JA-25-0001 OISS Capacity Increase_Redacted.pdf

DEPARTMENT OF THE NAVY

NAVAL FACILITIES ENGINEERING AND EXPEDITIONARY WARFARE CENTER

1000 23RD AVENUE

PORT HUENEME CA 93043-4301

N REPLY REFER TO:

JA-25-0001

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

CAPACITY INCREASE: OCEAN INFRASTRUCTURE SUPPORT SERVICES CONTRACT

(N39430-23-D-4050)

1. Contracting Activity.

The contracting activity is Naval Facilities Engineering and Expeditionary Warfare Center’s (NAVFAC EXWC) Oceans Engineering Contracting Department (CON74), Naval Base Ventura County (NBVC), Port Hueneme, California.

2. Description of the Action Being Approved.

Approval is sought by NAVFAC EXWC to use other than full and open competition to award a modification to increase capacity on the Ocean Infrastructure Support Services (OISS) Indefinite Delivery, Indefinite Quantity (IDIQ) contract. The modification will increase the ceiling by

, from the current ceiling of to .

This additional capacity will allow the Government to fulfill the surge of immediate and anticipated operational requirements throughout FY25.

3. Description of Supplies/Services.

The primary purpose of this IDIQ is for Ocean Infrastructure Support Services, including engineering and technical support solutions for projects and programs within NAVFAC EXWC’s Oceans Programs. As the Infrastructure In-Service Engineer Agent (ISEA) and test and evaluation lead for this program, NAVFAC EXWC is responsible for providing specialized undersea engineering, planning, procurement, installation, and maintenance. Solutions may require providing vessel(s), vessel services, engineering services, logistical support, facility support, environmental support, and equipment. Work will be performed in environments ranging from both marine and nearshore locations in all water depths where design, testing, construction, installation, maintenance, inspection, repair, and cable handling in support of NAVFAC EXWC and its sponsors.

While the funding types used will range from Operation and Maintenance (O&M), Other Procurement, Navy (OPN), Research, Development, Testing and Evaluation (RDT&E) and Other Procurement, Navy (OPN); RDT&E and OPN are anticipated as the main funding types to be utilized.

The OISS contract’s period of performance began in November 2022 and ends on 08 November 2027, with a six (6) month option to extend services to 08 May 2028. The OISS IDIQ contract is currently in ordering Period 1 (09 November 2023 to 08 November 2024) and is about to enter Period 2 (09 November 2024 to 08 November 2025). No additional time is requested as part of this capacity increase.

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

The statutory authority permitting other than full and open competition is 10 U.S.C. 3204(a)(1), as implemented by FAR 6.302-1, when the supplies or services required by the agency are available from only one or a limited number of responsible sources, and no other types of suppliers or services will satisfy agency requirements, full and open competition need not be provided for.

5. Rationale Justifying Use of Cited Statutory Authority.

As discussed below, unanticipated increases in mission-critical requirements associated with the increased operational tempo in the Pacific, unexpected technical problems affecting ongoing projects, unrelenting inflationary pressures, and industry-wide cost increases are exhausting the IDIQ capacity at a pace that could not have been anticipated at the time of contract award.

Increasing the capacity of the current IDIQ contract is the most appropriate solution to fulfill mission requirements without unnecessary delays and duplication of costs not anticipated to be either mitigated or recouped through competition.

With its specialized technology and equipment implementations, NAVFAC EXWC supports a variety of Navy Commands by providing improved undersea and seabed infrastructure and installation processes. It is critical that this contract is able to support emergent tests in support of operational systems, system outage, and/or maintenance that must be addressed in two to three months with specialized services of a consistently high level of quality.

The administrative effort required to award a new follow-on contract cannot be completed in an adequately timely manner, which may affect the Government’s ability to meet immediate and anticipated mission requirements during FY25. It is vital to avoid administrative delays on re-procurement for needs that will secure high-level requirements for the sponsor bases being served.

Significant and unforeseen increases in volume and complexity of work requirements have been experienced that were not anticipated during the planning phase of the OISS contract, which in return has led to higher costs than initially estimated. This is due to factors including, but are not limited to, surge in requirements associated with the Navy’s Posture in the Pacific Initiative, issues related to challenges and delays with actual implementation of planned requirements, higher prices due to inflation, and higher industry pricing from increased post-pandemic demands. The Posture in the Pacific initiative specifically has increased operational tempo and driven requirements for undersea installations and engineering from the United States Indo- Pacific Command (INDOPACOM) that require a high level of marine and nearshore vessel support. This industry in particular has seen a dramatic increase in demand in general, and costs associated with day-rates that are predicted to continue to increase over the next five years. Costs for materials needed for mission requirements has also seen a dramatic increase, as supply chains cannot currently satisfy industry demands following the Covid-19 pandemic. These vessel day-

Search identified a sufficient number of small businesses with demonstrated experience relevant to the requirement. Additionally, market research revealed that previous contracts for this requirement were successfully solicited as a 100% small business set-aside. Thus, this requirement under the current OISS contract was solicited as a small business set-aside to allow responses from as many small business offerors as practicable.

7. Determination of Fair and Reasonable Cost.

Costs for supplies and services required by the Government were determined to be fair and reasonable at the basic contract level. It is anticipated that the costs under future task orders issued under this contract will be fair and reasonable, and they will be evaluated on an individual task order basis to confirm this by conducting price/cost analysis in accordance with the procedures listed in FAR 15.401, Proposal Analysis Techniques. In addition, for cost-reimbursement type task orders, the Government technical team will continue to work closely with the acquisition team to establish criteria and guidelines for the determination of contract/order type in all cases, and to identify candidate projects for potential transition to fixed-price task order type.

8. Actions to Remove Barriers to Future Competition.

NAVFAC EXWC plans to award a follow-on contract with a larger capacity in early FY26. The technical requirements package is being finalized and is planned to be submitted to the contracting department within the next 60 days. Simultaneously, the technical team is analyzing future program needs to ensure the Government estimate is accurate and in-line with current industry pricing and that the follow-on will have adequate capacity capable to handle forecasted workload for future mission requirements. This will avoid the reoccurrence of capacity constraint related issues currently being experienced, and the need for future capacity increases. In addition, market research is currently being conducted for the follow-on to verify that a sufficient number of firms can meet the scope requirements, and competition will be received to the maximum extent practicable. It is anticipated that a single award small business set-aside will be utilized for the follow-on in order to incentivize as much small business participation as possible.