TMS_JCI JA - Redacted.pdf

J&A No. MSC-N3220522R4043-0001

DEPARTMENT OF THE NA VY

COMMANDER MILITARY SEALIFT COMMAND

471 EAST C STREET

NORFOLK VA 23511-2419

JUSTIFICATION AND APPROVAL FOR USE

OF OTHER THAN FULL AND OPEN

COMPETITION

1. Contracting Activity.

Department of the Navy, Military Sealift Command (MSC), Services and Ship Support (N102).

2. Description of the Action Being Approved.

This amended Justification and Analysis (J&A) provides the basis and rationale for awarding an Indefinite Delivery, Indefinite Quantity (IDIQ) multiple award contract (MAC) to Trident Maritime Systems LLC (TMS) and Johnson Controls Inc. (JCI) on an other than full and open competition basis for long-standing, recurring requirements for heating, ventilation, and air conditioning (HV AC), refrigeration, power generation and distribution, automation and controls systems for propulsion, steering, engine services, and any other equipment maintained by TMS and JCI installed onboard all MSC vessels -- particularly to T-AO 205 Class (Fleet Replenishment Oiler) and T-AKE Class (Dry Cargo/Ammunition), but not limited to these vessels exclusively.

In accordance with Navy Marine Corps Acquisition Regulation Supplement (NMCARS) 5206.303-1 (a)(i), this amended J&A is being submitted for approval prior to contract award. The original J&A, estimated at was approved on 20 September 2021 by the MSC Head of Contracting Authority (HCA), Rear Admiral Michael Wettlaufer, under Control Number 2021-08-30 TMS JA.

3. Description of the Supplies/Services.

This IDIQ MAC is for a broad range ofTMS and JCI Original Equipment Manufacturer (OEM) equipment, systems, and parts to maintain the following brand-name systems/parts contained within the MSC vessels including the classes stated below. The required parts and services are necessary to maintain the three following systems but not limited to these type of HV AC and propulsion systems exclusively:

i. T-AO 205 Class Power Generation and Distribution and Automation and Controls Systems (TMS).

1. TMS brand equipment that is already installed aboard the T-AO 205 Class includes but is not limited to: Control Consoles (i.e. Main, Cargo Ballast), Control Systems (i.e. Machinery Centralized/MCCS, Propulsion), Control Station Equipment, Control Cabinets, UPSs, Data Acquisition Units, Network Switch Unit, Alarm Panel, Switch Boards (i.e., Main, Ship Service, Emergency), Ship Service Transformers, Power Substations, Load Centers, and Motor Control Centers.

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J&A No. MSC-N3220522R4043-0001

11. T-AO 205 Class HV AC & Refrigeration Equipment (TMS/Callenburg)

1. TMS/Callenburg brand equipment that is already installed aboard the T-AO 205 Class includes but is not limited to: Sensors, Air Handlers, Fans, Blowers, Coils, Purge/Pump Out Systems, Filters, Dampeners, Dehumidifiers, and Heaters.

Callenburg is a subsidiary ofTMS.

iii. T-AKE Class and HVAC Refrigeration (TMS & JCI)

1. Most of the equipment and components installed aboard the T-AKE Class is manufactured by JCI and includes but is not limited to: Controller Panels, Sensors, Packaged A/C units, Compressors, Pumps, Motors, Controllers, Air Handlers, Fans, Blowers, Coils, Purge/Pump Out Systems, Filters, Dampeners, Dehumidifiers, and Heaters.

TMS and JCI will provide service support that will include periodic equipment grooms, technical representative visits, telephone consultations, life cycle management, refurbishment, upgrades, remote technical support via email and phone, hardware and software configuration management services, new/overhauled parts, training, assistance in accomplishing technical refresh effort to address obsolescence issues and other related tasks.

It is anticipated the contract will have a five (5) year ordering period, commencing upon award in Fiscal Year (FY) 25. It is also anticipated that the contract will include an optional six (6)-month extension in accordance with Federal Acquistion Regulation (FAR) 52.217-9.

The period of performance for each order will be determined at the time the individual requirement is developed. Prior to receiving proposals it was discovered that the original IGE was significantly underestimated. These findings were based on additional market research conducted on MSC internal databases that revealed MSC has historically paid significantly more for parts than what was indicated on the original IGE. In addition, MSC did not take into consideration the sharp rise in inflation due to economic conditions during the period from 2021 to 2023. The total estimated maximum ceiling of this requirement is now-

Each issued order will utilize corresponding FY United States Navy Working Capital Funds (NWCF) and/or Transportation Working Capital Funds (TWCF). The types of funding to be utilized are in the table below.

FY25-FY30

WCF

Total

4. Statutory Authority Permitting Other Than Full and Open Competition.

10 U.S.C. § 3204(a)(l), only one responsible source or only a limited number of responsible sources and no other supplies or services will satisfy agency requirements.

5. Rationale Justifying Use of Cited Statutory Authority.

All power generation and distribution, automation, and controls systems installed onboard T-AO 205 Class vessels must be maintained for the vessels to perform their required national defense mission.

J&A No. MSC- N3220522R4043-0001

Safety Management System Number (SMS) 10.6-002-ALL "Identification of Critical Equipment" has labeled these systems/items as L4 "critical equipment;" on a scale from Ll to L4 with L4 being the most critical. L4 critical equipment and systems must be repaired/maintained in accordance with regulatory body requirements, MSC Policy, and OEM) recommendations. Failure of these systems or associated parts would allow water to penetrate the ship's hull and/or its lubrication system causing mission failure, and would leave the propulsion and/or steering systems inoperable.

To comply with SMS 10.4-001-ALL "Preventive Maintenance (PM)" and SMS 10.7-001-ALL "Corrective Maintenance," MSC must contract with TMS because all of the TMS/Callenburg HV AC and refrigeration equipment onboard the T-AO 205 Class vessels are proprietary to TMS. At this time, TMS is the only company able to provide the necessary proprietary technical data/drawings for these systems/parts as required by United States Coast Guard (USCG) and American Bureau of Shipping (ABS) regulations, and is the only company that has the capability to provide services and manufacture parts to maintain these systems.

In sum, the engineering, technical characteristics, construction drawings, manufacturing procedures, tolerances, and installation procedures for these systems/items are proprietary to TMS. TMS does not share its proprietary data or authorize outside vendors to service or manufacture these systems, making TMS the only known source to provide these necessary supplies and services. TMS will not sell its data rights to the Government and maintains that it procured/manufactured these systems according to commercial standards, not non-commercial Government/Military standards. Therefore, MSC must obtain these requirements for services and parts for these systems from TMS at the task order level.

Likewise, JCI is the OEM for most of the HV AC and refrigeration systems onboard the T-AKE Class vessels. Unlike the equipment and services for T-AO 205 Class vessels, both TMS and JCI have the capability to provide parts and services for JCT-systems on T-AKE Class vessels and can obtain or have access to the engineering data, technical characteristics, construction drawings, manufacturing procedures, tolerances, and installation procedures for these systems. Therefore, since TMS and JCI are the only companies at this time that can provide these parts and services for these systems, MSC will compete the requirements for these services and parts for these systems amongst both companies at the task order level.

Since the engineering, construction drawings, and technical characteristics for the manufactured parts and services for these systems are proprietary to TMS and/or to JCI and the Government does not own the rights to the data nor canother companies access the proprietary data, it is proper to award to only TMS and JCI, in accordance with FAR§ 6.302-l(a)(2)(iii)(A) because awarding to any other source would result in a substantial duplication of cost to the Government, which would not be recovered through competition.

The cost for the Government to procure these systems to replace the current systems across the fleet from a different vendor and to service and provide parts for these systems is estimated in FY24 dollars at $600M. Additional cost would include researching to locate another OEM vendor that can provide similar services, parts, and systems that are equal or exceed the capabilities of the existing installed systems and the existing quality of services that MSC is currently receiving.

Design costs, and engineering costs are other important factors to take into consideration depending on the needs of MSC at that time. This estimate of replacing all the systems across the fleet relied on historical pricing data, technical advice within MSC provided by industry, and market research to obtain pricing and other information for the same or similar items that are within the same industry.

All OEM repair parts must comply with USCG, ABS, and International Maritime Organization (IMO) brandy.hernandez Line

J&A No. MSC- N3220522R4043-0001 regulatory requirements. At this time, MSC does not have manufacturing and technical information for these systems/items required to evaluate and determine whether non-OEM systems/items potentially offered as equivalent to the OEM components and replacement parts are technically acceptable. these systems/items require special tools, specialized repair parts and technical expertise unique to these systems. Only approved OEM parts are authorized to be installed for these highly sophisticated systems unless other non-OEM parts/components are recommended by JCI and TMS who are the technical experts for these systems. JCI and TMS are parts providers and service technicians who have access to provide parts and technical data/drawings for manufacture, and as required to properly repair and maintain the equipment.

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

A Source Sought Notice (SSN) was posted on 17 November 2020 on System for Award Management (SAM.gov) that included a response date of 07 December 2020 to determine if there were other small and large businesses who had the capability of performing the requirements outlined within the sources sought. TMS was the only company that responded to the sources sought. As required by FAR 5.201, the proposed contract action was synopsized on SAM.gov on 01 September 2022. A notice on SAM.gov was posted on 24 October 2022 to give interested parties an opportunity to attend a Pre Proposal Conference (PPC). The PPC was held on 02 November 2022 via Microsoft Teams to give interested offerors the opportunity to discuss procurement details, solicitation instructions, solicitation evaluation criteria, and to address any newly submitted vendor questions. TMS and JCI were the only interested parties to attend.

Market research continued through the issuance of the solicitation. That market research includes performing web searches and communicating and reaching out to other companies that are within the same industry to find potential alternatives. The results did not identify potential alternatives at this time.

7. Determination of Fair and Reasonable Cost.

The Contracting Officer has determined the anticipated cost to the Government of the supplies/services covered by this J&A will be fair and reasonable.

8. Actions to Remove Barriers to Future Competition.

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