testing equipment required for these repairs. These are not the same tools and test equipment utilized on current Bravo CEC production efforts by DRS and these tools and testing equipment are one of a kind items. To re-develop the same or similar tools and test equipment would require the Government to either attempt to take control of Raytheon’s systems or rebuild similar systems and test equipment without the required plans and information. It is anticipated that attempting to rebuild the systems and test equipment would take 24 months or longer. This 24 month period does not include time for qualifying the system and test equipment after it is built. It is anticipated the time to qualify the system would be an additional 12 months.

Resulting in a total delay of 36 months or longer.

Further, a complete TDP suitable for competition is not available for the repair of Legacy equipment. Raytheon is able to conduct repairs based on the extensive knowledge it has gained as the CEC producer and Design Agent for the Legacy systems. A new contractor would need to gain experience with Legacy equipment that has sparse documentation and testing procedures. It is anticipated the new contractor would require a total of 36 to 60 months, or longer to be ready to support the fleet. This time frame takes into account the need to redevelop and qualify the required tools and testing equipment (described above) and gaining sufficient knowledge with the Legacy systems.

These Legacy systems are the only CEC systems currently in the fleet and their replacement by the “B” system is not anticipated until 2022. A delay of 36 to 60 months would result in missing multiple fleet requirements resulting in those ships and aircraft being unable to support their CEC role within the battle group.

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

The CEC repair and maintenance efforts were synopsized on the Federal Business Opportunities (FedBizOpps) website on 13 November 2015. This initial synopsis only identified DRS and did not make a distinction between the Legacy and Bravo baselines. The synopsis posted on FedBizOpps allowed interested parties to respond to the synopsis with a letter of capability and interest, or proposal. As such, Raytheon responded to the synopsis on 20 November 2015 stating their interest and identified that they were the only source capable of performing repairs and maintenance for the CEC Legacy baseline. Based on Raytheon’s submission the Government on 11 December 2015 revised the synopsis on FedBizOpps to account for the Legacy baseline repairs and maintenance. No interest was expressed as of the closing of the revised FedBizOpps posting which identified DRS as the provider for the repair of CEC Bravo hardware and Raytheon as the provider for the repair of CEC Legacy hardware.

No additional market research was conducted because it is not practicable, for the reasons discussed in paragraph 5 above, for any company other than DRS or Raytheon to provide the required services in the time frame required. Additional interested offerors, if any, will be evaluated on their ability to meet deliveries under the cost and schedule constraints in each of the options.

Although the synopsis allowed interested parties to submit a letter of capability and interest, no separate standalone request for information or a sources sought notice was issued.

As such, a waiver in accordance with DFARS PGI 206.302-1 was signed on 13 November 2015 for the above requirements.

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 this CJ&A will be fair and reasonable. The Contracting Officer will use Certified Cost and Pricing analysis to support the determination of a fair and reasonable price. Assistance from the Defense Contract Audit Agency (DCAA) and the Defense Contract Management Agency (DCMA) will be utilized to analyze, evaluate, and negotiate based upon detailed cost or pricing data, which will be certified by DRS and Raytheon at the conclusion of negotiations.

8. Actions to Remove Barriers to Competition

As stated in Acquisition Plan (AP) No. PEO IWS CEC AP 6.0-06-01 Rev 4.0, this contract action will be awarded to the Contractor selected for CEC’s competitive production contract under authority of 10 U.S.C. 2304 (c)(1) for the reasons discussed in paragraph 5 above. Therefore, DRS will be awarded a contract for repair and maintenance of current Bravo CEC systems.

However, due to Raytheon’s interest and ability to perform the requirements in the time required for Legacy systems, Raytheon will also be awarded a contract for repair and maintenance support of Legacy CEC systems. Award to any other source other than DRS or Raytheon would result in unacceptable delays.