18RGP47_J&A_redacted.pdf

NCH 53.6-2 (MAY 2016)

Re

J&A Number: CR-180024

Code: 0221

PR Number: N0016418RGP47

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

The Naval Sea Systems Command, Naval Surface Center, Crane

Division, Code 0221.

2. Description of the Action Being Approved

Award of a firm fixed price (FFP), indefinite delivery, indefinite quantity (IDIQ), supply contract. The contract will be awarded on a sole source basis to JWS Machine, Inc.

501 S. Airport St, Terre Haute, IN 47803 for the TR-333

Hydrophone Program, Strategic Systems Program (SSP), SP24

Navigation Subsystem, to include Foreign Military Sales. The hydrophone housings and baffle rings are used in the manufacturing of TR-333 Hydrophones fleet stock.

3. Description of Supplies/Services

The resulting contract is for the purchase of hydrophone housings and baffle rings used in the manufacturing of TR-333 hydrophones.

The Government’s minimum needs have been verified by the certifying technical and requirements personnel. The ordering period of the IDIQ contract will be five years.

The table below provides the estimated dollar values per fiscal year and appropriation. The total estimated minimum dollar value is $150,000 and the maximum dollar value for this procurement action is $2,000,000.

DEPARTMENT OF THE NAVY

CRANE DIVISION

NAVAL SURFACE WARFARE CENTER

300 HIGHWAY 361

CRANE INDIANA 47522-5001

IN REPLY REFER TO:

Estimated Dollar Value

4. Statutory Authority Permitting Other Than Full and Open

Competition

10 U.S.C. 2304(c)(1), only one responsible source for each of the items being procured and no other supplies will satisfy the agency requirements in accordance with FAR 6.302-

1(a)(2)(ii)(A) and (B).

5. Rationale Justifying Use of Cited Statutory Authority

The above referenced items were first procured under competitive contract actions while the program was managed by

Lockheed Martin (the Sonar System Original Equipment

Manufacturer) prior to the program being assigned to NSWC

Crane in 1997. Lockheed Martin certified JWS Machine-Stark

Industries. NSWC Crane has also investigated building these items within the Center but the costs exceeded the contractual costs of N0016414CGP76 and N0016415DGP06 which were awarded on a sole source basis to JWS Machine. Contract

N0016415DGP06 has a five year ordering period but 80% of the maximum quantity of housings and 95% of the maximum quantity of baffle rings had already been ordered by the mid-point of the ordering period. This is the basis for increasing the contract maximum on the instant procurement.

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.

JWS Machine is the only certified source to build the respective items identified. Sources are required to pass all

FY19 FY20 FY21 FY22 FY23 Total

OMN $ 323,000 $323,000 $357,000 $357,000 $340,000 $1,700,000

FMS $ 57,000 $ 57,000 $ 63,000 $ 63,000 $ 60,000 $ 300,000

Total $ 380,000 $380,000 $420,000 $420,000 $400,000 $2,000,000 testing required within SSP Ordnance Document(OD) 62846 to become certified. All items are for the TR-333 Hydrophone used in the SP24 TRIDENT Navigation Subsystem Sonar. In order to certify any of the above units from a non-certified vendor, the estimated cost to be incurred would be

$3,556,957. Procurement from a new vendor would result in a twenty-four (24) month delay in production. Selection of a non-certified vendor would require three different levels of testing: unit testing, next level assembly (TR-333

Hydrophone) testing, and operations testing at sea. The table below illustrates the costs and timeline requirements to certify a new vendor.

Estimated costs for items (a) and (b) above are based on data from the production of current supplies for the same items covered under contract N00164-15-D-GP06. These costs include a historical fiscal year escalation rate of three percent.

Quantities include 16 hydrophone housings and 16 hydrophone baffle-rings.

Inspection costs for item (c) and (d) are based on inspection procedures and historical information and were utilized in the estimate of costs associated with inspection. Some examples of inspection requirements listed above are O-ring groove verification, surface finish, material verification, and electrical testing.

Costs associated with the Certification Procedure of the hydrophones, item (e) above, are based on an engineering estimate for the Performance Testing IAW OD 62846 and a quantity of 16 TR-333 Hydrophones manufactured by NSWC Crane in FY17 at $27,884 each, which includes parts, testing, and parts inspection and associated labor. The certification of a complete hydrophone includes all new vendor parts being

Description of Cost

TOTAL COST

TO CERTIFY

NEW VENDOR

a. Material Costs – Housings - Quantity 16 $ 42,189

b. Material Costs – Baffle Rings – Quantity 16 $ 9,624

c. Inspection - Housings $ 6,000

d. Inspection – Baffle Rings $ 6,000

e. Certification of Hydrophones - Quantity 16 $ 446,144

f. First Article Testing $ 48,000

g. Operation Testing $2,499,000

h. Documentation/Travel for Certification $ 500,000

NEW VENDOR CERTIFICATION TOTALS $3,556,957

tested together. The requirement in OD 62846 necessitates a quantity of 16 in order to complete the testing.

Costs associated with First Article Testing (FAT), item (f) above, are based on 20 years of experience of the technical activity in performing FAT of Hydrophones. The FAT includes costs associated with testing all new vendor parts together.

Costs associated with Operation Testing, item (g) above, are based on historical testing costs on research vessel CSS

Waters which included manning a research ship and supporting field engineers to evaluate a system while at sea. The typical manpower requirements are twenty-eight (28) field engineers and a crew size of twenty-five (25). The operational testing to certify a new vendor is estimated to take three months. The estimated cost for testing is

$2,499,000 for the three-month period. The Operation Testing costs include all new vendor parts being tested together.

Item (h) above estimates the 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 twenty-four-month 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. Competition on any of the procurements would not offset the estimated $3,556,957 certification costs that would be incurred if the Government procured any of the supplies from a new source.

The twenty-four (24) month schedule to certify a new vendor before production can begin will greatly impact Fleet readiness and would jeopardize the SSBN TRIDENT Submarine

Fleet overhaul schedules. The Fleet stock will need replenishing to maintain satisfactory safety levels. If the

SSBN TRIDENT Submarine Fleet 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.

A Request for Information (RFI) was issued on 03/15/2018, on the Federal Business Opportunities (FEDBIZOPPS) website. The

Government received no responses to the RFI. The synopsis for

N0016418RGP47 was posted to FEDBIZOPPS on 04/16/2018. To date, no responses have been received.

7. Determination of Fair and Reasonable Costs

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. DCMA pricing assistance will be requested along with a certification of current cost and pricing to support the fair and reasonable determination of the costs. Similar quantities of this requirement have been purchased from this offeror in the past in Fiscal Year 18 and cost/pricing information was received on that procurement.

This information will also be utilized to support the fair and reasonable cost determination of this procurement.

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 covered by this document. If another potential source emerges, NSWC Crane will assess whether competition for future requirements is feasible.

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

I certify that the facts and representations under my cognizance, which are included in this justification and its supporting data, including acquisition planning data except as noted herein, are complete and accurate to the best of my knowledge and belief.

TECHNICAL COGNIZANCE:

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

REQUIREMENTS COGNIZANCE:

LEGAL SUFFICIENCY REVIEW (NMCARS 5206.303(90))

I have determined this justification is legally sufficient.

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

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

APPROVAL BLOCK (FAR 6.304 for Approving Official)

Upon the basis of the above justification, I hereby approve, as

Competition Advocate for the Procuring 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).

NSWC CRANE COMPETITION ADVOCATE

Signature Name (Print) Date