N00164_14021_FBO.pdf

DEPARTMENT OF THE NAVY

CRANE DIVISION

NAVAL SURFACE WARFARE CENTER

300 HIGHWAY 361

CRANE INDIANA 47522-5001

IN REPLY REFER TO:

J&A Number: 14-021 Code: GXR P.R. Number: N00164-14-R-GR54

JUSTIFICATION AND APPROVAL

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).

2. Description of the Action Being Approved

Award of a 5 year indefinite delivery indefinite quantity contract on a sole source basis for Switch Tube (SWT) Production and Rebuild in support of to Econco Broadcast Service, Inc, a wholly owned subsidiary of CPI (Communications and Power Industries), 1318 Commerce Ave, Woodland, CA 95776.

3. Description of Supplies/Services

This procurement is in support of U.S. Navy New Ship Construction, Aegis Ashore (AA) (Missile Defense Agency new land based systems), U.S. Navy Modernization Programs and various Foreign Military requirements. The switch tubes are used in the to supply the other microwave tubes in the cabinets with the appropriate current pulse which results in the ability of the radar to perform its mission of Search, Detect and Track and for the to perform its mission to Destroy.

The proposed acquisition is for the rebuild of up to 60 Single Duty (S/D) Switch Tubes P/N 2904186 S/D and production and rebuild of up to 477 Double Duty (D/D) Switch Tubes P/N 6155763 D/D used in the Aegis Weapons Systems. This acquisition will be for switch tubes installed in

. The ordering period is 5 years. The total estimated dollar value for this procurement is $2,950,000.

Estimated Dollar Value

FY14 FY15 FY16 FY17 FY18 Totals

SCN

RDT&E

FMS

Total $2,950,000

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 as implemented by FAR 6.302-1.

5. Rationale Justifying Use of Cited Statutory Authority

Econco is the only source certified for production and rebuild of this product. These tubes are one of the for operation of the Aegis Weapon Systems due to high usage.

Use of an unproven product is an unacceptable risk that directly affects the operating costs to the Navy and the protection required from the Aegis Weapon Systems. Only Econco can provide the manufacturing and rebuild of the switch tubes in the timeframe required.

The U.S. Navy has invested approximately in engineering design changes in partnership with Econco to increase the Mean Time Between Failures (MTBF) of the current

. These product improvements, including a filament stem strengthening and black heat carburization have been incorporated into the current baseline of the being rebuild by Econco and will also be incorporated into the new production effort as well.

Although the Government funded this product improvement effort, there was insufficient funding available to procure a complete technical data package of the improvements sufficient in scope to pursue a competitive contracting strategy for the new production SWTs. Additionally, Econco used their proprietary processes for the black heat carburization and only Econo possesses the production processes necessary to incorporate these much needed product improvements into new production.

Econco holds the design and process rights to the manufacturing portion of the STEM for the switch tubes and under their agreement with Econco, they will be providing the STEM Assembly for this new production effort. The specifications (2904186 and 6155763) require the switch tubes used in the (which are a part of the Aegis Weapon Systems) to meet all tests/requirements prior to production or rebuild.

The certification consists of electrical testing, environmental testing and operating and shelf life tests.

Timeframe for a source other than Econco to become qualified is estimated to be 4 to 4.5 years and cost approximately . The timeframe and cost to certify another source was based on historical certification of switch tube designs. However, there is not a source of funding to certify another source for this product. Switch tubes are to be delivered as GFM to in November 2014 for the initial socket fill for the second Aegis Ashore system (HN-2). This requirement is for 32 D/D and 3 S/D switch tubes. Additionally, a like amount will be required in timeframe for the also to be delivered as GFM to .

is under contract to build transmitter cabinets with the tubes being GFM. It is expected that the Aegis USN Shipbuilding schedule will require 1 - 2 shipsets each year (shipset for socket fill is 35 tubes). will also require set of tubes with spares in FY15.

At this time, Foreign Military Sale (FMS) cases are expected to be funded in FY14/15.

These supplies are modified commercial products. The government does not own the data rights for the design drawings or processes. The government has the performance and interface specifications (2904186 and 6155763). Econco, now part of CPI’s Microwave Power Products Division, holds the design rights to production and rebuild which includes manufacturing processes.

Eimac, another subsidiary of CPI, was the OEM in the late 1970’s through 2002 when production ceased. At that time the Navy had sufficient quantity of failed Switch Tubes to fill all expected requirements until approximately 2015. The Navy decided to fill all future requirements with rebuilt switch tubes as a cost effective approach. NSWC Crane advertised in the Commerce Business Daily of a qualification conference for the Aegis microwave tubes where requirements for becoming certified/qualified and future requirements were openly discussed with industry. Only Econco, a subsidiary of CPI, expressed interest in becoming qualified for rebuild of the switch tubes. No other source expressed interest. Econco was certified in 1996 for rebuilding of D/D Switch Tube (6155763) as a rebuild source in addition to Eimac by the NSWC Crane ISEA. Both sources were necessary to meet requirements from 1997-2002. In 2001, the Navy determined that one source could provide all of the Navy’s requirements. Contracts from that time through 2010 were processed by using limited competition between the two certified sources with the entire requirement being awarded to one source. Econco was awarded five year contracts in 2001, 2006, and again in 2011.

Eimac was the sole provider of the Switch Tube STEM Assembly via existing repairable assets used in the rebuild process by Econco during the period 1997 to present. No other sources have been certified for production of the D/D Switch tube since management of the Aegis microwave tube program was assigned to NSWC Crane in 1982.

Eimac and Econco are both wholly owned subsidiary companies of CPI. They have formal agreements in place that limits production of new Navy switch tubes to Econco and STEM assemblies to Eimac and limits rebuild of switch tube assemblies to Econco.

The Aegis shipbuilding program was originally scheduled to end at . However, the current schedule has added , as well as . The Government no longer has sufficient quantities of Switch Tube carcasses available to meet the new shipbuilding schedule. New production of the current Switch Tube design will be necessary to fulfill these new requirements. As discussed above, Econco is the only vendor certified to produce these switch tubes.

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

The requiring technical activity's (RTA) Switch Tube Integrated Product Team Lead who has over 20 years of experience on Aegis Microwave Tubes and the In Service Engineering Agent for Aegis Microwave Tubes responsible for certifying designs for production and repair conducted market research in accordance with FAR Part 10.001(a)(2) for this effort. The results, of the RTA's collective market research, shows that there are two companies (both Divisions of CPI) who have the product line for this type of microwave tube. However, as discussed above, Econco's agreement with Eimac limits new production and rebuild of the Aegis Switch Tube to Econco.

NSWC Crane issued an RFI/Sources Sought on April 5th, 2013 and held an Industry Day on May 20th 2013. The results of those efforts are summarized in the market research and as follows:

There are currently two companies, and Eimac which produce switch tubes similar in function to the desired Aegis Switch Tube. Eimac is the original OEM for all switch tubes currently in the U.S. Navy. At one time there were S/D Switch Tubes on board ship manufactured by , but that company no longer produces switch tubes and their design is not repairable.

Econco is currently the only source certified to repair the Aegis switch tube.

Additionally, due to an agreement with their sister CPI company, Eimac, they obtain the STEM Base Assembly used in repair of switch tubes from Eimac. All the switch tubes used in the U.S. Navy today are Eimac built and repairable by Econco.

builds a similar gridded tetrode to the switch tube, but the design is different and there would be significant modifications required to enable it to be used in the Aegis System. Additionally, would need to become a certified source for SWT, a long and expensive process. Finally, the manufacturing facility for is located in the

. This would provide a logistic hurdle as well as ITAR issues.

Lexel Imaging does not currently build microwave tubes like the Aegis Switch Tube.

Their production processes would require significant retooling as well as certification by NSWC Crane Engineers, both long and expensive processes.

In the RTA's opinion none of these vendors, with the exception of Econco, meet the Government's current requirements

Based upon the RTA's training, experience, and market research, Econco is the only source that can meet the Government's current requirement considering the costs and delay associated with any other potential source.

A synopsis was issued through the Government Point of Entry as required by FAR 5.2 on 9 January 2014. As of 16 January 2014, there has been no response to the synopsis from industry.

7. Determination of Fair and Reasonable Costs

The Contracting Officer has determined that the anticipated cost to the Government for the supplies covered by the J&A will be fair and reasonable.

8. Actions to Remove Barriers to Competition

For the reasons set forth in Paragraph 5, NSWC Crane Division has no plans at this time to compete future contracts for the types of supplies covered by this document. If another potential source emerges, NSWC Crane Division will assess whether competition for future requirements is feasible.

FY14