N4523A_4401912JA_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 440.22/200 May 6, 2019

CONTROL NUMBER

440-19-12JA

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 YTB-823 CANONCHET 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 109 feet long, 29 feet wide, and has a full displacement of 346 long tons. Maintenance will include hull and freeboard ultrasonic test (UT) Inspection; visual inspection of tanks; and clean and recertify potable water tank. Repairs will include replace propeller shaft packing; replace steering packing; sea valve repairs; and flex hose repairs.

The NAICS code for this requirement is 336611 - Ship Building and Repairing. The

PSC number is J999 - Non-Nuclear Ship Repair (West).

The period of performance is 1 August 2019 to 5 September 2019.

The Independent Government Estimate for this acquisition is $480,459.76 and will be paid for using FY19 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).

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J&A #440-19-12JA

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 two 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, Delphinus, was not technically capable of performance because they did not have a dry dock. Delphinus has not proposed on a district craft project since this solicitation nor have they obtained a drydock. One of the contractors, Puglia, has been declared non-responsible and is now in Chapter 7 bankruptcy. Puglia will close its doors at the end of May 2019. 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 and received proposals from only Puglia and PMI. The MANHATTAN contract was awarded to PMI as N4523A18C1060 on an LPTA basis.

The Contracting Officer (KO) no longer expects a similar competitive environment.

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.

In a Memorandum dated 10 May 2017, Mr. Elliott B. Branch, 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 is a qualified contractor with a history of completing PSNS&IMF tug boats that is now HUBZone certified.

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 has a dry dock. No 8(a) program participants have a dry dock. Therefore, there is no reasonable brian.fergus Highlight brian.fergus Highlight 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 a sufficiently sized 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

For the reasons set forth in Paragraph 5, Code 440 has no plans at this time to compete future contracts for tug boat maintenance and repair. If another potential source emerges, Code 440 will assess whether competition for future requirements is feasible.

CERTIFICATIONS AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION (FAR 6.303-2(c))

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.

COMBINED TECHNICAL AND REQUIREMENTS COGNIZANCE:

John Tiemeyer, Code 411 Industry Management Department, (360) 476-4065

LEGAL SUFFICIENCY REVIEW (NMCARS 5206.303(90))

I have determined this justification is legally sufficient.

David Kelly, Code 107 Office of Counsel, (360) 979-3921

CONTRACTING OFFICER CERTIFICATION (FAR 6.303-2(b)(12))

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

Gary Binder, Code 440 Contracting Officer, (360) 340-2940

APPROVAL BLOCK (FAR 6.304 for Approving Official)

Upon the basis of the above justification, I hereby approve, as Contracting Officer, the solicitation of the proposed procurement(s) described herein using other than full and open competition, pursuant to the authority of 10 U.S.C. 2304(c)(5).

CONTRACTING OFFICER

Gary Binder, Code 440 Contracting Officer, (360) 340-2940 brian.fergus Highlight brian.fergus Highlight brian.fergus Highlight