N00164_16015_FBO.pdf

DEPARTMENT OF THE NAVY

CRANE DIVISION

NAVAL SURFACE WARFARE CENTER

300 HIGHWAY 361

CRANE INDIANA 47522-5001

JUSTIFICATION AND APPROVAL

IN REPLY REFER TO:

J&A Number: 16-01 5 Code: GXPM

PR Number: N00164-16-R-GP20

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

The Naval Sea Systems Command, Naval Surface Warfare Center, Crane Division, Code 0222.

2. Description of the Action Being Approved

Award of a Firm Fixed Price (FFP), Indefinite Delivery, Indefinite Quantity (IDIQ), supply contract on sole source basis to EDO Corporation, Salt Lake City, UT 84115, CAGE CODE to procure Hydrophone Ceramic Elements for the TR-333 Hydrophone Program, Strategic Systems Program (SSP) , SP24 Navigation Subsystem, to include Foreign Military Sales. The elements are used in the manufacture of TR-333 Hydrophones at NSWC Crane and for fleet stock.

3. Description of Supplies/Services

The supplies to be acquired are TR-333 Hydrophone Ceramic Elements. The elements are to be used in the manufacture of TR-333 Hydrophones at NSWC Crane. For the five year ordering period, the Government estimates a minimum of 3,000 Hydrophone Ceramic Elements and a maximum of 20,000 will be procured .

The Government's minimum needs have been verified by the certifying technical and requirements personnel.

The chart below provides estimated dollar values per fiscal year and appropriation. The total estimated maximum dollar value for these procurement actions is .

NCH 5 3 . 6 - 2 (SEP 20 11)

J&A Number: 16-015

Estimated Dollar Value

FY16 FY17 FY18 FY19 FY20 Total

OMN

FMS

Total $ 3 , 293 , 75 4. 00

4. Statutory Authority Permitting Other Than Full and Open Competition

10 U. S.C. 2304(c) (1), Only one responsible source and no other supply or services will satisfy agency requirements.

5. Rationale Justifying Use of Cited Statutory Authority .

As set forth below, EDO Corporation is the only responsible source capable of providing the required supplies.

The above referenced items were first procured under competitive contract actions . In accordance with FAR 6.302- 1 (a) (2) (ii), supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued production of highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in: A) Substantial duplication of cost to the Government that is not expected to be recovered through competition or: (B) Unacceptable delays in fulfilling the agency's requirements.

Award to a source other than EDO Corporation is likely to result in substantial duplication of cost to the Government that is not expected to be recovered through competition and unacceptable delays in fulfilling the agency's requirements.

Previously, the Government has acquired the ceramic elements from the original equipment manufacturer (OEM) EDO Corporation as follows:

N00164-03-C-6511 - Initial contract for first 1,000 ceramic elements with options and qualifications N00164-07-C-6540 - Subsequent award to fulfill fleet requirements for 21,000 US Navy assets N00164-11-P-0893 - Small purchase of 1,999 US Navy assets and 461 FMS assets

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N00164-12-C-GP46 - Current award to fulfill fleet requirements for 10,000 units and 3,000 FMS; last delivery was February, 2014.

Currently, EDO is the only certified source to build the elements for the TR-333 Hydrophone used in the SP24 TRIDENT Navigation Subsystem Sonar. The program requires critical component suppliers to go through an extensive qualification plan that will cost approximately and require an estimated to complete. This product would have to meet certification at 3 levels of testing - unit testing, next level assembly (TR-333 hydrophone) testing, and operations testing at sea. The table below illustrates the costs to certify a new vendor.

Description of Cost

a. Material Costs - Ceramic Elements b . Inspection - Ceramic Elements

c. Certification hydrophones

d. First Article Testing

e. Operation Testing f . Documentation/Travel for Certification

NEW VENDOR CERTIFICATION TOTALS

TOTAL COST TO

CERTIFY NEW

VENDOR

$3,638,872.00

Estimated costs for item a. above is based on data from current proposal and quotes from possible second sources.

The estimate is for engineering testing.

Inspection costs for item b. above is based on inspection procedures and previous inspection costs utilized in the estimate. Source inspection, workmanship, dimensional, surface finish, material verification, and electrical testing are some of the inspection requirements for the above items.

Costs associated with the Certification procedure, item c.

above, are based on an engineering estimate for the Performance Testing IAW for TR-333 Hydrophones previously assembled at NSWC Crane at each, which includes parts, testing, and parts inspection and associated labor.

The certification of a complete hydrophone includes all new vendor parts being tested together.

Costs associated with First Article Testing (FAT), item d.

above, are based on 20 years of experience of the technical

NCH 53.6 -2 (SEP 20 11 )

activity in performing FAT Testing of Hydrophones. The FAT Testing includes cost associated with testing all new vendor parts being tested together.

Costs associated with Operation Testing, item e. above, are based on previous testing costs provided by ship yards and Lockheed Martin on research vessel . The previous testing costs included manning a research ship and supporting field engineers to evaluate a system while at sea.

The operational testing to certify a new vendor is estimated to take three months. The estimated cost for testing is for the period which is to operate the ship each month per ship yard previous operating cost. The Operation Testing costs include all new vendor parts being tested together.

Item f. above provides the estimated additional costs to certify a new vendor for preparation and coordination of a test plan approval, engineering investigation of any failures, material analysis, and generating formal test reports. These additional costs include submission of Engineering Change Requests to make appropriate changes to controlled drawings, and travel expenses associated with technical briefings with the SP24 Program Office and the new supplier. These costs include the annual salary of one Lead Engineer for the period, travel for Government representatives to the new vendor's facilities, and documentation and reviews associated with the certification process. The Documentation/Travel costs include all new vendor parts being tested together.

Additional funds are not available to accomplish certification of new sources at this time. Competition would not offset the estimated certification costs that would be incurred if the Government procured any of the supplies from a new source. Nevertheless, as indicated in section 8 below, the Government has been working through Simplified Acquisition Procedures (SAP) to procure units for testing purposes from new sources in order to promote competition and to improve technical readiness in the event that the current source is not available. However, the new sources have not succeeded in the initial inspection phases to date. If a new source is successful in passing all phases of initial inspection (item b in the chart above) the Government would then seek to secure additional funding for

NCH 53 . 6-2 (SEP 2011)

the purpose of performing additional testing with the goal that an additional source becomes certified. Since no new sources have passed the initial inspection phases funds have not yet been earmarked for the purpose of certifying a new source. More information about the other sources that have delivered units that failed initial inspection is provided in section 8 below.

The schedule to certify a new vendor, before production can begin, will greatly impact Fleet readiness and would jeopardize the

The Fleet stock will need replenishing to maintain satisfactory safety levels. If the cannot deploy per the mission requirements the United States will be without one of its nuclear deterrents.

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

The NSWC Crane Platform and Launch Division performed market research to include their own knowledge of the industry.

Although several vendors were identified who manufacture the same or similar supplies, no additional vendors were found who have completed the Government certification requirements for any of the items required.

In accordance with DFARS Procedures, Guidance, and Information (PGI) 206.302-1, a Request For Information (RFI)/Sources Sought was issued on February 9, 2016 with a closing date of February 25, 2016. It stated that the Government was accepting information from companies potentially capable of meeting the TR-333 Hydrophone Ceramic Elements and provided access to the drawings. There were no responses received.

A synopsis for this procurement has been issued as required by FAR 5.202, via posting on the Federal Business Opportunities (FEDBIZOPPS) website. The synopsis for N00164- 16-R-GP20 was posted on 07 March 2016. To date, no responses to the synopsis have been received.

7. Determination of Fair and Reasonable Cost

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

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assistance will be requested along with a certification of current cost and pricing to support the fair and reasonable determination of the costs. All available information will be utilized to support the fair and reasonable cost determination.

8. Actions to Remove Barriers to Future Competition.

For the reasons set forth in Paragraph 5, the Naval Surface Warfare Division, Crane Division is not pursuing competition on the instant procurement but is pursuing multiple sources for potential competition in the future .

To date none of the deliverable items have passed all required testing . While currently pursuing another vendor as an additional source for the Ceramic Elements, based on production and testing lead times, the earliest timing of a second source availability would be . In the event that a second source becomes available during performance of the contract with EDO Corporation that results from the instant procurement action, the Government will make a determination at that time whether to immediately pursue a new, competitive contract action.

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CERTIFICATION OF APROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION (FAR 6.303-2(b))

I certify that the facts and representations under my cognizance, which are included in this justification and its supporting acquisition planning data, including Acquisition Plan No. SSP-83-lZ, except as noted herein, are complete and accurate to the best of my knowledge and belief.

TECHNICAL COGNIZANCE:

(Print) an Phone No. Date

COGNIZANCE:

Name (Print) and Title (Code) Phone No. Date

LEGAL SUFFICIENCY REVIEW (NMCAS 5206.303(90))

a e (Print) and Title (Code) Phone No. Date

CONTRACTING OFFICER CERTIFICATION (FAR 6.303-2(a) (12))

I certify that this justification is accurate and complete to he best of my knowledge and belief.

Name (Print) Pho:

BLOCK (FAR 6.304 for Approving Official)

Upon the basis of the above justification, I hereby approve, as Competition Advocate for the Contracting Activity, the solicitation of the proposed procurement using other than full and open competition, pursuant to the authority of 10 U.S.C.

2304 (c) (1).

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