N3220521D2146-4127 Wartsila IDIQ J_A redacted.pdf

N10-WÄRTSILÄ

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: Department of the Navy, Military Sealift Command (MSC), Ship Repair Division (N104).

2. Description of the Action Being Approved:

a. This action provides the basis and rationale for awarding of at least one (1) contract on an other than full-and-open competition basis for long-standing, recurrent requirements covering a broad range of stern tube seal, shaft seal, rudder seal, bulkhead seal, jet drive, propulsion systems, and associated parts supply in support of the following MSC class vessels: T-AH (Hospital); T-AKE (Dry Cargo/Ammunition); T-AO (Fleet Replenishment Oiler); T-AOE (Fast Combat Support); T-ARC (Cable Repair); T-ARS (Rescue and Salvage); T-AS (Submarine Tender); T-ATS (Tug and Salvage); T-EPF (Expeditionary Fast Transport); and T-ESB (Expeditionary Sea Base). These systems and associated parts are critical equipment defined by SMS Number 10.6-002- of the most critical. Failure of these systems or associated parts would allow water to penetrate the hull and/or lubrication system, and vessel would not be able to perform its required national defense mission.

b. MSC recognizes its obligation to further 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 items via limited source is based on a significant amount of MSC experience purchasing the very systems/items listed in paragraph 5, using previous related J&As. Specifically, contract history shows consistently procuring parts and services for these systems/items utilizing other than full-and-open competition for at least the past ten (10) years. The J&A will cover all task and delivery orders for the systems/items identified in paragraph 2.a. placed under the anticipated indefinite-delivery, indefinite-quantity (IDIQ) type contract that will be awarded utilizing the authority under this J&A; rather than duplicating a J&A each time the covered systems/items are required. This will be an IDIQ type contract with firm-fixed-price task and delivery orders.

3. Description of Supplies/Services:

a. MSC requires a broad range of Original Equipment Manufacturer (OEM) systems/items and/or OEM manufacturer/parts provider to maintain the following stern tube seal, shaft seal, bulkhead seal, jet drive, and propulsion systems/items contained within the multiple MSC classes of Vessels stated in paragraph 2.a.

b. The total estimated maximum value of this requirement is . The period of performance will be for a five (5) year ordering period. It is anticipated that each task and/or delivery order will be funded utilizing corresponding Fiscal Year (FY) United States Navy Working Capital Funds (NWCF) and/or Transportation Working Capital Funds (TWCF).

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

a. The statutory 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), When the supplies or services required by the agency are available from only one responsible source, or, for DoD, NASA, and the Coast Guard, from only one or a limited number of responsible sources, and no other type of supplies or services will satisfy agency requirements, full and open competition need not be provided for. Competition will be limited to the OEM for parts providers.

5. Rationale Supporting Use of Authority Cited Above:

a. There are currently ten (10) active ship classes in the MSC fleet with WÄRTSILÄ stern tube seal, shaft seal, rudder seal, bulkhead seal, jet drive, and or propulsion systems. The Stern Tube Seals provide a critical barrier for keeping water from penetrating the hull and/or lubricating oil, failure of which would result in the vessel not being able to perform its required national defense mission.

b. SMS Number 10.6-002- has labeled these systems/items as L4 critical equipment; on a scale from L1 to L4 with L4 being the most critical. It is required accordance with regulatory body requirements, MSC Policy, and OEM recommendations. as stated in Safety Management Systems (SMS) number 10.4-001-

ALL -001-ALL

Main WÄRTSILÄ provides proprietary technical data/drawings for these systems/items as required by United States Coast Guard (USCG) and American Bureau of Shipping (ABS) regulations and is the only authorized manufacture and distributor of these OEM products.

c. WÄRTSILÄ obtained the proprietary rights to data/drawing, updated repair procedures, specific trade information, rights to marketing, distribution, and corrective/preventative maintenance procedures associated with these systems/items, which is not available outside of WÄRTSILÄ. In sum, the engineering, technical characteristics, construction drawings, manufacturing procedures, tolerances and installation procedures for the systems/items manufactured parts are proprietary to WÄRTSILÄ. To date WÄRTSILÄ does not share proprietary data or authorize outside vendors/manufactures - making them the only known source. The Government did not, nor has interest at this time, to acquire proprietary rights in the above-described matters.

6. Description of Efforts made to Solicit Offers from as Many Potential Sources as Practical:

a. For all systems/items identified in paragraph 5, and in accordance with FAR 5.201(b)(1)(i), MSC intends to issue a synopsis of proposed contract action (solicitation) on the beta.sam.gov web portal. The stated intent will be to award at least one (1) IDIQ Contract with firm-fixed-price task and/or delivery orders. With one (1) exception further described below, no additional responses have been received in response to the sources sought notices described in paragraph 8. MSC will continue to work with its contracting, engineering support and program manager offices to identify potential manufacturing and authorized service providers. Further, MSC constantly communicates with the industrial base to assure that all potential alternatives are identified and receive consideration for these requirements. In sum, OEM manufacturing facilities have been found to be capable of the manufacturing and servicing of the systems/items; however, these are limited to the OEM described in paragraph 5.

b. MSC does not have manufacturing and technical information for these systems/items required to evaluate and determine whether non-OEM systems/items potentially offered as equivalent to the OEM components and replacement parts are technically acceptable.

These systems/items require special tools, specialized repair parts and technical expertise unique to these systems; only approved OEM parts are authorized to be installed for this highly sophisticated equipment. The OEM parts providers and service technicians have access to provide parts and technical data / drawings for manufacture, and as required to properly repair and maintain the equipment. All OEM repair parts are therefore to comply with USCG, ABS, and International Maritime Organization (IMO) regulatory requirements.

7. Determination of Fair and Reasonable Cost:

a. The IDIQ Contract will include pre-negotiated part prices, as well as pre-negotiated labor category 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 above systems, for which fair and reasonable prices have been individually determined. The Contracting Officer will ensure that the base contract as well as any applicable task or delivery orders utilizing non-pre-negotiated pricing are commensurate with the earlier pricing and adjusted for changed market conditions and/or inflation. In this way, the Contracting Officer will determine that the price to the Government for the parts and services covered under this J&A will be fair and reasonable.

8. Actions to Removed Barriers to Future Competition:

a. For reasons set forth in paragraph 5, MSC has no plans at this time to engage in full and open competition for this entire requirement. If another potential source emerges, with authorization from the OEM to provide parts for these systems/items, MSC Norfolk will assess whether additional competition for future requirements is feasible. Multiple sources sought notices were posted to Governmentwide Point of Entry (GPE) requesting market research information from industry, including interested and capable sources, as well as suggested solutions to maintain these engines. The latest sources sought notice was posted from 14 April 2020 to 27 April 2020. Further information regarding the sources sought notices and their results can be found detailed in the market research memorandum.

b. In summary, one non-OEM vendor responded to the sources sought notices. This company was Coastal Seals Services (CSS); however, CSS has not been identified to be able to provide any of the supplies set forth in paragraph 5. CSS has the ability to provide maintenance and repair services for WÄRTSILÄ MX9 on five (5) out of ten (10) ship classes and all WÄRTSILÄ rudder seals stated in this requirement. This has been validated through an approved MSC qualification letter dated 02 April 2020.

c. The Government will continue to monitor the market and conduct market research to identify additional authorized sources and solutions. Any additional timely sources will be afforded an opportunity to respond to this related Request for Proposal (RFP) and any interested vendor will also be afforded an opportunity to submit a request to be qualified by the Design Control Activity (DCA) in accordance with COMSCINST 4490.1C.

9. A Listing of the Sources, if any, that Expressed, in writing, an Interest in the Acquisition:

a. To date, no additional sources other than WÄRTSILÄ and Coastal Seal Services (CSS), mentioned above have expressed interest in the instant requirement. However, this requirement will be synopsized and solicited via the (GPE).

CERTIFICATION AND APPROVALS

Technical/Requirements Cognizance:

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

Signature Name (Printed) Phone # Date

Legal Sufficiency Review:

I have reviewed this justification and it is deemed to be legally sufficient.

Signature Name (Printed) Phone # Date

Contracting Officer Certification:

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

Signature Name (Printed) Phone # Date

Competition Advocate:

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

Signature Name (Printed) Phone # Date