N00164_14003_FBO.pdf

J&A Number:14-003

Code: CXNM P.R. Number: N00164-14-R-GM42

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

Naval Surface Warfare Center, Crane Division (NSWC Crane)

2. Description of the Action Being Approved

Award of a Firm-Fixed Price (FFP), 5 year Indefinite Delivery, Indefinite Quantity (IDIQ), service type contract on a sole source basis for the National Institute of Standards and Technology (NIST) calibration and emergency repair services of three HP93000 System on a chip (SOC) Semiconductor Test Systems, used in support of the

, to Advantest America Inc. The existing Semiconductor Test Systems were procured in a competitive environment.

3. Description of Supplies/Services

This service consists of calibration, emergency repair, and preventative maintenance. This award will provide continual maintenance on the Semiconductor Test Systems in order to maintain them to satisfy the test requirements set forth by the Program.

Estimated Dollar Value

FY14 FY15 FY16 FY17 FY18 Total

O&MN $130,000.00 $130,000.00 $130,000.00 $130,000.00 $130,000.00 $650,000.00

The estimates are based on historical pricing and market research. The ordering period is five years after contract award. The Government’s minimum need has 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), One source or limited sources and no other supplies or services will satisfy agency requirements, as implemented by FAR 6.302-1.

IN REPLY REFER TO:

DEPARTMENT OF THE NAVY

CRANE DIVISION

NAVAL SURFACE WARFARE CENTER

300 HIGHWAY 361

CRANE INDIANA 47522-5001

5. Rationale Justifying Use of Cited Statutory Authority is the original manufacturer of the HP93000/V93000 Test Systems which were sold to along with all the data rights, patents, and proprietary information.

was sold to Advantest, thus only Advantest now possesses the attributes of which are critical to both the timely and successful analysis/repair/maintenance of this equipment.

Advantest have the proprietary rights to all data, drawings and schematics and have in-house, both trained and licensed technical personnel, as well as a stockpile of certified repair/replacement parts. These elements are all necessary and critical to enable both timely and accurate repairs of the Advantest Test Systems identified above. This service contract will cover the periodic NIST calibration and emergency repair for all three Test Systems. Without proper calibration and maintenance there would be excessive downtime and delays. The Test Systems are regularly used to test batches of electrical components after irradiation.

In order to ensure product integrity the Original Equipment Manufacturer (OEM) must service the equipment. Only Advantest is approved and has trained technical personnel who are experienced in the analysis and repair of this test equipment, and have access to and can utilize the proprietary data and parts/components necessary for the analysis and repair of the HP93000/V93000 Test Systems. If another source was sought then the Government would have to purchase new systems. Approving another source would result in a substantial duplication of cost and unacceptable delays. The Requiring Technical Activity (RTA) has estimated that procuring different systems would cost more than $2.8M and take a total of six years to procure, approve, and train personnel. This estimate for the duplication of cost, effort and timeframe can be broken down and examined as follows:

Based on the initial purchase price of $ for the first test system, $ for the second test system, and $ for the third test system, procuring three new replacement test systems would cost at least $ . Due to this large dollar amount, the procurement process would be expected to take at least to complete market research, provide justification, prepare paperwork, and complete any other requirements to gain approval to complete the purchase.

These test systems are currently used to perform qualification and lot acceptance electrical tests of twenty six different electronic devices that are used in the system. Electrical testing done on the HP93000 is controlled by test software and test hardware that were developed by test engineers in the Component Engineering Branch – GXMQ. Because each of the twenty six electronic devices is different, each device required its own test software and test hardware. Each piece of test software and test hardware had to be individually developed, audited for accuracy, peer reviewed by Crane and other entities (other labs and SSP program office), and configuration controlled. This effort required three electrical engineers working in a full time status for at least

. The twenty six devices mentioned above are used in the guidance module for the

. These electronic devices are required by the SSP program office to be high reliability devices and the only failsafe method to ensure this is to perform exhaustive initial electrical, post environmental, and post radiation electrical testing. Because of the high reliability requirement and the fact they are destined to be used for controlling the flight path of a , the requirements for electrical testing are more rigorous and demanding than what is typically done in industry. The software and hardware development takes years to develop and is not compatible with and cannot be transferred to a new test system. If new test systems were to be procured, the enormous development, peer review, accuracy verification and software/hardware configuration management effort would need to be repeated. In short, new test systems would require a complete overhaul of all test software and hardware developed for all twenty six devices, as well as final approval by the program office for each piece of test software and each piece of test hardware. The cost for replacing these test systems also manifests itself in terms of training personnel to operate the new test systems, as well as the training required to be able to develop new test software and hardware specific to the new test systems. Based on the time required to become familiar with the existing HP93000 test systems, it’s estimated that it would take at least for a full time engineer to become proficient with new test systems. Based on the reasons stated above, procuring new test systems would represent a large duplication of cost and effort.

The electrical testing performed with these systems is also used by system designers who are tasked by the SSP program office to perform builds. NSWC Crane’s testing schedule is derived from their production schedule. As illustrated above, procuring new test systems would cause a delay to NSWC Crane’s testing schedule, which would incur at least a to the system designer’s production schedule. This delay is considered unacceptable.

All systems require regular calibration which must be done by the OEM, thus if the equipment was replaced via a competitive procurement ultimately the calibration, emergency repair, and preventative maintenance would result in another sole source situation. The Government currently does not have the funding nor the time to approve another source.

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

This action was synopsized on 19 November 2013. To date, no response has been received from industry.

Market research was performed to locate a other vendors, but none were discovered. Two methods of market research were utilized: a simple web search and an exhaustive search of supplier databases (Central contractor Registration www.sam.gov, Thomas Register www.thomasnet.com, and the Small Business Administration https://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm).

The web search was performed by searching for the following search terms:

http://www.sam.gov/ http://www.thomasnet.com/ https://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm

“NIST calibration V93000 ATE”, “NIST calibration HP93000 ATE”, “HP93000 tester NIST calibration”, “V93000 tester NIST calibration”, “V93000 tester calibration”

The web search revealed at least three vendors that sell spare parts. All three of these companies sell used and surplus semiconductor test equipment and may have spare parts for the HP93000 and V93000 test systems; however, none of these companies can provide periodic NIST calibration, emergency repair, and trained field technicians to install the spare parts due to the data rights, patents, and proprietary information.

Additionally, these companies can only offer spare parts from what is currently available in their inventory, which due to the nature of the surplus market is always changing. There is no guarantee they will have the critical spare part needed to perform an emergency repair. Finally, the spare parts offered by these vendors are not certified and are of unknown quality.

The exhaustive search of the supplier databases was performed by visiting the supplier database websites at www.sam.gov, www.thomasnet.com, and http://dsbs.sba.gov, and searching for the same search terms used for the web search: “NIST calibration V93000 ATE”, “NIST calibration HP93000 ATE”, “HP93000 tester NIST calibration”, “V93000 tester NIST calibration”, “V93000 tester calibration”

The Central contractor registration website, which redirects to www.sam.gov, returned a ‘no records found for current search’ message for each of the above search terms.

The Small Business Administration website database returned one result for the search term “NIST calibration”. This company was contacted regarding capability but no response was returned.

The Thomas Register supplier database returned fifteen vendors for the search term “NIST Calibration”. An email inquiry for vendors that can provide: NIST calibration, certified spare parts, and emergency repair service of the HP93000 and V93000 test systems was sent to these fifteen vendors. This email inquiry was sent via the Thomasnet.com website and the complete list of vendors was contacted. Two vendors replied stating they are incapable of providing the necessary trained personnel to calibrate and repair the equipment.

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 in accordance with FAR 15.404-1 (b)(2)(ii): Comparison of the proposed prices to historical prices paid, whether by the Government or other than the Government, for the same of similar items.

8. Actions to Remove Barriers to Competition

For the reasons set forth in Paragraph 5, NSWC Crane 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, NSWC Crane will assess whether competition for future requirements is feasible.

http://www.sam.gov/ http://www.thomasnet.com/ http://dsbs.sba.gov/ http://www.sam.gov/