63826 DF Consolidation RMH - Redacted.pdf

DEPARTMENT OF THE NAVY

NAVAL SEA SYSTEMS COMMAND

1333 ISAAC HULL AVE SE

WASHINGTON NAVY YARD DC 20376-0001

IN REPLY REFER TO

D&F: 63,826 Code: 0263

DETERMINATION AND FINDINGS

AUTHORITY TO CONSOLIDATE CONTRACT REQUIREMENTS

Upon the basis of the following findings pursuant to 15 U.S.C. § 657q, as implemented in Federal Acquisition Regulation (FAR) 7.107-2, and Navy Marine Corps Acquisition Regulation Supplement (NMCARS) 5207.107-2, it is hereby determined that the Naval Sea Systems Command (NAVSEA), Mine Warfare Program Office’s (PMS 495) requirements for the production of the Remote Minehunting (RMH) Module, associated engineering support, and spares may be consolidated.

Findings

1. Identification of Agency and Contracting Activity

This Determination and Findings has been prepared by the NAVSEA, Undersea and Unmanned Systems Contracts Division, SEA 026.

2. Nature/Description of Action

a. NAVSEA, on behalf of PMS 495, is anticipating a competitive award of a supply contract for RMH Module production and associated engineering support. The award of this consolidated contract is planned for Fiscal Year (FY) 2026 with an estimated contract value of and five (5) years of requirements (supplies and associated engineering support).

b. The RMH Module comprises a Towed Body (TB), Payload Delivery System (PDS), supporting equipment and associated software. The PDS enables the TB to be deployed and retrieved from the Mine Countermeasures Unmanned Surface Vehicle (MCM USV) and securely stowed during transit. The PDS provides the structural, power, and communications interfaces to the TB via a towed cable connected to the MCM USV interfaces. Elements of the PDS include the base assembly, upper and lower trolley, electronics control unit, hydraulic power unit, winch, towed cable, and associated software.

The RMH Module will replace the legacy AN/AQS-20 system which detects, classifies, and localizes moored volume, and close tethered mines in shallow and deep water by incorporating multiple sensors in a compact, lightweight, hydrodynamic, and stable TB.

c. Currently, the AN/AQS-20 TB and Minehunting (MH PDS) systems and associated support are procured across four (4) separate contracts.

(1) AN/AQS-20A-C production contract, N00024-21-C-6308, $74.03M. This sole source contract was awarded on 31 March 2021 to Raytheon Corporation for procurement of 10 AN/AQS-20C upgrades from the AN/AQS-20A configuration. This contract completed performance on 15 May 2025.

(2) AN/AQS-20C & MH PDS Engineering Support contract, N61331-22-D-0004, delivery orders 0024, 0035 and 0072, $91.71M. This sole source contract was awarded 28 August 2022 to Raytheon Corporation for AN/AQS-20C & MH PDS software updates, repairs, and In-Service Engineering Agent (ISEA) support. This contract completed performance on 19 April 2025.

(3) MH PDS production contract, N0024-24-C-6303, $28.4M. This sole source contract was awarded 25 November 2024 to Raytheon Corporation for production and engineering support. This contract will complete performance on 25 November 2029.

(4) Electro-Optical Identification (EOID) Sensors contract, N00024-24-C-6322, $12.3M.

This sole source contract was awarded on 24 March 2024 to Arete Associates (Arete) for repair and upgrade of twelve (12) AN/AQS-20 EOID sensors. This contract will complete performance on 28 March 2028.

3. Results of Market Research

The Navy determined through market research and a 25-year acquisition history that consolidation of the AN/AQS-20 and MH PDS contracts would have no negative impact on small business. Specifically, the transfer of RMH tasking from multiple sole source contracts into a single contract award via full and open competition increases potential small business participation for both prime contractor and subcontractor offerors, as verified by the market research described below.

In March 2019, the Navy posted a Request for Information (RFI)/sources sought notice (SSN) on SAM.gov to determine if any offeror had the ability to produce and deliver a minehunting sonar capability.

In June 2024, PMS 495 announced on SAM.gov that it would host an RMH Industry Day, where the Navy would discuss the requirements for the RMH program. At time of registration, all attendees were provided with an opportunity to schedule a one-on-one meeting with the Navy.

PMS 495 hosted the RMH Industry Day on 25 June 2024 with 23 companies in attendance. The Navy presented a brief that highlighted the purpose of the procurement, outlined its main objectives, and provided a broad overview of expected contract deliverables.

In January 2025, the Navy posted an RFI/SSN on SAM.gov to determine if sources exist that can satisfy the Navy’s anticipated program requirements for the RMH Module program. On 7 February 2025, the Navy updated the RFI/SSN to allow interested companies to review updated draft copies of RMH Module requirements documents.

The

Contracting Officer therefore determined that the requirement of FAR 19.502-2(a) for a reasonable expectation of obtaining offers from two or more responsible small business concerns has not been met. Therefore, the Contracting Officer recommended that this procurement should be solicited using full and open competition procedures.

In coordination with the NAVSEA’s Office of Small Business Programs, the Contracting Officer did not identify any negative impact by the acquisition strategy on contracting with small business concerns in accordance with FAR 7.107-2. Additionally, steps will be taken to address small business concerns in the acquisition strategy by requiring offerors to submit small business subcontracting plans as part of their proposals for the RMH effort.

Notwithstanding the requirements for a small business set-aside detailed in FAR 19.502-2 not being met, market research results have demonstrated that the consolidation of requirements remains suitable for small business concerns to perform.

4. Analysis of Alternatives

As an alternative to consolidation, NAVSEA evaluated alternative strategies that would involve a lesser degree of consolidation.

a. Award sole source contracts to incumbent contractor (Status quo): This alternative strategy is based on award of three separate sole source contracts to Raytheon Corporation, the current incumbent for the TB Sonar upgrades, MH PDS production and engineering support, which compose the RMH requirements. The EOID sensor, while part of the AN/AQS-20 family of contracts, is not a requirement for the RMH Module, as the Navy will not be requiring a particular sensor type. During the Navy’s analysis of this strategy, the Program Office determined it would be acting as the de facto system integrator for Raytheon Corporation during assembly of the RMH Module. Additionally, the Program Office determined it would need to fund, establish and maintain an entire System Integration Laboratory (SIL) to support system integrator activities. Recent Navy experience has shown that a lack of a SIL has led to ineffective configuration management during fielding.

The Navy rejected this alternative strategy, because award of these three (3) sole source contracts to the incumbent contractor retains the existing level of integration complexity and associated costs, while reducing potential competition without any offsetting benefits.

b. Separate Competitive Contracts for TB, MH PDS, and Engineering Support: This alternative strategy is based on award of three (3) separate competitive contracts for the TB production, the MH PDS production and engineering/integration support. The EOID sensor would not be separately procured for the same reasons as described in paragraph a. above. The Navy would incur the same disadvantage of acting as the system integrator as described in paragraph a. above due to the separately procured TB and MH PDS components. During the Navy’s analysis of this strategy, the Program Office determined it would still be acting as the de facto system integrator for TB and MH PDS component-level systems during assembly of the RMH Module. The Program Office also determined that separately competed contracts would not relieve the Navy of the need to fund, establish and maintain the SIL, which, as stated above, has led to ineffective configuration management during fielding. The Program Office also concluded that issuing separate competitive solicitations and contract awards would introduce the difficulty of defining new interface constraints and requirements between the TB and MH PDS themselves, and between the payload (i.e. TB/PDS) and MCM USV platform. This complexity may favor the current incumbent contractor and reduce competition by shrinking the number of interested offerors.

The Navy rejected this alternative strategy, because award of these three (3) competitive contracts to the up to three different contractors retains the existing level of integration complexity and associated costs without any guarantee of increasing potential competition, and without any offsetting benefits.

The proposed consolidated procurement is documented in Individual Streamlined Acquisition Plan with Services (ISTRAP-M) Acquisition Plan Number NAVSEA 24-074.

5. Benefits of Planned Consolidation

In accordance with 15 U.S.C. § 657q(c)(3) and FAR 7.107-2(c) and (d), the consolidation of the RMH Module requirements into one contract will result in the following benefits:

a. Integration Efficiencies

Consolidating the TB, PDS, and associated engineering support into a single competitive contract will result in integration cost savings. The current multi-contract structure requires integration efforts by multiple parties across towed sonar, PDS, and maintenance efforts. These integration efforts result in additional cost to the Government. Consolidation will significantly reduce integration costs, as the RMH Module contractor will integrate all RMH Module systems under a single SOW. Estimated Government integration savings resulting from the elimination of the need to establish and maintain a SIL are over the life of the contemplated contract.

b. SOW Efficiencies

Consolidation of the TB, PDS, and engineering support requirements will improve overall performance because it will enable the RMH Module contractor to focus on one single, unified Statement of Work (SOW). The unification of effort under a single contractor will allow for superior configuration control and unification of effort in support of RMH deliverables.

Improved configuration control will reduce technical and schedule risk compared to multiple discrete contracts, as the RMH Module contractor will be able to avoid the need for lengthy external communications and approvals with other contractors or the Government. This improved configuration control will allow the RMH Module contractor to resolve issues in RMH Module production quicker than multiple contracts without a single unified SOW.

Additionally, a contract with a single unified SOW will provide streamlined systems engineering and integration efforts, resulting in faster transition to production and sustainment products.

These efforts will improve support and accelerate deliveries of RMH assets to meet Fleet MCM deployments in FY29.

6. Small Business Impacts and Inclusions

The proposed consolidation will positively impact small business participation because it will provide an opportunity for small business concerns to compete as a prime contractor for work scope historically performed by a large business incumbent.

Determination

Based upon the foregoing findings, I hereby determine that the consolidation of PMS 495 RMH Module requirements is necessary and justified because the benefits of the proposed acquisition would substantially exceed the benefits that would be derived from each of the alternative contracting approaches, pursuant to 15 U.S.C. § 657q, as implemented in FAR 7.107-2 and

NMCARS 5207.107-2.

Date