N64498_02222028300.pdf

J&A Number: 0222-20-283-00 Code: 0222 P.R. Number: 20-A1P-001

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

The Naval Sea Systems Command, Naval Surface Warfare Center, Philadelphia Division (NSWCPD), Code 0222.

2. Description of Action Being Approved

This is a sole source action to be awarded without full and open competition as a Firm-Fixed- Price (FFP) Indefinite-Delivery Indefinite-Quantity (IDIQ) contract to L3Harris Technologies (“L3Harris”), Northampton, Massachusetts for the procurement of Universal Modular Mast (UMM) spare parts and cylinders utilized onboard VIRGINIA and COLUMBIA Class submarines. This is a follow-on contract to provide continuing support under Contract No.

N64498-16-D-0011.

3. Description of the Supplies or Services

The planned acquisition will provide for the procurement of material and incidental labor to manufacture and procure non-commercial spare parts, kits, and replacement cylinders in support of on-going efforts for maintenance and repair of UMM currently installed onboard VIRGINIA and COLUMBIA Class submarines. L3Harris shall provide all of the necessary materials, parts, testing, and delivery for a variety of spare parts and Hoist Cylinder Kits. The parts are intended to be procured at varying quantities for an overall ordering period of sixty (60) months after contract award, not to exceed the maximum quantity for each part.

The total estimated dollar value of this procurement is $5,134,573 for all five (5) years. The following is a breakdown of estimated funding type and amounts for this action by year.

Table 1 - Estimated Dollar Value Year 1 Year 2 Year 3 Year 4 Year 5 Total

SCN $807,871 $815,949 $1,158,626 $1,170,212 $1,181,915 $5,134,573

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

PHILADELPHIA DIVISION

5001 SOUTH BROAD STREET

PHILADELPHIA PA 19112-1403

IN REPLY REFER TO:

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

10 U.S.C. 2304(c)(1), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements, as implemented by Part 6.302-1 of the Federal Acquisition Regulation (FAR).

5. Rationale Justifying Use of Cited Statutory Authority

In order to meet the U.S. Navy’s requirements, L3Harris, in conjunction with Calzoni a wholly owned subsidiary of L3Harris located in Bologna, Italy, is the only source capable to produce the major components for this highly specialized equipment. Since this is a follow-on procurement, as described in FAR 6.302-1(a)(2)(ii), award to a source other than L3Harris would result in substantial duplication of cost to the Government that is not expected to be recovered through competition, and unacceptable delays in fulfilling the agency’s requirements. The previous Contract No. N64498-16-D-0011 was awarded sole source to L3Harris under Justification and Approval (J&A) 0231-15-096-00 signed 15 June 2015 by NSWCPD Chief of Contracts, Karen Gutmaker, Code 02. NSWCPD also issued spare parts Contract No. N65540-11-D-0024 sole source to L3Harris. The parts required under this procurement are used as spare parts to replace damaged or misplaced parts and components provided by the overall UMM system designer, L3Harris/Calzoni, during new construction, and therefore must interface with other components of the UMM System to ensure system operability.

L3Harris has designed and produced the UMM for above water sensors on many U.S. and international submarines. Calzoni designs and manufactures submarine masts for both U.S. and foreign navies. Since the inception of the UMM program under Naval Sea Systems Command (NAVSEA), L3Harris, with Calzoni, has been the sole designer, developer, and manufacturer of the UMM System. The UMM is a non-hull penetrating mast that serves as a lifting mechanism for five (5) different sensors mounted directly onto the UMM. L3Harris, with Calzoni, has manufactured and designed the UMM System under NAVSEA Contract Nos. N00024-03-C- 6200, N00024-07-C-6227, and N00024-13-C-6265 in support of new construction efforts.

The required spare parts and cylinders for this procurement are uniquely designed as part of the overall UMM System, and all have long lead times due to the fabrication and manufacturing process. The knowledge, technical expertise, facilities, and experience in developing and producing the UMM and associated spare parts is only available from L3Harris.

The Government does not own full data rights associated with the required components in order to meet fabrication requirements, nor does the Government have the in-house technical knowledge or facilities to be able to manufacture the required components to meet mission needs. L3Harris owns the rights to the fabrication level drawings for the parts and cylinders referenced in Paragraph 3 above. All delivered drawing packages to the Government contain

“Source Controlled” drawings, identifying L3Harris, along with Calzoni, as the source. The drawings do not contain the level of detail required in order to manufacture these items either in-house or through other manufacturing means. All dimensions and tolerances required to manufacture these spare parts have been removed and marked as “proprietary” to the source.

NAVSEA has approached L3Harris during past acquisitions for the UMM production contracts to assess the ability for the Government to acquire full data rights, most recently under the FY19 UMM Production Contact issued by PEO Submarines PMS 435. In addition, NSWCPD has inquired on the previously awarded spare parts contracts to obtain full data rights that would be sufficient to support a competitive acquisition for spares. L3Harris, along with Calzoni, is unwilling to sell such data rights, as there are critical areas of the overall design that are also used in modular masts provided by Calzoni to various foreign navies.

The inability to procure the required spare parts through this resultant contract would severely impact the VIRGINIA and COLUMBIA Class Submarine construction schedule, as the spares are provided as Government Furnished Equipment (GFE) to enable quick replacement of damaged or misplaced parts during construction to avoid delays in the overall production process. NSWCPD Code 435 is tasked with supporting new ship construction by PMS 450, and funding is provided by the program office to support this effort. Inability to procure these spare parts will result in the failure of NSWCPD and Code 435 to support any need of the shipbuilders to maintain construction schedule.

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

The Government assessed the market in an attempt to seek alternative manufacturers of a UMM that would meet extreme environmental conditions, use a common sail interface modular accessible for removal of subassemblies without removal of entire system from the sail, and serviceable at the Navy's Intermediate level. Candidate systems are required to have the capability to be integrated and interoperable with the five (5) sensors. In accordance with Defense Federal Acquisition Regulation Supplement (DFARS) Procedures, Guidance, and Information (PGI) 206.302-1(d), Sources Sought Notice N00024-18-R-6201 was published on 05 December 2017 on the Federal Business Opportunities (FBO) website with a draft Request for Proposal (RFP) package. In an effort to maximize industry involvement, the Government also provided the specifications and the limited drawing package to which the Government has data rights to interested vendors who were approved Department of Defense Contractors due to the Distribution D restriction on the data package. Despite the Government’s best efforts, the notice closed on 05 January 2018 with L3Harris as the only party responding. These efforts were documented in the requirements J&A signed by Senior Procurement Executive of the Navy, James Geurts, in March 2019 for the FY19 UMM Production Contract described above in Paragraph 5. These results are also being documented in this J&A as the Sources Sought Notice posted in December 2017 is also satisfying the requirements of PGI 206.302-1(d) for this procurement.

In accordance with FAR 5.201(b)(1) and FAR 5.204, a synopsis of the intent to solicit and negotiate with only one source under the authority of FAR 6.302-1 was posted to FBO on 24

January 2020 for fifteen (15) days. No responses from Industry were received in response to the required notice.

No additional market research was conducted because it is not practicable, for the reasons discussed in Paragraph 5 above, for any other source other than L3Harris to provide the required supplies.

7. Determination of Fair and Reasonable Costs

The Contracting Officer will make a determination that the price negotiated under the proposed contract is fair and reasonable pursuant to FAR Part 15, prior to award. Assistance from the Defense Contract Audit Agency (DCAA) and the Defense Contract Management Agency (DCMA) will be utilized as appropriate to analyze, evaluate, and assist in negotiations based upon detailed cost and pricing data, which will be certified by L3Harris at the conclusion of negotiations. The required parts and components have been procured previously from L3Harris.

Historical pricing information will be requested on past procurements and should prove sufficient to lend further support the fair and reasonable cost determination of this procurement.

8. Actions to Remove Barriers to Competition

The previous J&A approved 15 June 2015 concluded that L3Harris was the only source capable of providing the required parts and components. The previous J&A also states that there were no plans to compete any future contracts for the supplies covered under the procurement. No other potential source has emerged.

NAVSEA’s ability to compete future UMM componentry contracts is dependent upon potential new modular mast designs for future VIRGINIA and COLUMBIA Class blocks. A new modular mast would potentially allow the Government to establish a new acquisition strategy providing the Government an opportunity to own more of the data rights for the componentry that would be required to support a new modular mast system. This process could open the possibility of competition for similar form, fit, and function components.

NSWCPD Code 435 is specifically funded by the Virginia Class program office (PMS 450) to maintain an ability to procure construction spares. For the reasons set forth in Paragraph 5 above, NSWCPD has no plans to compete any future contracts for the supplies covered under the procurement in direct relation to the PMS 450 program office funding.