01 - JA JDAM FY24-FY33_Redacted v1_Redacted.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition

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Anti-Jam Beam forming Receiver (SABR-Y) and Military Code (M-Code) guidance kits. Laser sensor kits provide an enhanced guidance option that provides precision laser guidance capability for improved accuracy and enhanced reactive and mobile targeting capability to the standard JDAM weapon. Laser sensors will detect, acquire, and track the energy reflected from a laser designated target. The product support strategy for sustainment of the guidance kits is a 20-year warranty.

ii. The Program Team may add new JDAM guidance kits / laser sensor kits to the production contract based on results of ongoing enhancement efforts. Quantity adjustments will be discussed with applicable stakeholders and negotiated with the contractor via the changes clause (FAR 52.243-1) or other applicable authority.

iii. Technical Support for the JDAM weapon system provides the engineering, management and logistic support required to ensure the continued Operational Safety, Suitability, and Effectiveness (OSS&E) of JDAM weapons in accordance with (IAW) Air Force Material Command Instruction 63-1201. These services provide the necessary resources to effectively assess the warfighter's requests for potential enhancements and performance growth, as well as managing ongoing production and sustainment activities. These services also provide the necessary resources to effectively procure related spares, repairs, technical services, and ancillary equipment in support of USAF, USN and FMS customers. Technical support services include: simulations/modeling; lot acceptance testing and Weapon System Evaluation Program (WSEP) technical support; aircraft integration technical support; weapons system integration; non-warranty repair actions funded from separate Operations and Maintenance (O&M) accounts; software maintenance/ upgrades; assessments of impacts such as changes in GPS infrastructure; and studies and analyses related to current and future expansion of JDAM system performance. Program experience also indicates that due to parts/technology obsolescence, the vendor may be required to update/change system configurations.

Obsolescence and associated engineering change processes are also considered within the scope of this J&A. These items can only be completed by the original equipment manufacturer (OEM) since it owns the data rights explained in the data section.

B. As there are no feasible actions that could develop future competition for JDAM guidance kit production lots 28-32 or laser sensor kit production lots 12-16 (see Section VIII), this J&A will cover more than one fiscal year of requirements to align with the IDIQ contracts arrangement. It is anticipated these contracts will support USAF, USN, DSCA and FMS JDAM guidance kit production lots 28-32 and laser sensor kit production lots 12-16 (FY24-28) projections for production and sustainment requirements. The projected yearly/lot funding for this procurement is listed as follows.

C. IDIQ Fiscal Year Production Breakout ($ in millions):

D. The total ceiling of the contracts for USAF, USN and FMS requirements is estimated at The JDAM System Program Office (SPO) originally used the Acquisition Cost Estimating Integrated Tool (ACEIT) to provide this estimate, which is based on historical information from both the USAF and USN. The updated USAF totals (Section E) in this document are based on contract pricing for JDAM guidance kit production lots 28-37 and laser sensor kit production lots 12-21. Each requirement listed will be procured with BP3011 (Procurement Ammunition) appropriated funds. Repair requirements, as part of Technical Support Services, will be funded with BP3400 (O&M) appropriated funds. This is a “buy to budget” program for production; the program office purchases additional quantities to satisfy requirements and inventory levels as funding and negotiated prices permit. The program office updates the Procurement Documents (P- Docs) annually in accordance with the President's Budget.

E. Total combined USAF, USN and FMS estimated costs cited in Section III: .

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IV. Statutory authority permitting other than full and open competition.

10 USC 2304(c)(1) as implemented by FAR 6.302-1(a)(2): Only one responsible source and no other supplies or services will satisfy agency requirements.

V. Demonstration that the contractor's unique qualifications or the nature of the acquisition requires use of the authority cited above (applicability of authority).

A. The JDAM guidance kit is made up of highly specialized hardware and software. The specialized nature of JDAM is derived from the original Acquisition Pilot Program approach (utilizing the Acquisition Streamlining Act of 1994) and the enhanced capabilities achieved from multiple software revisions over the program's life time. The JDAM Pilot Program designation resulted in an arrangement where the US Government (USG) agreed to limited program oversight and limited rights in the technical data being developed while waiving Rights in Technical Data (FAR Subpart 27.4) clauses. The baseline JDAM weapon system has been designed, built, tested, produced and supported by Boeing since 1995. JDAM flight software is designed by Boeing in accordance with USG performance requirements and constraints as defined in the JDAM system specification.

The technical support and sustainment services needed to maintain the OSS&E of JDAM are intrinsic to the hardware and software designs of the system. Boeing is also the only source that possesses the necessary skill sets, technical data, special test/inspection/maintenance equipment, flight simulation models and computer programs to provide the required technical support services and analysis. Therefore, this class J&A will cover the initial five year period and the five year option period for continued production and associated technical/ sustainment support services of this major weapon system.

B. Award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition. The USG invested $318.4M as part of the original JDAM Engineering and Manufacturing Development (EMD) contract (F08626-94-C-0003). The USG does not have funding available to replicate this investment to qualify an additional source of JDAM guidance kits and laser sensor kits.

C. The USG has limited rights to the technical data that Boeing has developed in support of the JDAM program. The USG does not have the right to disclose any of this technical data for the purpose of manufacturing. Without sufficient licensing rights to the technical and production data, it is impossible for the USG to provide this information to other contractors to foster a competitive procurement environment. In October 2011, July 2012, October 2015, August 2016, and most recently June 2020 the JDAM Contracting Officer at Hill AFB queried Boeing to obtain pricing and availability of the JDAM data rights, drawings, manufacturing capabilities and engineering support documentation/programs. Boeing's contract manager responded to these requests stating "Boeing's JDAM/Laser JDAM proprietary data is not for sale at this time for use in munitions requirements competitions."

D. It is likely that award to any other source would result in unacceptable delays, of approximately seven (7) to ten

(10) years, in fulfilling the USAF, USN and FMS requirements. The JDAM SPO is aware of no other company starting development efforts toward producing an equivalent JDAM guidance kit or laser sensor Kit. Delaying procurement for another source of supply to develop JDAM guidance kit and laser sensor kit capability would result in a break in production. JDAM guidance kits and laser sensor kits are used extensively in testing, combat operations and are an integral part of the War Reserve Material (WRM)/Inventory Objective (IO) requirements and provide a critical weapon capability for the FMS partner. Because of the critical nature of inventory stockpiles, production must continue uninterrupted. Delaying production would drive the overall supportability even lower, directly affecting warfighter ability to precisely execute mission objectives (e.g. meet training objectives prior to deployment; weapons on hand to eliminate war planned target sets; close air support capability for ground units without increased likelihood of collateral damage; and ability to execute high priority/ high value target elimination utilizing precision strike weapons capability).

E. A delay in award for Technical and other related Sustainment Support/Services introduces significant risk through

March 2020 Page 6 of 8March 2020 Page 6 of 8 loss of the expertise required to support/troubleshoot JDAM weapons during urgent combat operations.

Currently, issues found during combat or training operations are immediately directed to and addressed by Boeing. A delay in contract award would negatively impact the warfighters' ability to troubleshoot any future weapons issues, triggering a significant potential for decrease in mission reliability and effectiveness.

Furthermore, any maintenance repair services performed by an alternate source would void the 20-year warranty purchased by the USG on the JDAM guidance kits and laser sensor kits produced by Boeing.

F. The JDAM SPO has determined that Boeing is the only company capable of providing the supplies and services described in Section III above without the USG experiencing unacceptable delays in fulfilling JDAM procurement requirements and substantial duplication of cost that could not be expected to be recovered through competition.

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was or will be publicized as required by subpart 5.2 and, if not, which exception under

FAR 5.202 applies.

Hill AFB Contracting (AFLCMC/EBHK) issued a Sources Sought Synopsis (SSS), FA8213-XX-XXXX_Lot28Plus_JDAM_and_Laser_Sensor_Kits, 30 September 2020 on Beta.Sam. The SSS requested capability statements to determine if sources, other than the OEM, exist in support of providing JDAM guidance kits, Laser Sensor kits and spares for USAF, USN and FMS customers. The SSS included direction to identify capability (experience, cost, timeline) to begin qualified Lot 28 production of certified JDAM guidance kits by February 2024 and complete deliveries by February 2025. New guidance kits and laser sensor kits must meet specifications noted in the System Specification (SS) and IAW aircraft Operational Flight Programs (OFPs) noted in the Interface Control Document (ICD). Requirements included projected lot quantities, requirements for technical services/support and ability to meet all related sustainment support requirements also IAW the SS and ICD specifications.

Boeing was the only vendor that responded to the 30 September 2020 SSS.

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The following steps will be taken to ensure that the anticipated cost of this acquisition will be fair and reasonable.

The Contracting Officer will comply with the procedures and criteria contained in FAR Part 30 - Cost Accounting Standards, Part 31 - Contract Cost Principles and Procedures, and Subpart 15.4 - Contract Pricing; to include technical evaluations and DCMA/DCAA audits, as appropriate. Additional steps to ensure price reasonableness will be under the guidance of the Contract Pricing Reference Guides, jointly developed by the Federal Acquisition Institute and the Air Force Institute of Technology. The contracting office will obtain certified cost or pricing data IAW FAR 15.403. The Price Negotiation Memorandum (PNM) will detail the cost and price analysis as well as document how the price was determined to be fair and reasonable. Upon completion of negotiations, contract clearance review, and Office of Secretary of Defense (OSD) Peer Review, the final PNM will disclose the final justification for the determination of price reasonableness.

VIII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

A. As described in Section VI above, follow-on market research, in accordance with FAR Part 10, was conducted by sources sought of the proposed acquisition, advising industry of the pending acquisition and soliciting capability statements from any vendors other than the OEM that believed they were capable of satisfying JDAM requirements. No vendors other than Boeing responded to this sources sought.

B. Because of the critical nature of inventory stockpiles, production must continue uninterrupted. This does not rule out competition; however, risks of qualifying a new source must be measured against additional savings/

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C. Ongoing Market Research is conducted by the JDAM SPO. On a regular basis, the AFLCMC/EBH Munitions Division and AFLCMC/EBD Direct Attack Division personnel attend various conferences, symposiums, etc. with industry to assess the current market capabilities. Also, the JDAM SPO performs internet searches to examine other capabilities that could meet the JDAM guidance kit/laser sensor kit performance and integration requirements.

D. As described in Section VI, Boeing is the only company that has a fully integrated and qualified capability to meet the timeline for the JDAM guidance kits production lots 28-32, laser sensor production lots 12-16 and associated Technical Services and Sustainment support requirements and schedule.

E. After review of the current market, no other United States manufacturers have been determined to meet the outlined capabilities within the cost and timelines established.

F. IAW FAR Part 10, AFLCMC/EBH Engineering continues to conclude that there are no commercial items or non-developmental items available that could be modified to satisfy agency needs.

IX. Any other facts supporting the use of Other Than Full and Open Competition.

As described in Section V above, the USG does not have adequate data deliverables or rights to pursue a fully competitive strategy for the requirements described. The USG will continue to pursue additional technical data rights and investigate competitive opportunities for JDAM production and sustainment support in the future.

X. List of any sources that expressed, in writing, an interest in the acquisition.

See section VI above.

XI. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before making subsequent acquisitions for the supplies or services required.

There are two major barriers to competition:

(1) The JDAM SPO does not own the technical design for the JDAM guidance kit or laser sensor kit

The first major barrier to competition for the JDAM program is the inability of the JDAM SPO to use technical data to compete the requirement. As noted in Sections V and IX, the USG does not have adequate data deliverables and rights to pursue a competitive strategy. The USG also does not own any of the technical data and previous inquiries to Boeing to purchase the data package have shown it is not willing to sell it. The JDAM SPO will continue to request the necessary data packages from Boeing and explore which aspects of the overall requirement may be susceptible to competition in the future.

(2) No other sources are qualified to deliver a JDAM guidance kit, laser sensor kit or other related requirements.

The second major barrier to competition for the JDAM program is the lack of qualified sources. Boeing was the only vendor that responded to the 30 September 2020 SSS as described in section VI. No other sources showed desire to have an integrated and qualified solution to meet the Government's timeline or performance needs. Should another vendor become qualified as a source within a timeline that would permit competition, while ensuring uninterrupted JDAM supply and sustainment support services, the Government would compete all future requirements.

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XII. Certification by the Contracting Officer.

The contracting officer's signature on the Coordination and Approval Document evidences that he/she has determined this document to be both accurate and complete to the best of his/her knowledge and belief.

XIII. Certification by the technical/requirements personnel.

By their signatures on the Coordination and Approval Document, the technical and/or requirements personnel have certified as accurate and complete all supporting data, which is their responsibility, contained herein IAW FAR 6.303-2(c).