N65540_02321504200.pdf

J&A Number: 0232-15-042-00 Code: 02322 P.R. Number: 15-B-R-059

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

The contracting activity is the Naval Surface Warfare Center, Philadelphia Division (NSWCPD) Code 0232, Philadelphia, PA.

2. Description of Action Being Approved

The proposed contract action is a sole source, Firm Fixed Price (FFP) Indefinite Delivery, Indefinite Quantity (IDIQ) procurement for Original Equipment Manufacturer (OEM) Navigation and Ship Control System hardware components, to be awarded to Leidos, LLC, of Sterling, VA 20164.

3. Description of Supplies/Services

The items being purchased under the proposed contract action are manufactured by Leidos in Sterling, VA. Leidos will be required to provide hardware items in support of Navigation and Ship Control Systems currently installed on the following multiple classes: Aircraft Carrier, Nuclear Powered (CVN); Mine Countermeasure Ship (MCM); Landing Ship, Dock (LSD);

Amphibious Transport Dock (LPD); Amphibious Assault Ship (LHA); and Multi-Purpose Amphibious Assault Ship (LHD). These systems include the Ship Control System, Navigation Critical Distribution System, Ship Control Display System, Automated Bridge System, and various Human Machine Interface (HMI) display applications. Leidos will provide hardware equipment and logistic support for all corresponding components in the form of drawings, technical manuals, test plans, procedures, and operator and maintainer training manuals.

The estimated list of items to be procured under the proposed new contract action is as follows:

QTY Item 750 12" Intelligent Display System 750 20.1" Intelligent Display System 500 20.1" Intelligent Display with Remote LCD & Touchscreen 500 20.1" Operator Control Console Display 125 42” Rugged Display

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

PHILADELPHIA DIVISION

5001 SOUTH BROAD STREET

PHILADELPHIA PA 19112-1403

IN REPLY REFER TO:

QTY Item 125 46” Rugged Display 125 Daisy Data Adapter 125 NAG Adapter 125 12" HMI Panel Mount Adapter 1000 Network Interface Card Upgrade Kit 1000 Computer Processor Upgrade Kit

The total estimated dollar value of this requirement is $48,351,250. The following is a breakdown of the estimated funding amounts for this proposed contract action:

Estimated Dollar Value Funding Type

FY16 FY17 FY18 FY19 FY20 Total

SCN

OPN

RDT&E

O&MN

Totals $48,351,250

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. 230(c)(1), “Only one responsible source and no other supplies or services will satisfy agency requirements.”

5. Rationale Justifying Use of Cited Statutory Authority

Certification efforts have been completed using the Leidos hardware specified, including Combat Systems Integration, Steering Control, and Navigation Qualifications. This hardware was selected via a previous competitive process resulting in Leidos receiving the award. Modifying the hardware that has already been certified will cause recertification efforts to occur, costing the Navy approximately $2,500,000 in total potential requalification efforts. See below table for cost details of actual certification testing and the associated engineering support:

Leidos’ hardware is required to ensure continued operational capability of numerous critical systems aboard aircraft carriers and other surface combatants. Leidos, as the OEM, is the sole designer and fabricator of this equipment, and as such, is the only contractor with the complete technical data necessary to furnish the required hardware. No other firm possesses the prerequisite technical data as this information is proprietary to Leidos. The government does not possess full legal rights to the technical data. Only Leidos possesses full legal rights to this information.

Based on above, Leidos is the only contractor which qualifies to perform the efforts associated with the specifications under this requirement.

Most of the equipment has been developed for the Navy by modifying Commercial-Off-The- Shelf hardware and Leidos is not willing to sell complete technical data and software source codes to the government.

Access to this information is required to continue the support of the Leidos equipment currently in use on highly critical Navigation and Ship Control systems installed in the fleet.

Without direct access to Leidos for their hardware and engineering knowledge, there is a high risk that the currently installed systems will suffer from inadequate support and eventual failure.

Serious issues, such as the inaccurate targeting of combat systems equipment and the safety of navigation with regards to steering control, could arise if the necessary support was not in place.

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

The proposed acquisition was synopsized in the Federal Business Opportunities (FedBizOps) website on 18 May 2015, in accordance with FAR 5.2. To date, there were no responses obtained as a result of the synopsis notification. Market research was conducted by NAVSSES Code 524 and proved unsuccessful in finding sources capable of providing all of the required hardware components. Three (3) companies were identified as potential vendors for the required hardware components, based on previous support provided to the Navy. However, due to identified obsolescence issues, incompatibility with current ship installed hardware and non-environmentally qualified items, these firms were deemed unable to meet the government specifications.

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 this Justification and Approval will be fair and reasonable.

In accordance with FAR 15.402, the Contracting Officer shall ensure that all supplies provided under this contract are procured at a fair and reasonable price. The contractor will submit a formal price proposal with certified cost or pricing data and sufficient information to support the accuracy and reliability of the estimate. Defense Contract Management Agency pricing assistance and/or Defense Contract Audit Agency audit of contractor’s proposal will be requested along with offeror’s certificate of current cost or pricing data at the conclusion of negotiations. The contractor’s proposal will be reviewed by experienced technical analysts, cost analysts and contract specialist with the aid of necessary field pricing support. The Contracting Officer will utilize cost and price analysis as the basis for negotiating a fair and reasonable price.

8. Actions to Remove Barriers to Competition

Efforts are currently in progress for the government to develop, own and control all interface specifications and hardware design requirements for all related Navigation and Ship Control Systems. Progress has been made in the last year; however, efforts are still not complete enough to support upcoming procurement and shipboard installation requirements. When these efforts become more mature and are able to provide specific direction and requirements to future engineering requirements, open competition for all Navigation and Ship Control related efforts would be possible. It is anticipated that a competitive environment will exist within the next five

(5) years. However, until this occurs it is essential that the government continue to rely on Leidos to provide the existing certified hardware components. The circumstances surrounding the need to obtain the required supplies/services without providing full and open competition will be reviewed annually by the Contracting Officer.

It should be noted that NSWCPD Code 525 plans to develop a Level III Build-To-Print Technical Data Package (TDP) or Performance Based Specification (PBS) that will support competition for future acquisitions of the same or similar items. This TDP is expected to be available in the third-quarter of Fiscal Year 20; the first competitive acquisition is planned to be solicited around the first-quarter of Fiscal Year 21. All components to be acquired must still satisfy all environmental tests for ATO eligibility.