N4008419D0404_JA_18-R-0426-NECO.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

J&A No.18-JA-FEACQ-0008

1. Contracting Activity

Naval Facilities Engineering Command, Far East (NA VFAC FE), Facilities Engineering and Acquisition Division (FEAD), Yokosuka, Japan.

2. Description of the Action Being Approved

This justification seeks approval to award a follow-on sole source, Indefinite Delivery Indefinite Quantity (IDIQ) contract with recurring and non-recurring services to Nikken Sogyo Co., LTD. on an other than full and open competition basis for the continued provision of (1) maintenance services of incinerator plant, (2) operation and maintenance services for sewage treatment facilities and wastewater treatment system, (3) cleaning water tanks and (4) maintenance of weight scales at Command Fleet Activity Yokosuka (CFA Y). The period of performance associated with this requirement shall be for one (l) year. Additional details are listed below and will be indicated in the respective contract specifications.

3. Description ofSupplies/Services

The purpose of this procurement is to obtain follow-on maintenance services for the incinerator plant, operation and maintenance services for sewage treatment facilities and the wastewater treatment system, cleaning services for water tanks and maintenance of weight scales at CFA Y. The current contract expires 30 November 2018.

The contract will include the following recurring services:

a. Periodic Preventive Maintenance and Inspection (PMI) service in order to help prevent and correct deficiencies with the incinerator plant thus minimizing breakdown and service interruptions, extending component service life, and maximizing operating efficiency.

b. Operation and PMJ service of sewage treatment facilities in order to keep qualified effluent water quality. Operation shall be required to continue services without any interruption and PMI services shall be required to help prevent and correct deficiencies with the sewage treatment facilities thus minimizing breakdown and service interruptions, extending component service life and maximizing operating efficiency.

c. Inspect and adjust weight scales including calibration to proper operation.

d. Cleaning and PMI service of potable water tanks.

e. Provision of qualified personnel at the site who shall promptly initiate required corrective action for emergency trouble calls (normally within four hours), and routine trouble calls (normally within twenty- four hours).

The period of performance of this contract will be limited to one year 1 base period, with a six (6) month option. The Government of the United States and the Government of Japan have been in

1 Note: Services for beyond the initial 12 month period will be covered under as subsequent J&A.

negotiations for the plarmed turnover of incinerator services to the incinerator plant operated by the city of Yokosuka, Japan. In anticipation of the plarmed turnover of incinerator services, the pl armed shutdown of the CFAY incinerator is scheduled for January 2020 when the city ofYokosuka incinerator will be operational. At that time, CFA Y will no longer be permitted to incinerate waste as currently conducted and will be required to utilize the services provided by the city of Yokosuka.

The estimated armual contract value for the recuning services is approximately XXXXXX; utilizing the FY19 Yen rate of¥111.5938. Funding for this requirement has been approved by the appropriate requiring activity and programmed in the PWD Working Capital Fund.

Non-recurring work may be ordered through a task order which specifies the type of work to be accomplished. The non-recurring work is repair work which is beyond trouble call coverage or preventive maintenance limit of¥300,000 per call/occurrence. When the contractor finds defective items, a repair recommendation report shall be submitted to the contracting officer. The work shall be verified by Government technical representatives, then a work request may be placed when the work is determined to be reasonably necessary and it is determined that the price will be fair and reasonable. Total non-recurring work pursuant to this justification and approval may not exceed $XXXXX one year.

4. Statutory Authority Permitting Other Than Full and Open Competition

The statutory authority permitting other than full and competition for this requirement is 10 U.S.C.

2304(c)(l), as implemented by FAR 6.302-1: Only one responsible source and no other supplies or services will satisfy agency requirements.

5. Rationale Justifying Use of Cited Statutory Authority

As described herein, it is determined that the follow-on services are only available from the original source, Nikken Sogyo Co., LTD, for the highly specialized services described above, as the Government would incur substantial duplication of cost unrecoverable through competition and unacceptable delays in performance of the requirements. The services covered under this contract are required to ensure safe, reliable operation of the incinerator plant, sewage treatment plant, and portable water tanks located at CF A Y. If a contractor that is unfamiliar and/or not experienced with the services required under this contract was selected to perform such services, there would be an unacceptable risk to operations associated with a possible failure to properly operate and maintain the incinerator plant, sewage treatment plant, and water plant. Such risk may lead to serious health, safety and sanitary problems for residents and other persormel on CF A Y and the surrounding are of Yokosuka, Japan. Additionally, such risk would manifest itself if a skilled contractor is not timely awarded this contract.

The existing PMI contract for the incinerator plant, sewage treatment facilities, weight scales, cleaning and PMI services for portable water at CF A Y is currently being satisfactorily performed by Nikken Sogyo Co., LTD under Contract No. N40084-15-D-0401. Nikken Sogyo Co., LTD also satisfactorily performed these services under the immediately prior Contract No. N40084-12-D-0400, sparming 03 years. Additionally, as described in details below, historical data from the current contract (Contract No. N40084-15-D-0401) and its prior contract (Contract No. N40084-12-D-0400) confirm that Nikken Sogyo Co., LTD was the only firm to submit a proposal to perform the required services under the two previous solicitations. Accordingly, while the requirements for the services contained in this contract are and have been written to obtain maximum competition practicable, Nikken Sogyo Co., LTD has been the only firm interested in performing the two (2) previous requirements for this scope of work.

Achieving maximum competition for the specialized requirements contained in this contract action may result in unexpected delays in fulfilling this critical requirement. For example, the market research detailed in paragraph 6 demonstrates that no local vendors are interested in and/or capable of performing the services contained in this contract. Most of the equipment serviced under this contract requires the prime contractor to possess specific business licenses and personnel certified to work on such specialized equipment. Nikken Sogyo Co., LTD contractor is a highly specialized source with required, certified and licensed personnel and business licenses necessary to perform the critical contract requirements included in this contract. A new contractor would likely be required to recruit workers with experience and obtain appropriate certifications to work on the specific specialized equipment covered under this contract as well as obtain an appropriate business license. There would also likely be a significant learning curve if a new contractor brings workers with no or limited experience to perform required operation and maintenance of the specialized equipment covered under this contract. Aside from the recruitment of certified personnel, the new contractor would have to acquire a business license that would take 2-3 months, provided the new contractor has all the necessary documents. The business licenses required for the prime contractor include licenses for operation and maintenance services of sewage treatment plants, portable water cleaning and operation & maintenance of incinerator plants. Ultimately, any contractor other than Nikken Sogyo Co., LTD would likely require a considerable investment of funding, time and resources in order to successfully obtain the necessary licenses and to successfully perform this requirement.

Given the limited period of performance of this contract, it is not likely that another contractor would make such an investment as there would be insufficient time to recover costs and make it cost effective. As there cannot be an interruption in the services performed under this contract due to the possible life, health and safety risks associated with this requirement, the Government is unable to accept a possible performance delay in the interest of promoting competition.

All said, there is no documentation to support the Government obtaining adequate competition for the requirements contained herein without incurring unacceptable delays in performance. No sources other than Nikken Sogyo Co., Ltd. are capable of or interested in providing the required services at CF A Y within an acceptable timeframe to avoid a performance delay. Therefore, full and open competition is not practicable for this requirement since no source other than Nikken Sogyo Co., LTD is capable of performing this requirement in a manner which meets the Government's time constraints.

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

As described herein, the Government performed market research in an effort to solicit offers from as many offerors as practical. Specifically, NA VFAC FE FEAD Yokosuka contacted multiple local contractors/vendors to determine if they are capable and interested in performing PMI and services for all the equipment covered under this contract. The NA VFAC FE FEAD Yokosuka acquisition team reached out to the following five (5) firms: Nikken Sogyo Co., LTD, Clean Service Co. LTD, Nihon Highway, Mitomo Denki Services and CS One. Only Nikken Sogyo Co., LTD indicated an interest in performing the required work. Accordingly, all firms other than Nikken Sogyo Co., LTD did not express an interest in submitting a proposal to perform the required work.

Additionally, the acquisition team reviewed historical data from the current contract (Contract No.

N40084-l5-D-0401) and its prior contract (Contract No. N40084-12-D-0400) to find that Nikken Sogyo Co., LTD is the only firm to submit a proposal to perform the required services. Accordingly, although the requirements for the previous contracts were written with and in terms of commercial practices to the maximum extent practicable in an effort to promote full and open competition, Nikken

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Sogyo Co., LTD was the only firm interested in performing the two (2) previous requirements for this scope of work.

Furthermore, as required by PGI 206.302-1, a Sources Sought Notice was posted to AsiaNECO in an attempt to attract additional in interest in this requirement. Despite seeking only limited information from interested parties, the Government received no response to the sources sought.

A synopsis of this planned contract action has not been published. In accordance with FAR 5.202(a)(l 2), a synopsis is not required when the contract action is by a Defense agency and the proposed contract action will be made and performed outside the United Stated and its outlying areas, and only local sources will be solicited. However, this justification and approval will be published in accordance with FAR 6.305.

7. Listing of Sources Expressly Interested in the Acquisition

Despite considerable market research opportunities described in paragraph 6 above, no source other than Nikken Sogyo Co., LTD expressed an interest in this acquisition.

8. Determine of Fair and Reasonable Cost

The Contracting Officer anticipates being able to determine and obtain a fair and reasonable cost based on historical prices paid for similar services under comparable terms and conditions. For example, the Government has reviewed similar contracts in order to develop an independent Government estimate. In instances when certified cost and pricing data are required, an analysis of cost information will be performed whkh will consider field pricing reports, commerciality, procurement history and other available cost and pricing information in determining price reasonableness. When certified cost and pricing data is obtained it will be used to ensure reasonableness, completeness and realism of proposed costs as required. The Contracting Officer will determine whether the price for this acquisition is fair and reasonable pursuant to FAR Part 15 before awarding a contract.

9.Action to Remove Barriers to Future Competition

NA VFAC FE FEAD Yokosuka shall continue to perform market research on an at least annual basis in order to determine if there is any additional interest in this requirement. If additional interest is received, then NA VFAC FE FEAD Yokosuka will assess whether competition for future requirements is feasible.

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CERTIFICATIONS AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION

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.

Technical/Requirements Cognizance:

SIIBO JAMES Digitally signed by

• • 511BOJAME5.12361 0 9670

12361096 70 ;? 18 .09 19 12:54 05

James Siibo Signature Name (Printed)

Contracting Officer Certification:

243-5072 Phone number Date

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

CALVO.DANIEL.139803318 Digitally signed by

CALVO.DANIEL.1398033180

Daniel Calvo Date: 2018.09.19 11 :33:08 +09'00'

243-5420 Signature

SHEPPARD.( Digitallyslgnedby

SH EPPARD.CASSEY.E.1

ASSEY.E. l 072 o m 9 s 1 8 4

295184 Date:201 8 .0 9.19 15:00:51 +0 9'0 0'

Signature

Legal Sufficiency Review:

Name (Printed)

Cassey E. Sheppard Name (Printed)

I have determined this justification is legally sufficient

HEALY.PATRIC 1 1

: ii ANIEL.1

K.DANIEL.1239 239435250

435250 ; ? 1 8 0 9 2 0 0 8 :05:51

Signature Patrick D. Healy

Name (Printed)

Phone number

243-9887 Phone number

243-6035 Phone number

Echelon IV Commanding Officer Approving Official (NFAS 6.304)

Date

Date

Date

Upon the basis of the above justification, I hereby approve the solicitation of the proposed procurement described herein using other than full and open competition, pursuant to the authority of 10 U.S.C. 2304 ( C) (1)

CAPT Michael D. Kenney, Jr. 243-7711 Signature Name (Printed) Phone number Date