N64498_0223-20-194-00_Redacted.pdf

J&A Number: 0223-20-194-00 Code: 0223 P.R. Number: 20-AFM-012

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 0223

2. Description of Action Being Approved

This action is to award an Indefinite-Delivery, Indefinite-Quantity contract, with provisions to place Firm-Fixed-Price (FFP) Delivery Orders, on a sole source basis to Allied Mineral Products, Inc. (Allied) for chemical products in support of the Naval Foundry and Propeller Center (NFPC).

3. Description of the Supplies or Services

NFPC requires chemical products to be utilized during daily operations. Specifically, this procurement is for refractory products that serve as a protective coating for the inside lining of the NFPC facility’s ladles and induction furnaces. The purpose of this refractory coating is to protect the outer steel shell of the ladles and furnaces from coming in contact with liquid molten metal.

This requirement is for the delivery of a fixed assortment of chemical products. The ordering period is 01 January 2021 through 31 December 2025 and allows for the placement of FFP DOs. The total estimated ceiling is $543,764 for the entire Period of Performance (PoP). A breakout of the funding to be used by fiscal year is provided below.

Appropriation FY21 FY22 FY23 FY24 FY25 Total O&M,N $94,556 $101,174 $108,257 $115,835 $123,943 $543,764

The Ordering Period for this effort will be five (5) years.

The Governments minimum needs have been verified by the certifying technical and requirements personnel.

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

PHILADELPHIA DIVISION

5001 SOUTH BROAD STREET

PHILADELPHIA PA 19112-1403

IN REPLY REFER TO:

4. Statutory Authority Permitting Other Than Full and Open Competition

41 U.S.C. 1901, a sole source acquisition under the authority of Simplified Procedures for Certain Commercial Items, as implemented by Federal Acquisition Regulation (FAR) Subpart 13.501(a).

5. Rationale Justifying Use of Cited Statutory Authority

NFPC utilizes ladles and induction furnaces to heat products to incredibly hot temperatures. The ladles and induction furnaces require very specific chemicals to protect the outer steel shell of the ladles and furnaces from coming in contact with liquid molten metal. Without the specific chemicals, use of the furnaces and ladles would be destructive.

A NFPC conducted study determined that the requested chemicals are the only acceptable products to be used for the facility’s ladles and furnaces, per Propeller Center Instruction (PCI) 9040 Rev A, dated 29 March 2005. Allied Mineral is the original manufacturer of these products and the only authorized distributor of these products. Any deviations from these products are strictly forbidden unless PCI 9040 Rev A is modified to grant the usage of a different manufacturer’s products.

Per the restrictions outlined in PCI 9040 Rev A, the Government has never utilized nor tested any non- Allied manufactured chemicals. It is unknown whether any other manufacturer’s chemicals are compatible with the Government owned furnaces. Each furnace and ladle has its own unique production schedule. NFPC has mapped out when each furnace is utilized to melt specific compounds to create a specific part. While there may be some built in contingencies to handle any delays that may occur, the delays are expected to be short and rare. Due to the nature of the use, any non-approved chemicals may cause catastrophic results to the furnaces that could effectively render the furnaces as unusable. Any obstructions with the furnaces can cause significant delays in production schedules because NFPC does not own any backup furnaces. It would take more than a year to order, deliver and install a replacement furnace, which would likely be a mission critical event effecting the U.S. Navy’s fleet. Additionally, it is estimated that a furnace and ladle would be extremely costly to replace. The risk of competing this requirement does not warrant the technical, schedule and cost risks associated with the destruction of the furnaces.

Based on the above, Allied is the only source that has the capabilities to manufacture these specific chemicals. Allied is the only source that can provide the supplies that meet the needs of the Government.

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

A Sources Sought Notice was published on beta.SAM.gov on 02 March 2020 to determine the availability of open market sources willing and able to provide the chemical products. No sources responded to the Sources Sought Notice within the specified time frame of ten (10) days. Additionally, market research was conducted to determine whether Allied utilizes subcontractors or distributors that could perform this work; finding, that Allied does not utilize subcontractors or distributors. Therefore, for the reasons discussed in Paragraph 5 above, market research and the results of the Sources Sought Notice, Allied is the only source that can satisfy this requirement. To conclude, NSWCPD plans to issue a combined synopsis/solicitation per FAR 5.203(a)(2).

7. Determination of Fair and Reasonable Costs

The Contracting Officer has determined that the anticipated cost to the Government for the supplies/services covered by the J&A will be fair and reasonable. An experienced technical analyst and a contract specialist with the aid of necessary field pricing support will review the Contractor’s proposal.

The Contracting Officer will use cost and price analysis as the basis for negotiating a fair and reasonable price.

8. Actions to Remove Barriers to Competition NSWCPD will continue to monitor the marketplace to identify potential sources of the services identified in this Justification. Any sources discovered that can potentially satisfy this specific procurement will be taken into account for any future requirements.

02-Sep-2020