NTS JA Redacted.pdf

MISSILE DEFENSE AGENCY

JUSTIFICATION AND APPROVAL FOR

OTHER THAN FULL AND OPEN

COMPETITION TEMPLATE

DA-04-T01

, 2023

Office of Primary Responsibility: Director for Acquisition (DA)

J&A No: 23-0031

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Introduction.

Upon the basis of the following justification, I, as the Director of Contracts for the Missile Defense Agency, hereby approve the issuance of the contractual action discussed below using other than full and open competition, pursuant to the authority cited herein.

2. Agencies and Contracting Activity (FAR Part 6.303-2(b)(1)).

The requiring agency for this justification is the Missile Defense Agency (MDA), Director for Engineering (DE). The contracting activity is the Directorate of Contracting for Systems Engineering (MDA-DEK). The point of contact is Jeannie Terrell, Procuring Contracting Officer (PCO) DE-K, at 256-955-5996 and Jeannie.Terrell@mda.mil.

3. Nature and Description of the Action Being Approved (FAR Part 6.303-2(b)(2)).

This is a follow-on sole source for a 10-year definitive "C-type" Cost Plus Award Fee (CPAF), Cost Plus Fixed Fee (CPFF) contract, known as the "National Team – Systems Engineering and Integration" (NT-S) contract being awarded to The Boeing Company (Boeing). The contract will be comprised of a 3.5-year base with two (2) 3-year options per Federal Acquisition Regulation (FAR) 52.217-9 Option to Extend the Term of the Contract and the option to extend service an additional 6-months per FAR 52.217-8 Option to Extend Services. A Statement of Work, Technical Instructions, and Contract Deliverable Requirements Lists will define specific tasks that Boeing will perform and data products to be delivered.

4. Description of the Supplies and/or Services Required to Meet the Agency’s Needs (including the estimated value) (FAR Part 6.303-2(b)(3)).

The MDA DE requires highly specialized technical services and support for further generation of critical Missile Defense System, Systems Engineering and Integration (SE&I) documentation and data deliverables that are in accordance with the MDA Systems Engineering Plan (SEP). The SEP articulates the MDA engineering process for the block-build developmental strategy for ongoing enhancements to the Missile Defense System. This strategy has been and will continue to be highly effective and successful in expediting the fielding of needed missile defense capabilities to the Warfighter; thus, these highly specialized services are required to meet the MDA's mission needs.

These highly specialized services will consist of a contractor’s team comprised of the

Original Equipment Manufacturers including the Prime Contractor, Boeing, performing as integrator and its Major Subcontractors, in alphabetical order, General Dynamics, Lockheed

Martin, Northrop Grumman, and Raytheon. The NT-S contract will provide unique historical knowledge and perspective in System Requirements, Design, Integration, Verification and Validation, and Assessments for fielding of future upgrades to the Missile Defense System.

The NT-S are needed to perform highly specialized services in each of the seven (7) technical processes included in the top-down design and bottom-up realization that support the transformation of DE's operational needs into operational capabilities. The Missile Defense System specific systems engineering "V" and required services under the future contract are depicted in Figure 1 and listed immediately below:

Figure 1 - Systems Engineering "V"

a. Plan

The Missile Defense System Architect is responsible for the top part of the V," the beginning, and end of the system engineering process. In the planning phase the Architect conducts analyses and comparative trade studies and uses the Prioritized Capability List and other stakeholder inputs to produce an architecture vision and initial requirements documents. The development of the Missile Defense System is time phased, where additional capabilities are developed integrated and tested in Increments. The Systems Engineer captures this evolutionary development in the System Description Document (SDD) and its associated Phased Implementation Plan (PIP). Additionally, the current and planned missile defense architecture framework is documented in the Architecture Framework and Functional Description document and is digitally captured in architecture tools.

b. Define

A primary purpose of the “Define” phase is developing, defining and documenting each Increment in the SDD and its associated PIP. The SDD describes the associated functionality and system architecture for incremental capability delivery.

c. Missile Defense System - System Design

The MDA Systems Engineer is responsible for the middle part of the "V." A primary purpose of the “System Design” activity is to document the System-level design.

The SDD triggers the development of the updated System Specification (SS) to include the new requirements for each Increment. NT-S expert knowledge and medium fidelity constructive models are leveraged to ensure required functional behavior and performance requirements are complete, feasible and affordable within schedule and budget constraints. The SS and Specification Change Notices allocate requirements to the Elements in increments, which are the periods when new capabilities are tested, verified, assessed, and delivered. The SS also synchronizes requirements across Elements when they must be delivered simultaneously in order to realize the intended system capabilities.

The System Interface Control Documents establish the Interface Exchange Requirements for the system-level Internal and External interfaces needed for an integrated Missile Defense System. The ability to properly allocate new achievable functional and performance requirements across the Missile Defense System requires an in depth understanding at the Element and Component level of how the current system is designed and operates.

d. Element Design and Build

The Chief Engineer will be responsible for products developed in the Element

Design and Build phase to ensure designs conform to previously approved System-level design and interface requirements and with M&S, integration, test, and analysis planning.

NT-S design engineers review the preliminary and critical design review plans to ensure that the contractor design is consistent with the system level allocated requirements, and the hardware and software are verified at component and program levels to meet specified requirements.

e. Test and Verify

The Test and Verify phase supports delivering capabilities to the Warfighter providing evidence used in the Delivery Phase. NT-S leverages the in depth knowledge of system behavior and performance to identify key test criteria and conditions. NT-S highly specialized services help define specific objectives for each test event which are captured in Test Objectives Memoranda that guide the data collection and test analysis and reporting. NT-S experts participate in test data analysis reviews to identify and document test results, anchor performance models and verify system performance.

f. Assess

The primary purpose of the “Assess” activity is to evaluate the performance capabilities of the Missile Defense System delivered configuration. Results from the increment’s ”test and verify” phase are assessed as to whether the measured capability matches the operational concept and supports a Technical Capability Declaration (TCD) for capability to be delivered to the Warfighter. NT-S highly specialized services used by the MDA Systems Engineer to perform system level reliability, maintainability, and availability analyses to support the TCD decision.

g. Deliver

All the prior systems engineering phases culminate with the delivery of capability to the Warfighters and updating of the Operational Capability Baseline. Missile Defense System increments include specific Hardware and Software configurations to facilitate the orderly and effective integration, testing, verification, assessment, delivery, and supportability of the Missile Defense System Elements and Components. Results of the Assess and Deliver System Engineering Phases define the delivered Missile Defense System capability, which is compared to the threat and the Warfighter's Prioritized Capability List, which then feeds back into the Plan phase of a subsequent Missile Defense System capability increment.

The total Research, Development, Test, and Evaluation rounded estimated contract value for this procurement is $900 million over a 10-year timeframe, beginning the third quarter of Fiscal Year 2024. The PCO has the authority to award in scope requirements up to 10% greater than the value stated on this Justification and Approval (J&A). See Table A below:

5. Statutory Authority Permitting Other than Full and Open Competition (FAR 6.303-2(b)(4)).

The statutory authority permitting other than full and open competition is 10 United States Code (U.S.C). § 3204(a)(1) as implemented by FAR 6.302-1, only one responsible source and no other supplies or services will satisfy agency requirement.

Specific authorities that apply to this J&A are FAR 6.302-1(a)(2):

When the supplies or services required by the agency are available from only one responsible source, or for DoD, NASA, and the Coast Guard, from only one or a limited number of responsible sources, and no other type of supplies or services will satisfy agency requirements, full and open competition need not be provided for.

In addition to the market research conducted which concluded this requirement can only be satisfied by one responsible source, FAR 6.302-1 6.302(a)(2)(iii)(A) is applicable, which states, “For DoD, NASA, and the Coast Guard, services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition.

6. Demonstration of Contractor’s Unique Qualifications or the Nature of the Acquisition Requires use of the Authority Cited (FAR Part 6.303-2(b)(5)).

The NT-S remains a critical element due to their historical knowledge in supporting MDA efforts to make complex decisions on the most cost effective means to make Missile Defense System component and element incremental upgrades as part of the on-going technical capability enhancements to the Missile Defense System.

In part, NT-S follow-on contract will continue to provide Subject Matter Expert analysis and advanced development efforts that are required to fully support the MDA SEP processes and products. Additionally, the NT-S follow-on contract will continue the MDA's efforts, as required, to achieve Department of Defense (DoD) mandated capability improvements, through a continuance of the highly complex SE&I-related efforts begun under the current contract.

The Government has now invested more than 20 years and an estimated $1.7 billion in the development of the capabilities in what is now a highly mature and unique contractor team. Boeing has put into place Organizational Conflict of Interest rules and procedures that enables review of all proposed work scope to identify and mitigate real or perceived conflicts-of-interest. Boeing has established a firewalled enclave enabling for the use of and protection of the proprietary data provided by their team members. They have established secure and Sensitive Compartmented Information Facility (SCIF) data processing facilities to utilize their team member's proprietary models and algorithms at multiple levels of secure processing.

The non-recurring transitional costs, coupled with the level of technical and schedule risk for the Government to effect a reconstitution of existing NT-S through a full and open competitive process would be very significant. Further, a hypothetical awardee other than Boeing is assessed by the MDA to be unlikely to achieve the level of expertise with the individual products of the five (5) major hardware manufacturers that the MDA needs for the SE&I products to be fully integrated and acceptable for their intended use. The unrecoverable inefficiencies if competition were sought would be experienced as new internal processes and internal/external interfaces were created and include 1) excessive cost redundancy that would be engendered by needing two (2) teams overlapping during a transitional period; 2) the learning curve associated costs as a new contractor were to become fully conversant with the 20 years of technical documentation contained within the architectural tools database and the Dynamic Object-Oriented Requirement Systems database.

Of greater importance, this would create an unacceptable risk that MDA DE (and the

MDA) would not be able to fulfill DoD commitments for the Next Generation Interceptor, Defense of Guam, or Hypersonic Glide Phase Interceptor capability enhancement commitments.

Competitively awarding a new contract at this time would require the transition of in-process, complex SE&I products and activities. The learning curve inefficiencies associated with those developmental activities is estimated to cost approximately $l8 million to reestablish Information Technology (IT) and SCIF infrastructure, rehost databases, and would potentially delay scheduled deliverables by up to 12 months or more. Such a schedule delay in the delivery of critical SE&I products would in turn result in a failure by the MDA to meet the milestones for the Next Generation Interceptor, Defense of Guam, or Hypersonic Glide Phase Interceptor capability deployments. It also significantly increases the risk associated with critical test activities and with baseline definition in the Missile Defense System Single Acquisition Management Plan and the MDA Integrated Master Test Plan. In order for MDA to maintain uninterrupted and affordable SE&I support and product deliverables needed to meet the Missile Defense System Incremental Capabilities delivery schedule, the current, fully integrated NT-S must remain in-place.

The unique business arrangement established by industry that currently exists under the terms of the NT-S contract, with Boeing and its subcontractors performing as a "badge-less" team, has provided MDA with unique benefits in terms of the "Reach Back capability" that exists when operational and engineering problems arise. Also, as a result of the NT-S team's intimate knowledge of the current Missile Defense System, MDA continues to benefit by achieving a rapid resolution of complex engineering issues as they arise with a high level of assurance that the capability increment SE&I artifacts required under the NT-S contract will be provided on a schedule that fully supports the needs for Missile Defense System.

These unique benefits and timeliness in meeting MDA requirements would be lost if this follow-on procurement was awarded to a new contractor.

7. Description of Market Research Conducted (FAR Part 6.303-2(b)(6), (8) and (10)).

Boeing will be the prime contractor for the NT-S acquisition. This noncompetitive acquisition is based on the statutory authority permitting other than full and open competition for this effort is 10 U.S.C.2304(c)(3) as implemented in FAR 6.302-1(a)(2)(iii).

In compliance with FAR 10.001, the MDA posted a Request For Information (RFI) to Sam.gov on 20 October 2022. Interested parties provided inputs in three (3) core areas and several sub-areas within each core area as detailed below:

Teaming Arrangement/Management Area 1: Efficient and Inclusive Team Approaches

Area 2: Systems Engineering Processes are collaborative between system and subsystem levels Area 3: Systems Engineering rocesses are collaborative across the MDA Engineering Team communities

Engineering Competencies Area 1: System Design and Requirements Area 2: Missile Defense System Concept Development Area 3: Technical Reviews Area 4: Modeling and Simulation Area 5: Test and Analysis Area 6: Past Performance Points of Contact

Facilities and Infrastructure Area 1: Facilities Area 2: IT Infrastructure

The RFI yielded five (5) industry capability statements submitted prior to the deadline. Four (4) responses came from large businesses and one (1) from a small business.

The review evaluated whether a response indicated an ability for the contractor to meet the SE&I requirements in the 11 areas beneath the core topics. Of the five (5) responses received, four (4) were determined to show they were unlikely to meet DE requirements.

With the exception of the incumbent, none of the respondents provided evidence that they could achieve efficient and inclusive team approaches or that they possessed systems engineering processes that are collaborative between system and subsystem levels. Although several respondents proposed teaming arrangements that could meet the requirements, there was no evidence provided in their response or subsequently, except for Boeing, that showed these arrangements existed. None of the RFI responses were from a “Consortium of OEM Primes” or from an “Equitable Partnership” of primes. None of the individual company responses, except for Boeing, showed a commitment from the proposed team members to be on the team.

Overall, with the exception of Boeing input for a continuance of the existing business construct, MDA did not receive an industry input that met all of the MDA/DE requirements, goals and objectives established for the NT-S follow-on procurement with acceptable risk.

Although several of the RFI responses proposed hypothetical teaming arrangements, businesses provided no evidence that such teaming arrangements existed or could be achieved. It is unlikely that alternative competitive teaming arrangements would develop in a competitive environment if Boeing has already secured commitments from their team members. Any plausible proposal would have to include Boeing as a team member.

Therefore, in addition to submitting a proposal as a prime contractor, Boeing would also have to commit to supporting proposals of competing contractors as a required subcontractor.

Boeing has no incentive to make such a commitment.

Because of all these factors, MDA/DE assesses that a full and open competitive acquisition strategy creates a significant risk for negative technical and schedule impacts on crucial SE&I data deliverables directly linked to the MDA’s ability to achieve DoD mandated capability deliveries. Further, the MDA would bear additional costs that are not likely to be recovered through potential competitive activities if the MDA pursued a full and open competitive strategy for this acquisition.

8. Determination of Fair and Reasonable Cost (FAR Part 6.303-2(b) (7)).

The MDA team will conduct a thorough technical evaluation, audit, cost analysis of the proposed costs to form the basis for the PCO's determination of fair and reasonable cost.

The analysis will include rate checks, a comparison of the proposed cost to similar procurements, and historical cost analysis from previous contract efforts performed by Boeing. The cost will exceed $2 million; therefore, certified cost or pricing data is required.

9. Any Other Facts Supporting the Use of Other Than Full and Open Competition (FAR Part 6.303-2(b)(9).

Figure 2 - Missile Defense National Team SE&I (NT-S)

The MDA requires unfettered access by the five (5) MDA primary hardware OEMs to each other's proprietary information within a "firewalled" environment. Boeing currently leads this collaborative team, which provides the MDA access to personnel who have highly specialized systems engineering expertise and access to major acquisition program contractors' proprietary data. Therefore in accordance with FAR 9.505-4 Obtaining Access to Proprietary Information; Boeing will continue to develop and employ proven processes for mitigating potential organizational conflict of interest risks that might impede or be perceived to impede NT-S ability to provide unbiased and objective systems architecture or systems engineering advice to the MDA.

10. Actions Taken to Remove Barriers to Competition (FAR Part 6.303-2(b) (11)).

NT-S Industry Concept of Operations is to operate as one “High Performance Team” at the System Level, and compete work at the Element and Component Level. Defined technical workshare goals under the current contract is 40% Boeing and 15% to each of its teammates, General Dynamics, Lockheed Martin, Northrop Grumman, and Raytheon. To promote competition at the subcontractor levels, FAR clause 52.244-5, Competition in Subcontracting, will be included in the contract award document, requiring Boeing and its teammates to subcontract on a competitive basis to the maximum extent practicable.

In 2002, MDA Director Lieutenant General Ronald Kadish established a four-community National Team construct consisting of: (1) Government, (2) University Affiliated Research Centers/Federally Funded Research and Development Centers, (3) Advisory and Assistance Services (A&AS) Contractors, and (4) Industry. To enhance competition, SE&I work scope that does not require this specialized expertise resident within the integrated Industry OEM team is accomplished by one of the other communities, such as the A&AS contractors. NT-S work scope will continually be evaluated to determine if portions of this effort are no longer require NT-S highly specialized services.

MDA’s requirement for the National Team industry component is for an integrated

Industry OEM team. Boeing’s existing investments in SCIF Facilities and IT infrastructure at the JetPlex can be a barrier to other team members being able to effectively compete for the NT-S lead. MDA has explored alternatives such as moving the NT-S into government facilities, or use of the government IT infrastructure. At the time, the government could not guarantee they could meet the security requirements for protecting National Team proprietary data, and the cost of replicating the SCIF and IT infrastructure was not likely to be recovered within the contract period of performance. There may be new opportunities to revisit this constraint as DoD and Aerospace Industries embrace new Digital Engineering and cloud based computing technologies, i.e. Infrastructure as a Service, Platform as a Service, and Software as a Service. The NT-S contract will encourage Boeing to leverage best industry practices, particularly as applicable to transition to cloud based services where practical, and to better integrate with MDA’s prototype Integrated Digital Data Environment, which is comprised of multiple enclaves across unclassified and classified cyber domains that use and share data from authoritative sources of truth to develop digital data products to support all phases of the product lifecycle. As these technologies mature, it should reduce dependency on the Boeing IT infrastructure embedded at the JetPlex. These opportunities for increased competition will be reassessed prior to the follow-on acquisition, e.g. host Industry Day(s) to better solicit feedback from the current OEM providers on how to facilitate increased competition to provide the Industry component of the National Team.