N64498-23-SIMACQ-PD-1410-0169_A26_JA Redacted.pdf

J&A Number: 0223-23-056-00 Code: 0223 P.R. Number: N64498-23-SIMACQ-PD-1410-0007

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

Award of a Firm-Fixed-Price (FFP) Purchase Order to Pietro Carnaghi Machine Tools on a Sole Source basis for the procurement of Carnaghi Vertical Turret Lathe Spare Parts for the Naval Foundry and Propeller Center (NFPC).

3. Description of the Supplies or Services

NFPC currently has the Pietro Carnaghi Vertical Turret Lathe - SU-22, Serial # 47750, and SU- 25 Serial # 48290 in production to support the Navy’s Virginia and Columbia Programs. In order to meet the DOD’s top priority USS Columbia delivery, NFPC has determined a 70% Turret Lathe machine utilization is imperative to meet mission requirements. In an effort to mitigate the risk of extended downtime, NFPC requests to proactively pursue the procurement of various long lead time for the Carnaghi Spare Parts, as specified in the schedule for the supplies. The subject parts are critical to maintain the required utilization rate, in case of failure.

The estimated value of this requirement is approximately $269,490. This procurement is anticipated to be fully funded using FY23 Shipbuilding and Conversion, Navy (SCN) funds as indicated below:

Appropriation FY23

SCN $269,490

The required delivery date for this effort is 35 weeks from date of award. The Government’s 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(e)(2), 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

Carnaghi is the only source capable of providing the necessary Original Equipment Manufacturer (OEM) parts of the Pietro Carnaghi Vertical Turret Lathe - SU-22 Serial # 47750, and SU-25 Serial # 48290. The Carnaghi Spare Parts are associated with the Pietro Carnaghi Vertical Turret Lathe - SU-22 Serial # 47750 and SU-25 Serial # 48290 which are an integral part of NFPC’s production. The machines produce components that are destined for the Navy’s marine surface and submarine vessels. The machines are vital to the production components utilized to meet critical deadlines for the production and repair of the Navy’s propellers. NFPC would like to proactively pursue the procurement of these Carnaghi spare parts as they to help mitigate the risk of extended downtime.

The spare parts we are requesting are unique to the Pietro Carnaghi Vertical Turret Lathe - SU- 22 Serial # 47750, and SU-25 Serial # 48290. As some of these parts require integration with the other hardware and software, procuring and utilizing spare parts from a third party source could cause damage to the SU-22 and SU-25 Machines. Any damage to the SU-22 and SU-25 machines would cause significant delays in NFPC’s manufacturing process, and would be a significant cost burden to the Government. OEM parts are essential because using non OEM parts adds an unacceptable risk to critical machinery. If a non OEM part is used in the machine and causes a failure, this could lead to a delay in production. The risk of damaging the machines does not outweigh the potential cost savings if we procured from a third party source.

These machines are an integral part of NFPC’s production. All of the produced machine parts and components are destined for the Navy’s marine surface and submarine vessels. These machines currently provide all of the intricate and highly precise metal removal for crucially developed NFPC parts and components. They are vital production components utilized to meet critical deadlines for the production and repair of the Navy’s propellers. Any delays due to equipment downtime will have a significant impact on the Navy’s ship acquisition and repair programs beyond NFPC, including project delays with naval ship manufacturers. As previously stated, Carnaghi is the only source that has the capabilities and resources to ensure maximum reliability and functionality of the SU-22 and the SU-25 machines to meet NFPC’s mission.

Carnaghi does not sell their drawings or intellectual property as it is related to parts and installation. Therefore, neither the Government nor any other entity can produce the Carnaghi Spare Parts to the required specification. Additionally, Carnaghi does not utilize subcontractors or distributors that could perform this work. Therefore, Carnaghi 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 Offerer’s as practical

A Sources Sought Notice was published on SAM.gov on 02 February 2023 to determine the availability of open market sources willing and able to provide the spare parts. No sources responded to the Sources Sought Notice within the specified time frame of ten (10) days. The Government contacted Carnaghi and confirmed that Carnaghi does not sell their drawings or intellectual property as it is related to the parts and installation. Therefore, the Government or any other entity cannot produce the Carnaghi Spare Parts to the required specification.

Additionally, a market research was conducted to determine whether Carnaghi utilizes subcontractors or distributors that could perform this work. As a result of this search, it was determined that Carnaghi does not utilize subcontractors or distributors. Therefore, for the reasons discussed in paragraph five (5) above and the market research Pietro Carnaghi is the only known source that can satisfy this requirement.

7. Determination of Fair and Reasonable Costs

The Contracting Officer has determined the anticipated cost to the Government of the services covered by this Justification will be fair and reasonable.

8. Actions to Remove Barriers to Competition

For the reasons set forth in Paragraph 5, NFPC has no plans at this time to compete future contracts for the types of supplies/services covered by this document. If another potential source emerges, NSWCPD and NFPC will assess whether competition for future requirements is feasible.

TECHNICAL AND REQUIREMENTS CERTIFICATION - (FAR 6.303-2(b))

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:

Thomas Neher, Business Manager (Code 1410.2) Date

LEGAL SUFFICIENCY REVIEW (NMCAR 5206.303(90))

I have determined that this justification is legally sufficient.

Paul Scheck, Office of Counsel (Code 00L) Date

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) using other than full and open competition, pursuant to the authority of 41 U.S.C. 1901.

William O’Tormey Jr., Contracting Officer (Code 0223) Date