Justification and Approval CMO 2024-031 Spindles Coating - Urgency FINAL - Redacted.pdf

CMO Control # 2024-031

DEPARTMENT OF THE ARMY

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND

OPEN COMPETITION

1. Contracting Activity: Army Contracting Command – Watervliet Arsenal (ACC- WVA) is the contracting activity for this action.

2. Description of Action: This action will result in a modification to firm fixed price

(FFP) contract number W911PT-23-P-0031, with Phygen Coatings, Inc., of Min-neapolis, MN, 53MV5 for services to apply Coating to 365

Spindles. Award is projected for the first quarter of FY24.

will be used for this procurement.

3. Description of Supplies/Services: This requirement is for services to apply

Coating to the outside surfaces of 365 each Spindles, per Drawing 11583062 Rev C, Note 8, for the , in support of . The estimated cost of each spindle is , for a total estimated total cost of . As a re-sult of this modification, the period of performance will be extended to 30 June 2025.

4. Authority Cited: The statutory authority permitting other than full and open competition is 10 United States Code (U.S.C) 3204(a)(2), as authorized by Fed-eral Acquisition Regulation (FAR) 6.302-2, “Unusual and Compelling Urgency.”

5. Reason for Authority Cited: As described in FAR 6.302-2, procurement by other than full and open competition is necessary to expedite this requirement, as the need for the supplies or services is of such unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources from which proposals are solicited. The need for this increased requirement first became known in July 2023. However, due to a delay in receiving a complete procurement package, production schedule changes, and competing fiscal year end priorities, the Government was unable to begin the process of procuring the Coating for the Spindles until November 2023.

Per the Statement of Urgency from the Watervliet Arsenal (WVA) Program Man-agement Division, WVA has been

, along with the spare and replacea-ble parts necessary to maintain these assemblies, One of the most critical parts with the longest lead times is the Spindles (11583062 Rev C). The Coating is required prior to assembly and this process is far superior to other treatments.

Currently WVA is short materials to meet urgent demands

. Due to WVA must expedite production and manpower to produce as quickly as possible.

This will affect

Without an almost immediate influx of ma-terials into the production line, WVA will have to pause the delivery of new

The treatment process is not available at the Watervliet Ar-senal and is a proprietary process to Phygen Coatings, Inc. Spindles in the past have been coated with Chrome and Phosphate; however, this new coat-ing is far superior to the Chrome with regard to corrosion resistance. Phygen Coat-ings, Inc., has successfully provided this service on multiple contracts, including the most recent, W911PT23P0031, in December of 2022.

Under normal procurement procedures using full and open competition, the stand-ard Procurement Acquisition Lead Time (PALT) for this type of service would be 120 days. It would then take 1-to-2-months per shipment for services to be completed with transit both ways, totaling 180 days for the first shipment. That does not include any pre-award survey that would be required from any contractor who has not produced this item, which would add approximately 45 days to the process. Phygen Coatings is currently working within a 30-day turnaround time for lots of up to 20 Spindles for these services and has the capacity to continue at this rate immediately and through-out the period of performance. This will save a significant amount of time, as WVA is ready to send the first shipment upon award.

Phygen

Coatings, Inc., is in a unique position to provide this service with an accelerated de-livery, as it already possesses the necessary technology, training, and proprietary process to successfully coat the parts to the current drawing revision.

This will delay these in a timely manner. Phygen Coatings, Inc., is ready to start production and turn around the first shipment of deliveries in January 2024. Additionally, the spindles are consid-ered to be a “high wear” item. Previous coatings have led to failures

. The Spindles are a major component required to ensure safe operation of .

continue without an extensive break or delay in production. The delivery of this item will enable WVA to continue to produce and provide monthly deliveries to

6. Efforts to Obtain Competition:

a. Effective Competition: Competition will be restricted to Phygen Coatings, Inc., in this instance, as it is the only proven supplier that can provide the

Coating on an expedited basis. Due to the urgency of this requirement, a synopsis and publication in the System for Award (SAM) will be waived in accordance with FAR 5.202(a)(2). However, future require-ments for this item will be synopsized/publicized via the SAM web portal.

b. Subcontracting Competition: Phygen Coatings, Inc., is a small business.

Therefore no subcontracting plan is required.

7. Actions to Increase Competition: Due to the urgency and demand for the Spindles, no competitive procurement will be issued at this time. However, any future procurement of these parts will be conducted on a full and open basis to try and develop additional sources that can manufacture or provide this service. In addition, no action can be taken to increase competition at this time since the service provided is proprietary to Phygen Coatings, Inc. The current requirement for 365 each will be procured from Phygen Coat-ings, Inc., under the authority cited in paragraph 4 above, with deliveries starting within 1 month after award.

8. Market Research: Market research for this item was conducted by , WVA Engineering Technician, in June 2023. The market research performed was based on Mr. personal knowledge, as well as his general knowledge acquired in the workplace. In addition, market research consisted of a review of previous procurements for coating of the Spindles, which indicated there were multiple available sources that could potentially satisfy the Government’s requirement (FAR 10.001(a)(3)(i)). Therefore, it was determined that the use of source lists for identical or similar items obtained from Government, professional, and/or industry sources was appropriate. Last, but not least, Phygen has been the only source historically that has shown interest in the procurement with the ability to meet the performance specification of a

For this requirement, without using Phygen, the Spin-dles could revert back to the shorter life cycles and cause failures in the field.

9. Interested Sources: To date, no other sources have written to express an interest.

10. Other Facts:

a) Procurement History:

1) W911PT23P0031 was awarded 15 December 2022, on a sole source basis, pursuant to the authority of 10 U.S.C. 2304(c)(2), as implemented by FAR 6.302- 2.

W911PT18P0057 was awarded 19 January 2018, as a small business set-aside and Phygen was the only offeror.

W911PT16P0114 was awarded 05 April 2016, as a small business set-aside with Phygen and IBC Coatings submitting offers; however, IBC Coatings’ pro-posal did not meet the technical requirements of the specification and was deemed non-responsive.

2) Justification & Approval # ACC-WVA 2023-01 was prepared to support the most recent procurement W911PT23P0031. Paragraph 7 stated that due to the Ur-gency and demand for the spindles, a competitive procurement would not be is-sued at this time, but future procurements could be conducted using full and open competition in an effort to develop additional sources.

3) Prior contracts for this requirement have either been issued as a small business set-aside, in which only one responsive offer was received, or as a sole source to the incumbent.

4) The most recent contract, along with this requirement, was issued on an urgent basis, as explained above, to meet the increasing demands in support of the

5) There have been no significant changes between this procurement and the last.

The requirement remains urgent as the quantity needed has increased.

b) Other Facts: There are no other facts necessary to justify limiting competition that were not previously stated.

11/12. Technical Certification/ Requirements Certification: I certify that the supporting data under my cognizance which are included in this J&A are accurate and complete to the best of my knowledge and belief.

Typed Name: David Blot Date: 21 December 2023 Title: Production Planning Supervisor Signature: //DRB//

13. Fair and Reasonable Cost Determination: I hereby determine that the antici-pated cost or price to the Government for this contract action will be fair and rea-sonable based on price analysis. The proposed action will be a commercial pro-curement, therefore certified cost or pricing data will not be obtained IAW FAR 15.403-1(c) (3). The offeror has submitted sufficient information to evaluate the reasonableness of the proposed price.

Typed Name: Joseph Pokrentowski Date: 21 December 2023 Title: Contracting Officer Signature: //JSP//

14. Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Typed Name: Joseph Pokrentowski Date: 21 December 2023 Title: Contracting Officer Signature: //JSP//