N00164_13037_FBO.pdf

J&A Number: 13-037

Code: CXNN P.R. Number:

N00164-13-R-WM03

JUSTIFICATION AND APPROVAL (J&A)

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

The Naval Sea Systems Command, Naval Surface Warfare Center Crane Division (NSWC Crane), Spectrum/Global Division (CXN).

2. Description of the Action Being Approved

Award of a five-year Firm Fixed Price (FFP) Indefinite Delivery Indefinite Quantity (IDIQ) supply contract on a sole source basis for the procurement of Heat Exchangers, Model 43060, part number G382822-2, for the AN/SLQ-59 Electronic Warfare (EW) System to Electro Impulse Laboratory, Inc.(doing business as Electro Impulse, Inc.), 1805 Corlies Avenue, Neptune, NJ 07753.

3. Description of Supplies/Services

This effort is for the procurement of Heat Exchangers for the AN/SLQ-59 EW System developed by the Naval Research Lab (NRL). These Heat Exchangers are a necessary operational component of the AN/SLQ-59 EW Sy ol the

Electro Impulse, Inc. is the Original Equipment Manufacturer and only qualified source of supply for the Model 43060 Heat Exchanger, part number G382822-2. It is anticipated that a FFP IDIQ contract will be awarded for the fabrication and delivery of these liquid-to-liquid cooled Heat Exchangers.

IN REPLY REFER TO:

DEPARTMENT OF THE NAVY

CRANE DIVISION

NAVAL SURFACE WARFARE CENTER

300 HIGHWAY 361

CRANE INDIANA 47522-5001

The estimated value of this procurement is $7,500,000. The ordering period will be five years from contract award.

Delivery shall be within 180 days of each order. 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). Only one responsible source and no other supplies or services will satisfy agency requirements.

5. Rationale Justifying Use of Cited Statutory Authority

Electro Impulse, Inc. is the original equipment manufacturer (OEM) and owns the Level III production drawings. The selection of a new vendor would be required to develop production level drawings from the Level II design package, and build and test a similar Heat Exchanger for the AN/SLQ-59 System. The estimated time for this design/build evolution is eighteen (18) months. First Article testing and acceptance would take six (6) months and another six (6) months would be required before additional units could be made available.

Based on an award date of 01 May 2013, this thirty (30) month cycle would put delivery of the first seven (7) units at no sooner than 01 November 2015. This would cause the Navy to miss five (5) or more critical installations, the first of which is planned for 09 April 2014. Each missed planned ship installation is estimated to cost $250,000 for a minimum of $1,250,000.

To develop a new vendor, the Navy would incur significant costs in excess of 114% over the minimum contract cost and there is no funding to cover any of these additional costs.

The costs are estimated to be:

(a) $400,000.00 for the development of Level III production drawings, requiring twelve (12) months from start to finish. Build-to-Print drawings are required based on part number G382822-2.

(b) $150,000.00 for Government Quality Assurance and engineering inspection during First Article manufacturing, requiring twelve (12) months to complete.

(c) $250,000.00 for First Article Testing and six (6) months to complete after manufacture of the First Article units. Government engineering and technician labor would be utilized, as well as Government test fixtures.

Using full and open competition presents a cost for development, which cannot be recovered through competition, schedule, which would delay delivery of units to the fleet for a minimum of 2 years.

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

Offerors as Practicable

Electro Impulse, Inc. was contacted by NSWC Crane Maritime EW Division personnel to inquire about the availability of data rights. Electro Impulse, Inc. was asked if licensing was available for sale to the Government. The company stated on 19 December 2012 that they are not willing to sell the data rights to the Government. The proposed contract was synopsized on the FEDBIZOPS website on 28 January 2013 in accordance with FAR 5.201. The synopsis indicated the sole source nature of this effort. To date, no responses have been received. No additional market research was conducted because it is not practicable, for the reasons discussed in paragraph 5 above, for any company other than Electro Impulse, Inc. to provide the required supplies.

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. The contracting office will use cost and price analysis to determine a fair and reasonable price. The Defense Contract Management Agency (DCMA) will be utilized to assist contracting to analyze, evaluate, and negotiate based on detailed cost or pricing data, which will be certified by Electro Impulse Laboratory, Inc. following negotiations. Pricing of same or similar items information is available and will be used in price analysis.

8. Actions to Remove Barriers to Competition

The Government expects to obtain a Level III (Production) technical data package (TDP) that will support competition for future acquisitions of this item. NSWC Crane Division is working a parallel long range planning effort to determine the total number of heat exchangers needed, have the Level III (Production) Drawings developed, and conduct sources sought for alternative manufacturers

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