20-66505 Word JA_Redacted.pdf

SOLE SOURCE JUSTIFICATION (SSJ) FOR OTHER THAN

FULL AND OPEN COMPETITION

I. Contracting Activity.

This Justification and Approval is to request authority for Other Than Full and Open Competition supporting requirements generated for the 402d Electronics Maintenance Group (EMXG), 569th

Electronics Maintenance Squadron and the 402d Software Engineering Group (SWEG), 581st Software

Engineering Squadron (SWES). The contracting activity for this requirement is AFSC/PZIMA. The

Purchase Request number supporting this contracting action is F3QCCM0105A002, Budget

Authorization Form# FD2060-20-66505.

II. Nature and/or Description of the Action Being Processed.

Due to the circumstances described herein, the activity requests authority to acquire kits for VDATS stations as listed in this document using ‘Other than Full and Open Competition’ as prescribed BY 10

U.S.C. 2302b, Implementation of Simplified Acquisition Procedures (41 U.S.C. 1901). This action will result in the award of a new contract which will be a five year Firm Fixed Price (FFP) Requirements contract with a base year and four one year orderingrdering periods. The estimated contract award date is projected to be 15 October 2020. Orders can be issued on this Requirements contract through 14

October 2025.

The sole source requirement will be purchased from the following company:

Astronics Test Systems, Incorporated

12889 Ingenuity Dr

Orlando, FL 32826

CAGE: 21793

Large Business

III. Description of the Supplies/Services Required to Meet Agency Needs

This requirement is for the procurement of kits required to assemble the VDATS stations. The VDATS is an organically designed test station with Open Architecture and Virtual Modular Equipment (VME)

Extensions for Instrumentation (VXI) technology. The test station contains flexible hardware and software architectures that are fully expandable and customizable, and eliminate or reduce the need for active Interface Test Adapters (ITAs).

The VDATS consists of standardized, commercially available test equipment, components and software.

There are two configurations of VDATS, the Digital Analog (DA)-1 and DA-2. Additionally, there are augmentations that provide additional capability to the core DA racks: Auxiliary Bays (ABs), Mission

Equipment Support Sets (MESSs) and Radio Frequency (RFs) roll-up racks. Currently, these configurations support the A-10, B-1, B-2, B-52, C-5, C-17, C-130, E-3, E-8C, F-15, F16, F-22, H-53, H-60, KC-135 MC-4, MQ-9, Navy ships, and UH-1 weapon systems.

All materials must be purchased as new, direct from the Original Equipment Manufacturer (OEM) in order to maintain configuration control and performance according to test station specifications. The remaining life cycle for the VDATS system is 30 years.

The kits covered by this J&A are shown below:

CLIN Name/Part

Number

Kit Unit

Price Yr 1/

Total

Kit Unit

Price Yr

2/Total

Kit Unit

Price Yr 3/

Total

Kit Unit

Price Yr 4/

Total

Kit Unit

Price Yr 5/

Total

BEQ

per

Year

Total for 5

Years

0001 DA

Kit/409073

0002 AB-2

Kit/409074

CLIN 0003 Over and Above: Over and above is estimated to accommodate potential purchase of additional individual parts listed within the kits. This also includes individual parts buys that may be initiated by the 410th Supply Chain Management

Squadron.

The Estimated Total Contract amount is The basis for the estimated cost was derived from current vendor individual part pricing. was applied to estimate unit prices for each Out-Year.

This Requirements contract will be for five years; a base year and four one year ordering periods. The estimated contract award date is projected to be 15 October 2020. Orders may be issued on this

Requirements contract through 14 October 2025. Delivery of the kits is to be determined based on the particular kits and quantities included on each order. This J&A covers the ordering period of the

Requirements contract through completion of all delivery orders.

These part numbers identified are applicable to PGI 217.7506 Spares Breakout Program for centrally managed replenishment or provisional parts for military systems and equipment. These kits are form, fit, and function configurations and are managed by the VDATS program office (AFLCMC/WNA) which maintains Operational, Safety, Suitability, and Effectiveness (OSS&E) authority. These kits are not stock listed and therefore were not screened.

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

10 U.S.C. 2302b, Implementation of Simplified Acquisition Procedures in accordance with procedures of FAR 13.5, Simplified Procedures for Certain Commercial Items.

V. Demonstration that the Contractor’s Unique Qualifications or the Nature of the

Acquisition Requires Use of the Authority Cited Above (Applicability of Authority).

The agency’s minimum needs can only be satisfied by the unique supplies available from Astronics Test

Systems. Astronics Test Systems is the OEM for these kits and is the only source capable of providing the specific parts they comprise, that are tested and approved for the VDATS. Acquisition must remain restricted to the controlled baseline that is approved and tested for the VDATS.

There is currently no existing contract available to satisfy new FY21 through FY26 VDATS requirements. Therefore this instant acquisition is necessary for the continued production of a highly specialized system.

AFLCMC/WNA maintains OSS&E authority. The part numbers included in the kits may be altered but form, fit and function of the parts will not change. As such minor configuration changes may be required to accommodate operational needs or avoid obsolescence. Configuration changes are approved by AFLCMC/WNA. EMXG is the procuring source in accordance with Acquisition Plan WRALC-

0901 dated 5 July 2012. When obsolescence occurs, the 581st Software Integration Lab (SIL) will research the replacement parts and provide recommendations to WNA. All materials must be purchased as new, direct from the OEM in order to maintain configuration control and performance according to test station specifications. The remaining life cycle for the VDATS system is 30 years.

To maintain strict configuration control of current production efforts and to comply with the technical requirements identified in the VDATS system technical documentation, the exact part number is required and must be procured in order to maintain the configuration control baseline and promote transportability of workload between test stations. In accordance with the DoD Automated Test Station

(ATS) Selection Guide, which can be found at the following link:

https://www.acq.osd.mil/log/MPP/ats library.html, program managers are mandated to select from appropriate, DoD approved ATS families to satisfy testing requirements.

Acquisition must remain restricted to the part number controlled baseline that is approved and tested for the VDATS ATS. Any change to the VDATS configuration potentially impacts every VDATS user and creates a ripple effect for software and firmware within Test Program Sets (TPS) for Line Replaceable

Units or Shop Replacement Units (LRU/SRUs) tested on the VDATS Support Equipment.

Accordingly, Astronics Test Systems is the only source capable of providing the supplies described in

Section III above in accordance with the VDATS technical data package.

The Government does not own the data rights to these proprietary Astronics items. A request for purchase of data from Astronics Test Systems was sent on 03 June 2020. Astronics replied on 04 June

2020 that they are unwilling to sell the technical data for these items to the Government at this time.

The DoD ATE framework that is shared by Air Force, Navy, Marines, and Army is structured around the use of COTS instruments. This is due to the difficulty of re-engineering those components; the measurement science that is required for National Institute of Standards and Technology (NIST)-traceable calibration adds a great degree of complexity to the design and sustainment of these instruments. In the event of obsolescence, AFLCMC/WNA would qualify a substitute COTS item.

Qualification of substitute parts only occurs due to obsolescence, which is difficult to forecast as it is based on technological improvements by commercial entities, developmental efforts on different airframes, and/or diminishing sources of supply. The review of substitute parts is completed at a part number level, and each new part requires extensive regression testing to ensure uninterrupted production on over 2500 Test Program Sets (TPSs) that currently run on the VDATS platforms. The research required to qualify a part includes approximately 12 months of review/testing. The cost of 12 months of analysis, testing, and integration for one part in any of the VDATS configurations is estimated at

$127,154. Astronics has two VDATS kits comprised of 5 unique parts and the average cost per part is

$7,645. Each kit contains an average of three unique parts. The average kit requalification cost of

$404,397 is shown below.

Substitute Qualification Estimates Cost per part =analysis testing + cost of the part

$127,154 + $7,645 = $134,799

Cost for all parts =Cost per part X 5 unique parts

$134,799 X 5 = $673,995

Cost per kit =cost per part X 3 unique kit parts

$134,799 X 3 = $ 404,397

Requalification of individual parts within the kit from another vendor would add additional administrative costs such as duplication of contract efforts and supplying multiple vendors with required

Government Furnished Property for testing. It would also have significant detrimental effects to the delivery and EMXG’s manufacturing schedule as planning/forecasting obsolescence is difficult, if not impossible, to accomplish with enough certainty and lead time to establish alternate vendor procurement methods to meet existing performance requirements. Therefore, requalifying individual parts through alternate vendors is not a viable option. Requalification of the entire kit would not be a viable alternative either as the programs are capitalizing on commercial off the shelf items with pricing and availability directly tied to the commercial marketplace. On average, commercial pricing in the market fluctuates +/-10%. Historically, the government has received catalog pricing and quantity discounts up to 7% which will likely be lost if multiple alternate vendors are utilized. Based on historical purchase data, the most a competitive market would offer would be an additional 3% savings (see breakeven analysis below); therefore, it would take thirty-one years to breakeven (recoupment of additional upfront costs through potential long-term savings); however, the life expectancy of some of the kit components is less than the breakeven due to the rapid changes in technology and obsolescence.

Previous acquisitions of VDATS parts were done on an individual basis. Due to the modular nature of requirements, the OEM, Astronics Test Systems, is now providing the required parts for specific modular configurations as kits. The procurement of these items as kits is expected to result in reduced administrative burden, better configuration control, and reduced costs over individual item purchases.

Award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition and unacceptable delays in fulfilling the Air Force’s requirements.

Breakeven analysis Average Part Cost $ 7,645

3% Savings per Part $ 229.35

Requalification cost per part $ 134,799

Breakeven - # of buys 588

Avg Qty Purchased per year 19

# of years to Breakeven 31

Unacceptable Delay: Award to any other source would result in unacceptable delays in fulfilling the

Air Force’s requirements. The VDATS are highly specialized equipment; without serviceable assets that have been tested and approved, system performance in accordance with test station specifications will be placed at great risk. Lack of proper configuration impacts every VDATS, causing failure to execute mission or preventing the achievement of critical objectives. The DoD ATS Selection Guide mandates program managers select from appropriate, DoD approved ATS families to satisfy testing requirements. Significant delay would be realized if testing and approval are required from sources other than the OEM. The estimated timeline is based on a minimum of 18 months to prepare a competitive solicitation and up to 48 months to test and approve each applicable part.

The items being acquired are critical to maintaining configuration control in all of the test stations. In order to maintain this control, Astronics Test Systems is the only known source that can satisfy the

Government’s requirement. Any attempts at Full and Open Competition at this time would cause a significant time delay in fulfilling the Government requirements. This acquisition will be a new contract for the production of the highly specialized equipment in support of those requirements

Accordingly, Astronics Test Systems is the only firm capable of providing the requirements described in

Section III above without the U.S. Air Force experiencing substantial duplication of cost that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirements.

VI. Description of Efforts Made to Ensure that Offers are Solicited From as Many Potential

Sources as practicable.

A Sources Sought (SS)/Request for Information (RFI) synopsis was posted to beta.SAM on 15 May

2020 with a response date of 15 June 2020 under Notice Number: F3QCCM2066505 titled Versatile

Diagnostic Automated Test Set Kits. The SS/RFI requested responses from interested vendors that possess the experience to meet qualification requirements for this effort. Two vendors responded to the

SS/RFI. The vendors were evaluated for their capability to provide the required kits. Astronics was determined to be capable based on their position as the OEM and ability to provide all of the required kits. Hiller Measurements was determined to be not capable based on not being identified by the OEM as an authorized reseller and having no current relationship with the OEM.

The requirement will be synopsized on beta.SAM in accordance with FAR 5.201. It is anticipated that sources having an interest in subcontracting may be identified through synopsis. Any source who responds to the Government as a result of this synopsis will be identified to the prime contractor as a potential subcontracting possibility.

VII. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable

The overall cost of this acquisition will be fair and reasonable to the Government. In accordance with

FAR 15.403-3, the Contracting Officer will require the submission of other than certified cost or pricing data. Price analysis or cost analysis based on “information other than certified cost or pricing data” will be used to examine and evaluate the proposed prices to determine fair and reasonable pricing. Price analysis techniques include comparison of proposed prices to historical prices paid for a same or similar item; comparison with published price lists, offered catalog prices and prices obtained through market research for a same or similar item; comparison of proposed prices with independent Government estimate; or analysis of data other than certified cost or pricing information.

VIII. Description of the Market Research Conducted and the Results, or a statement of the

Reasons Market Research was not Conducted.

Market research in accordance with FAR Part 10.001 and 10.002 was conducted from 26 January 2020 through completion date 15 June 2020. Techniques used included posting an SS/RFI synopsis as well as a search of the Dynamic Small Business Search (DSBS) engine.

As described in Section VI above, an SS/RFI was posted to beta.SAM advising industry of the pending acquisition and soliciting inquiries from interested vendors. The SS/RFI was posted 15 May 2020 under

Notice number F3QCCM2066505 titled Versatile Diagnostic Automated Test Set Kits. Responses were received from Astronics Test Systems and Hiller Measurements, LLC. Astronics confirmed that they are the OEM for the required kits and indicated they have one manufacturer's representative, Southern

Marketing Associates. Southern Marketing Associates stated all orders are placed directly with the

OEM, Astronics Test Systems, Inc. Hiller Measurements, LLC designs and manufactures large electronic test systems for both large corporations and the Government and has relationships with numerous vendors that supply VDATS parts, however they do not have an established relationship with

Astronics and were not identified by Astronics as an authorized reseller. Hiller has not had any

Government contracts for the VDATS or its associated hardware.

The Dynamic Small Business Search (DSBS) engine was queried using North American Industry

Classification System code 334515 (Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals) and key words “Test Equipment”. A search for HUBZone, 8(a), Veteran, Woman Owned and Service Disabled Veteran Owned businesses was conducted and returned 94 vendors. Several sources for “test equipment” were identified, however, due to the proprietary nature of the parts being procured, none are capable of satisfying the requirement. A large business, Astronics

Test Systems, owns the proprietary data needed to maintain configuration control and performance according to test station specifications.

General Services Administration (GSA) was also queried to determine if these items were offered under a GSA schedule. Astronics Test Systems does not offer the required kits under a GSA schedule.

Technical Communities (Testmart) was found to offer some of the individual parts within the kits on

GSA however they did not offer the required kits and were not identified by Astronics as an authorized reseller. Astronics does not have authorized resellers of the required kits. Astronics uses Southern

Marketing Associates as a manufacturer’s representative; however, all orders are made directly through

Astronics.

The VDATS is considered a commercial item as defined in FAR 2.101. The VDATS consists of standardized, commercially available test equipment, components and software.

The market research concluded Astronics Test Systems is the only vendor capable of fulfilling the

Government’s requirement.

IX. Any Other Facts Supporting the Use of Other Than Full and Open Competition.

None.

X. List of Sources, if any, That Expressed 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.

Acquisition must remain restricted to the controlled baseline that is approved and tested for the VDATS.

A request for purchase of data from Astronics Test Systems was sent on 03 June 2020. Astronics replied on 04 June 2020 that they are unwilling to sell the technical data for these items to the

Government at this time.

While the current market research indicates a sole source environment for the VDATS, the Government will continue to engage with the OEM to determine the feasibility of procuring the Technical Data

Package. Alternate sources of supply for equivalent parts are constantly being reviewed/evaluated in order to increase competition and system responsiveness. If a replacement for the VDATS is required in the future, competition would be considered. The remaining life cycle for the VDATS system is 30 years.

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Certification by the Technical/Requirements Personnel.

As evidenced by my (our) signature(s), I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.