N4523A_4402008JA_FBO.pdf

DEPARTMENT OF THE NAVY

PUGET SOUND NAVAL SHIPYARD

AND INTERMEDIATE MAINTENANCE FACILITY

1400 FARRAGUT AVENUE STOP 2090

BREMERTON WASHINGTON 98314-2090 IN REPLY REFER TO:

Ser 440.22/053 February 20, 2020

CONTROL NUMBER

440-20-08JA

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

Puget Sound Naval Shipyard and Intermediate Maintenance Facility (PSNS&IMF), Industry Management Department (Code 440), Bremerton, WA 98314.

2. Description of the Action Being Approved

Award of a contract to a HUBZone Small Business concern on a sole source basis for the maintenance of large tug boat YT-801 WASTUCNA to Platypus Marine, Inc. (PMI) in accordance with (IAW) FAR 19.1306.

3. Description of Supplies

This procurement is for the maintenance and repair of a large yard tugboat that is 108 feet long, 31 feet wide, and has a full displacement of 346 long tons. Coordinate with the Contracting Officer, via the Contracting Officer’s Representative (COR) to deliver the vessel to the Contractor’s facility. Dock, wash, and clean the exterior surfaces of the vessel upon docking.

Remove and replace all fendering and zinc anodes and their fasteners. Grind flush freeing ports.

Open, clean, inspect and certify marine sanitation device tank. Open, clean, inspect and preserve various tanks and voids. Conduct air test of tanks and voids. Clean, flush, disinfect and recertify fresh water system. Blast, inspect and preserve steel half pipe fenders; the underwater hull; aft steering compartment; main deck non-skid; engine room bilge; boat deck and pilot house top non-skid. Accomplish schottle Z drive maintenance. Hydrostatic test air receiver tanks. Modify fire monitor piping. Install removable ladder to engine room bilge; new galley and crews mess decking; new aft steering and drive room escape hatches; Galley Range; new main deck water tight doors; new engine room joiner door; new pilot house windows; new engine room deck plating; electric hydraulic mast lift; diesel generator keel cooler drain valve; fire pump keel cooler drain valve; and day tank fuel filter. Repair deck house steel; brow hydraulic cylinder;

exhaust system; main engine; sea water pump; air conditioning system; sea valve; main duplex strainer; foam proportioner and valve; main engine fuel cooler; hydraulic winch hoses; and the forward winch.

The NAICS code for this requirement is 336611 - Ship Building and Repairing. The PSC number is J999 - Non-Nuclear Ship Repair (West).

J&A #440-20-08JA

The period of performance is 6 August 2020 to 4 November 2020.

The Independent Government Estimate for this acquisition is and will be paid for using FY20 Operation and Maintenance (O&M) funding.

The Government’s minimum needs have been verified by the certifying technical and requirements personnel.

4. Statutory Authority Permitting Other Than Full and Open Competition

15 U.S.C. 657(a): HUBZone Act of 1997 as implemented by FAR 6.302-5(b)(5).

5. Rationale Justifying Use of Cited Statutory Authority

Historical acquisitions for repair/maintenance of PSNS&IMF tug boats illustrates a limited market response to those solicitiations. The acquisition strategy for the last three Yard Tug maintenance contracts was as a small business set aside. The first tug boat, the YTB-836 POKAGON awarded under N4523A-17-C-0008, was solicited in January 2017 and received three proposals. One of the contractors, , was not technically capable of performance because they did not have a dry dock. has not proposed on a district craft project since this solicitation nor have they obtained a drydock.

The POKAGON contract was awarded to PMI as N4523A17C0008 on an LPTA basis.

The second tug boat, the YT-800 MANHATTAN, was solicited in June 2018 as a small business set aside and received proposals from only and PMI. The MANHATTAN contract was awarded to PMI as N4523A18C1060 on an LPTA basis.

In December 2018, PMI was certified as a HUBZone Small Business Concern. The PSNS&IMF Deputy Director for Small Business was consulted and confirmed PMI’s new HUBZone status.

The third tug boat, the YTB-823 CANOCHET, was solicited in May 2019 as a HUBZone set aside. The PMI received was awarded contract N4523A19C1062 in July 2019 as a HUBZone sole source award.

In a Memorandum dated 10 May 2017, , Deputy Assistant Secretary of the Navy (Acquisition & Procurement), approved and encouraged the use of Socioeconomic programs including the HUBZone program described at FAR 19.1306.

In this instance, the HUBZone socioeconomic program was chosen in order to meet contracting goals assigned to PSNS & IMF by NAVSEA and because there are two contractors that are HUBZone certified. One, PMI, has a history of successfully completing contracts for maintenance and repair of PSNS & IMF’s tug boats. The other, , is new to Government contracting, but does not have the capability to safely dock a ‘V’ hulled vessel like a tug boat using their airbag system of docking (which is suitable for flat bottom vessels) and their access to a local graving dock has not been established nor have PSNS docking engineers determined it to be a safe facility for Navy projects.

A HUBZone program set aside was initially considered. Pursuant to FAR 19.13, the KO shall consider soliciting an acquisition under as a HUBZone program set aside before awarding it as a sole source to a HUBZone small business concern and before soliciting it as a small business set-aside provided none of the exclusions at FAR 19.1304 apply.

Market research was performed using the SBA’s Dynamic Small Business Search (DSBS) website to obtain a list of ship repair companies (NAICS 336611) in the state of Washington that were either HUBZone certified or 8(a) program participants. The DSBS data was compared to Code 440’s knowledge of Puget Sound area ship repair companies with dry docks.

PMI is the only certified HUBZone small business concern in the Puget Sound area that can safely dry dock a ‘V’ hulled vessel. No 8(a) program participants have a dry dock.

Therefore, there is no reasonable expectation that two or more HUBZone businesses or any 8(a) program participants would submit offers.

None of the exclusions at FAR 19.1304 apply.

Pursuant to FAR 6.302-5(a)(2)(i), the required services described above have been deemed to be only available from PMI due to the fact that PMI is the only Puget Sound area SBA certified HUBZone small business concern with the capability to safely drydock and historic capability of performing this requirement.

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

Code 440 maintains in-depth knowledge of the ship repair industrial base in the Puget Sound. This includes knowledge of individual ship repair companies and their capabilities.

Code 440’s representatives maintain this knowledge through routine contact with local shipyards and the Puget Sound Ship Repair Association (PSSRA). They also periodically visit industry facilities for briefings on companies' production capabilities.

Market research was conducted using the SBS’s DSBS website as described in Section 5 above. Based on its knowledge and expertise, Code 440 has determined that PMI is the only local shipyard with both the capability to dry dock this size tug boat and that is a HUBZone Small Business Concern.

IAW FAR 5.202(a)(10), the instant action is exempt from from the requirement to synopsize. The J&A will be posted to FBO.gov for 30 days IAW 6.305.

7. Determination of Fair and Reasonable Costs

Historically, PMI has been awarded a substantial number of contracts for maintenance and repair of district craft which were made on the basis of LPTA.

The KO has determined that the anticipated price of the contract action under this justification will be fair and reasonable. This determination will be documented in the Business Clearance Memorandum.

8. Actions to Remove Barriers to Competition

Code 440 remains open to considering private shipyards with the Puget Sound area of consideration for competing future contracts for tug boat maintenance and repair. As potential sources emerge, Code 440 will investigate and evaluate the docking capabilities of each candidate shipyard and obtain PSNS docking engineer concurrence with the facilities to ensure the Navy’s assets can be safely docked and protected.