J&A_Conversion_Kits_final_copy_redact_Redacted.pdf

J&A Number: 0232-17-075-00

Code: 0232 PR Number: 17-N E-025

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 0232, Philadelphia, PA.

2. Description of the Action Being Approved

Award of a Firm-Fixed-Price (FFP), Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract on a sole source basis to Johnson Controls Navy Systems (JCNS), 631 S. Richland Avenue, York, PA 17403, formerly known as York International Corporation for Air Conditioning Plant Conversion Kits.

3. Description of Supplies/Services

This requirement is to provide the potential to procure four (4) 200 Ton CFC-114 CG-47 Class Air Condition Plant Conversion Kits, four (4) 200 Ton CFC-114 DDG-51 Class Air Conditioning Plant Conversion Kits and two (2) 125 Ton CFC-114 LSD-44/49 Class Air Conditioning Plant Conversion Kits. The proposed contract will also provide for the furnishing of one (1) CG-47 Class Auxiliary Component Kit, one (1) DDG-51 Class Auxiliary Component Kit, one (1) 130 Ton R-134a Screw Compressor air conditioning plant, and Associated Technical Documentation.

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

The total estimated dollar value of the proposed procurement is $18,329,830.00 as indicated below in Table 1:

Table 1 – Acquisition/Appropriation Schedule

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

PHILADELPHIA DIVISION

5001 SOUTH BROAD STREET

PHILADELPHIA PA 19112-1403

Estimated Dollar Value

Fund Type FY 2019 FY 2020 FY 2021 Total

OPN

$7,265,915.00

$6,765,872.00

$4,298,043.00

$18,329,830.00

The Ordering Period for this effort will be three (3) years from the date of award.

4. Statutory Authority Permitting Other Than Full and Open Competition

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

5. Rationale Justifying Use of Cited Statutory Authority

As the result of Title VI of the Clean Air Act (42 U.S.C. 7671), Executive Order 12843 dated 21 April 1993 and Environmental Protection Agency (EPA) Regulations on the Protection of Stratospheric Ozone (40 CFR Part 82), the Navy has implemented various programs to eliminate the use of chlorofluorocarbons, halons, tetrachloride and methyl chloroform and to substitute safe alternatives to ozone-depleting substances that reduce overall risks to human health and the environment. One of the programs is the Navy’s Chlorofluorocarbon (CFC) Elimination Program, which is designed to convert the centrifugal compressor air conditioning plants used on various ships to permit the use of environmentally safe HFC-236fa refrigerant. Shipboard air conditioning plants produce chilled water for various cooling applications, which include weapon systems and other critical equipment. The proposed contract will provide for the procurement of conversion kits to modify the 125 and 200 ton air conditioning plants, used on the LSD-44/49, CG-47 and DDG-51 Class ships, to use HFC-236fa refrigerant in lieu of the current ozone-depleting CFC – 114 refrigerant.

HFC-236fa refrigerant is not a “drop-in” replacement for CFC-114. As a result, JCNS had to develop new compressors capable of using HFC-236fa refrigerant. The new compressor design will use variable geometry diffuser technology and will require a new control system. In order to modify the existing centrifugal compressor air conditioning plants to operate with HFC-236fa refrigerant, JCNS developed conversion kits to replace similar plant components that perform the same function and meet all existing performance requirements to include: plant capacity, power consumption, shock, vibration, and electromagnetic interference.

Since 1980 JCNS has been the only source for the large air conditioning plants required by the Navy. JCNS is the original designer, developer, and sole manufacturer of the 125 and 200 Ton Air Conditioning Plants used in LSD-41, CG-47 and DDG-51 Class Ships. Design and development of the air conditioning plants was accomplished by JCNS its own expense. JCNS was tasked under NSWC Annapolis Contract N65133-93-D-0010 to develop the Conversion Kits and to limit the cost of this development effort while achieving standardization with other Air Conditioning

Plants. It was agreed that JCNS would use or adapt parts developed for its commercial air conditioning plants. Since the design of the conversion kits is based on JCNS commercial Air Conditioning Plants, the Government only possess Government Purpose Rights (GPR) at the conversion kit level and does not possess rights to some of the underlying components that were developed by JCNS at private expense.

Based on the above, the conversion kits covered by the proposed acquisition are considered unique supplies available only from JCNS. The 125 and 200 Ton Air Conditioning Plant Conversion Kits were previously procured under Naval Sea Systems Command (NAVSEA) Contract N00024-01- C-4055; and, Naval Surface Warfare Center, Carderock Division (NSWCCD-SSES) Contract N65540-02-C-0046, N65540-07-D-0015, N65540-11-D-0006 and N65540-15-D-0001. These contracts were negotiated with JCNS on the same basis as discussed above. In September of 2016, NSWCPD asked JCNS to provide drawings and technical information regarding these Kits to the Government. JCNS stated that they are not able to provide the requested information because the significant investment they have made into this equipment.

A stockpile of CFC-114 Refrigerant has been established based on the Navy’s requirements until the conversion effort could be accomplished. Delays in the conversion would threaten to prematurely deplete the stockpile, which would result in loss of performance or capability of this mission critical equipment. The stockpile cannot be replenished since a ban on the production of CFC-114 Refrigerant went into effect on 31 December 1995.

The Government has awarded sole source contracts to JCNS for the production of Air Conditioning and Refrigeration (AC&R) plants based on JCNS’s ability to meet Government requirements. The AC&R plants and engineering support was awarded to JCNS based on the fact that JCNS owns the top level Technical Data Packages (TDPs) for the plants and has been unwilling to sell the Government sufficient access to the TDPs to allow a competitive acquisition of the required services. The Government does not possess and is unable to independently develop technical data in the form of drawings or a purchase description adequate to obtain the Conversion Kits on the basis of full and open competition. Due to the lack of sufficient technical data, it is impossible to ensure that Conversion Kits obtained from any other source would possess the essential design and functional properties for installation on the 125 and 200 Ton Air Conditioning Plants. The cost and time to competitively acquire, test and qualify alternative Conversion Kits were considered excessive when compared with the Government’s requirements and remain so today. Other contractors have been contacted and express no interest in supplying Conversion Kits that meet the Navy’s shock and vibration Grade “A” shock requirements. For example, both Adrick Marine and Stork Bronswerk Air Conditioning (A/C) plants installed on both LCS Class ships have not performed to Navy standards and are scheduled to eventually be replaced with JCNS A/C plants at a significant cost to the Government. Additionally, JCNS Conversion Kits use high speed turbines/impellers to compress the refrigerant gasses during the refrigerant cycle. The Conversion Kit design has to meet acoustic design criteria for shipboard applications and requires testing in JCNS’s sound evaluation and performance testing facility.

The Government does not have the facilities to match JCNS’s anechoic test chamber, nor does the Government have the ability to design high speed impellers that will meet Navy’s acoustic requirements. Without additional data rights to the privately developed aspects of the kits, and without the conversion kit TDPs suitable for full and open competition and proper testing facility, Conversion Kit requirements would necessitate extensive redevelopment. For the reasons set forth herein, JCNS is the only vendor capable of providing fully qualified conversion kits that meet the Navy’s requirements.

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

A sources sought notice was issued in the Federal Business Opportunities on March 8, 2017 with responses due March 20, 2017. No responses were received. In addition, the proposed procurement was synopsized in the Federal Business Opportunities (FEDBIZOPPS) website on March 23, 2017 as required by FAR 5.201(b)(1). No responses to the synopsis have been received to date, but any responses received will be evaluated.

Market Research was conducted and no other firms were found to meet the Government’s requirements.

7. Determination of Fair and Reasonable Cost

The Contracting Officer will make a determination as to whether the costs to the Government for the supplies covered by this J&A are fair and reasonable, prior to award. The contractor will submit a formal price/cost proposal with certified cost or pricing data and sufficient information to support the accuracy and reliability of the proposal. The contractor’s proposal will be reviewed by experienced technical analysts and contract specialists with the aid of necessary field pricing support. The PCO will use prior procurement history as a basis for negotiating a fair and reasonable price.

8. Actions to Remove Barriers to Competition

For the reasons set forth in paragraph 5, the Government has no plans at this time to compete future contracts for the Conversion Kits covered by this procurement. JCNS has indicated it is not willing to sell the technical data and legal rights to use the data for the 125 and 200 Ton Air Conditioning Plants or the Conversion Kits. As a result, it is not possible to overcome this impediment to full and open competition under future acquisitions for the Conversion Kits.

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

I certify that the facts and representations under my cognizance, that are included in this justification and its supporting data, are complete and accurate to the best of my knowledge and belief.

COMBINED TECHNICAL AND REQUIREMENTS COGNIZANCE:

Signature Name (Print) and Title (Code) Phone No. Date

LEGAL SUFFICIENCY REVIEW (NMCAR 5206.303-90)

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.

Signature Name (Print) and Title (Code) Phone No. Date

APPROVAL BLOCK (FAR 6.304 for Approving Official)

Upon the basis of the above justification, I hereby approve, as Designee of the Head of the Procuring Activity 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)(1).

TECHNICAL DIRECTOR

Signature M. R. Kistler, Technical Director, Code 00 Date is justification is legally sufficient.

Phone No. Date