Previous JA N64498_02221817900_Redacted.pdf

J&A Number: 0222-18-179-00.1 Code: 02222 P.R. Number: 18-B R-083

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

Award of a Cost-Plus-Fixed-Fee (CPFF) Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract on a sole source basis to Lake Shore Systems, Inc. (LSSI) for furnishing of services, including:

training, inspection, and labor to explore and resolve any in-service problems associated with all Federal Government owned LSSI, formerly Oldenburg Group Incorporated, hull and deck machinery systems to minimize equipment down time and ensure safe operation of equipment.

The CPFF IDIQ will also provide for supplies to finish/augment the services to include Slewing Arm Davits (SLAD), ancillary materials, and supplies.

3. Description of Supplies/Services

The proposed acquisition will provide for furnishing of services, including: training, inspection, material, and labor to explore and resolve any in-service problems associated with all Federal Government owned LSSI, formerly Oldenburg Group Incorporated, hull and deck machinery systems to minimize equipment down time and ensure safe operation of equipment. The proposed contract will contain a 60 month ordering period and the total estimated dollar value of the proposed acquisition is $11,328,312.

The following is a breakdown of the estimated funding amounts for this proposed contract action:

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL

OPN $4,600,000 $400,000 $400,000 $400,000 $400,000 $6,200,000

OM&N $3,058,898 $625,547 $470,964 $481,207 $451,696 $5,088,312

TOTAL $7,658,898 $1,025,547 $870,964 $881,207 $851,696 $11,328,312

The period of performance for this contract will be a five (5) year ordering period from the date of award.

DEPARTMENT OF THE NAVY

NAVAL SURFACE WARFARE CENTER

PHILADELPHIA DIVISION

5001 SOUTH BROAD STREET

PHILADELPHIA PA 19112-1403

IN REPLY REFER TO:

J&A Number: 0222-18-179-00

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

Management and Oversight Process for the Acquisition of Services (MOPAS) Acquisition Strategy Plan #0222-18-179-00 covers this acquisition.

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

Lake Shore Systems, Inc. (LSSI) is the original designer, developer and manufacturer of various boat handling, stern ramp, stern door, anchor windlass, and crane systems installed on numerous ship platforms in the US Navy. Detailed design of all of these Hull and Deck Machinery Systems is proprietary to LSSI. Additionally, these systems have all undergone rigorous factory and ship testing including Shock Testing, Electromagnetic Interference testing, Software Verification and Validation testing, Factory Acceptance Testing, Ship Installation Testing, and Dynamic Interface Testing. All these testing and qualification efforts are exclusive to the LSSI hardware specified herein. Additionally, LSSI is the only one that is able to train the US Navy on the systems given the proprietary information; wherein, a train the trainer will be employed on the SLAD systems.

These hull and deck machinery systems are mission essential equipment, and thus, could delay deployment schedules if the equipment is not properly maintained and if problems that arise are not found and repaired in a timely manner. LSSI’s support is required to expeditiously remedy these engineering problems to support critical ship schedules and deployments. The support services provided by LSSI are vital to ensuring quick and expert technical response to ship/TYCOM needs. The Government does not have, nor does it possess the legal right to the prerequisite technical data essential to perform the services to be furnished under the proposed contract or to obtain the parts or services on the basis of full and open competition. All the detailed design information, which includes manufacturing procedures and methods, component performance, manufacturing tolerances and assembly, software source code, inspection and testing techniques, and procedures, was developed and owned by LSSI. LSSI is therefore the only manufacturer qualified to build and deliver one of these systems to the Navy.

Since 1994, NSWCPD has attempted to obtain LSSI’s design information. More recent attempts include:

- 2008: during crane assessment visits for potential new drive system upgrades information on crane structural and drive capacity information for LSD Class cranes were needed and requested but not provided.

- 2009: during development of new Slewing Arm Davit (SLAD) development for the LSD Class detailed dimensional information and drawing requested for the 20T boat & cargo crane was needed and requested but not provided.

- 2010: during assessment of damage to starboard boat davit arm detailed dimensional information and drawing requested for the davit arm was needed and requested but not provided.

- 2014: during root cause determination of premature electrical shutdown of DDG SLAD system, electrical power and hydraulic flow calculations were requested but not provided.

- 2015: in response to software verification and validation questions from the LCS program office for the Lockheed Martin variant crane system, software details were requested but not provided.

- 2016: during development of Ship Change Document (SCD) to improve reliability of the davit slack rope device on DDG Class SLADs, detailed design and dimensional information needed and requested but not provided.

All attempts to obtain data rights were rebuffed in response that LSSI has invested a considerable amount of time and effort in development of this information and has no interest in release of proprietary data rights. Furthermore, Market Research was conducted by NSWCPD Code 433 and did not result in identifying any other manufacturers which could provide this specialized knowledge and expertise of Lake Shore. This is primarily based upon their proprietary knowledge of the design and fabrication details of their shipboard systems. NSWCPD Code 433 reviewed the Capabilities Statements of 6 vendors that provide support to other Navy deck systems, however, due to incompatibility with the required specialized knowledge and expertise on the current models, these firms were deemed unable to meet the government requirements.

Although the Navy does possess some limited organic capabilities in these areas, due to the lack of complete technical data (both lack of ownership and also lack of access to this data) and specialized knowledge and expertise, the original equipment manufacturer is required to supply training, inspection, labor, material, and support to explore and resolve any problems associated with all Federal Government owned LSSI hull and deck machinery systems. LSSI is the only source possessing the prerequisite technical data on the design and operation of the various machinery systems, the specialized test procedures, equipment, and personnel with unique knowledge associated with the systems necessary to furnish the required services.

As stated above, the Government does not possess, has no legal rights to, and is unable to independently develop sufficient technical data to procure the required parts and services on the basis of full and open competition. Any attempt to develop an alternative source would not be practical since it would result in a substantial duplication of cost to the Government that is not expected to be recovered through competition, and would result in unacceptable delays in the furnishing of the support services covered by the proposed acquisition. Accordingly, LSSI is considered the only source capable of furnishing the required services.

As outlined in the chart below, this procurement is estimated at $11.5 million; however, it would cost the government as estimated $45 million over eight (8) years in order to obtain via other sources. This estimate was derived from estimating the time to reverse engineer, test, and build a similar system capable of meeting the US Navy requirements.

Associated Task Estimated Funding Required Estimated Performance Time Specification Development $2,000,000 .75 years Engineering Design $5,000,000 2.25 years Systems Build $29,000,000 2.25 years Systems Integration $3,000,000 1 year System Testing $3,000,000 1 year Navy Qualification Test $3,000,000 1 year Total $45,000,000 8.25 years

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

A Request For Information (RFI) was posted on the Federal Business Opportunities (FedBizOps) website on 21 February 2018; wherein, no responses were received. The proposed contract was synopsized via posting on the FedBizOps website on 12 March 2018 in accordance with FAR

5.2. While to date no responses have been received to the synopsis notification, any responses obtained will be evaluated. Market research was conducted by Code 433 and proved unsuccessful in finding sources capable of providing engineering and technical services required for the furnishing of the services. No additional market research was conducted because it is not practicable, for the reasons discussed in paragraph 5 above, for any company other than LSSI to provide the required services.

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/services 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

For the reasons set forth in Paragraph 5, Naval Surface Warfare Center Philadelphia Division 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, Naval Surface Warfare Center Philadelphia Division will assess whether competition for future requirements is feasible.

At this point the Naval Surface Warfare Center Philadelphia Division has no definitive forecast or requirements for a follow on contract. A continued monitoring of the commercial market place and latest technology will be conducted and evaluated to determine if better alternatives exist in the future.