JUSTIFICATION & APPROVAL-N102-17-C-2000-REVISION 2.pdf

FOUO

J&A Control Number: N102-17-C-2000

JUSTIFICATION & APPROVAL (J&A) FOR USE OF OTHER THAN FULL AND

OPEN COMPETITION

1. Contracting Activity:

Department of the Navy, Military Sealift Command (MSC), Services Division (N102).

2. Description of Action Being Approved:

a. This action provides the basis and rationale for awarding a contract modification on an other than full-and-open competition basis for long-standing, recurrent services for regulatory survey requirements covering MSC vessels.

b. MSC recognizes its obligation to promote competition to the maximum extent possible, which it routinely does and will continue to do. However, as further described below, the decision to procure these survey service requirements using a sole source justification and approval is based on MSC’s significant experience in utilizing this particular service, especially with the service's unique, long-standing familiarity with MSC and consequent special capability this familiarity ensures. Specifically, MSC research and contracting history from at least the past ten years demonstrate the usage of the regulatory body to ensure MSC vessels are classed and comply with US law and regulation and Chief of Naval Operations (CNO) policy directives. This modification will add firm-fixed price options to an existing services contract to obtain the specialized services required and described herein.

3. Description of Supplies/Services:

MSC requires a broad range of services that primarily revolves around surveys for classing of MSC vessels. The only classification society that meets the Congressional and regulatory mandates in title 46 of U.S. Code, section 3316, and title 46 of the Code of Federal Regulations, and policy direction by the CNO, is the American Bureau of Shipping (ABS).

ABS provides surveys of MSC vessels to ensure safe operations and maintenance. Under the surveys, ABS provides various "notations" that support MSC efforts to comply with Department of Defense guidance, and assist MSC in making operational risk-based decisions associated with that guidance from a regulatory compliance perspective. One such notation is the Cyber Security Notation offered by ABS.

The estimated total amount of this requirement is $ which covers the remaining three (3)-year period and options. It is anticipated that each CLIN will be funded utilizing corresponding Fiscal Year Navy Working Capital Funds (NWCF) and/or Transportation Working Capital Funds (TWCF).

4. Statutory Authority Permitting Other Than Full and Open Competition:

The statutory acquisition authority permitting other than full-and-open competition is 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1(a)(2), whereby services are available from one or a limited number of sources. This requirement will be sole-sourced to ABS, which is effectively the only provider of survey services that will fully satisfy MSC requirements.

5. Rationale Justifying Use of Cited Statutory Authority:

This is not a new requirement. MSC has acquired the below survey services for the last two years on an other than full-and-open competition basis using the survey portion of the ABS contract. Currently, the required classing support services to maintain class for MSC vessels are being acquired through the current firm-fixed price contract. This J&A covers a modification to the existing ABS classification services contract.

a. ABS Cyber Notation: Meets DODINST 8500.01 for Cyber Security Risk

Management Framework (RMF)

Basis. The table below shows the list of classes entering the ABS Cyber Notation:

SHIPS

Option Yr 2 Option Yr 3 Option Yr 4

Enrollment Sustainment Enrollment Sustainment Enrollment Sustainment

T-EPF 1 7

T-AKE 1 6 2 6 8 14

T-AO 205 1 2 1

T-ATS 6 2 3 2

T-ESB 3 3 1 3

T-AGSE 1 4 4 4

SBX 1 1 1 1

Rationale. Because of their statutorily mandated role in the classification of Government vessels and with matters related to classification, and long familiarity with MSC vessels and their specific operational requirements, particularly with regard to cyber and operational security, ABS is uniquely situated to provide surveying services for Cyber Notation, effectively making them the only responsible source that can fully satisfy agency requirements.

In addition to ABS' unique qualifications with regard to survey services required for MSC vessels, ABS also works closely with the United States Coast Guard (USCG), having USCG-delegated authority as a third-party representative for the Alternate Compliance Program (ACP), a streamlined process for MSC to gain and maintain regulatory compliance while maximizing their vessels’ operating time, yielding a significant additional benefit to MSC. Even though Cyber Notation is not a classification task that is mandated in title 46 of U.S. Code, section 3316, and title 46 of the Code of Federal Regulations, MSC must meet substantive requirements imposed by higher authority within the Department of Defense, Cyber Notation prominently among such requirements. ABS Cyber Notation services will ensure vessels with engineering control systems meet or exceed the requirements set forth under DOD INST 8500.01.

Placing Cyber Notation within the current ABS contract vehicle will achieve a particularly high level of consistent, enforceable, and measureable compliance by ensuring that the services are provided by personnel who are thoroughly familiar with MSC's unique technical and operational demands. Cybersecurity can be considered within the safety at sea category as it surveys MSC vessel control systems and reports on any cybersecurity gaps or vulnerabilities, enhancing the safety and survivability of vessels and crew in potentially hostile operating environments. For these reasons, MSC strives to attain the highest cybersecurity notation rating level possible, and the resultant maximum cybersecurity for mission critical systems. Use of ABS services is intended to facilitate this goal.

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

a. For all items identified in paragraph 5, and in accordance with FAR 5.201(b)(1)(i), MSC does not intend to issue a synopsis of proposed contract modification action (solicitation) on the Federal Business Opportunities (FBO) web portal. The stated intent will be sole-source award to ABS for the Cyber Notation with firm fixed price option CLINS. MSC will continue to work with its contracting and engineering support offices to identify additional potential sources and communicate with the industrial base to assure that all potential sources are identified and receive consideration for these requirements.

b. MSC N7 Engineering does not possess the requisite manning and specialized technical skills needed to conduct effective cybersecurity surveys on industrial control systems for the entire MSC fleet. ABS possesses advanced technical knowledge of shipboard systems coupled with a proven cybersecurity program tailored specifically for control systems.

ABS experience in the maritime industry, specifically with MSC ships, is essential to achieving and maintaining the highest level of cyber readiness in the complex and ever-changing maritime environment.

7. Determination of Fair and Reasonable Cost:

The contract will include pre-negotiated prices. A fair-and-reasonable determination will be made using the techniques described in FAR 15.404-1. The Contracting Officer has surveyed the history of acquisitions for the required surveying services, for which fair-and-reasonable determinations were individually established. The Contracting Officer will ensure that the contract utilizing non-pre-negotiated pricing is commensurate with the earlier pricing, adjusted for changed market conditions and inflation. In this way, the Contracting Officer will determine that the price to the Government for the services covered under this J&A will be fair-and-reasonable.

8. Actions to Remove Barriers to Future Competition:

For reasons set forth in Paragraphs 3 through 5, above, MSC has no plans at this time to engage in full-and-open competition for this requirement. If another potential source emerges, MSC will assess whether additional competition for future requirements is feasible. To date, only one

(1) company (ABS) can perform the function and meet the requirements outlined above. The Government will continue to monitor the market and conduct market research to identify additional sources and solutions, should they arise in the marketplace.