FSS_JA_REDACTED_Redacted.pdf

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

FOR OFFICIAL USE ONLY

FOR OFFICIAL USE ONLY14 Nov 2017

NOTE: If a Justification and Approval was approved for the preceding acquisition, a copy of the approved J&A for the predecessor action must be included in the staff package for approval of the instant J&A. This applies to J&A staff packages that are submitted for review and approval at a level above the contracting officer. The predecessor J&A will be used as a reference document by the approving official.

Is this a new or amended J&A Document? New Amended ( Prior to Award Only! )

Funding level for this acquisition:

Contracting Activity: 763d Specialized Contracting Squadron (SCONS)

Purchase Request / Local ID Number:

Program / Project (and PE, if applicable): Forward Supply Spares (FSS) Leveling

Program Type (PEO or Other Contracting): Other Contracting

Authority: 6.302-1 – 10 USC 2304(c)(1), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

Estimated Contract Cost (including options): J&A Type: Class Individual

COORDINATION (AFFARS 5306.304(a) )

Date

21 Dec 2017

Requiring Activity

MR. MARK C. THOMPSON

HQ AMC/A4RMP, 618-229-4505

Signature

Date

21 Dec 2017

Contracting Officer

CAPT ANTHONY P. GRAY JR.

763 SCONS/PKA, 618-954-8722

Signature

Date

21 Dec 2017

Local Legal Reviewer

BRYAN T. MARTIN

HQ AMC/JAQ, 618-229-0025

Signature

APPROVAL (AFFARS 5306.304(a) )

Date

21 Dec 2017

Activity Competition Advocate

GREGORY D. ENGLISH, NH-IV, DAF

763 SCONS/CL, 618-256-9995

Signature

FOR OFFICIAL USE ONLY

FOR OFFICIAL USE ONLY14 Nov 2017

I. Contracting Activity.

Department of the Air Force, Air Force Installation Contracting Agency (AFICA), 763d Specialized Contracting Squadron (763 SCONS/PKA), 604 Tyler Street, Bldg 3189, Scott Air Force Base, IL 62225-5022. This is a Justification for Other Than Full and Open Competition.

II. Nature and/or description of the action being processed.

763 SCONS/PKA intends to award a new firm-fixed price (FFP) contract for FSS Leveling to:

Logistics Management Institute (LMI) Consulting, Inc.

6767 Old Madison Pike NW STE 275 Huntsville, AL 35806-2172

III. Description of supplies/services required to meet agency needs.

Under the contemplated contract, the contractor will operate the program for Forward Supply Location (FSL) candidate determination (Demand and Candidate Program (DaCP)) on a quarterly basis. Under FSL, a list of stock numbers will be provided to the stock leveling systems-Customer Oriented Level Technique (COLT) and Readiness Based Leveling (RBL) which are National Stock Numbers (NSNs) that receive the special FSL leveling logic. Additionally, demand information will be provided to the leveling systems so they can determine what percentages of demands are for the FSS and what are for the host base.

Additionally, the contractor will:

Review both COLT and RBL output to ensure accuracy and mission feasibility of the FSS. The contractor shall provide thorough quarterly review/investigations of the computed FSL levels during the RBL/COLT analyst review of results period and prior to the official Major Command (MAJCOM) RBL/COLT review of global spares levels.

Maintain the FSS programs by identifying required changes to the RBL and/or COLT FSS pre-processing logic 4 weeks, or more, prior to the next quarterly run date of either United Sates Air Force (USAF) leveling system, and work with the RBL and/or COLT programmers to ensure all required changes are completed, tested, and implemented prior to the next run date of both USAF leveling systems.

Perform additional studies to enhance the FSL leveling system, including monthly mission capable (MICAP) analyses and yearly FSL category reviews. Additional short term analysis tasks shall also be conducted by the contractor in support of AMC peacetime and wartime requirements/levels and operations. COLT and RBL compute peacetime levels and Aircraft Sustainability Model (ASM) computes the wartime levels. Analysis results must provide actionable recommendations on new stock levels formed in official USAF logistics systems and spares computation models.

These services will be acquired for one base period and two additional option years, paid on a monthly basis. It is expected that Air Mobility Command (AMC) will utilize these services through 2020. The total estimated value and period of performance is as follows:

Base Period: 1 Jan 18 - 30 Sep 18 Option Period 1: 1 Oct 18 - 30 Sep 19 Option Period 2: 1 Oct 19 - 30 Sep 20 Total Estimated Value:

Anticipated Contract Line Items include:

0001: Firm Fixed Price (FFP) Labor

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0002: Not Separately Priced (NSP) Data Deliverables

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

41 USC 1901, as implemented by FAR 13.501(a)(1)(ii), required by FAR 13.501(a)(1)(i).

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

Subsection 1:

AMC requires ongoing technical and analytical support for the unique issues associated with the strategic airlift supply chain. Spare stockage levels will be provided for C-5 and C-17 aircrafts Outside Continental United States (OCONUS) en route bases for all activities necessary to provide specific analytic support required to identify and resolve supply chain issues impacting AMC strategic airlift. Additionally, any necessary business rules and system changes will be implemented in the USAF standard leveling systems prior to the next quarterly leveling cycle, following identification of the required change.

FSS services are currently provided as a task order (Task Order 0008) under the AMC Advisory and Assistance (A&AS) Indefinite Delivery Indefinite Quantity (IDIQ) contract, FA4452-11-D-0006. The task order was awarded by the 763 SCONS 01 Oct 15 to B3H Corporation (Small Business) who teamed with LMI (Large Business) to provide these services for a total contract amount of $416,389.53. The contract was awarded on a competitive basis utilizing FAR 15 and 16 procedures and it set to expire 31 Dec 17. The requirement was classified under NAICS code 541611, Administrative Management and General Management Consulting Services. B3H is currently unable to perform 50% of the work on this contract due to the intellectual property rights on the ASM system owned by LMI.

LMI operates, maintains, and enhances the spares leveling logic used in the RBL concept for reparable items and the USAF-level consumable spares leveling logic in the COLT since 1999 and 2004 respectively. Both systems were developed by the USAF with assistance from LMI, and the USAF maintains ownership of these systems. LMI developed the ASM system, which directly impacts the "Operate The FSS Candidate Determination System" (Task 1), "Maintain The FSS Programs" (Task 4), "Additional Studies to Enhance The FSL Leveling System" (Task 5), and "Additional Short-Term Analysis" (Task 6) tasks of this requirement. The software and algorithms of ASM is trademarked as an LMI proprietary tool. Even if LMI were to team with another vendor, that vendor would not be able to accomplish at least 50% of the work on the FSS leveling system due to the intellectual property rights owned by LMI.

Specifically under Task 4, an important use/application of AMC for maintaining FSS programs entails testing FSS program modifications/enhancements executed under this task as well as changes to Task 1's Demand and Candidate Program (DaCP). ASM is used to quantify the impact on mission support arising from these maintenance actions. For example, if a portion of the pre-processing logic was changed, ASM is used to determine whether mission support will be impacted positively or negatively, and by how much. ASM can be viewed as a quality control method to validate the effectiveness of Task 4's programs maintenance work. ASM also directly impacts Task 1 by testing the effectiveness of changes and performance of the Demand and Candidate Program.

ASM also directly impacts Task 5 along with Task 6's "Additional Short-Term Analysis". For example, ASM impacts Task 5 by quantifying the effects of changes brought by changes to the FSS programs, as well as operational model changes.

ASM's value lies in quantifying the effects of relocating/withdrawing as readiness spares package (RSP) from an FF location. When this happens, the overall pool of spares available at an FSS site is reduced, ASM demonstrates how much system performance will degrade if the FSS-computed spares inventory is left to support the mission on its own.

The services in this requirement are considered highly specialized due to FSS spares level setting logic that is embedded within the USAF's standardized leveling tools, RBL and COLT. This requirement largely centers on preprocessing to get the parts' data into RBL and COLT. These two systems compute levels for spares across the entire USAF, but special logic is

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FOR OFFICIAL USE ONLY14 Nov 2017 reserved for use by the FSS.

The information that is proprietary to LMI in this requirement includes the ASM system which can only be maintained and enhanced by LMI. This requirement requires rapid capability to modify models numerous times in response to rapidly changing operational models and contingency-driven mission demands that ASM helps provide. Examples include shuttering en route locations at OCONUS locations such as Mildenhall and Lajes as well as changing maintenance capability and therefore parts needs at other locations.

Therefore, this acquisition is for continued performance of a high specialized service.

Subsection 2:

Award to any other source would result in substantial duplication of cost and unacceptable delays to the Government that is not expected to be recovered through competition and unacceptable delays in fulfilling the USAF's requirement. If HQ AMC decided not to continue to utilize the current FSS system with LMI, the alternative methods would be to buy the proprietary information from LMI or develop a new system for setting FSS levels. Developing a new system would also result in unacceptable delays.

In prior discussions with LMI, HQ AMC/A4 was told that LMI would not sell or license rights to the USAF or AMC for the FSS leveling system. LMI maintains a majority of their work with the USAF and AMC with their spares leveling work based on the ASM described in Subsection 1. This proprietary tool is used across the USAF and has begun working for the US Marine Corps aircraft as well.

If the USAF or AMC were to develop a new system for FSS levels, the potential requirement would take around three years to award and implement. The process would involve AMC obtaining HQ USAF/A4L approval for a new FSS system, a Request for Information to obtain market research information for potential capable vendors to assist the USAF in the development of the system. A vendor would have to be hired to assist in developing a new system because the USAF does not have the personnel, experience, or manpower to develop a system organically. At least one Contractor Manpower Equivalent (CME) would be required and a majority of the acquisition phase would be required for the new firm to gain access to the USAF Supply Central Data Base and develop data pulls to capture enterprise-wide demand data and determine how to distinguish demands from en route activity from other non-en route customers (sites such as Ramstein Air Base (AB) and Andersen Air Force Base (AFB)). Once the acquisition plan is approved, the requirement is solicited, and a contract is awarded, the new system will have to be implemented and trained to government personnel that would be operating and maintaining it.

Developing a new system would require to develop and implement a new system.

would cost approximately with FTEs developing a new FSS system, would cost approximately per year. The system would take approximately to develop and implement, costing around and unacceptable delays in the operation of these services. Along with developing a new system, the current FSS system would have to be kept in place to prevent any break in services utilizing LMI. For a three year follow on requirement, accounting for a inflation rate, would cost The total estimated cost to the program office would be However, since the USAF requires assistance of a contractor to develop a new system, the USAF could fall into a similar situation that it is in now. The new contractor would know the new system better than others, so, when it comes time to solicit for the maintenance of the system, it would be very difficult for a different vendor to be able to propose a lower price than the developer because of the learning curve and inexperience it would face.

Subsection 3:

Accordingly, LMI is the only firm capable of providing the services described in Section III above without the USAF experiencing substantial duplication of costs that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirement.

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VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable.

The previous task order was competitively awarded against the AMC A&AS IDIQ contract which expires on 31 Dec 17 and therefore cannot be utilized for the re compete. Prior to determining that LMI maintained intellectual property rights over the ASM system, an integral part of this FSS requirement, a sources sought (FA4452-17-R-0012) was posted to the General Service Administration (GSA) One Acquisition Solution Integrated Services (OASIS) Small Business Pool 1 on 12 May 17 with a response date of 30 May 17. Only one vendor replied with a response, which HQ AMC A4/ A4RMP reviewed and determined it was not capable of meeting this requirement due to essential lack of experience.

Due to the lack of capable responses on GSA's OASIS Small Business Pool 1 contract, a sources sought was posted on Federal Business Opportunities (FedBizOps) on 09 Jun 17 with a response date of 30 Jun 17. Six vendors replied. LMI was found capable of meeting this requirement. No other vendor could perform a majority of the work due to LMI's intellectual property rights over the parts of the FSS system.

The current contractor, B3H was contacted since they had not responded to the sources sought sent through GSA OASIS or FedBizOps. They stated that they would not be responding since LMI maintained intellectual property rights to the ASM system described above and they currently are not performing a majority of the work on the current contract. The central focus of this work involves proprietary algorithms and software by LMI that B3H cannot perform work on.

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

In accordance with FAR 13.106-3(a), before making award, the contracting officer must determine that the proposed price is fair and reasonable. In accordance with FAR 13.106-3(a)(2)(ii) and FAR 13.106-3(a)(2)(vi) the Contracting Officer shall determine prices fair and reasonable by comparison of proposed prices with prices found reasonable on previous purchases, and comparison of proposed prices to the independent Government estimate.

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

As described in Section VI above, IAW FAR Part 10, market research was conducted by issuing a sources sought synopsis of the proposed acquisition.

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

None.

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.

LMI has operated, maintained, and enhanced the COLT and RBL tools for the USAF for the past 15 years. LMI also developed the ASM model, which is trademarked as an LMI proprietary tool. ASM is heavily used in the fulfillment of the short-term analysis task of this FSS requirement and generates the outputs for RBL. Since LMI is the only vendor than can maintain and make enhancements to these tools due to their intellectual property rights, no other vendors would be able to perform more than 50% of the work required.

The USAF's logistics community (HQ USAF/A4 and AFMC/A4) recognizes the lack of competition due to LMI maintaining intellectual property rights on the ASM system required for the successful performance of this effort. Accordingly, to combat this sole source environment, the "Escape" effort, (underway at AFMC), as described in Section V above, seeks to

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FOR OFFICIAL USE ONLY14 Nov 2017 replace the current standardized spares leveling tools, and the corresponding dependence on LMI with a Commercial-Off- The-Shelf (COTS) based solution. Escape is currently scheduled to be implemented in FY2020, and AMC/A4R is engaging with the Government and contractor members of the Escape team to define the A4R en route spares requirements so they can be included into Escape in 2020. Therefore, it is anticipated that once the Escape system is employed, the separate AMC requirement will end. LMI will not be utilized for any future efforts in regards to the FSS leveling system if this merge occurs.

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) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.