SPMYM120R0003 - FOIA Redacted_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

SOLICITATION: SPMYM1-20-R-0003

[ X ] ORIGINAL

[ ] ADDENDUM (attach copy of original J&A for add-ons or revisions)

1. The Defense Logistics Agency, DLA Maritime Norfolk, is the contracting activity.

2. The action being approved is the acquisition of supplies on other than a full and open competition basis. The procedures in FAR subpart 13.5 will be used in accordance with 41 U.S.C. 1901.

3. The supplies required to meet the using activity’s needs are described as follows:

CLIN NOMENCLATURE QTY U/I EST. UNIT

PRICE

EST. TOTAL

VALUE

0001 Tube Bundle, G-C OD C w/Merc free, p/n 534-08325-000 1 EA 0002 Tube Bundle, G-C OD C w/Merc free, p/n 534-08385-000 1 EA 0003 Tube Bundle, G-C OD C w/Merc free, p/n 534-08325-000 1 EA 0004 Tube Bundle, G-C OD C w/Merc free, p/n 534-08385-000 1 EA

EST. TOTAL AMOUNT

Subject requirement is for the procurement of four (4) each tube bundles, needed for the USS Dwight D.

Eisenhower’s distilling plant condensers located inside the 5th and 6th stages. The distillation plant system onboard the USS Dwight D. Eisenhower is comprised of four (4) separate distilling units (model reference number S-4167 FL-6). Specific to this requirement, the tube bundles are a component of the distilling unit condensers. Each distilling unit is capable of producing 100,000 gallons of water per day, which attributes to the total distillation plant capacity of 400,000 gallons of fresh water from seawater daily. This water can be used by the propulsion plants, high pressure steam catapults, and also for the thousands of crew member’s daily necessities. The distilling plant must be operational before the ship can leave the Norfolk Naval Shipyard. Aqua-Chem, Inc. has the proprietary rights to the drawings, and technical expertise necessary to manufacture the required items. The use of any other make or manufactured material would not be mechanically compatible. Therefore, the material is to be procured directly through the sole source contractor, Aqua-Chem, Inc. At this time, there is no other known source of supply capable of providing the required tube bundles that would be compatible with this proprietary design and existing equipment already in use.

ESTIMATED BASE VALUE:

ESTIMATED TOTAL VALUE (BASE + OPTIONS): Not Applicable

MAXIMUM CONTRACT VALUE:

4. The statutory authority permitting other than full and open competition is:

10 U.S.C. 2304(c)(1) - Available from only one responsible source and no other type of property or services will satisfy the needs of the agency.

5. If restricted to the only source(s) of supply, include source(s) and CAGE code:

Aqua-Chem, Inc., Cage Code-0EXU3.

6. Efforts to ensure that offers are solicited from as many sources as practicable are:

The acquisition will be solicited on beta.SAM.gov to encourage potential supplier participation. Any interested party that requests a copy of the solicitation will be provided with one. The Government will continue to conduct market research, to see if changes occur in the marketplace that would enable future actions for these items to be competitive.

7. I hereby determine that the anticipated cost to the Government will be fair and reasonable.

In accordance with FAR 13.106-3(a), the Procuring Contracting Officer will make a determination of fair and reasonable of pricing based upon comparison of the proposed price with prices found fair and reasonable on previous contracts, as well as other cost, price, and buyer analysis. Information from market research, governmental sources, and Producer Price Index Industry (PPI) Data will also be used to help establish price reasonableness when needed.

8. Market Research/Efforts to Obtain Competition:

A Sources Sought notice was posted to beta.SAM.gov on 24 January 2020 with a closing date of 30 January 2020. No responses were received as a result of this notice.

Prior purchase history for the exact same tube bundles was obtained. The same material was identified by the same manufacturer and part numbers. DLA Maritime Puget Sound awarded a contract on 17 March 2015 for the same material as the current requirement. Contract number SPMYM2-15-C-0005 was awarded on an unrestricted basis, in the (base) amount of $785,834.24, to Aqua-Chem, Inc. (Cage Code 0EXU3). Contract SPMYM2-15-C-0005 was awarded as a firm fixed price, definite quantity-indefinite delivery requirement type of contract, with “option” quantities subject to economic price adjustments (EPA). The total requirement quantity consisted of fifty-two (52) tube bundles, with the total contract amount, prior to any EPA adjustments, initially estimated at . In accordance with DFARS PGI 206-303-2, a copy of the previous justification and approval (J&A) for solicitation number SPMYM2-15-R-0001, resultant contract SPMYM2-15-C-0005, is attached. (See Attachment 1, Previous J&A).

The Norfolk Naval Shipyard, Defense Logistics Agency (DLA), and numerous other Department of Defense activities have also done business with Aqua-Chem, Inc. in the past. Supporting information was located by querying Government databases that provide information relevant to agency acquisitions.

Catalogs and other generally available published product literature available via the internet were also reviewed. Aqua-Chem, Inc. is active in the System for Award Management (SAM) database, with no exclusions indicating history of debarment or suspension. The Acquisition Specialist contacted knowledgeable individuals within the Government regarding market capabilities, published a Sources Sought Notice via beta.SAM.gov, analyzed past procurement history requirements, queried Government-wide databases, and also reviewed catalogs and other product information available on the internet. Based on the information above and outlined herein; there is no indication or reasonable expectation that any other business concern would have the capability or resources available to support this requirement. Therefore, the Acquisition Specialist has determined Aqua-Chem, Inc. as the only source capable of providing the required material at this time.

Information received regarding the commerciality of the item(s):

In accordance with FAR 10.002(b), market research has been conducted to determine if commercial items or non-developmental items are available to meet the Government’s needs or could be modified to meet the Government’s needs. Although the required tube bundles are sole source to Aqua-Chem, Inc.;

the actual items and the manufacturing process are similar to what is used in the commercial marketplace. Tube bundles are located inside condensers, which are used to condense a substance from its gaseous to its liquid state. Condensers are typically heat exchangers/cooler assemblies which have various designs and come in many sizes ranging from small (hand-held), to very large industrial-scale units used in plant processes. For example, a refrigerator uses a condenser to get rid of heat extracted from the interior of the unit to the outside air. Condensers are used in other commercial items such as;

air conditioning/HVAC systems, industrial chemical processes (such as distillation), steam power plants, and other heat-exchange systems. The design, size, and scale of the tube bundles are relative to end item system a condenser would be a component of. Based on the results of the market research conducted, the Acquisition Specialist has determined that the tube bundles meet the FAR 2.101 definition of a commercial item.

[ X ] A market survey was not conducted due to:

Based on the results received from multiple other market research techniques used, a formal market survey was not conducted. The Acquisition Specialist contacted knowledgeable individuals within the Government regarding market capabilities, published a Sources Sought Notice via beta.SAM.gov, analyzed procurement history requirements, queried Government-wide databases, and also reviewed catalogs and other product information available on the internet.

9. Additional facts supporting other than full and open competition are:

The tube bundles are deemed to be available from only one (1) source of supply; the Original Equipment Manufacturer (OEM) and sole source, Aqua-Chem, Inc. The Norfolk Naval Shipyard (NNSY) is currently re-tubing the distilling plant condensers located on board the USS DWIGHT D.

EISENHOWER, CVN-69. The distilling plant condensers are a highly specialized component part of the major distilling plant system, which is the water purification system that generates freshwater from seawater for a variety of shipboard applications. Specific to this requirement, the subject material (tube bundles) are a component part of the condensers which works within the distilling unit. The condensers must be re-tubed, tested, and re-installed prior to the USS DWIGHT D. EISENHOWER’s scheduled Production Completion Date (PCD). Failure to receive the tube bundles in time will impact the ship’s availability schedule and will prevent the ship from deploying on time. Based upon the technical certification on file at NNSY, technical data is not available and cannot be developed to permit full and open competition. The data needed to acquire this part competitively cannot be obtained economically, nor is it possible to draft adequate specifications or any other adequate economical description of the material for a competitive solicitation. The data presently available reflects the minimum needs of the Government.

Aqua-Chem, Inc. owns all proprietary rights and data to the tube bundles. The use of any other product would not be compatible with the proprietary design of the existing equipment and system currently in use, and would also void any existing OEM warranties. The installation of any other manufacturer’s brand or type of tube bundle in conjunction with the highly specialized design would render the existing equipment inoperable. If the shipyard were to use another type of tube bundle; they would be required to purchase an entirely new distilling plant system. This would result in a substantial duplication of resources, cost, and time to the Government that would not be recovered through competition. To provide for continued operation of the existing system in place, it is in the Government’s best interest to proceed with the procurement of these direct one-for-one replacement component items.

10. A listing of sources, if any, indicating an interest in the acquisition is:

Aqua-Chem, Inc. (Cage Code - 0EXU3).

11. The following actions are being taken to identify additional sources:

The Government will continue to conduct market research, to see if changes occur in the marketplace that would enable future actions for these items to be competitive. Additionally; Sources Sought notices will continue to be posted to Government Point of Entry (GPE), prior to any future solicitations.

A review of the previous J&A (See Attachment 1) for solicitation number SPMYM2-15-R-0001, resultant contract SPMYM2-15-C-0005, reveals that the requirement was synopsized and a pre solicitation notice (SPMYM215R0001) was posted to the Government Point of Entry (FedBizOpps) from 3 December 2014 to 12 December 2014. No responses were received as a result of this notice and no additional sources capable of supporting the requirement were identified. Competition would require the Government to procure four (4) complete new distilling units, rather than having the capability of overhauling or refurbishing the existing equipment. Due to the size and complexity of these units and component parts, there are no known aftermarket manufacturers for the Aqua-Chem, Inc. distilling units.

The Government has not developed or anticipates developing requirement documentation suitable for full and open competition for these commercial components, as it is cost prohibitive to re-engineer all of the components for each of the distilling units. Aqua-Chem, Inc., the Original Equipment Manufacturer (OEM), holds all proprietary rights to all technical data and knowledge of the system operations. There were no aftermarket components available for the distilling units, and there was no plan for the Government to purchase, or attempt to purchase, the OEM drawings from Aqua-Chem, Inc. Planned actions to remove any barriers to competition cited on the previous justification include that the Government may consider competitive procurements in the future if aftermarket components become available.

Prior to publicizing and posting the solicitation (SPMYM1-20-R-0003) for the current requirement; a Sources Sought notice was posted to beta.SAM.gov on 24 January 2020 with a closing date of 30 January 2020. No responses were received as a result of this notice. In addition to publicizing the Sources sought notice; the Acquisition Specialist contacted knowledgeable individuals within the Government regarding market capabilities, reviewed prior procurement history requirements, queried Government-wide databases, and also reviewed catalogs and other product information available on the internet. Based on the results of the market research conducted, there is no reasonable expectation or indication that any other potential source of supply would be capable of, or have the resources available to, support this requirement. Additionally, the results of market research provide no indication of aftermarket manufacturing capabilities or aftermarket component availability at this time. In the absence of aftermarket availability, the Government does not have a planned action to complete on this non-competitive follow-on requirement. The determination is made that the requirement/guidance in PGI 206.304 have been addressed.

Referenced Attachments:

1.) Attachment 1, Previous J&A

I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief. If not exceeding $700,000, this signature serves as the approval.

Contracting Officer Date

APPROVAL/CERTIFICATION

I have reviewed and approve this justification:

Competition Advocate Signature Date

Head of the Contracting Activity (HCA) Date Signature

DLA General Counsel Date

Senior Procurement Executive (AQ) Date

SPENN.AMAND

A.R.1283715090

Digitally signed by

SPENN.AMANDA.R.128371509

Date: 2020.03.30 18:49:46

-04'00'

MCDONALD.TYS

ON.STEWART.126

1488767

Digitally signed by

MCDONALD.TYSON.STEWAR

T.1261488767

Date: 2020.03.31 08:11:20

-04'00'

APPROVAL REQUIREMENTS

[ X ] Up to $700,000 Contracting Officer

[ ] $700,000 to $13,500,000 Competition Advocate

[ ] $13,500,000 to $93,000,000 Head of Contracting Activity (HCA)

[ ] over $93,000,000 Senior Procurement Executive (AQ)

(DLA General Counsel signature line required when sending to AQ)